Bank for International Settlements Exec Shows New Fondness for CBDCs

Bank for International Settlements Exec Shows New Fondness for CBDCs

A long-skeptical exec at the Bank for International Settlements now says that CBDCs could open up new possibilities

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General manager at the Bank for International Settlements (BIS) Agustin Carstens seems to have changed his negative stance towards central bank digital currencies (CBDCs), now stating that such currencies could open up new possibilities.

In his speech entitled “The future of money and the payment system: what role for central banks?” published on Dec. 5, Carstens dug into central banks’ approach to emerging technologies in regards to building more efficient and inclusive financial systems.

Wholesale and retail CBDCs

Carstens said that the introduction of retail CBDCs — which are available to the general public, including businesses and consumers — could bring serious changes to the financial sector by opening up new possibilities when it comes to the 24/7 availability of payments, different degrees of anonymity, and peer-to-peer transfers.

He continued noting that wholesale CBDCs — where the network participants are financial institutions — could be made compatible with the provision of central bank settlement liquidity. Wholesale CBDCs would not raise difficult financial footprint issues as they would be largely restricted to institutions that already use central bank deposits, according to Carstens.

Unlike wholesale CBDCs, retail versions would raise a range of concerns such as the designation of entities  responsible for the enforcement of know-your-customer and anti-money laundering regulations, Carstens outlined.

CBDCs’ negative impact on the financial system

In late March, Carstens was not so positive about CBDCs, when he advised against the issuance of such currencies. Carstens argued then that a CBDC could facilitate a bank run, enabling people to move their funds from commercial banks to central bank accounts faster, thus destabilizing the system.

At the time, he also noted that there are enormous operational consequences for the central bank in the implementation of monetary policy and the traditional market’s stability.Carstens stated: “Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions.”

Meanwhile, a number of countries are exploring the issue of the development of a digitized national currency, including China, France and Ghana, among others.


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A long-skeptical exec at the Bank for International Settlements now says that CBDCs could open up new possibilities

Bitcoin Price Circles $9,500 as Futures Settlements Form New Bear Factor

Bitcoin Price Circles $9,500 as Futures Settlements Form New Bear Factor

Bitcoin price eyeing catalysts for change as stagnant trading continues

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Bitcoin (BTC) price continued trading around $9,500 July 30 as analysts suggested the end of the month could still provide a fresh move upwards.

Market visualization. Source: Coin360

Market visualization. Source: Coin360

All eyes on futures and 50-day moving average

Data from Coin360 revealed little change in Bitcoin’s behavior Tuesday after the largest cryptocurrency suddenly lost $800 over the weekend. 

As Cointelegraph reported, the downturn caught markets by surprise, BTC/USD dropping from $10,150 to a low of around $9,200.

Now, attention is focusing on Bitcoin futures — the end of the month means settlement, something which has traditionally placed downward pressure on the Bitcoin price before payouts take place. 

For Josh Rager, the regular analyst and trader, the near-term course for BTC/USD could involve an uptick towards $10,000, but with the 50-day moving average forming a roof. 

Rager specifically viewed CME Group’s futures as an important metric.

“CME is an important chart to watch & looking at one scenario that could play out,” he wrote on Twitter Tuesday.

He continued: 

“I lean neutral sideways but would be intrigued if price moved up to fill the meme gap at $9965 1D close before rejected off 50 MA[.] Lean bullish if price closes above $10,635 on CME.”

Bitcoin 7-day price chart. Courtesy of Coin360

Bitcoin 7-day price chart. Courtesy of Coin360

So far, however, little evidence suggests the more bullish scenario will occur, with many suggesting a period of bearish action is likely before momentum for gains builds once again.

Others pointed to ongoing regulatory scrutiny, particularly in the United States, as pressuring price. On Tuesday, Washington is set to hold another hearing dedicated to blockchain and cryptocurrency policy. 

“It’s a new product. It’s much different from most new products,” J. J. Kinahan, chief market strategist at TD Ameritrade, told Bloomberg.“Everybody, including regulators, are trying to figure out the best way to roll this out to protect people, keep it something that’s viable but keep it from being the Wild West.”

Sideways landscape prevails in top 20

Altcoins meanwhile continued to move in step with Bitcoin’s sideways action. Ether (ETH), the largest altcoin token by market cap, dropped slightly more than average — 2.5% on the day — to land at $208. 

Ether 7-day price chart. Courtesy of Coin360

Other major coins saw negligible losses of up to 3%, while only a handful registered any form of gains, these not surpassing 2%. 


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Bitcoin price eyeing catalysts for change as stagnant trading continues

Italy’s Banks to Use Blockchain to Boost Settlements and Improve Transparency

Italy’s Banks to Use Blockchain to Boost Settlements and Improve Transparency

Italy’s banks plan to integrate DLT into internal processes to improve transparency and efficiency

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Italian banks will deploy blockchain technology to run reconciliations starting in March 2020, financial technology news outlet Finextra reported on June 18.

The Italian Banking Association (ABI) has announced that Italy’s banks will integrate distributed ledger technology (DLT) into internal processes to boost settlements. The deployment of blockchain is also set to improve transparency in transactions between banks and efficiency of communication between counterparties.

The initiative comes as part of a program managed by ABI Lab dubbed Spunta Project, a blockchain interbank solution based on blockchain consortium R3’s open-source distributed ledger platform. The ABI began testing Spunta in February. At the time, Spunta was undergoing testing by 18 banks that together represent 78% of the Italian banking sector by number of employees.

ABI’s blockchain-powered interbank system successfully passed the initial phase of testing last October, with the participation of 14 local banks. The application of blockchain was also expected to assist in specific aspects of banking operations that usually involve a number of complex discrepancies such as storing data on multiple nodes shared by the banks, with the implementation of smart contracts.

In February of this year, the Italian House of Representatives approved a bill defining DLT and blockchain, as well as the technical criteria that smart contracts will have to comply with in order to have legal validity.

In May, Prince Lorenzo de’ Medici, president of the eponymous Medici Bank, said he had been motivated by advancements in blockchain technology to start the new venture, which aims to “create seamless, digital customer experiences and expand financial opportunity across global markets.”


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Italy’s banks plan to integrate DLT into internal processes to improve transparency and efficiency