Cryptocurrency adoption has been a major point of discussion among its supporters but as time goes by, more and more players seem to be interested in it. This gradual change comes more than a decade after the inception of Bitcoin.
At the recently concluded World Economic Forum [WEF] discussion in Davos, several major players came together to reveal the formation of a cryptocurrency ‘consortium’. This group will be responsible for crypto governance as well as regulatory decisions for fintech organizations.
The WEF has also created a policy-maker toolkit that will enable banks to ensure that there is no underhanded play in the crypto market. The toolkit is also slated to function as a manual for banks who want to travel through the cryptocurrency trenches.
The list of regulations is expected to help banks in retail, cross border CBDC, wholesale and private money stocks known as ‘hybrid CBDC’. According to the document released by the WEF:
“As policy‑makers navigate this process, they should consider how CBDC may introduce new capabilities that support regulatory goals while also introducing new risks or compliance vulnerabilities. CBDC could potentially be used as a tool to achieve policy objectives such as improved safety and resilience in payments systems; increased efficiency, and financial inclusion.”
One of the key obstacles in the cryptocurrency industry has been the regulatory uncertainty surrounding it. This ranges from SEC recommendations to CFTC lockdowns in the United States. With its latest proposal, the WEF plans to do away with all the confusion.
The consortium will include members from leading companies, financial institutions, NGO’s, government representatives and WEF officials. According to sources, the consortium will keep a keen eye on factors such as speed, security, and interoperability of a decentralized product.
The Forum’s moves have also been justified by institutions close to the developments. They claimed that new steps had to be taken because the financial climate was always changing. Klaus Schwab, the founder and executive chairman of the WEF admitted that digital currencies were a key interest to the Forum. According to Klaus, the consideration of cryptocurrencies right now will foster inter-industry developments in the private and public sectors.
The time has changed when central banks used to turn a blind eye to cryptocurrencies. Post the decision by the WEF, several bigwigs in the banking department gave their two cents on it. Mark Carney, the Governor of the Bank of England was quoted as saying:
“It is critical that any framework on digital currencies ensures security, efficiency and legitimacy of payments while ensuring fair and open competition. We welcome the World Economic Forum’s platform to help develop a robust governance framework for digital currencies.”
Talks about cryptocurrencies in the mainstream fore have always made news, albeit this time it was positive. The fact that institutions were serious about digital assets such as Bitcoin goes to show how far the industry had come. With each new update, supporters of the field were waiting to invite the predicted technological revolution.