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Stablecoins To Undergo Extreme Scrutiny Following Proposal Of The ‘STABLE’ Act

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Stablecoins came as a boon to those who feared the volatile nature of cryptocurrencies. While certain governments seemed to be more accepting of stablecoins as opposed to cryptocurrencies, several platforms began rolling out their private stablecoins. As the financial universe is piled with stablecoins, a United States’ Congresswoman decided to probe these assets, while proposing a new act to regulate stablecoins.

Stablecoins Fall Under The Purview Of US Congress

Rashida Tlaib, a Congresswoman with Congressmen Stephen Lynch and Jesus Garcia penned down a press release that pointed out the introduction of a new bill. The bill will reportedly protect consumers from the risks that arise with the use of stablecoins by scrutinizing them from the issuance process itself. The members of the Congress particularly went on to mention Facebook’s Libra project now known as Diem. Keeping this in mind, Congress proposed the “STABLE Act”. This act which is an acronym for Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, intends to regulate the stablecoin market as the members entering the market have been on a surge.

Elaborating on the same, Congresswoman Tlaib said,

” […] the protections the STABLE Act would make possible are more needed than ever amid a pandemic that will breed riskier financial decisions out of necessity because our federal government continues to fail us all by not providing adequate relief legislation.”

With this latest act, anyone who intends to issue stablecoins would be mandated to seek the approval of the Federal Deposit Insurance Corporation (FDIC), FED along with several other banking entities. Any stablecoin that has been issued without the approval of the aforementioned entities would be categorized as illegal.

The Congresswoman took to Twitter to share the announcement with the public.

While some lauded the Congresswoman for the formulation of the latest act, a few others, especially from the crypto-verse denounced the latest move of the Congress. Tyler Lindholm, the Wyoming House Representative, also called out the Congress for this move and tweeted,

“Centralization of power for a decentralized world. No thanks. This industry has been light years more successful in bringing financial freedom to the unbanked and that happened without cronyism as suggested in this bill.”

Not long ago, Congresswoman Tlaib had written an elaborate letter dissing the Acting Comptroller of the Currency [OCC], Brian Brooks’ “unilateral” set of actions that was inclined towards the digital assets industry.

Stablecoins Become First Crypto to Receive Regulatory Green Light from SEC, OCC

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A monumental turn of events took place on Monday for the digital asset space, as Stablecoins became the first cryptocurrencies to received guidelines from the Securities and Exchange Commission (SEC) and the Office of the Comptroller of the Currency(OCC).

According to the official press release, a list of national guidelines were revealed on how fiat-backed cryptos can be treated under the law. Before the current announcement, there had been zero regulation clarity behind the functionality of stablecoins such as Tether and Circle’s USDC.

The press release stated,

“This letter addresses the authority of a national bank to hold deposits that serve as reserves for certain “stablecoins.” stablecoin issuers may desire to place assets in a reserve account with a national bank to provide assurance that the issuer has sufficient assets backing the stablecoin in situations where there is a hosted wallet.”

In addition, it was added that the bank offering services to hold stablecoins on behalf of crypto projects will need to comply with appropriate controls to ensure due diligence on the risks involved while maintaining an understanding with the stablecoin issuer. The banks should facilitate a proper understanding of th risks and issue a review for compliance under applicable laws and regulations, also with regards to the Bank Secrecy Act (BSA) and anti-money laundering.

From an adoption perspective, it is a huge deal as the OCC currently wanted the regulated banks to feel comfortable in providing services to stablecoin issuers.

Brian Brooks, Acting Comptroller of the Currency stated,

“National banks and federal savings associations currently engage in stablecoin related activities involving billions of dollars each day. This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner.”

With respect to the SEC, the commission indicated that they did not consider certain stablecoins as securities under the federal law but advised issuers to work with the organization to avoid any misunderstanding.

Will more crypto-assets receive regulations now?

To be fair, not in the near future. It is important to note that stablecoins are the least volatile asset in the space, that are ear-marked 1:1 with fiat currency. The only reason the OCC and SEC have allowed stable assets to work under federal law is its association with the U.S dollar. However, it is definitely a start and over time, the paradigm might shift towards regulating more digital currencies in the space.

The European Union Publishes Study Detailing Loopholes in Cryptocurrency Industry, Recommends Creation of New AML Regulator

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Since its inception, countries in the European Union have played an active role in the cryptocurrency industry. The EU recently published a new study to make sure that members of the cryptocurrency industry do not utilize any of the loopholes in the written law.

The study covered several topics in the industry ranging from stablecoins to AML issues in the world of digital assets. According to the key points mentioned in the study, assets such as stablecoins and token-based fundraising need to come under the purview of the law. 

The report was titled ‘Crypto-assets: Key developments, regulatory concerns and responses’ looked at the issues in the industry and how it can be rectified. Authors of the report claimed that cryptocurrencies can be used to convert illegally obtained capital in to clean cash. This money laundering technique has become a major thorn in the side of regulators, with many countries complaining of rapid capital surges.

Members of the EU further opined that there were several blind spots in the digital asset industry and the sooner they are rectified, the better. An excerpt from the report said:

“Newly mined coins are by definition ‘clean’, so if someone (e.g., a bank) is willing to convert them into fiat currency or other crypto-assets, the resulting funds are also clean. A first regulatory step could be to try to map the use of this technique and subsequently, if it effectively proves an important blind spot, to consider appropriate countermeasures.”

The EU suggested that regulators need to broaden the scope of the definition of virtual assets by including parameters such as security tokens. Another recommendation put forth by the EU was related to cryptocurrency exchanges. The body believed that crypto to crypto exchanges as well as financial services providers in the industry need to be surveyed. Cryptocurrency mining and miners were the other concerns of the EU.

The report said that anyone with a powerful computer could begin mining cryptocurrencies, which would also include criminal actors. It continued:

“A first regulatory step could be to try to map the use of this technique and subsequently if it effectively proves an important blind spot, to consider appropriate counter measures. In addition, and in view of the cross-border nature of crypto-assets and their misuse, the introduction of a European AML watchdog could have various benefits, especially if it is staffed with highly trained IT personnel capable of analyzing the AML/CFT risks new technologies bring.”

Stablecoins was another pain point for the EU. The report indicated that most stablecoins have a local footprint that can be used to track the sender and receiver. Several countries have entered the cryptocurrency sphere in recent years, with many developing their own Central Bank Digital Currencies [CBDC]. Christine Lagarde, the president of the ECB had said that the body was assessing the value of CBDCs in daily value.

 

Circle Doubles Down on Stablecoin, Looking to Sell its Crowdfunding Unit

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The Boston-based crypto company, Circle is reportedly looking to sell its crowdfunding unit. The move is a direct result of the company’s focus on the Stablecoin business.

The Circle has made yet another headline. Previously, the firm appeared on top bulletins after spinning out of the Poloniex crypto trading platform which Circle had acquired in the year 2018 for $400 million. Moreover, it has successfully signed the sale agreement of its  “over-the-counter trading desk” with Kraken exchange for approximately $1 million. However, the business saga of Circle didn’t end here. The platform is now looking out for an investor who can buy SeedInvest, Circle’s crowdfunding unit.

Circle acquired SeedInvest last year in March 2019. SeedInvest was meant to help organizations build funding power using their financial assets. 

One of the internal sources of Circle commented that the crypto company is going through a tough time solving the lingering issues based on how the SeedInvest’s acquisition was made in March 2019. As a result, they are facing trouble finding a considerable investor who can purchase its crowdfunding unit.

Additionally, the source commented on Circle’s ruling out of the trading unit as the biggest blow for the crypto company. In 2018, the trading unit helped them build a total sum of $ 24 billion in the form of cryptocurrency.

Crypto Company’s Next Center – Stablecoins

You might think of what’s next for Circle when they have already eliminated its 3 working platforms! To answer your question, the crypto organization has already confirmed its upcoming plans on their website. They are now aiming for USDC – the Stablecoins.

The Stablecoin has already seen its high when its supply was doubled in 2019. The supply went on to reach $441 million. 

Circle’s spokesperson Josh Hawkings mentioned that the organization is now aiming to build its availability of businesses with its commercial accounts. These accounts will provide a proper online environment for the local as well as international businesses to convert their investment in USDC into a convertible asset that can be used for payment purposes.

Adding to it, it was also mentioned by the spokesperson that the Stablecoins are still pretty new in the market. It will acquire good stability going forward and will soon be adopted by everyone.

Contradicting the comments submitted by the spokesperson of Circle, other sources believe that the USDC’s model of working will create a tough time for the organization. The hard game of launching USDC on the platform will guide a way for others in the same field to follow their steps to launch the Stablecoins on their respective platforms.

Looking at all the comments and reactions, it is clearly a longer and tougher task for Circle to unwind the existing ones and strategize for the new baby entering the business to get the same support from the followers.

Composable Platform Komodo Easing launching of Stablecoins Through a Click

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Imagine a blockchain ecosystem that you could launch your own stablecoin at the click of a few commands. The possibilities of a  decentralized multi-chain blockchain that enables third party creation and customization. Komodo is making this possible and for that reason; Released its beta net for creating stablecoins through bitcoin protocol based cryptocurrencies. 

Komodo came to birth after a team from SuperNET forked Zcash. The platform is more an ecosystem than a blockchain that provides end to end blockchain solutions for launching independent chains and Initial Coin Offerings. Furthermore, the multi chain platform also includes a cryptocurrency anonymizer and a decentralized exchange for boosting privacy of transactions.

Users have the ability to create a blockchain that is independent of Komodo. In fact, the resulting blockchains are verified on the Bitcoin Network which makes them secure and customizable via a couple of decentralized modules. 

Komodo ingeniously allows coders with some level of experience to design and deploy their bitcoin protocol-based cryptocurrencies. A blockchain development web application platform called Komodo’s Antara makes all of these possible.

The Komodo Stablecoin composer’s alpha version tests a Price and Pegs feature. This feature is for the deployment of commodities and stocks backed by stablecoins and digital currencies. Additionally, it will work in sync with the prices module to keep track of asset pricing in the real world. Then provide metadata to the overall Komodo Smart Chain.

The platform will have the value of any Bitcoin lock fund protocol in the form of stablecoin and withdraw a limit of 90 percent. In turn, the user can exchange the value through an atomic swap for other assets on the network.

 Atomic swap is a smart contract module for exchanging cryptocurrencies for another by eliminating intermediaries. Once a stablecoin is deployed on the Komodo Smart Chain, creators can list it on the native AtomicDEX. The Chief Technology Office at Komodo, Kadan Stadelmann said 

“If you wanted to create a chain, you could do that right now, alone at your computer, without any external support, without any funds—without anything—and you can just like spin up your own blockchain”

Creators can back bitcoin, Komodo native cryptocurrency (KMD), or several other digital currencies to their Komodo Stablecoins. Once deployed, creators anchor it into the Bitcoin network to boost safety and efficiency. The entire process will be decentralized and centered in the Komodo Smart Chain: Stadelman added that: 

“There is full transparency, the biggest problem with [certain] stablecoins is the lack of transparency. We believe that our technology, and the way that we implemented the stablecoin module, provides 100% transparency.” 

Komodo is finding potential partnerships for its stablecoin services with financial firms that could be interested in building and securely deploying their very own stablecoins. The CTO noted that :

 “This feature would allow financial firms and investment firms to spin up a stablecoin within  minutes,” 

Enterprises that build their own stablecoins will enjoy loyalty program integration, branding opportunities, and secondary market liquidity. Furthermore, they could also lower transaction costs, streamline loyalty programs and benefit stable interest income from traditional fiat reserves. Stadelman pointed out that:  

“If you are from the fintech sector, you could basically build up a derivative trading platform in a decentralized fashion,”

The CTO believes that the applications of blockchain are endless and present a future of possibilities. 

 

China’s Mission To Creating an All Powerful Stablecoin

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Blockchain and the cryptocurrency race is the most interesting innovation since the advent of the internet in the 90s. Cryptocurrencies have been around since taking over the financial world.

With the world’s most powerful economies and corporations drafting plans to launch their digital currencies. China and Facebook are leading in this front respectively. On the other hand, Satoshi Nakamoto’s Bitcoin leading the entire battalion of crypto markets. 

There had been chances of witnessing the world’s first digital currency in 2019. However, China has pushed the launch date. Global financial enthusiasts are anticipating a 2020 debut of China’s stablecoin. Meanwhile, this very significant launch will also be the basis of a new Digital Currency/Electronic Payment system  (DCEP).

China’s penetration into a leading supplier of global consumer products threatens several other leading economies with its digital payment system.

For instance exports and imports through China will have to go through the DCEP. A signal that the country is creating an efficient and legal payment system to complement global trade. 

China Central Bank
Credit: pbc.gov.cn

It is worth noting the difference between China Digital Currency Electronic Payment  (DCEP) and other existing cryptocurrencies. The bitcoin blockchain, for instance, controls the value source of bitcoins through an algorithm. Furthermore, technologists mine bitcoins in a decentralized ledger. 

On the other hand is DCEP, a model that the government sanctions and with at least 50 registered patents.  All patents relating to the distribution of currency through traditional financial institutions. Features that make DCEP centralized and a striking resemblance with traditional fiat.

Additionally, only the government will have control of the blockchain ledger rather than distributed across the system. DCEP will follow the normal model of paper money.

In fact, the government will integrate into the commercial ecosystem. The Chinese payment system will also effectively reduce initiation constraints due to time lags. According to Wired, the government will not deploy the ledger to mining nodes.

Hence and unlike bitcoin, it will have daily practical usability. Well, the fact that the system will peg the value of the coin to the valuation of Yuan -; the Digital renminbi won’t trade as fractions. Blockchain analysts hope that the system will be easy to use;  since daily users anticipate a platform that is no different from existing payment platforms. 

Nonetheless, people have questioned China’s move to crack down bitcoin trading. Facebook’s Libra coin has also become a global bone of contention. A situation that reveals that central banks are warming up for the digital currency era; 

But still, find other digital currency potentially a threat. 

Especially when such digital currencies are out of their control. Or rather when they pose a threat to a nation’s financial security. China cracked down on crypto trading activities back in 2017 when it shut down at least 173 crypto trading platforms. 

China feels that the United States has been benefiting from global trade. A former member of the NDRC said: 

“When we trade with the Philippines, and we use the regular financial system, both of us convert into dollars. It’s the US who benefits from that trade.”

Launching the DCEP will enable China to effectively navigate its activities without the need for the US dollar. 

And just like that, the United States will have to grapple with an autonomous economy toppling it from being the world reserve currency. 

 

Facebook’s Libra Project is Developing a Governance Model that will Disrupt the Remittance Space

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The controversial Facebook’s Libra project has been 2019’s biggest story. However, it is not the only payments project hoping to transform the payments sector, when still ripe to throw into disarray.

As per the most recent statistics, the remittance course leading to low and middle-income nations is predicted to extend to  $574 billion in 2020; and $597 billion by 2021. However, this is a sector that has been pestered by carelessness, which has been an expensive occurrence to some. The high cost on top of the rigorous laws and regulations, continue to bear an impediment to the payments sector.

Dante Disparte, the Head of Policy and Communications at the Libra Association, likens the current payments system as “walled gardens.” He notes that the current 230 million economic asylum seekers are the individuals that propel the GDP of their mother countries. This is bigger than the p2p payments, foreign direct investments or even official government aid and development assistance. However, he adds that there is no way to achieve this in a less expensive and systematic way.

Libra Tapping Payments Space

Moreover, Disparte claimed in a recent interview that the competition in the payments space is minimal; and the existing methods are “one big monopolist player or there’s a duopoly operator” running the remittance sector. He also touched on the Libra project exploring this opportunity. He said:

“If we introduce the opportunity for digital wallet providers to emerge that are interoperable, that’s a big game-changer for the world. To do that right, of course, means you have to go through the process we’re going through now – build a governance model that can withstand the the the vagaries and the vicissitudes of any one organizations and association but also build a model that could achieve a regulatory standard that protects consumers.”

In addition, the lack of infrastructure has led to slow digital currency and remittance engagement. However, in the case that Facebook’s Libra project receives regulatory approval, it will go head-to-head with an experienced figurehead in the industry; Ripple. The blockchain firm has multi-partnerships under its wing.

Will Libra Disrupt the Remittance Space?

As per the initial expectations, Facebook expects the Libra cryptocurrency to launch within the first half of 2020. The global stablecoin is designed to enable users to be able to initiate payments using Facebook and WhatsApp and stored in its digital wallet called Calibra. 

The main focus of the Libra project is on developing countries and the unbanked. However, it remains to be seen which companies the project will partner within these regions because their targets are not expected to book Uber or buy hamburgers. The ineptitude to bring value is expected to make make it hard to sell in the particular regions especially; since it will disrupt the local players on top of limiting the government’s oversight on the banking system.

In addition to this, Libra will facilitate payments regardless of whether the parties involved are criminals or not; whether they are under sanctions or not. Facebook will have to provide good proof that it will not facilitate terrorism. Given how the social media giants handle their social network, this will be a difficult task.

In conclusion, the stablecoin will have to get rid of many middlemen (in this case banks) from the market. However, they still need banks in their loop. In order for Libra users to use it, they will have to convert fiat into Libra. Additionally, if its target is the over $500-billion-dollar remittances market, there is a need for a smooth transition from Libra back to local currency. These are the areas where banks will be required.

 

‘Google Coin’, Libra and Big Corporations Foray into Digital Currency

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‘Google Coin’: The media space is currently enthralled by the idea of big corporations venturing into digital currency. Facebook led the way for the big four internet companies (Amazon, Netflix, Google and Facebook) with plans for launching the Libra stablecoin. While Bitcoin had a rough 2019 ending, the blockchain ecosystem entered into a hectic 2020 start. 

Price swings are not that frequent and at best, no more Initial Coins Offerings and scams to wade of industry attention. The fact that it’s so hard to predict tomorrow gains with digital assets, positioned institutions, and corporations as mere observers. However, the sublime of events into a subtle crypto sphere is shifting attention towards the development of fresh projects. 

While it is Bitcoin that sparked the digital money revolution,  established internet firms and central banks will create the future.

Speaking about digital money, Tyler and Cameron Winklevoss highlighted the Big Four, will each have at least one digital currency project by 2021. Headlines of Google attaining Quantum Computing Supremacy in late 2019 voiced alarm on the future of Bitcoin. Later on China would join the space with claims of working towards quantum computing technology. 

This technology breakthrough raised more fear than fun among blockchain communities, given that quantum technology could easily affect Bitcoin’s key features.  If quantum computing falls in the hand of cybercriminals, they could easily hack cryptocurrency ledgers and take control of the blockchain.

Following Google’s breakthrough, the search giant entered into a partnership with Citigroup for launching a fully-fledged smart checking bank account through Google Pay. This announcement piled pressure on Bitcoin developers and the blockchain community to enhance Bitcoin’s user experience and mass adoption. 

Or else Google wipes cryptocurrencies to redundancy. 

The Internet mogul code-named its planned bank account to Cache and anticipates to enable users to implement  Google’s analytic tools in traditional banking products. The firm expects to launch the payment service by the end of 2020, alongside Facebook’s Libra coin. Two projects that pose a major competition for Bitcoin. 

Google Coin Compliance Debate

Regulators in the United States are still concerned that Facebook’s Libra could potentially bypass the US dollar. In addition to as well bypassing the traditional banking system. Meanwhile, with China hot on heels to launch its digital stablecoin, Mark Zuckerberg believes Libra is the only saving grace for the US dollar in the currency wars.

Moreover, Google executive Caesar Sengupta in an interview with the Wall Street Journal noted that Google Pay’s approach is to partner with the existing financial ecosystem.

It might occur that Facebook is the only tech giant struggling with data privacy concerns, yet numerous user privacy controversies have plagued Google as well. For at least half a decade now. 

Google’s Ad Data Aggregation Could Fuel Google Coin

Majority internet scholars argue that Google is an ad company and not a consumer software firm. Hence to make possible its outreach, the search engine collects exhaustive amounts of user data to render its service.

Achieving the full capability of targeted ads calls for an extensive understanding of browsing habits, user background, purchases and several other preferences. All of which Google has the ability to cling to through data aggregation and analysis. 

Unlike Facebook, Google plays its role in protecting user data from hackers and phishing attempts. However, the internet giant’s model needs to collect as much online data as possible for cross-correlating between your offline persona and your online preferences. 

Ben Smith, a Vice President of Engineering and a fellow at Google admits that ads contribute a significant amount of revenue for the company. An amount averaging at least $33.7 Billion per year.

 

The revenue does play a big part in driving Google’s core mission to provide value to everyone. It’s not every day that a company provides top quality products to worldwide users at no monetary cost.

Thanks to the ad revenue, Google can afford to develop expansive user security solutions for free. Yet here is the big question: are these services free in the actual sense, or does Google provide them for free at the expense of user privacy?

Let find out, because;

If Facebook’s Libra gives you worry, Google coin should definitely give you a migraine.

Here are six good reasons.  

Google Coin Data Privacy Concerns

  • Tracking – Tracking and providing user information to advertisers around the world gave Google a whopping $95 Billion in 2017. The internet company tracks through its various applications, from Gmail to Android phones. 

 

  • Incognito – The incognito mode on Google’s Chrome browser tricks users into thinking they are anonymously surfing the net. However, this method is only meant to bar Google from tracking your information. Nonetheless, other websites on the internet can easily track you. 

 

  • Gmail – It is common to find targeted ads a few seconds into using Google’s search engine. The firm combines its native tracking capabilities with the search engine and Gmail to win sufficient user information. 

 

  • Cookies -These are such a crafty way of accumulating user data. Besides Google, hundreds of thousands of internet businesses use them to collect user information. The worse thing is that cookies are stored on a user’s device. 

 

  • Data Leaks – Despite the company admitting to setting aside massive resources for deploying security and privacy checkups, there is always the chance of bug leak. In 2009, at least 0.5 percent of google doc users had their data leaked following a bug leak. 

 

  • Association with National Intelligence (CIA & NSA) – Google has partnership ties with In-Q-Tel, an investment subsidiary of the CIA. The subsidiary provides cutting edge technologies to Intelligence. Which means they can easily acquire user data from Google if they wanted to. 

 

While it is not that Alphabet Inc (Google’s Parent Company) is an unethical company to just sell your privacy; there lies a formidable risk with such a company owning your financial data. Well if Google coin launched today,  who knows the amount of financial data we would provide them with. The fact is we provide too much data to Google and that would pose a great risk to users of Google Coin.

Tim Draper believes that the fiat to cryptocurrency usage ration will become 50-50 after digital currencies become cheaper and frictionless to operate. He added that the attainment of this ratio will make spending and investing of Cryptocurrencies easier and convenient than it is with dollars. 

With Google, Facebook and other tech companies joining the race to digital money, the ratio outlook is by far possible sooner than later.  A situation that also validates that digital currencies are here to stay. 

Sengupta said: 

“It may be the slightly longer path, but it’s more sustainable. If we can help more people do more stuff in a digital way online, it’s good for the internet and good for us.”

The biggest concerns around Libra and Google Coin lie within regulatory compliance, digital security and data privacy. While data privacy is a growing concern with Facebook,  and Google positioning itself as the ethical outlier of “Never be Evil”; users still have not been able to abandon the consumption of their services. Meanwhile,  Google Coin poses a bigger threat against Bitcoin than Quantum computing. 

When you start with Bitcoin and crypto investment, there are a few important things you should learn, such as market capitalization, trading volume, secure cryptocurrency storage, where you can buy crypto in 2020, etc.
Investing in Bitcoin today is widely considered to be a very risky undertaking. But as per my understanding Investing in cryptocurrency does not have to be difficult or risky. Before taking action, investors clearly need to have a strategy and each responsible trader always does its own research before making an investment in any asset. Make sure yours is done!

 

China Pilot Testing its Digital Currency: Will the Digital Renminbi Challenge the US Dollar in the Currency Wars ?

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The majority of Chinese intellectuals called out over-reliance on the United States Dollar and seemed worried about the safety of Beijing’s massive amount of US dollar reserves. These scholars suggested the diversification of China’s reserve and pressed the government to globalize the Chinese Renminbi.

Against this backdrop to potentially unleash a currency war against the United States amidst heightening tensions with the Trump administration; The central bank of China is on its way to launch the digital renminbi.

Almost overnight, China has transformed into a global economic powerhouse. The nature of money has changed, and with it has come to a cashless payment society in China. Hundreds of Millions of Chinese citizens use popular payment applications to make purchases such applications like WeChat and Alipay. It is easy to see how immensely technology and quantum macroeconomics have redefined the future of money.

Since the inception of Bitcoin in 2009, many people have objected to the concept of fiat money.  Perhaps even challenging the perceived notion of the US dollar as a good store of value.

New Era in the Currency Wars

Now the People’s Bank of China (PBoC) is preparing to test the genesis of a global stable coin. In a bid to solve one of the biggest results of conspiracy in financial crises, several experts believe China’s digital currency marks the beginning of a New Era in the currency wars.It was unlikely that a digital currency could have the potential to challenge national currencies. Yet as it turns out, projects such as the Digital Renminbi and Facebook’s Libra could catalyze a new economic arms race against the US Dollar.

The fact is that programmable algorithms were initially not better storage of value, hence the rise of a volatile bitcoin. A cryptographic asset that could easily skyrocket by $10,000 or even declines to as low as $1000. Invariably, governments and central banks still had an upper hand in the financial ecosystem. However, Bitcoin and other altcoins still maintained a vast potential as mediums of exchange and international remittance.

Meanwhile, China’s Central Bank has been working on digital currency for the past six years in an effort to usurp the US dollar from its reserves. Figures have it that at least 58% of global foreign exchange reserves are held in dollars. While China could create an all parallel new financial ecosystem presently dominated by giants such as Paypal and SWIFT; it is unlikely that it would catch up with the US dollar. China positions its digital Renminbi as a stablecoin. And as it holds, stablecoins are regarded as the quintessential stepping stones towards the mass adoption of digital currencies.

Despite the Central Bank’s statue as one of the most advanced central banks in the world, PBoC shifted its acceleration forward following Facebook’s plan to unveil a global stablecoin. Beijing worried that if Facebook would unleash its currency to approximately 3.0 billion of its Facebook, whatsapp and Instagram users, China’s digital currency would be reduced to nothing. Therefore, the bank geared its effort to complete its work quickly and is currently preparing to launch its first pilot test.

Facebook CEO Mark Zuckerberg was skeptical about the United States laxity to renovate its financial system. The internet mogul referred to the currency war as global competition and guaranteed that his country’s financial leadership was at risk:

“China is moving quickly to launch a similar idea in the coming months,If America doesn’t innovate, our financial leadership is not guaranteed.“

While Libra is tied to a diverse amount of major currencies, the digital renminbi is backed by the regular yuan. Hence, it will be relatively stable. Yet unlike Bitcoin’s decentrality, the central bank will monitor all transactions that take place.

 

Bitcoin didn’t need permission to innovate, Anthony Pompliano to IMF’s Christine Lagarde

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The European Central Bank (ECB) President Christine Lagarde believes that there is a high demand for digital currencies out there and urges ECB to get ahead of the curve on stablecoins.

Speaking during her debut press conference on Thursday, Lagarde stressed about countries considering launching their own stablecoins due to escalating interest received by their respective central banks in the digital currency space. She highlights that ECB should lead the wave of the decentralized domestic currency. However, according to her statements, ECB might propose clear objectives for its upcoming stablecoin by mid next year.

My personal conviction is that give the developments we are seeing, not so much in the bitcoin segment, but in the stable coins projects and we only know of one at the moment but others are being explored and underway at the moment. We’d better be ahead of the curve if that happens because there is clearly a demand out there that we have to respond to.

While she seems adamant about stablecoin, she sidelines Bitcoin – interestingly, the co-founder of Morgan Creek Digital, Anthony Pompliano caught up Legarde’s statement and retorts “Bitcoin didn’t need permission to innovate”.

No amount of committees, press conferences, or business plans is going to help those that are set to be disrupted, tweeted Pomp.

Undoubtedly, the year 2019 witnessed hype on stablecoins. However, China has become quite an active player in adopting the nascent blockchain technology and announcing a few features about its forthcoming digital currency. It’s worth noting that, ECB has previously been questioned if it’s considering the launch of digital currency – but there is no definite response observed so far.

Nevertheless, her latest remark about digital currency certainly reveals ECB’s attempt on accelerating the effort to enter into digital space. In fact, she seeks ECB should be ahead of the curve with digital currency as she sees an upward interest graph received by Canadian and British counterparts.

Disclaimer: The presented information is subjected to market conditions and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

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