2020: The Year Of Central Bank Digital Currencies

in #btuniverse10 months ago

The banking industry has a strange relationship with cryptocurrency. For years the fight was taken to the alternative money industry. Bankers, rightfully so, viewed these means as a threat to their dominance and power.

Over the past couple of years, we saw a FUD campaign waged in the media. The attacks on Bitcoin and other decentralized cryptocurrencies is relentless. Anyone who is excelling under the present financial system, i.e. Wall Street, hopped on the "attack wagon".

There is an old saying "if you can't beat them, join them". Are we seeing this approach from the banks?


Source

One of the first indications of the change of heart is the fact that many Wall Street institutions started to set up trading desks for cryptocurrencies. This served a two-fold purpose:

For starters, it enables these entities to sell cryptocurrencies to their customers. This has the potential to be a large revenue source, especially as institutions start to dip their toe into the cryptocurrency waters.

The other purpose for the establishment of these desks is to offer security tokens to their clients. This is where the real money resides. With the potential threat to the IPO, Wall Street can fend this off by having the ability to take a company public via security tokens.

It helps that regulators such as the SEC have determined that it is illegal for unregistered entities to sell tokens via an ICO. This attempts to keep control over this facet of the business in the hands of Wall Street.

The next step in the banking conversion appears to be the acceptance of digital currencies by Central Banks. This looks like the trend for 2020 with many looking to bring out their own digital tokens.

China got the most publicity since it is going to bring out a digital version of the Yuan. This is being done in an effort to circumvent the United States and the USD. Having the global reserve currency gives the United States a big advantage over other countries. China, along with Russia, seek to get around this with its own central bank-issued digital currencies.

The expectation is that this idea may spread to other countries around the world. Being a relatively new technology, institutions are taking a slow approach. However, the activity appears to be heating up.

The WEF has published a paper called ‘The Central Bank Digital Currency Policy-Maker Toolkit’. This is said to assist the central banks in designing and launching their own digital currencies.

cryptodaily.co.uk/2020/01/central-bank-taking-over-industry

Here we see a big shift in mindset. The guidelines are being put forth that are going to assist Central Banks in bringing out their own digital currencies. Obviously, once the dam is broken, we are apt to see things spreading very quickly. It is likely that there will be a dozen Central Bank Digital Currencies by the end of the year.

What does this mean for the decentralized cryptocurrency world? It is hard to tell at this point. One thing we do know, the decentralized nature of cryptocurrency makes it impossible to shut down. Therefore, the Central Bank creations are going to have to co-exist with their decentralized counterparts.

There is always the option of outlawing yet again, but the decentralised nature of the technology makes this almost impossible. Couple in the fact that privacy features are being developed and we can see how the regulators might be fighting a losing battle to stop the spread of cryptocurrencies.

Regardless of how everything pans out, the overarching narrative for 2020 remains being about Central Bank issued digital currencies.



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This kind of thing is one of the ways to further blockchain technology. Decentralization is good but some amount of consumer protections and centralization can be good so long as the various options are available to the public discretionary force. Options. That's the major key to the furtherance of crypto adoption.

Ok, @puncakbukit upvoted and resteemed to thousand followers.. Many thanks to approve us as witness and curator.

Great article! Thanks for sharing.

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