Central Bankers fight to hold their monopoly.
Here is our pick of the 3 most important Stablecoin news stories during the week.
As the old joke goes “If monopolies are so bad, why is there only one Monopoly commission?” So too with Central Bankers, who are used to having a monopoly on the manufacture, distribution and regulation of money.
Bitcoin was a challenge but whilst it remained relatively small and in the shadows of main street, not really a threat. But Facebook’s Libra changed that. Not because of Facebook as such, but because now it was clear, anyone can make money, distribute it and to a certain extent regulate it.
This week we saw a number of Governments and Central Bankers admit that they will have to up their game if they are to stay in the game.
Firstly, The Bank for International Settlements (BIS) or the Central Bankers Bank, will establish four additional “Innovation Hub” branches – in Toronto, Stockholm, London and a joint location for Paris and Frankfurt – over the next two years in a major expansion of its year-old effort to ponder the future of money. BIS Innovation Hub to expand to new locations in Europe and North America
These new locations, announced Tuesday, “will be well placed to advance work” on digital currency and distributed ledger technology (DLT) alongside other central banking issues including cyber security, artificial intelligence and digital payments, said Innovation Hub chief Benoît Cœuré in a press statement.
At the U.S. Senate Banking Committee Remains Open to Idea of Digital Dollar in Tuesday’s Hearing “Not every U.S. lawmaker is on board with the idea of a central bank digital currency (CBDC) or digital dollar, but no one explicitly rejected it during a hearing of the powerful Senate Banking Committee.”
Meanwhile, Japan takes the first step towards a digital currency with virtual Yen experiment “The Bank of Japan (BoJ) intends to start experimenting with digital versions of the Japanese Yen to test the feasibility of virtual currencies. As reported by Coin Telegraph, the bank issued a report on Thursday — “Technical Hurdles for CBDC” — that noted upcoming experiments with a central bank digital currency (CBDC) could provide an alternative to the traditional Yen.”
And in closing, someone is actually doing more than research as Lithuania becomes first country to trial state-backed digital currency “No one in the Central Bank community was thinking about digital currency seriously before we realized that there is a legitimate threat that someone else will take our space” said Marius Jurgilas, deputy governor of Lithuania’s central bank.
So now we have some real competition in one of the most important functions of society. Let the game commence – healthy competition is fun to watch and can only benefit us all!
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
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