What type of CBDC is best?
Here is our pick of the 3 most important Stablecoin news stories during the week.
As noted here many times, Central Banks (with the exception of China) don’t know what type of coin to build, in terms of privacy, use case or how centralized v distributed it should be. In the meantime private firms are getting on with building new coins and more market share.
A French Retail giant will launch a Tezos based stablecoin. The new coin is named after a god in Irish mythology and will go by the ticker symbol EURL. Groupe Casino, a 120-year-old retail company headquartered in France, will reportedly be launching a stablecoin pegged to the Euro. According to journalist Grégory Raymond, the French retail giant will be launching the stablecoin to use in its stores’ loyalty programs as well as for trading. Groupe Casino oversees more than 11,000 stores in France and Latin America.
Convertible central bank digital currencies (CBDCs) offer countries a tantalizing chance to improve vital cross-border payment rails, researchers from the Bank for International Settlements (BIS) wrote in a March note.
Authors Raphael Auer, Philipp Haene and Henry Holden charted one road for cross-border CBDC finance in a detail-heavy research note. They offered a handful of potential mechanisms for multi-CBDC and took some pot shots at the public sector’s inevitable competitor.
A financial expert has hit out at the Russian Central Bank’s digital ruble project, hinting that it amounts to a plan to control the entire financial system – and claiming that if this is the case, it will fail both on the domestic and the international stage.
So in summary, the very characteristics that have drawn so much interest in Central Bank Digital Currencies could be the very ones that cause them to fail. Not a problem if you are a small group of entrepreneurs with big plans, if you fail, no biggie. But if you are a Central bank, failure is not an option.
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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