Here is our pick of the 3 most important Stablecoin news stories during the week.
CBDC? oh why even bother!
What will a CBDC give us that Tether and Circle don’t already and will they even be as good on privacy and general usability?
The week began when the Bank for International Settlements, or BIS, released a paper on central bank digital currencies, or CBDCs, and how they can be used to meet policy goals for financial inclusion. The paper drew on interviews conducted in the second half of last year at nine central banks that are currently exploring retail CBDCs. It looked at common goals across a range of economic development levels and challenges to inclusion.
Two things really stood out to me, firstly, how little importance they are putting on enabling P2P payments and Better Privacy. Do they realise what they will be competing against?
And secondly how Digital Cash leads the motivations. Do you need a CBDC for Digital cash?
As if on que in the USA, Stephen Lynch, a member of Congress who chairs the Task Force on Financial Technology, introduced the Electronic Currency and Secure Hardware Act on March 28, which would develop “an electronic version of the U.S. Dollar for use by the American public.” Guess what he doesn’t want a CBDC!
Finally, we saw the number 2 market leader close a large investment round which included NYC-based BlackRock Inc., which is the world’s top asset management firm with around $9.5 trillion in total assets under management (AUM) announced in a press release, Circle said that it had “entered into an agreement for a $400M funding round with investments from BlackRock, Inc., Fidelity Management and Research, Marshall Wace LLP and Fin Capital” and that “the funding round is expected to close in the second quarter.”
So in summary, this week we saw the CBDC talkfest disappear up its own backside, while the players in the privately issued stablecoins build a war chest for further consumer and Institutional adoption.
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years. Twitter @Alan_SmartMoney
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