IMF Expects Launch Of Central Bank Digital Currency

IMF Expects Launch Of Central Bank Digital Currency
July 2, 2019

 

The cryptocurrency market remains in a correction mode which started last Saturday. Bitcoin (BTC), which hit a high of $13,980, has lost about 30% in the past five trading sessions to trade at $10,344 at the time of writing this article. In the past 24 hours, Bitcoin has lost 6.5%. Similarly, Ethereum (ETH) has lost 3.6% to trade at $288.80. Except for Binance Coin (BNB), which is trading flat compared to yesterday, all other of the top 20 altcoins are trading with a loss of -0.6% to 6%. This includes Litecoin (LTC-$119.21, -5.1%), Monero (XMR-$87.25, -3.5%), IOTA (MIOTA-$0.3965, -2.9%), Ripple (XRP-$0.4020, -2.8%), Tron (TRX-$0.0321, -3.5%) and EOS (EOS-$5.92, 0.9%), Stellar (XLM-$0.1036, -5.5%) and Cardano (ADA-$0.08192, -4.2%).

 

Government level initiatives

R&D division of RBI building a blockchain system for banking

The R&D division of Reserve Bank of India (RBI) is building a blockchain system for banking. The blockchain platform, planned to be introduced next year, will be used by several applications run by banks. As per RBI’s R&D division, the Institute for Development and Research in Banking Technology, the platform is “for blockchain applications for the government in banking.”

Even though RBI is taking blockchain related initiatives, it does not support cryptocurrencies. Two months earlier, the RBI stated that only blockchain associated projects would be allowed to use its regulatory sandbox venture. All other cryptocurrency ventures, including ICOs (initial coin offerings) and cryptocurrency exchanges, will not be permitted.

Earlier this month, the Economic Times magazine reported that Facebook would not attempt to register its forthcoming digital currency Libra with the RBI as the central bank has already issued a blanket ban in servicing firms involved in cryptocurrency related business.

 

Private sector initiatives

Dukascopy developing a native cryptocurrency, Dukascash

Dukascopy, an online bank based out of Switzerland, is creating its native cryptocurrency. The stable coin, which will be based on Ethereum blockchain, will be pegged to the US dollar, Swiss franc, and the euro. The stable coin, which will adopt ERC-20 standard, has been named “Dukascash.” Based on consumer demand, more stable cryptocurrencies are planned to be added.

“The initial Dukascash tokens tranches of roughly CHF 10 million or equivalent in each base currency will be issued and initially kept by the Bank as ‘unreleased’ tokens. Additional Dukascash tokens will be issued in tranches, depending upon client demand. Small portions (up to CHF 100,000) of unreleased Dukascash tokens will then be released in favor of the Bank to enable it to sell Dukascash tokens to clients.”

Dukascopy intends to begin testing the stable coin on July 3rd. The bank also wants to offer a custody service for Dukascash tokens and permit its customers to pay for its services with the stable coins. The bank will use a 1:1 exchange rate while receiving payment for its services.

 

Brimhall Foods collaborates with Surge Holdings

Brimhall Foods, the US-based snack food firm, has collaborated with Surge Holdings to offer its BRIM’s products via a blockchain powered ordering system.

Specifically, SurgePays blockchain network will be used by BRIM to gain access to several thousands of new stores. Brian Cox, CEO of Surge Holdings, revealed that BRIM would offer 15 products to begin with. Cox further elaborated by saying that products can be ordered and restocked by their bodegas, corner markets, and convenience stores.

Terry Brimhal, President of Brimhall Foods Company, stated that the collaboration would permit Brimhall to access “tens of thousands of additional retail locations” without a need to increase the strength of its sales team and distribution network.

 

Miscellaneous

Central banks might release their own cryptocurrencies in the future

A document published by the International Monetary Fund (IMF) indicates that the global financial institution believes that central banks may come up with their own version of cryptocurrencies in the future. The document was created based on a survey conducted by the IMF and World Bank on financial technology. The conclusion was made based on the 96 responses received from financial institutions of all member countries.

The document claims that central banks in different countries are looking at the possibility of launching Central Bank Digital Currency (CBDC) in some form or other. Notably, Uruguay has already launched a CBDC trial program, while China, Bahamas, Sweden, Eastern Caribbean Currency Union, and Ukraine are “on the verge” of trialing their systems.

Furthermore, several central banks are researching CBDC’s likely influence on financial stability, banking sector framework, monetary policy implementation, and the arrival of non-banking financial institutions.

The report points out that there are varieties of reasons for the eagerness in launching CBDC. Even though emerging and developed economies are looking at CBDC options, the objective is different. While developed economies wish to introduce CBDC as an alternative to cash due to a steep decline in the use of fiat money, emerging economies want to use it for minimizing banking costs and also provide transaction facilities even to unbanked citizens.

However, there is one similarity among central banks with regard to CBDCs. None of them wish the crypto to support anonymous transactions.

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Sammy

Sammy

Sammy is our forex expert, with over 20 years experience in the financial sector, she will be keeping you up to date with the ups and downs of currencies around the world


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