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<ul class="summary-list"><li><keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">Crypto</keyword> assets like <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> are getting nearer to posing a financial stability risk, a top Bank of England official warned.</li><li>Because cryptos are growing very fast, they are becoming more integrated with the financial system, Jon Cunliffe said.</li><li>Regulators and legislators need to "think very hard" about the risks closing in, he said.</li></ul>Crypto assets like <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> are evolving so rapidly that they are becoming more of a potential threat to the global financial system, Bank of England's deputy governor Jon Cunliffe has warned."On the question of bitcoin and other crypto assets and their value, my judgement is they are not at the moment a financial stability risk," he said, speaking in an <a href="https://www.bbc.co.uk/sounds/play/m0011l02">interview</a> with BBC Radio 4 on Monday."But they are growing very fast, and they are becoming integrated more into what I might call the traditional financial system," he added. "So the point at which they pose a risk is getting closer, and I think regulators and legislators need to think very hard about that."Crypto assets have exploded in popularity, and their total market capitalization has swelled from $463.4 billion a year ago to $2.8 trillion today, according to CoinGecko data. But regulators are still working on developing rules to oversee the evolving space.Cunliffe has previously raised a red flag over what happens if cryptocurrencies' typically high volatility spills over into traditional <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>. He said in October that a crash in <a href="https://markets.businessinsider.com/news/currencies/cryptocurrency-collapse-plausible-boe-deputy-governor-cunliffe-defi-regulation-crash-2021-10">crypto markets</a> is plausible.The International Monetary Fund <a href="https://www.imf.org/en/Publications/GFSR/Issues/2021/10/12/global-financial-stability-report-october-2021">warned</a> the same month about the dangers of excessive speculation and the potential for "runs" on seemingly stable assets.But Cunliffe has also said the UK's central bank has started finding ways to manage risks in decentralized finance, where peer-to-peer transactions on the blockchain deliver financial services without a go-between bank or broker.The BoE has <a href="https://markets.businessinsider.com/news/currencies/bank-of-england-britcoin-digital-currency-cbdc-consultation-china-crypto-2021-11">started talking to the financial industry and tech companies</a> to find out whether to issue its own <keyword id="11892695" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword>, a digital pound nicknamed "Britcoin." But the central bank digital currency, or <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword>, is unlikely to be launched until after 2025.Even so, Cunliffe told Radio 4 the central bank digital currency, or CBDC, could "anchor and hold together our monetary system.""The way we live and the way we transact is changing all the time. Our lives are ... becoming more digital. And as that happens, the way we use money and the money we hold changes," the deputy governor said."The question is whether the public at large — businesses, households — should really have the option of using and holding the safest money, which is Bank of England money, in their everyday lives."Cunliffe also highlighted that digital money projects from the likes of Facebook, whose stablecoin Libra is now known as Diem, are not a concern for US regulators yet."There are proposals from new players who are not banks, including some of the big tech platforms — some of the social media platforms — to come into the world and issue their own money," he said. "But I think those proposals don't yet exist at scale. So I don't think we're behind the curve here on the regulation and management of crypto assets."

Bitcoin is getting closer to posing a risk to financial stability, the Bank of England's deputy governor warns

<ul class="summary-list"><li>US President Joe Biden is reportedly set to sign an executive order aimed at unifying the government's oversight of the cryptocurrency market.</li><li>The order is expected to direct federal agencies to study potential regulations and policies for digital currencies. </li></ul>US President Joe Biden will sign an executive order that directs federal agencies to study and craft a comprehensive plan that would unify the government's oversight of the cryptocurrency market, according to news reports. The order is expected to be signed this week and should describe what the <keyword id="11898864" type="UNKNOWN" weightage="60" keywordseo="treasury-department" source="Orion">Treasury Department</keyword> and other government agencies need to do to develop regulations and policies on digital currencies, the <a href="https://apnews.com/article/russia-ukraine-cryptocurrency-biden-technology-business-09760647fcae7fb0f791eeb84fc4f80a">Associated Press reported Monday.</a> Two sources told the AP that work on the order began well before Russia's invasion of Ukraine nearly two weeks ago. The <keyword id="11908406" type="UNKNOWN" weightage="60" keywordseo="biden-administration" source="Orion">Biden administration</keyword> has been concerned about the use of <keyword id="11895317" type="UNKNOWN" weightage="60" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword> by Russia to side step international sanctions stemming from the war it launched against the former Soviet republic. There is no one regulatory agency that oversees the cryptocurrency market which last year swelled to a value of more than $3 trillion. The value has declined to $1.8 trillion as of Tuesday on pullbacks in prices for <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a>, <a href="https://markets.businessinsider.com/currencies/eth-usd">ether,</a> and other digital currencies. Biden's executive order will require government agencies later this year to report on what they're doing related to digital tokens, <a href="https://www.bloomberg.com/news/articles/2022-03-07/biden-to-sign-crypto-order-as-industry-faces-sanctions-pressure?sref=GUP2BhaG">Bloomberg reported</a>, adding that the directive is also expected to address the possibility of the US issuing a central bank digital currency, or <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword>. But the administration may hold off on taking a firm position on the creation of a US CBDC as the <a href="https://www.bloomberg.com/quote/13598Z:US">Federal Reserve</a> is still studying the issue, the report said.

Biden is preparing to sign an executive order to expand US oversight of the $2 trillion cryptocurrency market

<ul class="summary-list"><li>A new report from the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> opened the door to debate around a <keyword id="11939356" type="UNKNOWN" weightage="60" keywordseo="central-bank-digital-currency" source="Orion">central bank digital currency</keyword>.</li><li>The <keyword id="11894209" type="UNKNOWN" weightage="60" keywordseo="fed" source="Orion">Fed</keyword> avoided taking a side for or against the idea and instead raised a number of pros and cons.</li></ul>Cryptocurrencies' ascent to global stardom put governments on alert. Some, like China and Sweden, are already tinkering with digitizing their own currencies. Now the Federal Reserve is dipping its toes in the water.The Federal Reserve still hasn't sided for or against a <keyword id="11964297" type="UNKNOWN" weightage="60" keywordseo="central-bank" source="Orion">central bank</keyword> digital currency, but a new report lays out the potential benefits and risks of fully digitizing the US dollar.The Fed kickstarted the debate over a US central bank digital currency on Thursday, publishing a highly anticipated <a href="https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf">report</a> on the topic. A <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> would serve as a purely digital version of cash that's backed by the Fed and just as available to the public as physical cash. It wouldn't require the same deposit insurance that banks need for cash, and it wouldn't need to be backed by a physical asset.A Fed-backed <keyword id="12998637" type="UNKNOWN" weightage="60" keywordseo="digital-dollar" source="Orion">digital dollar</keyword> would then provide many of the benefits touted by cryptocurrencies without their wild price swings and usage fees. In theory, a CBDC would meld the best aspects of physical and digital currencies for the average American.A CBDC likely wouldn't feel all that different from a regular dollar. People already use digital cash when they shop with credit or debit cards, but in those situations, the currency is backed by private-sector banks. Should the Fed introduce a CBDC, Americans would be able to shop with a digital dollar backed by the country's central bank. If that sounds outlandish, it shouldn't; physical dollar bills are already backed by the Fed, not by commercial banks.The Fed stopped short of taking a position on a CBDC, saying it first aims to engage with the public, Congress, and other stakeholders on the topic. Still, the Thursday report detailed a handful of reasons why such a currency would benefit the country and serve as a better medium for spending than the commonly traded cryptocurrencies that have seen adoption explode over the past few years.<h2>A CBDC could bring safe, fast, and accessible payments</h2>Cryptocurrencies surged in popularity partly due to their use in real-time, peer-to-peer payments. A CBDC could offer the same. Transactions with a CBDC would be "final and completed in real time," and could be used for everything from buying groceries to receiving government stimulus, according to the report.The digital cash would also be free from credit risk, liquidity risk, and, perhaps most importantly, the volatility that makes spending with crypto so unreliable. Stablecoins, or cryptocurrencies that aim to fix their exchange rate with a more conventional currency like the dollar, address some of the volatility problem, but a recent <a href="https://home.treasury.gov/system/files/136/StableCoinReport_Nov1_508.pdf">report</a> from the President's Working Group on Financial <keyword id="11893875" type="UNKNOWN" weightage="60" keywordseo="markets" source="Orion">Markets</keyword> found gaps in the authority of regulators to address some stablecoin risks.A CBDC would also allow for more flexible transacting, the Fed said. Payments could be scheduled for certain times and used for small transfers that traditional systems might not allow for. And while services like PayPal and Venmo already have some of these capabilities, a CBDC would allow users to make such transfers without a private third party.<keyword id="12197645" type="UNKNOWN" weightage="60" keywordseo="cbdcs" source="Orion">CBDCs</keyword> could even improve cross-border payments, but such gains would take time to materialize. International CBDC transfers would require new infrastructure, government coordination, and enforcement to curb illicit finance. Still, a future network of CBDC could do away with transfer fees and long settlement times.<h2>A CBDC would come with 21st-century risks</h2>A fully digitized dollar would come with its fair share of pitfalls, the Fed warned. For one, allowing the Fed to back digital payments could "fundamentally change the structure of the US financial system," according to the report. Commercial banks rely on deposits to dole out loans, but a CBDC could replace cash held in commercial banks with digital wallets offered by the private sector. That could make it far more difficult for people to take out loans.The stability of a CBDC could also spark runs on commercial banks in times of economic uncertainty, the Fed said. Traditional measures used to prevent massive outflows from banks would be inefficient if people rushed to convert their bank holdings into CBDC.Implementation of a Fed-backed digital dollar could even erode the central bank's policy power. By changing the amount of reserves in the financial system, a CBDC could affect how the Fed sets interest rates and steers inflation. The Fed would likely need to boost its level of reserves just to accommodate fluctuations between outstanding cash, bank reserves, and CBDC holdings.Introduction of a CBDC, risks and all, would make for "a highly significant innovation in American money," the Fed said. The central bank is set to take comments on the matter until May 20, when it is expected to further mull the currency's pros and cons. While the future of a digitized dollar remains uncertain, the Fed's report unequivocally opens the door to such a project.

A fully digital US dollar would be a better online currency than crypto, new Fed report suggests

<ul class="summary-list"><li>Benoit Coeure, head of the <keyword id="12010620" type="UNKNOWN" weightage="60" keywordseo="bis" source="Orion">BIS</keyword> Innovation Hub, urged central banks to speed up their work on digital cash.</li><li>In a speech in Ljubljana, he said digital currencies should ensure price and financial stability.</li><li>He said they must up the pace because "<keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">stablecoins</keyword> and <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> assets are already here".</li></ul>The Bank for International Settlements is urging central banks to crank up their efforts in developing their own digital currencies while the current financial system is still in place, because stablecoins and cryptocurrencies are already a reality.Benoit Coeure, who is head of the BIS Innovation Hub, said central bank digital currencies (CBDCs) should be easy to use, low cost, convertible, offer instant settlements, continuously available and offer a high degree of security, resilience, flexibility and safety. But they're competing with cryptocurrencies like <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> and ether, as well as stablecoins, which are pegged to the likes of the dollar, or gold, and central banks will need years to develop digital cash that is fit for purpose, he said."The time has passed for central banks to get going. We should roll up our sleeves and accelerate our work on the nitty-gritty of <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> design. CBDCs will take years to be rolled out, while stablecoins and crypto-assets are already here. This makes it even more urgent to start," Coeure said in a speech at the Eurofi Financial Forum in Ljubljana.Cryptocurrencies like bitcoin and stablecoins, such as <keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">tether</keyword>, have surged in popularity recently, prompting concern among central banks over the risk these assets may pose to the stability of the financial system. And so many are actively looking into, and even developing, their own CBDCs. "Banks are worried about the implications of CBDCs for customer deposits. Central banks are mindful of these concerns and are working on answers. They see banks as part of future CBDC systems," Coeure said. "But make no mistake: global stablecoins, DeFi platforms and big tech firms will challenge banks' models regardless," he said.China is already trialling a digital version of the yuan, while the Bahamas have issued the "sand dollar" and Nigeria this week said it would pilot its "e-naira" next month. Major central banks such as the Federal Reserve, the Bank of England and the European Central Bank are still very much at the exploratory stage. The BIS innovation hub, which focuses on "<a href="https://www.bis.org/about/bisih/about.htm">critical</a> trends in technology affecting central banks", and the central banks of Australia, Malaysia, Singapore and South Africa announced they are working on "Project Dunbar", which will run trials of cross-border payments in <a href="https://markets.businessinsider.com/news/currencies/australia-cbdc-malaysia-singapore-south-africa-china-crypto-bitcoin-2021-9">CBDCs</a>. "A CBDC's goal is ultimately to preserve the best elements of our current systems, while still allowing a safe space for tomorrow's innovation. To do so, central banks have to act while the current system is still in place - and to act now," Cœuré, who previously served on the executive board of the European Central Bank, said.

Central banks must 'roll up their sleeves' and urgently speed up their work on their own digital currencies before crypto upends the current financial system, the BIS says

<ul class="summary-list"><li>The <keyword id="45672" type="ORGANIZATION" weightage="60" keywordseo="Fed">Fed</keyword> warned about cryptocurrencies for the first time in its Monetary Policy Report.</li><li>It was a single sentence in the 75-page semi-annual report published Friday.</li><li>"The surge in the prices of a variety of crypto assets also reflects in part increased risk appetite," the report said.</li></ul>The <keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> warned about cryptocurrencies and their price volatility for the first time in its <a href="https://www.federalreserve.gov/monetarypolicy/files/20210709_mprfullreport.pdf">Monetary Policy Report</a> published Friday."The surge in the prices of a variety of crypto assets also reflects in part increased risk appetite," the report, written by the board of governors, said.The lone sentence in the 75-page semi-annual report was inserted in the middle of a discussion of risky assets, which the central bank said have generally increased in the first half of 2021. Risk appetite of investors has been buoyed by the accelerating pace of economic reopening, equity market indexes reaching record highs, the ratio of prices to forecasts of earnings remaining elevated, and yields on corporate bonds and leveraged loans remaining low, among others, the report said.Still, the central bank said it is confident <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> will withstand future headwinds. "While some financial vulnerabilities have increased since February, the institutions at the core of the financial system remain resilient," the report, meant to be presented to the US Congress, added. Like many central banks around the world, the Fed is still figuring out the most sustainable and effective ways to approach the rapidly evolving $2 trillion cryptocurrency space.Fed Chair <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> <a href="https://markets.businessinsider.com/news/stocks/crypto-regulation-cbdc-jerome-powell-coinbase-brian-armstrong-giancarlo-meeting-2021-7">met with Brian Armstrong</a>, the CEO of <a href="https://markets.businessinsider.com/stocks/coin-stock?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">Coinbase</a>, on May 11, as well as crypto backer Christopher Giancarlo the next day, according to an entry in his <a href="https://www.federalreserve.gov/foia/chair-powell-calendar-052021.htm" target="_blank" rel="noopener">monthly calendar</a>.<keyword id="362955" type="PERSON" weightage="60" keywordseo="Powell">Powell</keyword> on May 20 also revealed that the Fed has taken further steps in its <a href="https://markets.businessinsider.com/currencies/news/federal-reserve-central-bank-digital-currency-cbdc-research-report-summer-2021-5">exploration of a digital currency</a> and will be releasing a discussion paper this summer outlining its current thinking on digital payments.Cryptocurrencies, after breaching record highs earlier this year and seeing a <a href="https://markets.businessinsider.com/currencies/news/crypto-market-value-47-percent-lost-7-days-2021-5">massive crash in May</a>, have been trading sideways in recent weeks. The largest and most popular cryptocurrencies are still up for the year. B<a href="https://markets.businessinsider.com/currencies/btc-usd">itcoin</a> and <a href="https://markets.businessinsider.com/currencies/eth-usd">ether</a> are up 250% and 777% respectively in the last 12 months.

The Fed warned about crypto for the first time in its review of financial risks

<ul class="summary-list"><li><keyword id="6358584" type="UNKNOWN" weightage="60" keywordseo="HSBC">HSBC</keyword> chief <keyword id="799166" type="PERSON" weightage="60" keywordseo="Noel-Quinn">Noel Quinn</keyword> said that the bank has no plans of initiating a crypto desk nor offering these to clients, <a href="https://www.reuters.com/article/hsbc-hldg-bitcoin/exclusive-hsbc-ceo-says-bitcoin-not-for-us-idUSL2N2NB0KO">Reuters reported</a>.</li><li>He cited the volatility of cryptocurrencies as the reason, as well as a lack of transparency.</li><li>The statement is in contrast to other major banks such as UBS, <a href="https://markets.businessinsider.com/stocks/gs-stock?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">Goldm</a>a<a href="https://markets.businessinsider.com/stocks/gs-stock?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">n Sachs</a>, and Morgan Stanley, which have all recently added crypto services. </li></ul>HSBC chief Noel Quinn on Monday said that his bank has no plans of initiating a <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword> desk nor offering these to clients, <a href="https://www.reuters.com/article/hsbc-hldg-bitcoin/exclusive-hsbc-ceo-says-bitcoin-not-for-us-idUSL2N2NB0KO">Reuters first reported</a>. The CEO of Europe's largest bank cited the volatility of cryptocurrencies as the reason, as well as a lack of transparency in the digital assets. "Given the volatility, we are not into <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword> as an asset class, if our clients want to be there then of course they are, but we are not promoting it as an asset class within our wealth management business," Quinn told Reuters.The statement of Quinn comes after China reiterated its call to <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-reaction-china-reiterates-crypto-mining-trading-crackdown-2021-5-1030455767">restrict bitcoin mining and trading activities</a> Friday, sending the world's largest cryptocurrency spiraling further by 11% that day, after an already bloody seven-day sell-off that caused it to lose around 50% of its value from this year's peak. Bitcoin was trading 6.97% higher to $37,745 as of 8:25 a.m. ET Monday.The move also comes in contrast with other major banks such as <a href="https://markets.businessinsider.com/stocks/ubs-stock">UBS</a>, which is reportedly in talks to <a href="https://markets.businessinsider.com/currencies/news/ubs-crypto-conisders-offering-cryptocurrency-investments-wealthy-clients-bitcoin-2021-5-1030409217">offer cryptocurrency investments to its wealthy clients.</a> <a href="https://markets.businessinsider.com/stocks/gs-stock?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">Goldman Sachs</a> meanwhile recently announced it will trade <a href="https://markets.businessinsider.com/currencies/news/goldman-sachs-bitcoin-derivatives-investors-crypto-futures-2021-5-1030398903?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">non-deliverable forwards</a>, a derivative product tied to <a href="https://markets.businessinsider.com/currencies/btc-usd?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestedium=ingest" target="_blank" rel="noopener">bitcoin</a>'s price, and <a href="https://markets.businessinsider.com/stocks/ms-stock">Morgan Stanley</a>, which in March was the first major American bank to <a href="https://www.businessinsider.com/bitcoin-morgan-stanley-to-offer-wealthy-clients-btc-fund-access-2021-3">offer its wealth management clients</a> access to <a href="https://markets.businessinsider.com/currencies/btc-usd?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">bitcoin</a> funds."I view bitcoin as more of an asset class than a payments vehicle, with very difficult questions about how to value it on the balance sheet of clients because it is so volatile," he told Reuters.The CEO did say he was more bullish on central bank digital currencies."CBDCs can facilitate international transactions in e-wallets more simply, they take out friction costs and they are likely to operate in a transparent manner and have strong attributes of stored value," he told Reuters.Federal Reserve Chair Jerome Powell on May 20 revealed that the <a href="https://markets.businessinsider.com/currencies/news/federal-reserve-central-bank-digital-currency-cbdc-research-report-summer-2021-5-1030452795">central bank has taken further steps in its exploration of a digital currency</a> and will be releasing a discussion paper this summer outlining its current thinking on digital payments.A <a href="https://markets.businessinsider.com/news/stocks/fed-boston-president-rosengren-cbdc-central-bank-digital-currency-launch-2021-5-1030422818?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">number of central banks</a> worldwide have been exploring CBDCs, spurred by strong momentum in the cryptocurrency space this year.China has been leading the race since developing its digital currency electronic payment <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword> in 2014 and testing a pilot program in 2020.In April, Norway announced it would <a href="https://markets.businessinsider.com/currencies/news/norway-central-bank-digital-currency-after-4-years-research-2021-4-1030334599?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestedium=ingest" target="_blank" rel="noopener">start testing various solutions for a CBDC</a>, while the UK said it is <a href="https://markets.businessinsider.com/currencies/news/crypto-uk-bank-of-england-backed-britcoin-cryptocurrencies-btc-2021-4-1030318483?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingesttm_medium=ingest" target="_blank" rel="noopener">coordinating exploratory work on a potential CBDC</a>, dubbed "Britcoin."

HSBC CEO reportedly says the bank will not expand its businesses into bitcoin, citing volatility in the cryptocurrency

<ul class="summary-list"><li>Fed Chair Jerome Powell revealed on Thursday that the central bank has taken further steps in its exploration of a <keyword id="1624829" type="PERSON" weightage="60" keywordseo="digital-currency">digital currency</keyword>.</li><li>Powell said the Fed will release a research report this summer outlining their current thinking on digital payments.</li><li>The Fed chief also said cryptocurrencies have not found a way to make payments convenient, blaming their volatile price swings.</li></ul><keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> Chair Jerome Powell on Thursday revealed that the central bank has taken further steps in its exploration of a digital currency and will be releasing a discussion paper this summer outlining its current thinking on digital payments.Powell in a <a href="https://www.federalreserve.gov/newsevents/pressreleases/other20210520b.htm">video published on Thursday</a> highlighted how technological advancements have enabled the bank to develop a <keyword id="6472011" type="UNKNOWN" weightage="60" keywordseo="Central-Bank-Digital-Currency">central bank digital currency</keyword>, or <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword>.A CBDC is a type of central bank liability - just like the US dollar - issued in digital form, which could be designed for use by the general public.The chairman noted that the central bank has been exploring the benefits and risks of a CBDC in the past, focusing on whether it could improve what he said is the "already safe, effective, dynamic, and efficient" domestic payments system in the US."We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks," he said.The <a href="https://www.bostonfed.org/news-and-events/press-releases/2020/the-federal-reserve-bank-of-boston-announces-collaboration-with-mit-to-research-digital-currency.aspx" target="_blank" rel="noopener">Boston Fed teamed up with the Massachusetts Institute of Technology</a> in August 2020 for a multi-year collaboration to explore CBDCs with the <a href="https://dci.mit.edu/" target="_blank" rel="noopener">Digital Currency Initiative.</a>Powell said the forthcoming discussion paper is meant to "stimulate broad conversation" from the public and elected officials on issues related to payments, financial inclusion, data privacy, and information security.He added that the design of a CBDC needs to look into monetary policy, financial stability, consumer protection, legal, and privacy considerations, among others."Irrespective of the conclusion we ultimately reach, we expect to play a leading role in developing international standards for CBDCs, engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process," the chair said.A <a href="https://markets.businessinsider.com/news/stocks/fed-boston-president-rosengren-cbdc-central-bank-digital-currency-launch-2021-5-1030422818">number of central banks</a> have been exploring CBDCs spurred by strong momentum in the <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword> space this year.China has been leading the race since developing its digital currency electronic payment CBDC in 2014 and testing a pilot in 2020.In April, Norway - the <a href="https://www.norges-bank.no/en/news-events/news-publications/Speeches/2020/2020-11-05-bache/" target="_blank" rel="noopener">world's most cashless country</a> - announced it would <a href="https://markets.businessinsider.com/currencies/news/norway-central-bank-digital-currency-after-4-years-research-2021-4-1030334599?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">start testing various solutions for a CBDC</a>, while the UK said it is <a href="https://markets.businessinsider.com/currencies/news/crypto-uk-bank-of-england-backed-britcoin-cryptocurrencies-btc-2021-4-1030318483?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestedium=ingest" target="_blank" rel="noopener">coordinating exploratory work on a potential CBDC</a>, dubbed "Britcoin."The comment of the Fed chief comes just hours after the Treasury Department revealed its plans to have any <a href="https://markets.businessinsider.com/currencies/news/us-treasury-crypto-transfer-10000-reported-irs-taxes-bitcoin-btc-2021-5-1030452403">cryptocurrency transfers of at least $10,000 be reported</a> to the Internal Revenue Service.The global cryptocurrency space saw a seven-day sell-off that <a href="https://markets.businessinsider.com/currencies/news/crypto-market-value-47-percent-lost-7-days-2021-5-1030447473?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">wiped out 47% of its </a><a href="https://markets.businessinsider.com/currencies/news/crypto-market-value-47-percent-lost-7-days-2021-5-1030447473?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">entire market valuation</a> on Wednesday. But on Thursday, the market cap came in at $1.86 trillion, climbing 37% from the previous session's low of $1.35 trillion, according to <a href="https://coinmarketcap.com/charts/" target="_blank" rel="noopener">data from CoinMarketCap.com</a>."To date, cryptocurrencies have not served as a convenient way to make payments, given, among other factors, their swings in value," Powell said.Former Fed chief and now Treasury Secretary Janet Yellen has, in the past, <a href="https://markets.businessinsider.com/currencies/news/janet-yellen-bitcoin-is-an-extremely-inefficient-way-to-transact-2021-2-1030109052">cast her doubts on cryptocurrencies</a>, particularly bitcoin."To the extent it is used, I fear it's often for illicit finance," Yellen told the <a href="https://www.nytdealbookconference.com/dealbookdc2020/827493" target="_blank" rel="noopener">DealBook DC Policy Project</a> in February. "It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer."Read more: <a href="https://www.businessinsider.com/cryptocurrency-crash-explained-causes-should-i-sell-buy-the-dip-2021-5" target="_blank" rel="noopener">7 crypto heavyweights told us what's behind the sudden sell-off that erased over $400 billion from the market in just 24 hours - and whether now is the time to 'buy the dip'</a>

The Fed is advancing its efforts to develop a digital currency - and says it will publish a research report this summer

<ul class="summary-list"><li><keyword id="219358" type="PERSON" weightage="60" keywordseo="Mark-Cuban">Mark Cuban</keyword> said <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword> are the future, especially as the world recovers from a pandemic.</li><li>The billionaire outlined the two reasons why he thinks the country should shift to digital currencies.</li><li>Cuban is among the high-profile crypto bulls, and is a particularly vocal backer of meme-based <keyword id="1985091" type="PERSON" weightage="60" keywordseo="dogecoin">dogecoin</keyword>. </li></ul>As the cryptocurrency market continues to skyrocket - hitting $1 trillion in February to double its market capitalization in just three months - enthusiasts such as Mark Cuban are increasing calls for the world to embrace digital and decentralized money.Cryptocurrencies, the billionaire said, are the future, especially as the world recovers from once-in-a-generation pandemic.On a podcast hosted by actor <a href="https://podcasts.apple.com/us/podcast/supply-and-demand-undefeated-w-mark-cuban/id1510058141?i=1000520407488">Rob Lowe</a>, Cuban outlined the two big reasons why he thinks the country should shift to digital currencies:<h3>More access</h3>The billionaire investor discussed the hurdles involving in receiving and cashing stimulus checks faced by many Americans during the pandemic, whether the came via direct deposit or by mail. He also touched on the <a href="https://www.businessinsider.com/americans-access-stimulus-checks-irs-banks-weekend-2021-3">number of days banks need to clear the checks</a>, pointing to the friction points still encountered when dealing with traditional financial institutions."The people who needed the money the most got it to slowest," he told Lowe. "If everybody had a digital bank account, with or without digital coins, the money would just go just like that, right into your account from the Treasury, whenever there was a stimulus."<h3>Lower costs</h3>The billionaire also added that transaction costs would drop significantly with digital assets. While the cost of producing pennies, nickels, and dimes, is less than their actual value, the US Mint <a href="https://www.coinnews.net/2021/02/23/penny-costs-1-76-cents-to-make-in-2020-nickel-costs-7-42-cents-us-mint-realizes-549-9m-in-seigniorage/#:~:text=Penny%20Costs%201.76%20Cents%20to%20Make%20in%202020%2C%20Nickel%20Costs,Realizes%20%24549.9M%20in%20Seigniorage">allocates billions of dollars yearly to produce these coins</a>. For the fiscal year last year, the bureau responsible for producing coinage for the US spent roughly $618 billion to produce all the coins combined, according to a <a href="https://www.coinnews.net/2021/02/23/penny-costs-1-76-cents-to-make-in-2020-nickel-costs-7-42-cents-us-mint-realizes-549-9m-in-seigniorage/#:~:text=Penny%20Costs%201.76%20Cents%20to%20Make%20in%202020%2C%20Nickel%20Costs,Realizes%20%24549.9M%20in%20Seigniorage">Coin News report</a>. "Then there's just the physical dealing with it for retailers, which is expensive, and for banks, which is expensive," he said. "Then there's the sanitary side."There are no cons to moving to digital currency, he said. The only problem is that people are resistant to change."Who wants to know what a digital wallet is, or wants to deal with setting up a new type of account?" Read more: <a href="https://www.businessinsider.com/bitcoin-ether-prices-will-reach-100k-10k-fundstrat-digital-assets-2021-5" target="_blank" rel="noopener">Fundstrat's head of digital assets research walks us through his $100,000 and $10,500 year-end price targets for bitcoin and ether - and shares the 8 tokens he's bullish on</a>The billionaire has long been an advocate of digital currencies. The <keyword id="218068" type="ORGANIZATION" weightage="60" keywordseo="Dallas-Mavericks">Dallas Mavericks</keyword>, which Cuban owns, began <a href="https://markets.businessinsider.com/currencies/news/mark-cubans-dallas-mavericks-will-accept-dogecoin-for-tickets-2021-3-1030151539">accepting the cryptocurrency</a> as payment for tickets and merchandise earlier this year. He also suggested to TV host Ellen DeGeneres that she should allow the use of dogecoin as payment for her show's merchandise.Cryptocurrencies have soared in 2021 - with <a href="https://markets.businessinsider.com/currencies/btc-usd?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">bitcoin</a> rising 95% year to date, <a href="https://markets.businessinsider.com/currencies/etc-usd">ether</a> surging 380%, and <a href="https://markets.businessinsider.com/currencies/doge-usd">dogecoin</a> skyrocketing an astounding 13,000%.This month, a non-profit called Digital Dollar Project <a href="https://www.businesswire.com/news/home/20210503005330/en/Digital-Dollar-Project-to-Launch-Pilot-Programs-to-Explore-Designs-and-Uses-of-a-U.S.-Central-Bank-Digital-Currency">announced</a> that it will launch at least five pilot programs to test the viability of a US central bank digital currency over the next 12 months.CBDCs, digital versions of banknotes, are meant to be more instantaneous and seamless thanks to digital processing. To date, a number of central banks have been exploring CBDCs spurred by a rapidly growing crypto space and competition from central banks around the world.

Mark Cuban explains why crypto is the future, especially as the world recovers from a generational pandemic

<ul class="summary-list"><li><keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies" source="Orion">Cryptocurrencies</keyword> will survive, but their use may be limited by central bank digital currencies, Deutsche Bank said.</li><li>The report says cryptocurrencies will become stronger and more usable in everyday life the longer they exist.</li><li>Once CBDCs are commonplace, their advantages could outweigh those of cryptocurrencies, the report said.</li></ul>Cryptocurrencies aren't going anywhere in the coming years, but their usage will probably decline when central bank digital currencies (<a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=article-editorial">CBDCs</a>) are eventually rolled out, according to Deutsche Bank International Private Bank. Currently, cryptocurrencies like <keyword id="6354947" type="General" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> are not a mainstream asset class, but it will become more robust over time, Christian Nolting, Deutsche Bank's global chief investment officer, wrote in an introduction to a special report. "The longer cryptocurrencies survive, the more robust and credible they become due to network effects (Metcalfe's law). Once we see some stability in terms of price fluctuations, the use of cryptocurrencies for the exchange of goods and services goods could increase," the report said. Whether this will become reality depends on the rollout of CBDCs and factors such as regulation, environmental impact, security issues and transaction speed, Deutsche Bank said. Whilst most major <keyword id="46318" type="ORGANIZATION" weightage="60" keywordseo="central-banks" source="Orion">central banks</keyword> are examining the possibility of launching their own <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=article-editorial">digital currencies</a>, China and Sweden are two of the few who have started trials. The US Federal Reserve and the European Central Bank are yet to decide whether to launch their own digital coins. Deutsche Bank argues the longer central banks take to deploy their own digital currencies, the more scope existing cryptocurrencies will have to establish themselves. As most CBDCs are still at the very early stages of development, this could be a long time coming, but will have a significant impact when their use does become mainstream. "A widespread introduction of CBDCs accompanied by higher regulation of <keyword id="2721952" type="PERSON" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword>currencies could create a more challenging environment for crypto assets as some (but not all) of their advantages compared to traditional financial assets would fade in the longer term," the report concludes. Key differences between cryptocurrencies and CBDCs include the levels of centralization, regulation, oversight, encryption and transparency, Deutsche Bank said. <div type="image" title="CBDCs vs Crypto" height="524" width="1049" msid="82261102" hostid="261"></div> "My belief is that governments and more digitally-aware populations may ultimately prefer to go with <keyword id="6791630" type="General" weightage="60" keywordseo="CBDC" source="Orion">CBDC</keyword>, at least for general use, at the possible expense of some cryptocurrencies," Nolting said in the report. "If this happens, then the more successful cryptocurrencies are likely to become increasingly differentiated in terms of business models and utility," he continued, highlighting a potential future path for crypto investments. The report also urged caution against treating cryptocurrencies as an equivalent to gold in terms of diversification and risk management. Deutsche Bank said the high volatility and low liquidity of cryptocurrencies were key concerns. Despite this, the incorporation of crypto assets into existing investment vehicles like ETFs may attract more retail and institutional funds into the sector as it makes investments easier, the bank said.

Cryptocurrencies will survive the rise of central bank-backed digital coins, but their use will likely decline, Deutsche Bank says

<ul class="summary-list"><li>54% of fintech experts surveyed expect <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword> to overtake currencies issued by central banks in global finance by 2050. </li><li>The move could also take place by 2035, according to 29% of respondents. </li><li>The majority of the panel see bitcoin as currently undervalued, and the price rising this year to $66,284. </li></ul><a href="https://markets.businessinsider.com/currencies/btc-usd?utm_source=markets&amp;utm_medium=ingestgest">Bitcoin</a>, the world's most traded <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword>, will surpass money issued by central banks as the dominant form of finance worldwide in less than 30 years, according to a panel of fintech specialists. 54% of 42 crypto experts surveyed foresee so-called <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">hyperbitcoinization</a> - or the moment that bitcoin overtakes global finance -- occurring by 2050, according to a <a href="https://www.finder.com/uk/bitcoin-btc-price-prediction">report Friday from Finder.com</a>, a personal finance comparison site. That event could take place even sooner, by 2035, according to 29% of the respondents. The projection come during a time of growing interest in the cryptocurrency market among institutional and retail investors and as the majority of the central banks are conducting work on <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">digital currencies</a>, ranging from research to pilot programs. "Some countries will leverage BTC as their primary currency of choice. With fixed circulation, ease of transfer, it will serve them well to move to a "bankless" model inherent in this ecosystem," Joseph Raczynski, a Thomson Reuters technologist and futurist, said in Finder.com's report. He expects by 2025 for bitcoin to overtake fiat currencies and, by then, it priced to be $150,000. El Salvador is breaking ground with its move in <a href="https://markets.businessinsider.com/currencies/news/el-salvador-bitcoin-adoption-poses-network-challenges-blockchain-jpmorgan-2021-7">becoming the first country to adopt bitcoin as legal tender</a>. Usage will begin in September following approval by lawmakers in June. 55% of the panelists think bitcoin will become the currency of choice in developing nations, with Finder.com asking them about bitcoin's use in such countries specifically in light of El Salvador's action and as Venezuelans use bitcoin as a way to beat hyperinflation. But 44% of 41 respondents don't think hyperbitcoinization will occur at all. Among them is Lee Smales, an associate professor at the University of Western Australia. "Ultimately I think Bitcoin (and many other cryptocurrency assets) will lose out to central bank digital currencies - many of which will be live by the end of the decade," Smales said. Federal Reserve Chairman Jerome Powell told US lawmakers this week that cryptocurrencies<a href="https://markets.businessinsider.com/currencies/news/fed-crypto-jerome-powell-senate-testimony-stablecoins-2021-07"> have failed to become a viable payment method</a> and that an official US digital currency could undercut the need for cryptocurrencies or stablecoins. Powell said a research paper on whether the Fed should establish a digital currency will likely be published in September. 86% of central banks are exploring the benefits and drawbacks of central bank digital currencies, or CBDC, according to a 2020 survey by the <a href="https://www.bis.org/publ/bppdf/bispap114.pdf">Bank for International Settlements</a>. Looking at bitcoin's price in 2021, 61% of Finder.com's panel said bitcoin is currently undervalued. On average, the panel expects bitcoin to climb to $66,284 by the end of the year. Bitcoin on Friday traded below $32,000 <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-falls-lowest-july-cryptocurrencies-selloff-eth-doge-powell-2021-7">and was headed toward its worst weekly performance</a> in more than a month. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/twitter-built-on-blockchain-will-let-users-monetise-their-posts-and-come-up-with-their-own-rules/articleshow/84548663.cms">Twitter alternative built on Ethereum will let users monetise their posts and come up with their own rules</a> <a href="https://www.businessinsider.in/cryptocurrency/news/ethereums-co-founder-quits-crypto-with-a-big-warning/articleshow/84547141.cms">Ethereum’s co-founder wants to be more than just ‘the crypto guy’ as he exits the industry</a> <a href="https://www.businessinsider.in/cryptocurrency/news/dogecoin-jumps-10-after-elon-musks-twitter-profile-picture-change/articleshow/84544778.cms">Dogecoin jumps 10% after Elon Musk’s Twitter profile picture change</a>

More than half of experts in a recent crypto survey said bitcoin will replace fiat currency by 2050

Mumbai, Fintech players should form <keyword id="18684976" type="General" weightage="50" keywordseo="a-self-regulatory-organisation" source="Orion">a self regulatory organisation</keyword> for an orderly growth of the industry that is projected to have revenues of USD 200 billion by 2030, <keyword id="7268643" type="General" weightage="20" keywordseo="rbi-governor-shaktikanta-das" source="Orion">RBI Governor Shaktikanta Das</keyword> said on Wednesday. Addressing the industry at the <keyword id="9621521" type="General" weightage="50" keywordseo="global-fintech-fest" source="Orion">Global Fintech Fest</keyword> here, Das said fintech players need to evolve industry best practices to avoid misselling, stress on ethical practices, pricing transparency and take care of privacy and data protection concerns. "I would like to use this opportunity to urge and encourage the fintechs to establish a Self Regulatory Organisation (SRO) themselves," he said and assured all help from the Reserve Bank of India (RBI) for the process. The fintech players should form the SRO at the earliest, Das said and hoped that such a platform will be ready at least by the next edition of the yearly event. Stating that other industries also have SROs, Das said forming an SRO will help the players to voice their concerns. He also said that having the SRO will reduce the burden of regulating a dynamic sector off the RBI's shoulders. Das said regulators play a critical role in addressing arbitrage, ensuring compliance with existing laws, and adopting regulations as per technological advancements. Further, he asked the fintech players -- most of them startups -- to avoid the "relentless drive for valuations" and profits, and asked them to focus on customer centricity. "... to focus on customers means embracing a customer-centric approach to innovation by understanding the needs of customers, making provisions that protect customer interests and earn their trust," he added. He said that good governance will be key to durable and long term success of any company and in particular, the fintech players. Technological innovation has "unprecedented potential" to make finance more inclusive, competitive and robust, Das said, adding that advancements in technology need to evolve in a "responsible" manner. "Fintech players should themselves ensure responsible digital innovations. The Reserve Bank on its part will continue to drive the necessary regulatory and other policy measures to promote a vibrant and responsive fintech ecosystem," he said. While stressing that the coming years hold immense promise which need to be leveraged by innovators, the RBI chief said that as per projections, the fintech sector revenues are set to touch USD 200 billion by 2030. "We are at the cusp of a major transformation in fintech sector". Das also spoke about the progress on the Central Bank Digital Currency and said that newer use cases will be soon added on the wholesale CBDC front. The CBDC retail pilot is currently being operated through 13 banks across 26 cities, Das said, adding that around 1.46 million users and 0.31 million merchants are currently part of the pilot as on August 31, 2023. RBI has also enabled full inter-operability of CBDC with UPI QR codes, and is targeting 10 lakh CBDC transactions per day by December 2023 which will give it sufficient data points for analysis, Das said. Meanwhile, Srinivas Jain, the Co-Chairman of the Fintech Convergence Council, said it will be working earnestly to have an SRO in place at the earliest. "We are not on the same pages on who all from the fintech space can be members as currently this space is dominated by payments tech players but there are many others also in the fray," he told PTI.

You Searched For "cbdc price" and got 11 results

Bitcoin is getting closer to posing a risk to financial stability, the Bank of England's deputy governor warns

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Biden is preparing to sign an executive order to expand US oversight of the $2 trillion cryptocurrency market

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A fully digital US dollar would be a better online currency than crypto, new Fed report suggests

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Central banks must 'roll up their sleeves' and urgently speed up their work on their own digital currencies before crypto upends the current financial system, the BIS says

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The Fed warned about crypto for the first time in its review of financial risks

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HSBC CEO reportedly says the bank will not expand its businesses into bitcoin, citing volatility in the cryptocurrency

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The Fed is advancing its efforts to develop a digital currency - and says it will publish a research report this summer

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Mark Cuban explains why crypto is the future, especially as the world recovers from a generational pandemic

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Cryptocurrencies will survive the rise of central bank-backed digital coins, but their use will likely decline, Deutsche Bank says

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More than half of experts in a recent crypto survey said bitcoin will replace fiat currency by 2050

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RBI Governor asks fintech players to form self regulatory organisation

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