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Bitcoin and cryptocurrency prices have soared in recent weeks, fueled by a series of positive news and supported by the US election.
The price of bitcoin has also risen after central banks around the world, including the US Federal Reserve last month, reported that they are increasingly looking to digitize their currencies, potentially opening the bitcoin and cryptocurrency market to millions. .
Now, bitcoin and cryptocurrency watchers are prepared ahead of the European Central Bank’s (ECB) two-day annual forum, starting today, with ECB President Christine Lagarde, who said last month that the ECB “should be ready to issue a digital euro “. to talk about the “implications of fundamental global changes for central banks”.
European Central Bank (ECB) President Christine Lagarde will open the central bank’s annual forum … [+]
AFP via Getty Images
Lagarde will open this year’s online event and will be joined by Fed Chairman Jerome Powell and Bank of England Governor Andrew Bailey, with globalization, climate change and digitalization on the agenda.
Cryptocurrency traders will be looking for comments from senior central bankers on how research and development on central bank digital currency (CBDC) is progressing and how governors expect CBDCs to impact existing digital currencies. , like bitcoin.
“Central bank digital currencies will be net positive for bitcoin,” Richard Paulsen, chief executive officer of Oslo-based Arcane Media and Research, said via email, explaining how he expects CBDCs to affect markets and the use of bitcoin and cryptocurrencies.
“The structure of a CBDC, in retail markets, will definitely be in the form of a token. This also means that for it to function as a payment method, payment solutions must have changed from today’s analog world to a true digital one. it will make it much easier for e-commerce to switch from CBDC to bitcoin in every single transaction. “
Last month, Lagarde said she wanted to make sure “the euro is fit for the digital age”, in a statement alongside the ECB’s announcement that it was “[intensifying] his work on a digital euro “.
CBDCs have become a hot topic among central bankers over the past couple of years, with Facebook’s plans for its bitcoin-inspired Libra cryptocurrency spurring countries around the world into action amid fears that a popular private digital currency might undermine monetary policy. The coronavirus pandemic, resulting in increased central bank intervention in the markets, appears to spur interest from the CBDC.
“The economic devastation of Covid-19 and the collapse of the old systems has meant rapid monitoring of any innovative technology that can help GDP growth and digital currencies and stablecoins fit this narrative perfectly,” said Keld van Schreven. , CEO and co-founder of digital real estate investment firm KR1.
“This is an unstoppable trend,” said Nick Jones, chief executive of the Edinburgh-based bitcoin and cryptocurrency wallet and payment platform Zumo. “The key to the success of CBDCs is that they exist on the public blockchain so that there is interoperability between CBDCs and the potential to revolutionize cross-border transactions is not lost.”
Bitcoin price has skyrocketed in the past month, adding more than 35% as cryptocurrencies get closer … [+]
Coinbase
The ECB joined most other major central banks in announcing CBDC research, with the launch of China’s digital yuan, now being tested across the country, potentially threatening international domination of the dollar and euro. .
“Technology and innovation are changing the way we consume, work and relate,” Fabio Panetta, chair of the Eurosystem’s High-Level Task Force on Central Bank Digital Currency, said last month. Panetta will chair a session on monetary policy challenges stemming from falling natural interest rates at the ECB’s annual forum.
“A digital euro would support Europe’s drive for continuous innovation,” added Panetta. “It would also contribute to its financial sovereignty and strengthen the international role of the euro.”
Elsewhere, Fed Chairman Powell said that although the Fed has not yet made a decision on issuing a digital currency, it is conducting research and prioritizing “doing it right” over being first.
“We believe it is more important to do things right than being first and doing it right means that we not only look at the potential benefits of a CBDC, but also the potential risks, and also recognize the important trade-offs that need to be thought through carefully. “Powell said at a roundtable on digital payments hosted by the International Monetary Fund in October.
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