- An unsuccessful attempt to break USD 8,400 sees Bitcoin trading closer to USD 8,200 support levels in early Friday hours
- The World Economic Forum has released a toolkit for central bank digital currency (CBDC)
- MIT urges regulators to seek out crypto lessons to help evaluate CBDC
Bitcoin continued to lose more ground throughout the early Friday activity of Asian traders. The day’s low so far is at USD 8,264 (CoinDesk) and current price is not far from there, although to their credit, they prevented price from crashing even farther, and even did attempt to break past USD 8,400 unsuccessfully.
Outside of price action, news in the industry has been surprisingly good, whether you look at crypto adoption by one of the most well-known adult industry players Pornhub, who recently added Tether to its list of payment options to join TRON and others, or if you look at all the discussions going on currently regarding crypto at the World Economic Forum in Davos.
The former piece of news will have been welcomed by anyone in crypto — and by the models blocked by PayPal as in a piece we covered last year. Justin Sun of TRON doesn’t seem to mind partnering with the competition.
If you’re on @Pornhub, stop what you’re doing. #USDT is now an option for models on Pornhub! Pornhub is using USDT-TRON to support models seeking payment solutions. This is a brilliant way to support the victims of centralized payment platforms like PayPal. #TRON #TRX https://t.co/qwpMf0LgmS
— Justin Sun (@justinsuntron) January 22, 2020
But the real focus should be on the developments at the Davos World Economic Forum (WEF), where a gathering of the world’s elite in finance and banking have apparently come together to create a toolkit for policymakers to understand central bank digital currency (CBDC).
This toolkit, which was announced yesterday, will be the formal WEF attempt to assist policymakers in their own jurisdictions to gain an understanding of whether or not CBDCs would be beneficial in deployment, and if so, aid them in designing.
The collaboration involved researchers from central banks and their correspondent regulators, plus experts from international organizations and more than 40 institutions. WEF head of blockchain and distributed ledger technology (DLT) Sheila Warren explained:
“Given the critical roles central banks play in the global economy, any central bank digital currency implementation, including potentially with blockchain technology, will have a profound impact domestically and internationally. […] It is imperative that central banks proceed cautiously, with a rigorous analysis of the opportunities and challenges posed.”
The toolkit already has rave reviews from those using it, like Thailand’s Project Inthanon, which has seen the central banks of Thailand and Hong Kong move just that much closer towards CBDC use in cross-border payments. Bank of Thailand Governor Veerathai Santiprabhob said the toolkit was vital for continued development of Inthanon’s work:
“From our experience, we need to identify tradeoffs between benefits from the use cases and their associated risks across different dimensions. This is where the Policymaker Toolkit could usefully provide an actionable framework for CBDC deployment.”
The WEF isn’t the only significant group to be looking seriously at CBDC, either. While the economic giants have been building frameworks, academics like those at MIT continue to research into how CBDC will delve into crypto’s tech to use them in real use cases. The Digital Currency Initiative at Massachusetts Institute of Technology (MIT), who are its DLT research arm, said in a comprehensive report on the same day as the WEF announcement:
“CBDC should not be a direct copy of existing cryptocurrencies with exactly the same design and features but there are things we can learn from their emergence — the usefulness of programmability in money and the importance of preserving user privacy.”
Citing lessons learned from ten years of cryptocurrency, the group notes that digital value transfer innovation has fallen behind in the global appetite for computerized payment solutions, such as can be observed in the booming sector of e-commerce.
They believe that it was this void in necessity that crypto filled, and the long history of trial and error can be great learning points for states looking to reexamine the condition of modern money. It further said to take caution of what was readily available to observe:
“A common mistake is to assume new technology always improves things; this is often not true.
Introducing new technology into a complex system usually has effects that cannot be predicted,
some positive and some negative. And whether things have improved depends on your
It concludes that caution is right from regulators and central banks, but suggests that any CBDC development be done together with “democratically accountable institutions that already govern currency and who will carefully evaluate new technology and apply it to payments”.
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