The BOJ has long been seen as a major source of uncertainty for financial markets, including cryptocurrencies.
Test and Deploy: A New Era for CBDCs
Bank of Korea Governor Sees CBDC Introduction as Case for ‘Urgency:’ Report
Stablecoins’ widespread usage and frequent instability could lower the effectiveness of central bank monetary policies, Rhee Chang-yong said.
Bank of Korea Governor Sees CBDC Introduction as Case for ‘Urgency:’ Report
Stablecoins’ widespread usage and frequent instability could lower the effectiveness of central bank monetary policies, Rhee Chang-yong said.
Bank of Korea Governor Sees CBDC Introduction as Case for ‘Urgency:’ Report
Stablecoins’ widespread usage and frequent instability could lower the effectiveness of central bank monetary policies, Rhee Chang-yong said.
Taiwan Completes Wholesale CBDC Technical Study, Central Bank Official Says
The central bank is now gathering feedback and improving a platform design, according to Deputy Governor Chu Mei-lie.
UK Lawmakers Urge Lower Digital Pound Holding Limits
They also want the government to tweak plans to make sure the CBDC’s design won’t preclude the possibility of paying interest on the digital pound.
Bitcoin Holds Steady Above $34K After Hawkish BOJ Decision
The BOJ’s yield curve control program has been a major source of liquidity for financial markets since 2016. Early Tuesday, the bank tweak the curve control program in what appears to be a stealth hawkish move.
Bank of Japan a Major Source of Uncertainty, Crypto Volatility Trader Says
Once the BOJ begins policy normalisation, yen carry trades may unwind quickly, leading to increased cross-asset volatility.
Bitcoin Steady Above $29K, Bond Yields Rise as BOJ Makes Yield Curve Control More Flexible
BOJ announced a proper yield curve control tweak with semantics that camouflaged the hawkish move.
Central Banks Successfully Test DLT in Linking Financial Settlement Systems
The experiment, called Project Meridian, shows it’s possible to settle large synchronized transactions in central bank money, a report said.
BoE Considers Limits on Stablecoin Payments as Parliament Debates New Crypto Rules
The Bank of England plans on releasing a consultation proposal by the end of the year, Jon Cunliffe said at Innovate Finance’s annual global summit.
World’s Most Influential Central Banks’ Balance Sheets Look to Have Troughed
The directional change suggests an end to the quantitative tightening that roiled cryptocurrencies last year.
World’s Most Influential Central Banks’ Balance Sheets Look to Have Troughed
The directional change suggests an end to the quantitative tightening that roiled cryptocurrencies last year.
SWIFT moves to next phase of CBDC testing after positive results
According to SWIFT, 24% of central banks will introduce a CBDC within the next couple of years.
Bitcoin price surge: Breakthrough or bull trap? Pundits weigh in
Bitcoin nearly broke its record for the longest streak of daily green price candles this month, but many believe its recent surge could be short-lived.
Amid Macro Uncertainty, Bitcoin Stabilizes. Incredible October Stats Inside
The world is upside down. Is bitcoin stable now? Or is everything else extremely volatile all of a sudden? As the planet descends into chaos, bitcoin remains in a weird limbo that’s uncharacteristic of the asset and doesn’t seem to end. That’s both what it feels like and what the stats say. In the latest ARK Invest’s The Bitcoin Monthly report, they put it like this, “bitcoin finds itself in a tug of war between oversold on-chain conditions and a chaotic macro environment.”
What about the numbers, though? The stats support the thesis, “for the third month in a row, bitcoin continues to trade between support at its investor cost basis ($18,814) and resistance at its 200- week moving average ($23,460).” Three months in that range seems like too much. Something’s got to give. However, that’s what everyone’s been thinking for the last few months and we’re still here.
The Dollar Milkshake Theory
Bitcoin has been less-volatile than usual, sure, but the main factor here is that the whole world is falling to pieces. Every company is in the red, especially techy ones, and all of the world’s currencies except the dollar fell off a cliff. Are we seeing “the dollar milkshake theory” playing out in front of our own eyes? It sure feels that way. Global central banks have been printing bills like there’s no tomorrow, and that extra liquidity is there for the stronger currency to take.
According to professional investor Darren Winter, the “dollar milkshake theory views central bank liquidity as the milkshake and when Fed’s policy transitions from easing to tightening they are exchanging a metaphoric syringe for a big straw sucking liquidity from global markets.” If that’s what we’re seeing, what happens next? Back to The Bitcoin Monthly, ARK says:
“As macro uncertainty and USD strength have increased, foreign currency pairs have been impacted negatively while bitcoin has been relatively stable. Bitcoin’s 30-day realized volatility is nearly equivalent to that of the GBP and EUR for the first time since October 2016”
BTC price chart for 11/07/2022 on Bitstamp | Source: BTC/USD on TradingView.com
Bitcoin Vs. Other Assets In October
The macro-environment has been so bad lately, that there’s the perception that bitcoin has been doing better than stocks. The facts are that, for the first time since 2020, “bitcoin’s 30-day volatility is on par with the Nasdaq’s and the S&P 500’s.” And, we know past performance doesn’t guarantee future results, but “the last time bitcoin’s volatility declined and equaled the rising volatility of equitiy indices was in late 2018 and early 2019, preceding bullish moves in the BTC price.”
However, let’s not kid ourselves, bitcoin has not been doing good. The thing is, not much is prospering out there. Especially in the tech sector. “The price drawdowns from alltime high in Meta (-75.87%) and Netflix (-76.38) have exceeded that of bitcoin’s (-74.46%). To a lesser extent, Amazon also suggests a correction proportional to that of BTC’s “usual” volatility (-48.05%).”
According to The Bitcoin Monthly, the situation “suggests the severity of the macroeconomic environment and bitcoin’s resilience against it.”
The only constant is change, however. Bitcoin’s stability suggests a violent breakout, either up or down. The entire world can’t remain the red forever, something or someone has got to rise above the crowd and show everyone how it’s done. We’ve been waiting for a resolution for what feels like ages, and we’ll probably have to wait some more. There will be a movement, though. When we least expect it, probably.
Featured Image: Bitcoin 3D logo from The Bitcoin Monthly | Charts by TradingView
Bank for International Settlements will test DeFi implementation in forex CBDC markets
The centralized financial institution says the automated market making technology in DeFi can serve as a “basis for a new generation of financial infrastructure.”
CBDCs require governments to put a special focus on security
Any nation implementing a CBDC in the near future must make sure it’s ready to defend its digital assets and, most importantly, its private keys.
Visa Creates Service To Advise Financial Institutions On Cryptocurrencies
It’s a new dawn. Credit card giant Visa is now in the cryptocurrency business. They won’t be buying and selling yet, though. Its new division will focus on advising everyone. From retail customers to financial institutions, even central banks can get information from Visa’s crypto experts. A lot of people still value the input traditional institutions can give, even if they don’t have the track record. So this seems to be good news for the crypto industry as a whole.
Related Reading | As Amazon Takes on Visa, Does Cryptocurrency Offer the Real Alternative?
Reuters informs:
“Visa’s services include educating institutions about cryptocurrencies, allowing clients to use the payment processor’s network for digital offerings, and helping manage backend operations.”
And Visa promises:
“Tap crypto’s potential with a pioneer in global payments. For crypto to realize its full potential, we are connecting crypto and blockchain networks to our trusted, global payment network. And we’re propelling innovation to deliver even more access and value to the crypto ecosystem.”
Visa’s CFO Still Doesn’t Understand Bitcoin
In a bizarre move, considering they’re offering expert advice in cryptocurrencies, Visa’s CFO said the darndest thing. Vasant Prabhu told Reuters:
“If the price is going to fluctuate from $60,000 to $50,000 in a few hours, it’s a very difficult thing for a merchant to accept (bitcoin) as a currency. I don’t know if cryptocurrencies like bitcoin will ever be a medium of exchange. Stablecoins will.”
Bitcoin is already a medium of exchange. It’s legal tender in an entire country. It’s a process, but merchants will quickly learn the benefits of holding a deflationary currency instead of an inflationary one. If Prabhu doesn’t understand this, how does he expect his clients to take his advice seriously?
BTC price chart for 12/09/2021 on Gemini | Source: BTC/USD on TradingView.com
What Did Visa’s Crypto Research Department Found Out?
As an introduction to the company’s crypto research department, the company says, “For financial institutions eager to attract or retain customers with a crypto offering, retailers looking to delve into NFTs, or central banks exploring digital currencies, understanding the crypto ecosystem is a vital first step.”
As the first show of power, they produced “The Crypto Phenomenon: Consumer Attitudes & Usage.” A report that, among other things, found out the following:
- “Almost universal awareness of cryptocurrency at 94% globally among adults with discretion over their household finances.”
- “Nearly one in three crypto-aware consumers already own or use cryptocurrency, with the majority saying that their use has increased in the past year (62% Owners), and two-thirds expecting that they will increase the share of their investable assets invested in crypto in the next 12 months (66% Owners).”
- “In Emerging Markets, ownership (37%) and curiosity about (27%) cryptocurrency is even more pronounced.”
- “The biggest drivers of owning and using cryptocurrency are to take part in the “financial way of the future” (42% Owners) and to build wealth (41% Owners)”
- “Most crypto owners would be interested in buying cryptocurrency from their bank (85% Owners)”
- “More than a third of current owners indicate that they plan to switch to a bank that offers crypto products within the next 12 months (39% Owners).”
- “The significant majority of consumers who use cryptocurrency express interest in crypto-linked cards (83% Active Owners) and rewards (86% Active Owners).”
Related Reading | Visa Is Building A Payment Channel Network On Ethereum
Conclusions To Avoid Confusion
Even though Visa’s study seems to be skewed to what its clients need to hear to acquire their new service, the results are interesting. It’s useful to see what the research department of a company with that kind of resources can come up with. Let’s hope they keep it coming. And let’s also hope that Visa’s CTO reads “The Bitcoin Standard,” because that quote was embarrassing.
Featured Image: Visa and Bitcoin, taken from their site | Charts by TradingView
