BitOoda Global & Regulatory Analysis, 1/27/2020: World Focusing on CBDCs, Leaving U.S. Behind
For anyone following macro geopolitical and regulatory crypto issues, this week was all about the world’s focus on central bank digital currencies (CBDCs). However, while both individual nations and multinational organizations pursue the development of CBDCs, the U.S. is being left behind. While U.S. regulators and financial leaders continue to focus on unregistered ICOs (SEC this week initiated a new action against Opporty International while continuing to push forward in its court battle with Kik), the rest of the world is looking ahead to an increasingly digital global economy:
· The World Economic Forum issued a framework for CBDCs to help policymakers weigh benefits, risks, challenges, and opportunities.
· Six central banks created a working group to collaborate on CBDC assessments with the Bank of International Settlements (BIS), the Financial Stability Board (FSB), and the Committee on Payments and Market Infrastructures (CMPI). The six members of the group are Sweden, Canada, Switzerland, the U.K., the European Central Bank, and Japan.
· In additional to this multinational effort, Japanese lawmakers announced they are working on a digital currency proposal to balance China’s plans for a digital yuan.
· The BIS also published a report with the results of its survey showing that central banks around the world are “undertaking extensive work” on CBDCs. The Block last month assessed that at least 18 central banks are conducting actual development work on — or have already launched — a CBDC.
Despite a recent op-ed by the IMF’s chief economist arguing that digital currencies are unlikely to replace the dollar as the world’s primary reserve currency, we feel that the U.S. Federal Reserve is short-sighted in its belief that there are no “material benefits” to the pursuit of a digital dollar. Former CFTC Chair Giancarlo’s new Digital Dollar Project focuses on the changing nature of money in an increasingly-digital global economy; we will monitor with interest whether this effort gains traction among Washington, DC policy circles. We hope there are enough influential voices in DC to realize that the key issue is not maintaining control of domestic monetary policy — the key issue is maintaining the U.S.’s position as a global economic leader.
In the meantime, we at BitOoda will continue to push ahead with the development and execution of new products and services to help our clients seize opportunities and effectively manage risks. Our unmatched regulatory posture continues to enable our clients take advantage of new and emerging digital markets in a compliant manner, as the broader digital asset ecosystem continues to evolve over time.