Cryptocurrency the money-spinning financial innovation needs support to change the existing status quo worldwide. This innovation would only be possible if the central entities give their full support and regulators understand their importance, to boost the economies. Recently, Zeeshan Feroz, United Kingdom CEO of Coinbase, in an interview with CNBC, discussed the importance of digital assets and the ways how it can pull off mass adoption.
On Oct 24, CNBC flashed an interview with Feroz, which highlighted significant points in support of cryptocurrency. The conversation underlined that central bank digital currency (CBDC) issuance and Facebook’s Libra stablecoin can play the role of a catalyst for the cryptocurrency ecosystem to go mainstream.
Role of Central banks & Silicon Valley Towards Cryptocurrency Promotion
Reportedly, 19 different countries have issued or researched about the issuance of CBDC. Countries that have taken steps or started to experiment are: The Marshall Islands (Its official digital currency, called the Sovereign (SOV)), Singapore (UBI project), Iran (drafted new rules regarding cryptocurrencies), Venezuela (Petro), Senegal (eCFA), Tunisia (E-Dinar), UAE & Saudi Arabia (Aber project), Peru (PeruCoin).
Countries researching digital currencies are Canada, Thailand, Israel, China (renminbi), The Bahamas, Uruguay, The Netherlands, Norway Sweden, Eurasia.
Earlier, Christine Lagarde, Managing Director of the IMF on CBDC communicated that:
“The case is based on new and evolving requirements for money, as well as essential public policy objectives. My message is that while the case for digital currency is not universal, we should investigate it further, seriously, carefully, and creatively.”
For the readers, CBDCs like the digital US dollar or British pound are different from the cryptocurrencies. However, it is called as digital currency issued by a central bank. It is a digital means of payment like paper banknotes, a unit of account. Allegedly, considered a high-security digital instrument and a store of value. Meaning, the government regulators and law decide its legal tender status.
Feroz cited, “CBDCs can carry this mission out and catalyze the adoption in a way that us geeks in Silicon Valley might not be able to.”
On Facebook’s Libra, he argued, “They have billions of users who are stepping in and creating the ability to pay. Here Facebook has got the potential to take crypto mainstream. Libra as a currency has a strong potential to be a payment, as universal in its nature. However, it’s a 1000 steps journey to challenge a status quo with something like that. We all have the vision to set the financial system, wherein people can send receive the money globally like an email without friction.”
Further went on to put out, “For the transition from the world where we are today we need centralized entities. You can’t buy crypto if you don’t have a centralized business… Centralized businesses must support the crypto ecosystem and accept it as a form of payment.”
Facebook’s Libra Hearing Failed to Assuage Legislators
Yesterday, Facebook’s Founder and CEO Mark Zuckerberg faced a six-hour grilling testimony before the United States House of Representatives Financial Services Committee to defend Libra project, in the US Capitol Building. However, the concerns of the lawmakers are still the same and didn’t come to positive conclusions.
Zuckerberg’s responses towards the launch of Libra and its associated issues flopped the demonstration and hence, made the federal committee to stand against it, due to the vagueness of the Libra project.
Reportedly, the U.S. chairwoman, Maxine Waters, during the hearing, mentioned that she is not in favor of Libra and not supporting the project launch, at this point. “I don’t think that that has been adequately explained.”
Further, in a separate hearing, Yesterday, Steven Mnuchin, Secretary of the Treasury mentioned, a separate working group has formed to monitor cryptocurrencies and Libra Financial Stability Oversight Council (FSOC).