Selected articles of the week:
The dollar remains the world’s dominant FIAT currency. Apart from the fact that the most important commodities are traded in dollars, half of all outstanding global debt outside the US is denominated in this currency. The Greenback has retained its status as the world’s reserve currency despite an diminishing dominance over the years. According to the IMF, the dollar is still more heavily used than all other currencies combined, accounting for almost 60% of global foreign exchange reserves. As global payments enter the digital age, the structure of international capital markets is also expected to change. Central banks are gaining greater control over money flows through the issuance of digital central bank currencies (CBDCs) and, with programmable money, are gaining a set of tools for targeted fiscal policy that should not be underestimated. CBDCs in fact have the potential to influence geopolitical hegemonies, but the issuance of a digital currency also carries risks. As a result, the U.S. wants to weigh potential adoption very carefully. The first discussion paper appeared in January, contrasting the many benefits with the downsides. Fed Governor Christopher A. Waller took a contrary view at a recent security symposium at Harvard University. The economist argued that any threat from a foreign CBDC would only endanger the dollar’s dominance as a means of exchange, not as a store of value. Waller argues that the United States does not need to give in to the pressure of China’s already introduced CBDC, citing privately issued stablecoins as a proven alternative.
According to the Fed’s Christopher Waller, America should abandon the idea of a dollar CBDC, preferring instead to use private stablecoins.
2022 will go down in the history of the still young blockchain technology as a year marked by bankruptcies of major crypto service providers. The implosion of the crypto hedge fund Three Arrows Capital led to a serious liquidity crisis in the industry, which in a domino effect brought down quite a few providers and projects. Also affected was the largest centralized crypto lending platform Celsius Network, which managed funds from various other service providers and had to file for bankruptcy a few months ago. Connections to Celsius now also led to an abrupt end for the seven-year-old German crypto platform Nuri (formerly Bitwala).
A takeover bid for Nuri and its 250,000 customers has failed. The startup formerly known as Bitwala has to file for insolvency.
Switzerlands Berner Kantonalbank (BEKB) is teaming up with SIX Digital Exchange (SDX) to accelerate the infrastructure for the issuance, custody and trading of tokenized shares. BEKB’s move marks another milestone in the development of blockchain-based securities infrastructure in the country. The collaboration will enable SMEs to issue their shares digitally in the form of DLT securities and transfer the shares seamlessly into a regulated bank custody.
Berner Kantonalbank (BEKB) will be included in the Swiss SIX Digital Exchange (SDX) for the tokenization of securities.
The payment giant Mastercard wants to make cryptocurrencies accessible to the masses. To this end, the company will provide interested financial institutions with a comprehensive range of applications. In addition to a crypto trading infrastructure, these also include proven identity, cyber, security and consulting services. This puts Mastercard back in the race with its main competitor Visa, which has already expanded strongly in the blockchain sector.
Mastercard is diving deeper into the space as it expands its crypto services and makes it easier to engage new users.
In addition: Crypto assets have come under severe pressure in 2022. In addition to macroeconomic factors, failures of central platforms have also led to a loss of confidence. Nevertheless, interest in the new asset class among professional investors is unbroken. The fundamental strength of the sector is underlined by the development progress in the infrastructure as well as the market entry of established financial institutions such as Blackrock or Postfinance. Let yourself be informed about the latest developments in the industry by distinguished experts on October 26. Participants in the event “The Future of Digital Assets” will gain a broader understanding and valuable tips on dealing with crypto assets. A Q&A session followed by networking opportunities will round off the event.
Proven experts will explain in Zurich how crypto assets can be used wisely within a portfolio context.
