A few years ago this idea would have been immediately rejected or ridiculed. The Federal Reserve (FED), the American central bank, is now taking the concept of official stablecoin seriously. This setback must be put to the credit of two American deputies, French Hill and Bill Foster. It was in a letter sent to the FED that a response from its president, Jay Powell, announced new directions for the FED. This is the establishment of the Central Bank Digital Currency (CBDC).
A project envisaged against a background of constraint
The infiltration of the blockchain in the global financial sector is not new, but some applications placed decentralized solutions in front of regulatory authorities. One of the most significant events is the entry into play of one of the world’s largest economies as a promoter of stablecoins. China’s announcement of the launch of a state cryptocurrency adequately reveals the direction it is driving. The other central banks must now tie in with the train already in motion and do the same. The context of trade war in progress lends it the flank which tests the strength of the economic and monetary autonomy of the countries which engage in it.
The currency of Facebook, Libra, is another sign that you cannot ignore. Although Libra Foundation has suffered a massive exodus of investors, the idea behind this project is enough to sound an abrupt awakening of visibly sleepy regulators and decision-makers. It was most likely China’s abrupt change of position on crypto that sounded the last wake-up call. Powell provided tangible new information on how the US views this developing movement in its response to the two deputies. Barry Topf, chief economist of Saga, consultant at IMF and former of the EDF, said :
” The FED has understood that cryptocurrencies, whatever their form, are here to stay ”
Mark zuckerberg, CEO of Facebook, had also declared before Congress:
” While we debate these issues, the rest of the world is not waiting. ”
Powell nevertheless clarified that the EDF had no plans to develop a cryptocurrency at this time. However, he has discussed the idea at length and continues to weigh its pros and cons.
The role that government must play in this great leap into the unknown
It is evident that regulators are continuing to debate the fundamental problems and technical realities that the issue of stablecoins would imply. However, they are now doing so under the pressure of competitors such as China, which has already entered the race. The question is whether the race is really worth it and especially if it is not a leap into the unknown. However, some experts believe that if the USA goes into crypto it will have repercussions on the world market. Indeed, a stablecoin issued by the government would encourage the growth of the two financial ecosystems. The other positive sign of such an adoption is that it would confer greater legitimacy to the crypto-sphere and would increase the level of engagement of institutions.
A major problem could arise from the decision to create a possible stablecoin supported by the government. The question would be whether the government could in any case create a blockchain equivalent to what already exists on the market. Grigory Rybalchenko, co-founder and CEO of Emirex, believes that it is up to the government to find the right balance between the number of centralized and decentralized solutions. This will promote financial freedom and give people the opportunity to make a choice. Other experts believe that any platform deemed capable of affecting the sovereignty of the government and its national currency could run up against obstacles.
The Exchange CEO StormGain, Alex Althausen, agrees. He believes governments have never wanted to let concepts like decentralized governance take precedence over their total control.
Meanwhile the race has already started
Javier Sim, CEO of Bithumb Global, has already had proof of the race that the world’s governments are leading for the blockchain. Sweden and Estonia have already launched projects for tokenize assets and identification systems.
The coming years will see central banks around the world increasingly adopting crypto. Unfortunately, this will be to the detriment of all the possibilities that this system offers if actors like China or Libra take over its monopoly.
Maximalist shitcoin, clumsy AND recently converted BTC trader. My studies are light years away from crypto which is both fun and hopeless