The committee has also requested the lawmakers to develop some mandatory regulatory substruction for future adoption and expansion.

The survey reveals that Norway is one of the most cashless countries in Europe and only 2% of testifiers used cash for the majority of their in-person transactions.

The research for CBDC has recently entered the fifth phase, and the final decision to implement is expected by the end of 2025.

On November 15, Bloomberg, a leading international media outlet reported that the Norwegian advisory committee has demanded against adoption of a state-controlled digital currency which was to be adopted as soon as possible. The report has also quoted the notice of the committee which was presented in front of the Finance Minister of Norway, Trygve Slagsvold Vedum. 

The committee has also requested the lawmakers to develop some mandatory regulatory substruction for future adoption and expansion. Also, the value of cash in the market is acknowledged by the committee by stating that it is an accessible and secured payment method. 

However, it quoted that a central bank digital currency can be proved as a suitable tool for protecting these considerations in the future. 

What does the report suggest? 

On June 5, Norway released a retail payment services report in which it mentioned that Norway is among such countries having the highest annual use of payment cards per inhabitant. Most of the card payments were made at shops such as restaurants, vending machines, hairdressing salons, and also public transport. 

According to the survey, around 20% of payments at a physical point of sale were made by different mobile payment platforms. The survey further reveals that Norway is one of the most cashless countries in Europe and only 2% of testifiers used cash for the majority of their in-person transactions.

Other country’s stance over CBDC 

The same action has been taken in Sweden where the government’s examination and survey concluded that there is no swift need for an e-krona. The government had also asked Riksbank to review and revise its plans. 

Talking about South Korea, it has initiated a CBDC pilot collaborating with seven major banks. The Financial Services Commission along with the Bank of Korea and the Ministry of Science and ICT has permitted the program to investigate the use of CBDC-based tokens for public transactions. 

Adoption may be expected by 2025

By 2025, Norges Bank has to present its recommendations to policymakers related to the adoption of CBDC. The recommendation will mainly include whether CBDC will be adopted by the country or not. 

The Deputy Governor of the Central Bank, Pal Longva has commented that the bank is keenly monitoring the retail and wholesale models of CBDC and after this, with finally gaining resistance on a global level for its application in interbank transactions. 

Now, the research for CBDC has set foot in the fifth phase recently and the final decision on implementation can be expected by the end of the next year. However, the exploration has continued for the past two years. 

According to Foresight News, an expert committee advising Norwegian politicians has expressed that Norway, despite being one of the countries with the lowest cash usage globally, is not in a hurry to adopt a central bank digital currency (CBDC). The committee emphasized the continued importance of cash in ensuring secure and straightforward payment methods for everyone.

The panel acknowledged the potential benefits of digital currencies but stressed the need for careful consideration before making any significant changes to the current monetary system. They highlighted that cash still plays a crucial role in the financial ecosystem, providing a reliable and accessible means of transaction for all citizens. This perspective underscores the importance of maintaining a balance between innovation and stability in the financial sector.

While the committee is not advocating for immediate adoption, it does recommend initiating necessary regulatory reforms. These reforms would prepare the groundwork for the possible future introduction of a CBDC, ensuring that the country is ready to embrace digital currency when the time is right. The committee's cautious approach reflects a broader trend of careful evaluation and strategic planning in the face of rapidly evolving financial technologies.

A Norwegian expert committee has suggested that there is no urgent need to introduce a central bank digital currency (CBDC) at the present time. Although the use of cash has decreased, accounting for only 2% of transactions at physical points of sale during the pandemic, the committee has highlighted the importance of cash for secure and inclusive payments.

They have recommended starting work on exploring the potential benefits and risks of CBDCs to ensure that any future decisions are well-informed and based on a comprehensive understanding of the implications.

Source

<p>The post Norwegian Expert Committee Advises No Immediate CBDC Adoption first appeared on CoinBuzzFeed.</p>

Often hailed as a pioneer in cashless transactions, Norway is taking a measured approach to Central Bank Digital Currencies (CBDC). Despite being one of the world’s most cashless societies, the government resists the urge to rush into a CBDC rollout. 

A Norwegian task force appointed by the government to assess the feasibility has advised delaying the process. The group cited strong regulatory frameworks prioritizing financial accessibility and inclusivity in a digital-first economy.

Why Delay When Cash Usage Is Fading?

Cash has become a rare sight in Norwegian wallets. A recent Norges Bank survey revealed that only 2% of respondents used cash for their most recent in-person payment. Despite this, cash retains its reputation as a secure and inclusive payment method, especially for vulnerable populations. 

Norway has already implemented laws guaranteeing the right to use cash in all transactions. This ensures financial accessibility remains a cornerstone even as digital systems evolve. The task force acknowledged that the decline in cash usage underscores the importance of updating payment regulations. 

However, they emphasized that rushing a CBDC rollout might introduce risks the country needs to prepare to manage. The task force recommended ensuring digital payment systems are robust, secure, and accessible before launching a CBDC. They highlighted the importance of adapting current financial regulations to reflect the realities of a predominantly digital economy.

What Lies Ahead for The Norway CBDC Policy?

Norges Bank will provide lawmakers with its official recommendation on a CBDC by 2025. This recommendation will be based on the task force’s findings and the bank’s ongoing research. 

Deputy Central Bank Governor Pal Longva highlighted the value of the task force’s cautious approach. He noted that it provides a clear framework for measured progress. This is to ensure any future CBDC rollout is well-informed and carefully planned.

South Korea Takes Bold Pilot on CBDC

While Norway takes a measured approach, South Korea has launched a CBDC pilot. 

This initiative collaborates with seven major banks, including Kookmin Bank and Woori Bank. South Korea’s pilot aims to assess the viability of a digital currency for public use in transactions, ranging from everyday purchases to government services. By doing so, the country seeks to explore how CBDCs can integrate into daily financial activities.

The Financial Services Commission, the Bank of Korea, and the Ministry of Science and ICT have formed a dedicated inspection team to oversee the pilot. This effort ensures compliance with regulatory standards.

The post Norway Takes Cautious Path on CBDCs Amid Global Adoption appeared first on TheCoinrise.com.

Norway’s financial task force has warned against introducing central bank digital currency. It recommends policymakers to establish a strong regulatory framework for a safer future rollout.

On 15th November a Bloomberg report shared the Norwegian committee’s recommendation for steady and slow adoption of the CBDC. The report which was submitted to Trygve Slagsvold Vedum, Norway’s Finance Minister, propelled the policymakers toward the regulatory approach.

The report mentions that a “central bank digital currency may in the future be a relevant instrument for safeguarding these considerations”. However, payments through cash are still more secure and accessible.

Norway’s strategy reflects Sweden’s approach

Sweden also has the same stance as the recommendation made by Norway’s task force. The government of Sweden appointed an inquiry which concluded that the transition towards e-krona is not urgently needed. They warned the Riksbank to reconsider the plans.

In 2025, the Bank of Norway is set to deliver a plan of its own regarding the implementation of CBDC and its format.

While the wholesale approach is already attracting attention globally for its role in interbank transactions, Pal Longva says the bank is evaluating CBDC’s retail and wholesale models.

President Javier Milei recently advocated for maintaining a separation between cryptocurrency and state control.

Speaking at “Meta Day Argentina,” an event held at the Palacio Libertad Domingo Faustino Sarmiento, Milei criticized central bank digital currencies (CBDCs) and advocated for the private management of cryptocurrencies, warning against government overreach.

Opposition to CBDCs and State Control

In his speech, the president declared, “Do not let the state take over and carry out the cryptocurrencies.” Milei believes that private cryptocurrencies offer a trusted alternative to state-issued currencies and have emerged in response to public dissatisfaction with seigniorage payments—profits derived by governments from issuing currency.

He described digital assets as a revolutionary means of dismantling the state’s monopoly on money, thereby empowering individuals with greater economic independence. Furthermore, he elaborated that technological progress, including innovations within the cryptocurrency space, serves as an important solution to problems caused by centralized systems.

Milei also rejected the concept of CBDCs, labeling them as tools that could increase state control over financial systems. “They have already appropriated paper money and are scamming us with central banks,” the president said.

Overall, he was advocating for virtual assets to remain privately managed to maintain their original purpose as a trusted alternative to state-issued currencies. According to him, if the government is in charge of cryptocurrencies, “they will turn us into slaves.”

His comments align with his libertarian philosophy, which aims to reduce state influence across sectors. His administration’s “Chainsaw Model” focuses on privatization and deregulation, targeting non-essential industries.

Recently, he revealed that this model is being considered for implementation in the United States. According to Milei, SpaceX CEO Elon Musk and Argentina’s Minister of De-Regulation and State Transformation Federico Sturzenegger are collaborating to replicate its principles.

Trump’s Crypto Ambitions and Global Context

These remarks come as U.S. President-elect Donald Trump advances an ambitious cryptocurrency agenda following his re-election.

Trump has pledged to make the United States a global crypto hub. Throughout his campaign, he made several promises to the people that are in line with this.

His plans include firing SEC Chair Gary Gensler, creating a Bitcoin reserve, and expanding Bitcoin mining operations in the country.

Trump’s administration is reportedly already consulting with industry leaders to develop a pro-crypto regulatory framework. Additionally, his team is considering multiple pro-crypto candidates for key roles within various financial regulatory bodies.

Such initiatives are expected to position the United States as a central player in the cryptocurrency landscape worldwide.

The post Argentina’s President Advocates for Clear Division of Crypto and State appeared first on CryptoPotato.

Norway’s financial task force has warned against introducing central bank digital currency. It recommends policymakers to establish a strong regulatory framework for a safer future rollout.

On 15th November a Bloomberg report shared the Norwegian committee’s recommendation for steady and slow adoption of the CBDC. The report which was submitted to Trygve Slagsvold Vedum, Norway’s Finance Minister, propelled the policymakers toward the regulatory approach.

The report mentions that a “central bank digital currency may in the future be a relevant instrument for safeguarding these considerations”. However, payments through cash are still more secure and accessible.

Norway’s strategy reflects Sweden’s approach

Sweden also has the same stance as the recommendation made by Norway’s task force. The government of Sweden appointed an inquiry which concluded that the transition towards e-krona is not urgently needed. They warned the Riksbank to reconsider the plans.

In 2025, the Bank of Norway is set to deliver a plan of its own regarding the implementation of CBDC and its format.

While the wholesale approach is already attracting attention globally for its role in interbank transactions, Pal Longva says the bank is evaluating CBDC’s retail and wholesale models.

A Norwegian task force has advised against the immediate adoption of a central bank digital currency.

A Norwegian advisory committee has recommended against the immediate adoption of a state-controlled digital currency, Bloomberg reported, citing the committee’s findings submitted to Finance Minister Trygve Slagsvold Vedum. The report urged policymakers to focus on developing the necessary regulatory framework for a potential future rollout.

The task force concluded that cash remains critical to ensuring accessible and secure payments but acknowledged that a “central bank digital currency may in the future be a relevant instrument for safeguarding these considerations.”

Norway is among the most cashless societies in Europe, with a 2023 Norges Bank survey showing just 2% of respondents used cash for their most recent in-person transaction, according to Bloomberg.

Norway’s approach mirrors Sweden’s stance

The task force’s recommendation echoes similar findings in Sweden, where a government-appointed inquiry concluded that there is no immediate need for an e-krona, urging the Riksbank to reassess its plans.

Norges Bank is expected to provide its own recommendation to lawmakers in 2025 on whether to adopt a CBDC and, if so, in what form. Deputy Central Bank Governor Pal Longva recently confirmed that the bank is studying both retail and wholesale CBDC models, with the latter gaining traction globally for its applications in interbank transactions.

Norway’s exploration of a CBDC entered its fifth phase this year, following two years of collaborative research. A decision on its implementation is expected by the end of 2025.

Read more: Australia’s central bank seeks feedback on wholesale CBDC, tokenized markets

The post Norway Says ‘No Rush’ for Digital Currency appeared first on Coinpedia Fintech News

While many countries are rushing to adopt central bank digital currencies (CBDCs), Norway is taking its time. A government committee has advised politicians to hold off on introducing a digital currency, even as cash use continues to decline. The group, in its report to Finance Minister Trygve Slagsvold Vedum, suggested that while there’s no immediate need for a CBDC, it’s wise to start working on the rules and regulations in case it becomes necessary in the future. They also note that cash still plays an important role in making payments safe and accessible for everyone. Norway’s careful approach shows a focus on balancing planning for the future while keeping current systems secure.

RFK Jr. Reaffirms Crypto Commitment

In a stirring address at the Bitcoin 2024 conference, independent U.S. presidential candidate Robert F. Kennedy Jr. has once again underscored his deep commitment to Bitcoin, revealing that a significant portion of his wealth is invested in the cryptocurrency. His statements reflect not just personal investment, but a broader policy vision for the United States should he assume office.

Bitcoin as the Future of Financial Freedom

Kennedy’s rhetoric was clear and bold: “I am a huge supporter of Bitcoin. I have most of my wealth in Bitcoin,” he declared, emphasizing, “I am fully committed.” This isn’t the first time Kennedy has championed Bitcoin; his history with the digital currency includes advocating for its role in safeguarding personal financial sovereignty and as a hedge against inflation. His latest remarks echo his earlier sentiments on social media platforms, where he has positioned Bitcoin as an “off-ramp for our addiction to the Federal Reserve.”

Cryptocurrency Policy Proposals

Elimination of Capital Gains Taxes on Bitcoin: Kennedy has proposed the elimination of capital gains taxes when converting Bitcoin to U.S. dollars, aiming to make the U.S. a global hub for cryptocurrency.

Backing the Dollar with Hard Assets: He suggests backing a small percentage of U.S. Treasury Bills with hard assets like Bitcoin, gold, and precious metals to stabilize the dollar and curb inflation.

Opposition to CBDCs: Kennedy has voiced strong opposition to Central Bank Digital Currencies (CBDCs), warning of potential government overreach in financial monitoring and control.

Who is Robert F. Kennedy Jr.?

Robert F. Kennedy Jr. is an environmental lawyer, author, and activist, known for his lineage in the famous Kennedy family, being the son of former U.S. Attorney General and Senator Robert F. Kennedy. His career has spanned advocacy in environmental issues, but he has recently gained attention for his views on health, politics, and now, cryptocurrencies. His stance on various issues, including his skepticism towards certain health policies, has made him a notable, if controversial, figure in American politics.

I am thrilled to announce Robert F. Kennedy Jr. as The United States Secretary of Health and Human Services (HHS). For too long, Americans have been crushed by the industrial food complex and drug companies who have engaged in deception, misinformation, and disinformation when it…

— Donald J. Trump (@realDonaldTrump) November 14, 2024

Community Reaction and Market Impact

Kennedy’s statements have resonated within the crypto community, often seen as a beacon for those advocating for decentralized finance. His policies could potentially influence voter sentiment, especially within the tech-savvy demographic interested in financial technologies. However, while his ideas might appeal to crypto enthusiasts, they also face scrutiny for their economic implications and feasibility in practical governance.

Congratulations. I look forward to seeing you Make America Healthy Again.

— Michael Saylor (@saylor) November 14, 2024

Robert F. Kennedy Jr.’s latest statements on cryptocurrency underscore a significant policy direction if he were to win the presidency. His vision for Bitcoin integration into U.S. financial policy could redefine economic strategies, focusing on transparency, individual financial control, and innovation. As the election approaches, his crypto stance might not only influence his campaign but also spark a broader discussion on the future of money in America.

The post Robert F. Kennedy Jr. Doubles Down on Bitcoin Commitment appeared first on Cryptopress.

1. The Hong Kong Monetary Authority (HKMA) has warned the public about certain overseas cryptocurrency firms misusing the term “bank” in their marketing and descriptions. 2. The HKMA stated that only licensed banks, restricted license banks, and deposit-taking companies authorized by the HKMA are permitted to conduct banking or deposit-taking activities in the region.

3. The HKMA identified incidents involving two overseas crypto firms that made misleading representations in Hong Kong. One firm described itself as a “bank,” and the other referred to its card product as a “bank card” on its website. 4. The HKMA expressed concerns around misleading consumers into believing that the firms are licensed banks operating under supervision.

The authority stated that such representations could mislead consumers to believe they are licensed banks in Hong Kong and are under the HKMA’s supervision. 5. Using the term “bank” in names or product descriptions without the authority’s written consent could potentially be a criminal offence for entities, according to the HKMA.

6. The strict regulatory framework is being enforced to ensure the public is not misled by unauthorized entities posing as legitimate banks. 7. The HKMA provided resources to verify authorized institutions, encouraging consumers to consult the HKMA’s register of authorized institutions or contact its Public Enquiry Service hotline for clarification.

8. The HKMA reiterated its commitment to protect the public from misleading practices and ensure a clear distinction between licensed banks and unauthorized entities. 9. Hong Kong is trying to position itself as a global leader in digital finance by introducing a robust regulatory framework for virtual assets.

10. The city is cultivating a thriving digital asset ecosystem and advancing innovation in the Web3 sector, with major initiatives including a forthcoming stablecoin regulatory framework prioritizing fiat-backed stablecoins to ensure financial stability. 11. The HKMA has advanced its e-HKD pilot program to phase 2, collaborating with over 20 firms, including prominent entities like HSBC, Visa, Standard Chartered, and DBS.

This initiative explores the practical use cases of a Central Bank Digital Currency (CBDC). 12. The forward-looking approach aligns Hong Kong with global trends in digital currency adoption.

Source

<p>The post Crypto Firms Beware: Hong Kong Authorities Crack Down On Misleading Bank Claims first appeared on CoinBuzzFeed.</p>

Argentine President Javier Milei pushes for a distinction between cryptocurrencies and state control. He believes that private cryptocurrencies can potentially challenge the state’s monopoly on cur

rency, and is against the implementation of central bank digital currencies (CBDCs). Milei’s stance on this issue highlights his support for keeping cryptocurrencies outside the reach of the state.

Source

<p>The post Crypto & State Separation: Argentine President’s Bold Vision first appeared on CoinBuzzFeed.</p>

The Bank of Ghana (BoG) has won the prestigious ‘Innovation in Digital Currency Design for Financial Inclusion’  at the 2024 Payment, Innovation, and Technology Week by Currency Research.

According to a press release by the BoG, this recognition emphasizes the eCedi’s innovative approach, especially its:

Governance

Online and offline accessibility

Interoperability, and

Infrastructure,

all designed to enhance financial inclusion in Ghana.

CBDC DAILY: ROCKSTARS #Ghana learned from #Nigeria…slow is good!

“eCedi to Boost Financial Inclusion in Rural Areas with an Offline Solution, Says Bank of Ghana”

Ensuring that offline transfers will be ready to go at launch with the #eCedi is a wise move by the Bank…

— Richard Turrin (@richardturrin) May 25, 2023

The award also acknowledged the Bank of Ghana’s collaborative ecosystem approach, which involved active engagement with banks, payment service providers, and the public throughout the eCedi pilot phase.

Key initiatives included:

The participation of financial institutions and payment service providers in the eCedi pilot program

https://t.co/v90Nq5wI3z Vodafone Cash and CalBank customers have been granted the opportunity to test the online version of Bank of Ghana’s Central Bank Digital Currency, the eCedi.

— Eager Beaver (@eagerbeavertech) May 30, 2022

 The eCedi Hackathon, inviting the public to showcase innovative applications using digital currency

CBDC HACKATHON | Bank of Ghana Launches eCedi Hackathon as Part of CBDC Research

The hackathon, in partnership with EMTECH, will span a period of 12 weeks and aims to assemble teams comprising programmers, designers, engineers, and various financial experts whose solutions… pic.twitter.com/P5a2qtHAuu

— BitKE (@BitcoinKE) October 10, 2023

A live trial at the 3iAfrica Summit, where participants made payments using eCedi at the Digital Village

The Payments, Innovation and Technology Week, organised by Currency Research, aims to explore trends and research in digital currency use and Artificial Intelligence (AI) applications for central banks.

Currency Research is an independent leading global provider of premium conferences for central banks, regulators, payment operators and other key companies regarding the subjects of cash and payments.

eCedi

The Bank of Ghana is pursuing a token-based approach for the CBDC, in addition to building it on the Hedera Hashgraph network.

#CBDC | The eCedi is Token-based and Built on the #Hedera Hashgraph Network, Says Bank of Ghana #HBAR https://t.co/yTMIwrvsNH

— Forest (@Earthling875) October 24, 2023

The eCedi operates on a token-based system, in contrast to the account-based model used by other Central Bank Digital Currencies (CBDCs), like the eNaira. This means that the eCedi is in the form of tokens that can be stored locally on a mobile phone or a card, rather than being held in accounts managed by the central bank or designated intermediaries.

The Bank of Ghana (BoG) is responsible for producing eCedi and distributing it to third parties, including banks and merchants, who then pass on the Central Bank Digital Currency (CBDC) to consumers.

eCedi wallets are designed to be fully accessible even in offline mode.

Besides Nigeria, Ghana, South Africa, and Eswatini have the most advanced CBDC projects across the continent.

9 Out of 13 African Countries Chasing CBDCs Are in Research Phase, Says The IMF https://t.co/rF0dbsTlwi via @BitcoinKE

— RareBirdsHQ (@RareBirdsHQ_) June 29, 2022

 

 

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The Digital Administrative and Financial Reform Council recently held its eighth meeting in Japan, and the resulting documents paint a picture of digital rulership utilizing AI, drones, NFTs, robots, massive cloud-based data sharing, and even medical check-ups at train stations. 

As the Western world dives further into infatuation and confusion over US politics with the latest, backtracking Trump cabinet appointments, Japan’s government is quietly but coercively pushing to upload the whole nation into a cloud-based data-sharing system.

Japanese public raises concern over the intentions of the 8th Council meeting

On November 12 (JST) the government’s Digital Administrative and Financial Reform Council held its eighth meeting, attended by Prime Minister Shigeru Ishiba and Digital Transformation (DX) Minister Masaaki Taira. Following the meeting, they released a document detailing their discussion, which reads like a page out of a Sci-Fi novel.

For some, repeated references to local digital currencies to revitalize economies, the use of NFTs (non-fungible tokens) to boost regional initiatives and other data-oriented projects, and the use of DAOs (decentralized autonomous organizations) seem to signal a bright future for the land of the rising sun. But not all are convinced the sugary-sounding plans are well-intentioned.

Source: https://www.cas.go.jp

“For digitalization, we want a Japanese-made NEC system! … It is not okay to adopt systems made by China or South Korea!” one critic said on social media platform X.

As Cryptopolitan has previously reported, the push for “Digital Transformation” in Japan by figures such as DX minister Masaaki Taira and opposition leader Yuichiro Tamaki is reaching fever pitch. Combine this with newly selected “defense geek” (read: Warhawk) PM Shigeru Ishiba, and talk of a central bank digital currency (CBDC), and it’s clear to see why fears of dystopian takeover are on the rise.

The recently released agenda document from the eighth meeting of the council plans for, among other things:

Use of local digital currencies to revitalize economies.

“Expanding sales channels for agricultural products using NFTs.”

Monitoring dairy farms with AI.

Implementation of robotic care workers in healthcare facilities.

Replacement of human jobs with robots/automation.

Up-close bridge and infrastructure inspection with drones in place of humans on-site.

Autonomous (self-driving) buses and taxis.

Cloud-based data sharing of education system information ( school attendance, etc.).

Cloud-based data sharing amongst major auto companies regarding CO2 emissions.

Cloud-based data sharing of medical information.

Expanded use of the catch-all ID “My Number” system.

Medical check-ups conducted online at train stations and post offices.

“Developing infrastructure to utilize a common system for determining where people are in times of emergency, even in peacetime.”

Source: https://www.cas.go.jp Japanese bite back at surveillance agenda

“The previous Digital Minister spoke with glee about the fact that a contract had been signed with an overseas company in Government Cloud dollars for system standardization, but how much has the weak yen increased costs?” one X user responded (translated by Google) to the post from the prime minister’s official account.

This would be in reference to Taro Kano, who has controversially advocated the centralized closure of unsuccessful businesses in recent months.

Source: x.com Source: https://www.cas.go.jp

With fears of a draconian globalist agenda running hot, and Westernized local media refusing to see the writing on the wall (or hear the voices of the Japanese people) when it comes to issues like 15-minute cities, perhaps it is more than understandable people are angry.

Many of the country’s economically embattled, tourist-overrun residents don’t want grandma cared for by a robot or at the train station, even with the addition of shiny NFTs and lip service given to cryptocurrency for the sake of political gain.

Federal Reserve Governor Christopher Waller recently questioned the necessity of a central bank digital currency (CBDC) in the US payment system during a speech at The Clearing House Annual Conference 2024. Waller emphasized the lack of a clear problem that CBDCs could solve and advocated for market-driven solutions. He highlighted the private sector's role in fostering payment system innovation through competition. US lawmakers, including Patrick McHenry, have expressed concerns about CBDCs, citing issues related to privacy and financial freedom. Anti-CBDC legislation has been passed in states like Louisiana and North Carolina. Additionally, the article discusses the inflows into spot Ethereum ETFs post-US elections, Bitcoin's appeal as a hedge amidst shifting US policies, and the cost efficiency of running a crypto business compared to traditional financial services. The article also includes a disclaimer regarding investment advice and the risks associated with trading cryptocurrencies. Read more AI-generated news on: https://app.chaingpt.org/news

Federal Reserve Governor Christopher Waller recently questioned the necessity of a central bank digital currency (CBDC) in the US payment system during a speech at The Clearing House Annual Conference 2024. Waller emphasized the lack of a clear problem that CBDCs could solve and advocated for market-driven solutions. He highlighted the private sector's role in fostering payment system innovation through competition. US lawmakers, including Patrick McHenry, have expressed concerns about CBDCs, citing issues related to privacy and financial freedom. Anti-CBDC legislation has been passed in states like Louisiana and North Carolina. Additionally, the article discusses the inflows into spot Ethereum ETFs post-US elections, Bitcoin's appeal as a hedge amidst shifting US policies, and the cost efficiency of running a crypto business compared to traditional financial services. The article also includes a disclaimer regarding investment advice and the risks associated with trading cryptocurrencies. Read more AI-generated news on: https://app.chaingpt.org/news

According to CoinDesk, Pablo Hernández de Cos, the former governor of the Bank of Spain, is set to become the general manager of the Bank for International Settlements (BIS) starting July 1. He will succeed Agustín Carstens in this role, overseeing the operations of the BIS, often referred to as the "central banks of central banks," for a five-year term. The BIS, based in Basel and owned by 63 central banks, has been actively involved in the cryptocurrency sector, collaborating with various central banks on digital currency projects aimed at enhancing cross-border payments, privacy, and anonymity. The organization has also been a proponent of a unified ledger for central bank digital currencies (CBDCs), which are digital assets issued by central banks.

Hernández de Cos has been a vocal advocate for the European Central Bank's efforts to develop a digital euro, emphasizing its potential to drive payment innovation. His involvement in the global financial landscape includes his role as chair of the Basel Committee on Banking Supervision, where he played a key part in finalizing global crypto-banking rules in 2022. The BIS's Board of Directors, responsible for overseeing management and strategic direction, has also made other significant appointments. François Villeroy de Galhau, the Governor of the Bank of France, has been reelected as the chair of the BIS Board of Directors. Additionally, Tiff Macklem, the Governor of the Bank of Canada, will assume the position of chair of the BIS Consultative Council for the Americas (CCA) starting in January. These appointments reflect the BIS's ongoing commitment to addressing the evolving challenges and opportunities within the global financial system.

According to Odaily, Federal Reserve Governor Christopher Waller has reiterated his stance that there is no immediate necessity for the United States to introduce a digital currency. Waller emphasized that the Federal Reserve's role encompasses managing financial stability risks while simultaneously supporting innovation. He highlighted the central bank's commitment to enhancing the efficiency and security of the payment system, which ultimately benefits households, businesses, and the broader economy.

Waller's comments come amid ongoing discussions about the potential development of a central bank digital currency (CBDC) in the United States. While some advocates argue that a digital dollar could modernize the financial system and provide a counterbalance to private cryptocurrencies, Waller remains cautious. He believes that the existing payment systems are already efficient and secure, and any move towards a digital currency should not compromise these attributes.

The Federal Reserve continues to explore the implications of a CBDC, considering factors such as privacy, security, and the impact on the banking sector. However, Waller's remarks suggest that the central bank is not in a rush to implement such a currency, focusing instead on ensuring that any future developments align with its goals of promoting economic stability and innovation.

The post Can Cryptocurrency Beat Inflation? Bitcoin vs. CBDCs Explained appeared first on Coinpedia Fintech News

The average inflation rate for the world in 2023 was 5.69%, impacting the quality of life of people worldwide. Inflation is generally characterized by currencies losing value over time and an increase in the price of consumer goods.

But these price spikes are nothing compared to the volatility in the cryptocurrency markets, where there could be massive annual jumps on one hand and severe drops on the other, leaving room for increased volatility and market risks. 

While central banks can raise interest rates and bring soaring inflation under control, there are no such options in the crypto market. The supply and demand for the limited number of coins available mostly drives the fluctuations in cryptocurrency values. 

Is It Possible For Bitcoin To Replace Central Banks?

Before we dive deeper to know if Bitcoin has any effect on central banks, it is important to understand the role that central banks play in an economy. Central bank policymaking supports the global financial system. For instance, the Federal Reserve in the United States is responsible for controlling inflation and maintaining maximum sustainable employment. The Bank of England ensures the stability and solvency of the financial system in the United Kingdom.

These Central banks use a variety of tactics, known as monetary policy, to achieve their mandates. Mainly they manipulate the money supply and interest rates. For example, a central bank might increase or decrease the amount of money circulating in an economy. 

The biggest advantage is that a central bank builds trust in the system. A central bank-issued currency is backed by a trusted authority and can be exchanged at a universal value. If each party in a monetary transaction issued its own coins, then there would be competition among the currencies, and chaos would follow.

Bitcoin on the other hand uses a decentralized system and a decentralized peer-to-peer ledger. It has the potential to become a globally accepted payment method and revolutionize people’s access to finances and financial services. However, most governments do not control or recognize it, and central banks cannot influence it.

This creates a few questions because some favor removing the influence and regulatory stances governments have on currencies, while some believe cryptocurrency is not a viable replacement for government-backed currency. So, is it possible that Bitcoin could replace central banks and fiat currencies? Let us dive deeper and understand more. 

A Central Decision-Making Authority

The problem with the structure described above is that it places far too much trust and responsibility on the decisions of a central agency. In the interconnected nature of the global economy, the policymaking decisions and errors by one central bank are transmitted across many countries.

What’s the difference between CBDCs and cryptocurrency?

The main difference between a CBDC and a cryptocurrency is that a CBDC is – as its name implies – issued by a central bank. “CBDCs are direct liabilities of the central bank, just as paper cash is,” adds the Harvard Business Review, which makes CBDCs a safer form of digital money than commercial bank-issued digital money.

Cryptocurrencies are not issued by governments or other financial institutions. Instead, they are digital currencies exchanged between people and various entities on a decentralized system. Crypto is not backed up by a central public authority or within the banking system, it is not considered legal tender and users are not protected from price volatility or theft because of hacking, or when crypto firms collapse.

Can Crypto Beat Inflation?

Largely driven by institutional investments, the cryptocurrency has become increasingly aligned with general market movements, which means that when the market goes down, Bitcoin likely goes down as well.

Therefore, when news of inflation strikes, policy interest rates will go up, and there will be monetary tightening. As a result, assets including crypto like Bitcoin will see a price decline. 

Notably, cryptocurrencies also experience inflation, even Bitcoin, which is often seen as “inflation-resistant.” However, as mining for new Bitcoin is automatically reduced by 50% every four years, inflation rates also decrease eventually.

Although Bitcoin is more volatile than gold, it offers better long-term growth prospects and therefore protects against inflation.  But how?

How Bitcoin Serves As an Inflation Hedge?

Bitcoin’s fixed supply makes it a good inflation hedge. One key to making an asset resistant to inflation is scarcity. Because Bitcoin has a limited supply, it remains scarce, thereby ensuring that its value will remain steady over time, which is why it is dubbed “digital gold.”

Bitcoin, like gold, does not belong to any single entity, economy or currency. Bitcoin is a better option than equities because it does not have to deal with the many economic and political risks associated with stock markets.

Much like gold, Bitcoin is durable, easily interchangeable, scarce and secure. Bitcoin has the advantage over gold, given that it is more portable, decentralized and transferable. Due to its decentralized nature, anyone can store Bitcoin, while gold has a controlled supply in sovereign nations. Cryptocurrencies like BTC and Ethereum provide a great alternative to investors who want to diversify their investment portfolios.

How Bitcoin Has Transformed Economies and Institutions

On 7 September 2021, El Salvador became the first country in the world to adopt bitcoin as a legal tender which has transformed El Salvador into a beacon for financial innovation as other nations began to closely observe its bold experiment. Today, with 5,748.8 bitcoins held in national reserves, El Salvador’s leadership continues to buy bitcoin, depicting its confidence in the long-term potential of the digital asset. 

In another example, since 2020, CEO Michael Saylor has focused on growing MicroStrategy’s value by buying Bitcoin with debt, particularly through convertible bonds, and capitalizing on the cryptocurrency’s high volatility. As a result, over the past five years, MicroStrategy’s shares have appreciated by nearly 1,200%, closely mirroring fluctuations in Bitcoin prices. 

Also, lately, the approval and launch of spot Bitcoin ETFs have further validated Bitcoin’s legitimacy in the mainstream financial system which has bolstered confidence in Bitcoins. Spot Bitcoin ETFs represent a significant evolution in cryptocurrency, offering a regulated and simplified way to gain exposure to Bitcoin’s prices. 

But, despite all of this, some believe that cryptocurrency is not a viable replacement for government-backed currency.  Also, Bitcoin has not been adopted at a rate that it would become a replacement for current financial systems. Rather, it has earned a place as a favorite for financial speculators and risk-takers because they believe its price will continue to rise even with nothing backing it but the hype.

The Government-Backed Solution

CBDCs potentially offer a way to enhance economic stability and boost the effectiveness of monetary policy.

Like all cryptocurrencies, CBDCs are founded and function on the bedrock of blockchain technology and use decentralized and encrypted checks and balances to record transactions and protect investors from fraud and cyberthefts. 

Notably, 134 countries & currency unions, representing 98% of global GDP, are exploring a CBDC. Currently, 66 countries are in the advanced phase of exploration—development, pilot, or launch. Every G20 country is exploring a CBDC, with 19 of them in the advanced stages of CBDC exploration. Of those, 13 countries are already in the pilot stage. This includes Brazil, Japan, India, Australia, Russia, and Turkey. Three countries have fully launched a CBDC—the Bahamas, Jamaica and Nigeria. 

This leaves investors in a dilemma if they should invest in cryptocurrencies that offer significantly more returns although caught with high risk, or should they opt for the safe route and invest in CBDCs?

Cryptocurrencies are decentralized and lack the censorship that comes with government-controlled CBDCs. This makes CBDCs vulnerable to inflationary situations as the supply is not fixed and can be increased at the discretion of the Central Bank.

A key discussion point however revolves around safety and security while transacting using Bitcoin or CBDCs. While transacting in Bitcoin, investors enjoy greater privacy than in the case of CBDCs as the transactions are pseudonymous. In the case of CBDCs, investors are subject to compliance measures and need permission to engage in transactions which takes away the control and freedom of investors. 

Bitcoin or Gold?

Precious metals like gold and silver are often considered by investors seeking to potentially stabilize and protect their portfolios due to their historical performance during periods of economic volatility.

Bitcoin and gold are commonly compared. Both Bitcoin and Gold have distinct advantages as stores of value. Gold offers time-tested stability and universal acceptance, while Bitcoin provides modern benefits like decentralization, portability, and digital security.

Understanding these differences is crucial for making informed investment decisions in a rapidly changing economic landscape. Whether you lean towards the ancient charm of gold or the futuristic promise of Bitcoin, each of the assets offers unique benefits that cater to different investor preferences.

So Which Is The Best Inflation Hedge?

Cryptocurrencies are a lightning-quick, efficient and cheaper way of conducting financial transactions whereas CBDCs due to being controlled and subjected to bureaucratic processes are much slower and a lot more complex in nature. However, some investors prefer the control and transparency that are linked to CBDCs over the anonymity of Bitcoin.

Bitcoin and cryptocurrencies are supported by a global network of traders and miners while CBDCs are a concept that is undergoing various levels of research and development. Therefore, it is crucial for investors looking to invest their hard-earned money into digital currencies to match the rapidly changing pace and scrutinize the impact of Bitcoin and CBDCs on their personal investment strategies. 

Therefore, consumers need to understand the differences between these concepts and the ways they could interact and impact one another.

According to PANews, the Reserve Bank of Australia (RBA) is collaborating with the Digital Finance Cooperative Research Centre (DFCRC) to explore the potential of wholesale Central Bank Digital Currency (CBDC) and asset tokenization. This initiative is part of the Acacia Project, which aims to engage industry participants in providing feedback and participating in trials for wholesale tokenization use cases by 2025. The RBA is also considering forming an industry advisory group to further these efforts.In addition to wholesale CBDC, the Acacia Project will investigate the use of private forms of digital currency, including tokenized deposits. This exploration marks a significant step in understanding how digital currencies can be integrated into the financial system, potentially offering new efficiencies and innovations in financial transactions.Previously, the RBA and DFCRC conducted experiments involving both wholesale and retail CBDCs, where the digital currencies were issued on infrastructure controlled by the central bank. In the latest phase of experimentation, the central bank is contemplating issuing a pilot wholesale CBDC (wCBDC) on third-party blockchain networks, drawing inspiration from Switzerland's Project Helvetia. This approach could provide insights into the interoperability and functionality of CBDCs within existing financial frameworks.