CBDCs and Stablecoins in the ever-evolving Global Payments Aren

Time:2022-01-18 Source: 795 views NFT Copy share

Locke Lord lawyer and co-founder of the Prepaid International Forum, Robert Courtneidge, believes that “cryptocurrency will be an important part of the future of our society, and regulation will soon become part of the crypto space”.

While we have seen continued growth in major cryptocurrencies such as Bitcoin and Ethereum in recent years, they are all hedged against real-world assets and commodities such as gold, stocks and currencies in the form of investment assets. There has been a lot of effort trying to build them into the infrastructure of mainstream payments, more recently Crypto.com and others using Visa or Mastercard-related payment cards have created a bridge to give them access to traditional Scenarios where payment channel companies exchange cryptocurrency for fiat currency for payment.

Some players like Coinpayments are offering merchants the opportunity to accept cryptocurrencies directly from customer wallets, but so far, this approach has seen extremely low adoption compared to the ubiquitous real and virtual card scheme payment terminals. In addition, the emergence of many scams and “carpet” cryptocurrencies has drawn the attention of regulators and fears that they will enter the public eye, which means they are far, far away from becoming any mainstream game in the payments space. However, that all changed when Facebook joined the initially ill-fated Libra project, which has now become Diem. That prompted action from regulators and governments around the world, with France even saying it would ban it, while the United States sent senators to Switzerland to prevent it from taking shape.

Activities of this magnitude are now leading to new regulations in Europe, the UK and the US. On October 6, 2021, the Committee on Payments and Market Infrastructures (CPMO) and the International Organization of Securities Commissions (IOSCO) published a consultation report on the application of the Principles for Financial Market Infrastructures (PFMI) to stablecoin arrangements, which indicates that Ensure a consistent application of international standards to cryptocurrency-focused financial services. On October 7, 2021, the Financial Stability Board (FSB) released a report on the progress of stablecoin regulation, oversight and oversight in 48 jurisdictions around the world.

In January 2022, the FSB will begin to review these recommendations and address any gaps, in consultation with other standard setting bodies and international organisations, and on October 13, 2021, the Deputy Governor of the Bank of England (Financial Stability) Jon Cunliffe gave a speech on cryptography. Presentation on the impact of currencies on the stability of the UK financial system. The immediate issue surrounding the financial stability of unbacked cryptoassets, such as Bitcoin, is the impact of sharp price corrections, he said. Regarding supported crypto assets (i.e. stablecoins), regulators need to ensure that current system payment system standards are equally valid for any system payment system that uses stablecoins. Some investors may hear the word "regulation" and worry that it will hurt the crypto space. However, Robert Courtnatch

As you can see, the world seems to be terrified of the potential impact of unregulated stablecoins and wants to close this loophole soon, but are we missing something? While all of this is trying to stop the likes of Facebook from creating a global currency, China is on the offensive with its CBDC, the digital yuan (eCNY) launching on January 1st, 2022! In a 11 December 2021 Financial Times article, the head of the UK's GCHQ warned that technology could allow Beijing to monitor users and control global currency transactions. Sir Jeremy Fleming, head of Britain's electronic intelligence agency, said China was now the "biggest strategic issue" facing the UK and was expanding its espionage and seeking control of digital infrastructure.

In fact, there is an entire section in the 2021 McKinsey Global Payments Report “Learning from China’s CBDC Pilot.” Since 2013, China has been developing the Belt and Road Initiative in more than 70 countries. In itself, this is a daunting task to help many developing countries. But is there more? Is it a coincidence or a plan that China started developing its digital currency a year later? If we look at how China will launch eCNY in countries along the “Belt and Road” in the next few years, a new world pattern begins to emerge.

While the Chinese continue to say their currency poses no threat to the dollar, the global settlement currency, it is believed that the yuan could rise to 5% to 10% of global reserves by the end of 2030. While we currently don’t know how this scene will play out, and we do know that the West is working on its own central bank-issued digital currency, it’s clear that China has been planning this for years, and the West is now playing hide-and-seek, and the U.S. is worried.

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