Years of hostility sealed by banks by allowing cryptocurrencies to play a limited role
But the ambition flattens some to take the center of gold.
Investors in Bitcoin and other cryptocurrencies have had an extraordinary run, Financial Times reports.
However, Janet Yellen's arrival as Treasury is likely to herald a new era of hostility on the part of regulators and central banks towards what advocates call "libertarian" forms of digital money.
At her last press conference in 2017
Ms. Ylen was the president and chief executive of
- the Federal Reserve Bank that "bitcoin" is a "highly speculative asset"
- and that it is not a "fixed store for value preservation."
- However, although a number of officials at the time supported those dismissive remarks
- the market value of bitcoin doubled
- indicating that cryptocurrencies were found to remain.
Comedian John Oliver launched his teaser in 2017-2018
as the cryptocurrency wave began, describing Bitcoin as "everything you don't spend on money mixed with everything you don't understand about computers."
Although technological aspects, particularly the blockchain network of digital account records used to record transactions, have not risen to the level of initial publicity, they have begun to improve.
The issuance of $20 billion :
as an "initial currency offer" appeared to contain elements of the speculative bubble, but the funds raised were used to launch projects similar in outline to the rest of Silicon Valley's information technology projects.
Hostility is expected to continue with cryptocurrencies in the form of payments and conversion vehicles.
- Besides, it is due to the high cost of making deals
- as the use of "bitcoin" is not widespread to make payments
- and its future role appears to be limited.
Treasury Secretary Stephen Mansion has previously worked on new laws that would increase transparency in bitcoin transactions and reduce the margin of money laundering. However, in collaboration with the Fed, Ellen will likely adopt a stricter approach that treats payment systems as an ideal public good.
The Fed cooperates with foreign parties in investigating the development of the Central Bank's cryptocurrencies.
- Central Bank cryptocurrencies will almost certainly be issued within core budgets following China's example.
- However, they will be allocated in local currencies rather than cryptocurrencies.
Private competitors who will be named in the original new currencies as "bitcoin" will be subject to stringent laws or will be effectively thwarted.
- While hybrid cryptocurrencies like Facebook's Libra.
- which is linked to a single currency or other real assets
- More welcome by central banks
- If they are subject to direct conversion into traditional currencies.
Moreover, it will not be provided with "blockchain" support. Any central bank can develop its own ledger technology.
This keeps the field for cryptocurrencies as an investment tool and as a value store.
But can Bitcoin compete with gold as a safe asset for large investors?
History, laws and market volatility show the exclusion of probability, but that does not prevent cryptocurrencies from developing an important role.
It shows that there is a weak logic to monetary policy and the foundations of fiscal stability that governs regulators' concern about competing digital currencies with gold as a preserving store of value.
The world of cryptocurrencies :
is currently in a state of short-lived anticipation and hectic waiting, but investors' continued belief in the dubious narrative of indicating that these private currencies are "safer" than those dominated by central banks will likely contribute to the potential for those currencies to rise further in terms of market value over the coming years.
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