With the #cryptocurrency market collapse, a #CBDC outage, and rumors of the largest #stablecoin project folding, January brought bad news for #digital currencies of all kinds. ⬇️ some takeaways. (1/n)
1. As #crypto prices collapsed, narratives of each coin need to be reevaluated. Fixed supply alone does not make for an inflation hedge. Claiming that a project is "Decentralised" does not make it so. Technological promises remain elusive: ideas.repec.org/p/bis/biswps/7… (2/n)
2. A live #CBDCs had an outage. One of the use cases for a retail #CBDC is as a resilient payment rail that can act as a backstop to the payment system in cases where other electronic means of payment fail. Engineering should focus on this aspect: ideas.repec.org/a/bis/bisqtr/2… (3/n)
The new @BIS_org Innovation hub work program already includes projects focussed on exactly this.
bis.org/about/bisih/ab…
Source for the outage:
eccb-centralbank.org/news/view/regi… (4/n)
bis.org/about/bisih/ab…
Source for the outage:
eccb-centralbank.org/news/view/regi… (4/n)
3. - Bloomberg reports that #stablecoin #Diem is liquidating. This is not confirmed officially! But what can be said is that its now much more likely that instead of all-encompassing "global stablecoins"...
Source:
bloomberg.com/news/articles/… (5/n)
Source:
bloomberg.com/news/articles/… (5/n)
...that are used for #cross-country #payments, the industry will for the time remain focused on stablecoins underpinning #DeFi. Regulation that is being developed around the world needs to take their potential into account: ideas.repec.org/p/bis/biswps/9… (6/n)
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