Digital Currency Revolution Series: Concept of Cryptocurrency Strikes Chord Among Central Bank Community

Recently, the Chinese central bank ‘PBoC’ issued a statement in a response to the US' labelling China as "currency manipulator". The Chinese central bank defended that the CNY depreciation is largely due to change of market conditions, and blamed that the US accusations are groundless. While they made an announcement of approval from the state administrative authority to start working on a national digital currency in order to combat the uncertainty of Libra, as per the Chinese reports.

Very recently, in an interview at the Federal Reserve’s annual Jackson Hole Symposium, Carney hinted that there is going to a dramatic shift in the monetary policy outlook that the central banks’ are perceiving a greater interest in crypto-assets such as Facebook’s libra. 

While the rumours are lingering that Governor’s proposal would replace the U.S. dollar as the world’s reserve currency with a digital alternative.

Apart from the cryptocurrency avenues, it is the waning luring prospects across the macroeconomic surface that are likely to be crucial driving forces in the rest of 2019. The continuing escalation of the China / U.S. trade tension is inflicting havoc across global capital markets and reinvigorating safe-haven sentiments among bullion markets (Gold and Silver). 

Perhaps the most significant economic development over the week was the Jackson Hole, Wyoming, gathering of U.S. Federal Reserve officials, academics and central bankers to discuss the state of the global monetary system. Here the mood could best be described as ominous, with James Bullard, president of the St Louis Federal Reserve telling the Financial Times the developed world had experienced a ‘regime shift’ saying “Something is going on, and that’s causing ... a total rethink of central banking and all our cherished notions about what we think we’re doing. We just have to stop thinking that next year things are going to be normal.”

Ultimately, it was the governor of the Bank of England, Mark Carney, who dropped the biggest bombshell, saying the dominance of the United States dollar as the global reserve currency “will not hold” and suggesting “a network of central bank digital currencies” to ultimately replace it.

This all bodes well for the narrative of Bitcoin as a nation-agnostic alternative to USD. Other significant macro bull signs for Bitcoin include increasing retail flows via onramps such as Coinbase, new institutional onramps via long-awaited launches from Fidelity and Bakkt, and the growing anticipation of Bitcoin’s 2020 halving event. Courtesy: BNC

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