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It’s now or never — The US has to prepare itself for digital currency

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It’s now or never — The US has to prepare itself for digital currency

Welcome to the world of central bank digital currency, or CBDC, where big countries like China and small countries like the Bahamas are trying to mark their presence. It’s a world where 86% of the world’s central banks are trying to create digital currencies. Almost 60% of them are working on the concept and 14% have already introduced a pilot program.

Related: Did CBDCs affect the crypto space in 2020, and what’s next in 2021? Experts answer

CBDC: A global perspective

A CBDC is the digital version of a national currency that can be exchanged throughout the world. Unlike a national currency, you can keep a digital currency on your smartphone to buy whatever you want.

Five countries have already introduced their digital currency. The Atlantic Council believes that around 81 countries (contributing 90% of the world’s GDP) have already started researching digital currency. And this is just the beginning.

Related: The CBDC promised land: As some governments falter, others press on

According to a Bank for International Settlements (BIS) survey published back in January, there will be a boom in digital currency in the next few years. Per BIS, countries comprising one-fifth of the world’s population will launch a digital currency soon.

China is at the top of the league right now. They have already made over $5 billion worth of transactions with its CBDC, the digital yuan. Some people fear this will help China get an edge over the U.S. dollar’s status.

Related: How the digital yuan stablecoin impacts crypto in China: Experts answer

But how can you use CBDCs? Well, there are various ways. They can buy necessities, such as food and medical supplies. However, it’s best if the digital currency is not used for buying alcohol or cigarettes. Digital currency can also come in handy during a pandemic. It can deliver government aid fast through digital wallets. It can also help the government stop malpractice.

Is America ready to enter the world of CBDC?

The U.S. Federal Reserve is still skeptical about the efficacy of central bank digital currencies. They are still years away from developing their own digital currency. Meanwhile, according to a Bank of America report, digital currency would make the U.S. dollar “remain highly competitive…relative to other currencies.”

The U.S. House Committee on Financial Services held a hearing on the benefits and drawbacks of central bank digital currencies. Many people who attended the hearing, including Julia Coronado of MacroPolicy Perspectives, expressed their opinion that the U.S. has to be more serious and take a leadership role in CBDC.

China is already leading the race and other countries are also making steady progress. If America continues its laid-back attitude regarding digital currency, it will lose the chance to decide the future of digital currency.

Possible reasons behind America’s laid-back attitude towards digital currency

One possible reason America is not taking proactive steps regarding digital currency is because the U.S. dollar still reigns supreme. But what America does not understand is that CBDCs can remove the U.S. dollar from its numero uno position as the global reserve currency in the future.

A digital currency would eliminate hurdles for countries making financial transactions with each other directly. They wouldn’t have to depend on the U.S. dollar anymore. One reason the U.S. dollar is dominating the world is because it is a reserve currency. People use it for convenience. But with the emergence of digital currency, these people can enact a direct settlement between trade pairs.

Related: China’s CBDC is about domestic dominance, not beating the dollar

The U.S. dollar is an integral part of America’s foreign policy. The federal government can bar sanctioned countries from the dollar-based system.

Now, everything depends upon the United States. If the country doesn’t introduce its own CBDC, it may not get much information on cross-border transactions in the future. If the other countries use digital currencies for transactions, they wouldn’t need to use the Society for Worldwide Interbank Financial Telecommunication network, which America can supervise.

What can the U.S. possibly do?

There is one disadvantage of digital currency, and that is the lack of privacy. Many Americans may not like the fact that the government can easily monitor transactions made with digital money. The U.S. government can play a significant role in alleviating this concern. It can develop a digital currency that won’t lead to privacy infringement. According to the co-founder of the Digital Dollar Project, Chris Giancarlo:

“If this is going to be the tech of the future, we want to make sure the U.S. brings democratic values to bear.”

Final notes

A close inspection of the current scenario shows that the digital currency is here to stay. Digital currency can help central banks to coordinate with people directly. This is extremely helpful during times of crisis.

The widespread use of digital currency may cut down the operating cost of the global financial industry. It may become the most convenient way to make financial transactions and push us toward a cashless society.

Will it eliminate cash completely? Well, it’s too early to predict, since cash is still the most private form of money. Central banks are not recommending a total elimination of cash.

Will it replace Bitcoin (BTC) or other cryptocurrencies? The fundamental difference between CBDCs and cryptocurrency is that the first one is digital government currency, and the second one is a nongovernmental digital currency. As of now, CBDCs are less likely to replace cryptocurrency, which is convenient for private transactions (although it is unregulated and vulnerable to hackers).

Next comes the next big question: What about America’s place in the CBDC world? The answer is simple. If America is still not ready for digital currency, it will stay on the sidelines. It will lose a chance to create a digital currency that is democratic and has a strong focus on privacy. According to Michael Sung of the Fudan Fanhai Fintech Research Center in Shanghai: “You’re going to see a massive transformation of the international monetary system.”

If this is true and there is widespread use of digital currency, the value of the U.S. dollar as a global currency will decrease. If America acts wisely and develops digital currency, it can bring around 14 million unbanked U.S. adults into the financial system.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Lyle Solomon is a principal attorney for the Oak View Law Group in California, where he specializes in consumer bankruptcy. In addition to his extensive litigation experience, Solomon has written several articles on financial well-being.

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Bitcoin (BTC) Drops Below $60,000 But Correction Could Be Short-Lived

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Bitcoin (BTC) Drops Below $60,000 But Correction Could Be Short-Lived

Bitcoin (BTC) is likely in the middle of a short-term correction that has taken it below $60,000. Following this correction, a rebound in price is likely. 

BTC decreased considerably on Oct 26 and created a bearish engulfing candlestick.  This is a type of bearish candlestick in which the entire upward movement from the previous day is negated with an equal or larger drop the next day.

The main support area is found between $52,400 and $53,350. This range is made up of a short (white) and a long-term (black) Fib retracement level and a horizontal support area. There is also a minor support level at $56,550, created by only the short-term Fib level. 

Technical indicators support the continuation of the decrease.

The MACD, which is created by short and long-term moving averages (MA) is falling. Currently, the MACD is still positive, indicating that the short-term trend is moving faster than the long-term trend. However, it’s decreasing, signaling that the MA is decelerating.

The RSI, which is a momentum indicator is also decreasing. It’s above 50, signaling that momentum is still bullish, but the decreasing RSI indicates that momentum is also losing strength.

BTC gets rejected

The six-hour chart shows that BTC is moving underneath a descending resistance line since the Oct 20 all-time high price. 

More recently, the line rejected the price on Oct 25 (red icon), initiating the current downward move. The rejection also coincided with the $63,650 resistance area.

As long as the descending line remains unbroken, the short-term trend is considered bearish.

Wave count

The short-term wave count shows that BTC is likely in an A-B-C correction, which is potentially contained inside a parallel channel. For a long-term wave count analysis, click here.

Currently, BTC is in the C wave, which is the final portion of the correction and after which a rebound in price is likely.

There is considerable support near $56,500 and a drop to those levels would give waves A:C an exact 1:1 ratio. Furthermore, it would coincide with the support line of the channel. In addition to this, the area coincides with the short-term Fib support outlined in the first section. 

For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Bitcoin drops $1K in five minutes in fresh dip below $60K

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Bitcoin drops $1K in five minutes in fresh dip below $60K

Ethereum slips below $4,000 as an anticipated correction suddenly takes hold of crypto markets.

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Bitcoin drops K in five minutes in fresh dip below K

Bitcoin (BTC) fell sharply on Oct. 27 as $60,000 finally gave way to two-week lows.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin bites into major buy wal

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD nearing $58,000 at the time of writing, hitting its lowest since Oct. 15.

The move follows multiple retests of $60,000, with Bitcoin now taking liquidity in a large support wall with $57,000 as its base.

Analysts, as Cointelegraph reported, were already prepared, with some data suggesting a deeper dive to a low as $50,000 would still preserve the overall bull trend.

#Bitcoin couldn’t break through $63.6K and tests the other side of the range.

Might be dropping another time if $61.6K can’t break and then I’m looking at $58K next. pic.twitter.com/HIsvhE5ZlZ

— Michaël van de Poppe (@CryptoMichNL) October 27, 2021

Commenting on the situation meanwhile, Charles Edwards, CEO of investment firm Capriole, blamed leveraged traders for sparking the volatility.

“Basically Bitcoin looks incredible here on most metrics, but leverage traders have gone out of control,” he argued.

“We won’t get sustainable price rises until that changes.”

Data showed $500 million being liquidated in a single hour across cryptocurrency.

Altcoins lose big on trend reversal

Ether (ETH) led a bleed from altcoins Wednesday, falling below its hard-won $4,000 support line.

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView

Related: Expanding ecosystem and $1.86B futures open interest back Solana’s $250 target

Several of the top ten cryptocurrencies by market cap saw daily losses of over 15%, including Dogecoin (DOGE) and Solana (SOL).

Shiba Inu (SHIB) was still largely in the green, up 23% on the day despite the market turnaround and continuing a wild month.

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Redditors cheer as GameStop assembles team of NFT experts

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Redditors cheer as GameStop assembles team of NFT experts

“Future creators won’t just build games but also the components, characters, and equipment. Blockchains will power the commerce underneath,” Gamestop’s Head of Web3 Gaming job listing reads.

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Redditors cheer as GameStop assembles team of NFT experts

GameStop (GME) is assembling a team of blockchain and NFT experts to work on the firm’s upcoming NFT platform.

The firm’s GME stock is a cult favorite amongst retail traders as a result of the r/wallstreetbets and Robinhood saga earlier this year. On Reddit the r/Superstonk community boasts 659,000 members, and is dedicated to hosting business and stock discussions related to GME.

A post about GameStop’s job listings yesterday has received more than 10,000 upvotes at the time of writing, with many members posting bullish sentiments over GameStop’s latest move.

GameStop quietly unveiled a bare-bones website for its NFT marketplace in May. The site currently features a Nintendo Gameboy-style gaming console with an Ethereum logo, along with a message calling out for recruits to work on the platform.

Since then the firm has held its cards close to its chest, however on Oct. 25 it listed a total of eight jobs for crypto-friendly candidates, including three roles for NFT experienced software engineers, three jobs for product marketers and with two roles focused on Web3 based gaming.

One of the listings for the Head of Web3 Gaming job says that GameStop is looking for someone with experience with “Ethereum, NFTs and blockchain-based gaming platforms.” The firm has also hinted that there are some plans related to the Metaverse in the works.

“GameStop is looking for a unique individual who can help accelerate the future of gaming and commerce. In this future, games are the places to go, and play is driven by the things you bring. Future creators won’t just build games but also the components, characters, and equipment. Blockchains will power the commerce underneath,” the job listing reads.

Web3, billions in revenue, NFTs, Ethereum Layer 2. probably nothing. $GME pic.twitter.com/s3PiaqtWQl

— Chris SilvΞstro (@vestro) October 26, 2021

Related: Reddit may be preparing to launch its own NFT platform

Members of the r/Superstonk community were singing the firm’s praises yesterday, with “Triaspia2” calling it one of the “best job listings” they had seen, while pledging to buy more GME as it was a “bullish signal.”

Redditor “Donnybiceps” was equally bullish, noting that:

“NFTs are the future and people who haven’t gotten on board the GME train while knowing all these clues then you should be blaming yourself for not thinking this through.”

GME has had a volatile performance in October, going as low as $166 before bouncing to around $187 and subsequently crashing down again. However, according to data from Tradingview, the price of GME has still gained 2.8% this month to sit at $178 at the time of writing. The year-to-date gain for GME is a whopping 844%.

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