CBDCs protect privacy and break data monopolies

Central banks and corporations are racing for digital payment infrastructures. A blog post by the US Federal Reserve argues why a state digital currency (CBDC) would be a better solution.

Has the cash had its day? Surveyprove that in the wake of the corona pandemic, Germans are also increasingly paying digitally. This global trend can be explained by increased hygiene and comfort. Data protectionists are still alarmed, because cashless payments create an unimagined amount of data for corporations such as PayPal , Visa, Google and Facebook . Could privacy be better protected with central bank digital currency (CBDC)?

At least that’s what Rodney Garrett and Michael Lee claim in a blog postfrom November 23rd. The economist from the University of California at Santa Barbara and the researcher from the New York arm of the US Federal Reserve discuss a jointly published paper. The two describe CBDCs as “inexpensive, privacy-protecting electronic means of payment.” On the other hand, they reject Bitcoin and Co. because of high transaction costs.

Private payment platforms and the data monopoly

Garett and Lee first ask about the effects of digital payment infrastructure in private hands . As is usual in economic research, the considerations of the two authors are based on a number of model assumptions. They assume that companies use data to gain a competitive advantage and that consumers choose between different payment models based on the price. As digital payments promise user data, companies would create incentives for their use. As a consequence, according to the model, a data monopoly is forming on the market:

A company that gains small information advantage early on will aggressively price to increase its share of consumer data and monopolize the market in the long run. In such a market, we find that the monopoly controls the vast majority of the data and is able to offer a product that is far superior to its competitors‘ products.

What is beneficial for this company turns out to be a disadvantage for end users. Because only a fraction of the added value that has been generated by their data actually reaches them. With a CBDC, however, the calculation is different.

CBDC: When digital infrastructure meets cash

Digital central bank money goes hand in hand with the same convenience for consumers as private payment platforms. Still, a Garrett and Lee model CBDC offers the same wealth of privacy as traditional paper.

This gives end users another benefit. Because if private providers want to access consumer data, they have to make payment processing cheaper via their own platforms than via a CBDC. It is irrelevant whether consumers actually make use of the digital cash. The mere presence of a CBDC creates incentives for remuneration for disclosing one’s own data.

The reasoning of the two researchers is based on the assumption that central banks are not after profit and therefore have no use for user data. CBDCs could therefore help to save the anonymity of cash into the digital age. This conclusion may be correct for liberal democracies. In the case of China and comparable autocracies, however, state digital currencies in particular open up frightening monitoring and control options.

Visa CEO kijkt vooruit naar de wereld van Crypto

De CEO van Visa is optimistisch dat er in de toekomst meer digitale valuta op het Visa-netwerk zullen draaien.

Visa-CEO Alfred Kelly zei dat hij een groot potentieel ziet in cryptocurrencies

Digitale activa zullen erg handig zijn in landen met een groot aantal mensen zonder bankrekening, voegde hij eraan toe.

Het kan echter enkele jaren duren voordat Bitcoin Era de opkomende technologie volledig omarmt.

Alfred Kelly, CEO van betalingsgigant Visa, zei dat zijn bedrijf de komende jaren een groot potentieel ziet in digitale valuta, vooral in opkomende markten met een aanzienlijk aantal mensen zonder bankrekening, volgens het rapport van CNBC dat op vrijdag werd gepubliceerd.

„Crypto is een zich ontwikkelend onderdeel van betalingen in de wereld“, zei Kelly, en voegde eraan toe: „Uiteindelijk zouden we digitale valuta’s op het Visa-netwerk regelmatiger kunnen zien draaien,“ zij het „over een aantal jaren.“

Het bedrijf heeft onlangs Plaid overgenomen, een bedrijf dat 11.000 financiële instellingen in de VS en 2.700 fintech-ontwikkelaars helpt om gegevens uit te wisselen

„We zijn een netwerk en proberen steeds meer een netwerk van netwerken te worden,“ merkte Kelly op, en legde uit: „Plaid is gewoon op zijn eenvoudigste niveau een ander netwerk waarvan we denken dat het past in de wens om meerdere netwerken te hebben waarop we informatie en geld over de hele wereld. “

De CEO van Visa voegde eraan toe dat een van de grootste voordelen van crypto ligt bij de 1,7 miljard mensen zonder bankrekening over de hele wereld die geen toegang hebben tot traditionele rekeningen.

„Er zijn 1,7 miljard mensen op aarde waarvan we denken dat ze niet in een regulier banksysteem zitten in welk land ze ook wonen, inclusief sommigen hier in de VS“, merkte Kelly op en voegde eraan toe: „We staan ​​zeker open voor elk voertuig. dat helpt om geld over de hele wereld te verplaatsen. We willen er middenin zitten. “

Tegelijkertijd is Visa van plan om samen te werken met centrale banken als – of wanneer – zij hun eigen digitale valuta van de centrale bank (CBDC’s) gaan uitgeven. Hoewel de meeste van deze projecten zich nog in een vroeg ontwikkelingsstadium bevinden, merkte Kelly op, verwacht het bedrijf dat deze inspanningen in de toekomst zullen worden gerealiseerd.

„We blijven verwachten samen te werken met centrale banken over de hele wereld bij het ontwikkelen van digitale valuta voor de toekomst“, zei de CEO van Visa. En het ziet ernaar uit dat dat bij velen van hen zal gebeuren .

Bitcoin skifter før de avregner over $ 16K igjen

Bitcoin-prisen skjøt forbi 16 000 dollar-nivået for et par dager siden. Siden har det lagt til mer enn $ 200 til prisen, og det ser ut til at mange analytikere er overbevist om at $ 20.000 – eiendelens heltidshøyde som opprinnelig ble oppnådd i desember 2017 – kunne bli slått igjen før årets slutt.

Bitcoin har beveget seg litt de siste få dagene

Imidlertid ser det ut som bitcoinprisen kan ha gått gjennom noen opp og ned bevegelser før den endelig gjenopprettet og handlet for det den for tiden sitter på. Valutaen steg til $ 16.200, men falt deretter ned til $ 15.600 kort. Derfra skjøt det opp til $ 15,900 før det endelig slo seg tilbake over $ 16,000-merket.

Dette antyder at flyttingen ikke er en fluk, og at valutaen potensielt opplever en liten smak av motstand her og der. Imidlertid viser eiendelen sin styrke og motstandskraft og tillater ikke at dråpene er permanente. Valutaen har beveget seg fremover i $ 16.000-serien, og for det meste blir den der.

Denis Vinokourov – forskningssjef for den Londonbaserte digitale valuta-virksomheten Bequant – forklarte i et nylig intervju:

Det er noe overbelastning mellom $ 16,170 og $ 17,150-sonen (basert på prishandling i 2017 og 2018), men til slutt ønsker markedene å teste heltidshøyder og motstand før det ser meningsløst ut, basert på den nåværende risikofølelsen. . Selv om oppsiden kan ha avtatt noe, peker den pågående økningen i futures åpen interesse, sammen med å gjenopprette bitcoin-hash-rate og det faktum at det amerikanske valget er ute av veien, ytterligere gevinster for bitcoin og det bredere markedet som helhet.

Han mener at konsolideringene de siste dagene er sunne tegn på at bitcoin gjør akkurat hva det burde være. Jason Lau – COO for kryptovalutautveksling OK Coin – forklarte videre at bitcoin også er på et solid sted, og at okserallyet sannsynligvis vil fortsette på lang sikt. Han forklarer:

Bitcoin nettopp ryddet $ 16.000 for første gang på tre år, og bekreftet den eksisterende hausseoppgangen. Det har vært sterkt, med seks sammenhengende positive ukentlige avslutninger. Sterk institusjonell interesse (BTC-futures åpen interesse er på høyeste nivå) og innkommende detaljstrøm (PayPal åpnet kryptokjøp til alle amerikanske brukere i dag) gir fortsatt drivstoff til dette rallyet. Med minimal motstand fram til $ 20K, er det vanskelig å fortelle hvordan de neste dagene vil handle inn mot årsskiftet, men tegnene er positive.

Hva konsentrerer handelsmenn seg om?

Tim Enneking – administrerende direktør for Digital Capital Management – foreslo at markedsdemografien rundt BTC og krypto har endret seg, og kommenterer:

Den gjennomsnittlige BTC-handelsprofilen endres hver 12.-18. Måned eller så. Profilen har nå blitt mye mer institusjonell, mer konsentrert og mer fokusert på ‘hodling’ snarere enn handel.

BTC and Biden supply: 5 things to keep in mind about Bitcoin this week

Bitcoin is preparing for battle at the beginning of the Democratic transition in the United States and the spread of coronavirus blockages elsewhere.

Bitcoin (BTC) is beginning what will likely be a busy week for the markets as the United States begins its two-month presidential transition.

After Joe Biden was declared the projected winner of the U.S. presidential election over the weekend, Bitcoin Freedom fell but managed to avoid major losses, what’s next?

Cointelegraph takes a look at the factors that will influence BTC’s price action over the next week.
US Election Frenzy Starts to Bite

Attention remains firmly fixed on Washington as the aftermath of a highly controversial election begins to unfold.

Experts have warned that market volatility is almost guaranteed once the outcome occurs. Since this happened over the weekend, the opening of Wall St. on Monday will be a source of interest for market participants.

At the close of this edition, Japan led the way in profits, with its stock market reaching a 29-year high in what the press is calling the „Biden Bounce“.

Binance’s DeFi index falls 60% while Bitcoin eclipses the altcoins

Bitcoin, on the other hand, has stopped at the continuation of last week’s gains and at one point reached $14,400, $1,590 less than its recent peak. Since then, BTC/USD has rebounded considerably, reaching $15,250 at the close of this issue.

Acting President Donald Trump has promised to challenge the vote recount and could cause more problems for Biden, leading to confusion about the policy, which could stir up feelings.

However, analysts often argue that in the long run, Bitcoin and gold as a safe haven will emerge, regardless of which candidate leads the U.S. in the future. The reason, among other things, is inflation.

As Cointelegraph reported, a speech last week by Federal Reserve Chairman Jerome Powell saw demands for greater financial stimulus to enter the U.S. economy, increasing debt and downgrading the dollar.

„Bitcoin is the dominant crypto currency network, designed to house the ideal safe-haven asset and preserve monetary power for long periods of time without loss of power,“ summarized Michael Saylor, CEO of MicroStrategy, in a tweet on Monday.

„That makes #BTC the solution to the problem of every investor’s reserve value. Few understand this.“

Coronavirus Chaos Drowning Europe

Accompanying the consequences of the elections is the continuing confusion over the handling of the Coronavirus by the nation states.

Europe and the US have recently diverged on this issue, with the former succumbing to a wave of new blocking measures that have been met with considerable public rejection.

After showing buoyant recovery statistics for the third quarter, many governments will soon paint another totally less attractive picture of their economies for the fourth quarter, as economic activity plunges for the second time in 2020.

The Fed’s call for more stimulus is „key to buying Bitcoin,“ says Winklevoss

This opens up the possibility of history repeating itself for Bitcoiners. After March’s cross asset drop and first closings, Bitcoin recovered from $3,600 to five figures in less than two months.

While the governments themselves were repeating the controversial responses to the virus, analysts were already predicting a strong year for Bitcoin in 2021. Among them, as Cointelegraph reported, Real Vision CEO Raoul Pal and Gemini Exchange co-founder Tyler Winklevoss predicted a new all-time record for BTC in the first quarter of next year.
Fear and Greed Index hits danger zone

However, in terms of current investor sentiment, warning bells are ringing as Bitcoin remains above $15,000.

According to the Fear and Greed Index, which measures market sentiment using a basket of factors, a correction is more than overdue.

Compiled as a score of 100, the index reached its highest reading since June 2019 on Monday, when Bitcoin reached its annual high of $13,800.

By comparison, two weeks ago, the index was measuring below 60, firmly „neutral“ territory, before the latest price spike raised optimism.

The closer your score gets to 100, the more likely it is that the market will correct itself thanks to a wave of sales, dragging the price down.
Historical Fear and Greed Index Chart.