Brazil Becomes The Latest Country To Confirm Plans to Launch A CBDC

Brazil’s Economy Minister recently spoke during the celebration of the Caixa Economica Federal’s 100 millionth digital savings account, and he used the opportunity to announce Brazil’s own CBDC.

The Central Bank Digital Currency (CBDC) trend is larger than ever, with countries worldwide announcing their intention to create their own digital currency, one after another. The latest in this long line is Brazil, whose Economy Minister personally confirmed plans to launch digital real.

Brazil announces its upcoming CBDC — digital real.

Brazil’s decision to launch its own digital currency does not come as a major surprise. After all, as soon as China announced digital yuan, many countries started developing their own CBDCs in China’s fear of obtaining too much influence.

As soon as a few nations’ central banks showed their willingness to start creating their own crypto, the rest were bound to follow. Brazil comes as the next one in line, as confirmed by its Economy Minister, Paulo Guedes.

Guedes made his statement yesterday, November 5th, during a special ceremony that celebrated the opening of the 100 millionth digital savings account in Caixa Economica Federal.

He said that the central bank is once again autonomous and that the digital dimension is booming. With that being the case, he revealed that Brazil would have its own digital currency and remain ahead of many other countries.

Brazil was prepared for work on CBDC, but it did not address it before

Interestingly, this was the first time that the country’s Economy Minister addressed this subject. However, he still did not reveal any more details regarding the upcoming digital real.

Of course, Brazil has been keeping an eye on crypto in the past. Its central bank even announced setting up a study group for potential CBDC issuance back in August.

Its president, Roberto Campos Neto, also said that Brazil requires improvement in its currency. However, he expected that this would happen within the scope of a new federal digital payment system, Pix. He said,

“In our case, Pix is very important because from now on, we see the union of an instant, open and interoperable form of payment with an open data system. They will meet somewhere in the future with a currency that has yet to be perfected.”

Brazil’s CBDC to arrive in 2022

As mentioned, there are currently no available details on the digital real, as not even the central bank has released new information about it. However, Campos Neto did reveal that digital real will be in circulation in 2022.

Another interesting thing regarding this announcement is its timing. As some may know, Pix just recorded its first transaction this Monday, and it will be officially available as of November 15th.

According to the central bank’s statement, it will only be used for foreign exchange transactions in and out of the country as for digital real.

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Author: Ali Raza

IOHK CEO, Charles Hoskinson, Talks Cardano Market Prospects Following Shelley Launch

  • In an interview on Friday, Charles Hoskinson, Cardano’s founder and CEO of IOHK, spoke on the importance of price in the longevity of blockchain projects highlighting ADA’s 50% move on Shelley’s launch announcement.
  • Can ADA cement its place on the tenth position winning the battle of proof-of-stake (PoS) tokens?

Hoskinson: “Market will basically decide what the standards are”

Price is not always a revered matter in some sections of the blockchain development community, who believe that the benefits of the platform outweigh the speculation in price. However, Charles differed with this opinion stating that the markets have the power to decide the appreciation of a company as they are also customers of the product.

Over the years, the cryptocurrency market has shed off and accepted several currencies in the top ranking lists, Bitcoin (BTC) being the only constant since launch. Some of the projects such as Peercoin, the first blockchain to employ staking mechanism, and Primecoin, an improvement on BTC’s scalability and transaction fees, have faded into oblivion.

Despite the earlier projects offering a tangible solution, the market failure stifled development setting newer projects such as Cardano (ADA) and Tezos (XTZ) to take over the staking market and Bitcoin forks, Bitcoin SV (BSV), and Bitcoin Cash (BCH) to swallow the alternative Bitcoin market. Charles Hoskinson said,

“Ultimately people do what they make money with, the market will basically decide what the standards are.”

Market is king

In an interview with CoinDesk, speaking about Cardano, Hoskinson believes a high price is beneficial to motivate its community on the utility and inherent value of developing the platform. This strengthens the price even further. However, over the years the crypto market has shown its randomness in picking winners and losers and Hoskinson is wary of the fact.

The crypto market field does not reflect the project’s development progress but rather a speculation ring of trades. The growth of Dogecoin, a meme token, to a current market capitalization of $320 million is a clear indication of the “market is king.”

Charles further explained that he didn’t expect Ripple-backed XRP and Tether (USDT) to reach their current multi-billion market capitalization at their launch. He said,

“The things you think may gain traction and become a big deal, they could be yesterday’s news, and other things that you don’t think are going to be a big deal, end up becoming huge.”

Cardano starts the launch of the Shelley upgrade

Less than a month since Charles announced the launch of the Shelley upgrade on Cardano would be deployed in 2020, the process has started with the final upgrade expected to be complete and running on June 30th. In light of the launch, the price of Cardano rose to an 11 month high – a prospect that Charles believes will propel the blockchain to compete with the very best projects in the field. He said,

“There’s a very strong possibility that we will be very competitive price-wise with the rest of the crypto market.”

Over the past 24 hours, Cardano, ticker ADA, and Tezos, ticker XTZ, have exchanged the 10th position on Coinmarketcap multiple times. Cardano currently claims it with a total market cap of $2.21 billion, currently trading at $0.085288 on major exchanges at the time of writing.

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Author: Lujan Odera

China’s SAFE Regulator: Libra Could Be Used For Mischievous Cross-Border Payments

A senior Chinese regulator, Sun Tianqi recently spoke about the Facebook’s Libra project. According to the Chief Accountant of China’s State Administration of Foreign Exchange, Libra needs to abide by the same kind of law that other foreign currencies do or it will be banned from the country.

According to Sun, countries that asses Libra could threaten state control over capital should ban the token, as it could make it much easier for criminals to transfer money around.

He affirmed that financial technology can bring innovation and efficiency to a market, but also that illegal cross-border transfers could be made if the technology is not properly regulated. It is because of this that all countries should be very concerned, especially in emerging markets, as they could be directly harmed by Facebook’s new stablecoin.

He stated,

“Financial technology can promote the opening up, innovation and development of a country’s financial market, but it could also bring a lot of illegal cross-border financial activities. This should be a matter of great concern to all countries, especially emerging markets.”

Sun is also concerned that, in China’s case, people would stop use of the yuan in domestic transactions, which would limit the country’s ability to enforce economic policies, as people would be easily able to circumvent them.

For instance, the government can create a downward pressure on the yuan to boost exportation. With people using Libra instead, this would probably not be possible.

His comments are pretty much compatible with what other experts are confirming in China. Recently. Zhou Xiaochuan, a former governor for the People’s Bank of China, stated that projects such as the Libra would end up harming the Chinese economy and national payment systems. Wang Xin, head of research at the bank, was another figure that defended this idea.

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Author: Gabriel Machado

FSB Chair: Stablecoins Can Make Legal Obstacles More Difficult

The chair of the Financial Stability Board, Randall Quarles, recently spoke about the rise in popularity stablecoins are having, including very prominent projects such as Libra. According to him, the future can have significant regulatory challenges because of these projects.

He talked about this issue during a recent presentation that happened at the European Banking Summit, which reunites in Belgium several important people in the sector.

Quarles affirmed that Libra may not have been released yet, but that it has certainly raised the public interest in the matter. According to him, this could spark a new scale of and scope to the stablecoin space and the community has to carefully consider which way to follow to achieve the best results.

The regulator is far from anti-Libra, though. He affirms that these assets bring a “small financial risk” but also acknowledges that there is potential to Libra and the other projects.

At the moment, both the G7 and the G20 are currently investigating stablecoins and the FSB was tasked with leading the initiative to understand these assets better and spearhead the regulatory changes.

You may not know, but the FSB was created at the same time that Bitcoin was. Both of them were a response to the 2008 global crisis and both aimed to ensure that an event like that would never actually happen again.

Because of this, the FSB deserves some credit on policing governments and private actors to reduce the potential for a future economic crisis that can cause devastating effects on the world. If it depends on the organization, stablecoins will definitely be tightly regulated.

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Author: Gabriel Machado

Federal Reserve Chair Jerome Powell Talks About Demand of Central Bank Digital Currencies

The chair of the U. S. central bank (Fed), Jerome Powell, recently spoke about some of the hottest crypto subjects during a forum sponsored by the Swiss Institute of International Studies.

During his presentation, he was asked whether central banks should issue their own centrally-backed cryptos and if they were losing an opportunity for not doing it. Powell answered that the U. S. central bank is not considering this at the moment, just like many other central banks.

According to him, one of the main issues of creating a digital version of the dollar is that it would have to be incredibly secure. It is bad enough that paper money can be counterfeit, so if someone can do it with digital money, it can be even worse. With a proper hack, someone could print as much money as they wanted, so it is hard to really create a project like this one.

This is the main reason why the Fed is not really trying. It is simply a huge effort. Also, he acknowledges that the demand for this simply does not exist yet. The consumers are absolutely not clamoring for a central bank-backed cryptocurrency.

He also spoke about Facebook’s Libra during the forum, affirming that it could become very important very quickly because Facebook simply has a huge user base. In order for something so powerful to exist, it would need to be heavily regulated and supervised constantly. Facebook will not get away with doing whatever it wants with it.

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Author: Gabriel Machado