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Wednesday, November 30, 2022

Bitcoin Could Get a Boost from Central Bank Digital Currencies – CoinDesk

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Bitcoin price is caught in a downdraft after a series of rallies in recent weeks that repeatedly fizzled out at the $10,000 mark.

“There is no clear understanding where bitcoin will go,” Yuriy Mazur, head of data analytics at cryptocurrency exchange CEX.IO told CoinDesk’s Omkar Godbole. “It may either retrace back to $6,500 or reach $10,000.”

Jack Purdy and Ryan Watkins of the research firm Messari wrote last week in a report that the “coming digitization of money,” including the launch of CBDCs, could provide a “secular tailwind” for bitcoin.

Most central bank digital currencies, or CBDCs, would, by their very nature, be issued and controlled by governments, and in many cases distributed through banks.

CBDCs have gained momentum over the past year as countries consider whether to roll out digital versions of their currencies to keep up with Facebook’s proposed Libra and China’s forthcoming digital currency electronic payment, which is already in testing.

The journal Central Banking, which is supported by the Bank of International Settlements and the European Central Bank among others, found in a survey earlier this month that some 46 countries are considering CBDCs using a constrained form of distributed ledger technology.

Federal Reserve Chair Jerome Powell told Congress in February the U.S. central bank is in the early stages of researching digital currencies, and that having a “single government currency at the heart of the financial system is something that has served us well.”

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