• Jerome Powell says the FED needs to take care of risks related to CBDC.
  • The central bank's adoption of CBDC will force a dramatic change in the global financial system.
  • Bitcoin and other cryptocurrencies will eventually benefit from the new world's order.

The IMF has held a conference on the use of digital assets, where Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), is expected to shed some light on the use of Central Bank digital currencies. 
FED's Jerome Powell, the head of the Central Bank of Saudi Arabia Ahmed Alkholifey, and the general manager of the Bank of International Settlements Agustín Carstens were among other participants of the discussion.

 The cryptocurrency community has been expecting some clarity, with many participants focusing on the comments from the head of the US central bank. In February 2020, Powell already moved the market by mentioning the digital currencies' potential during testimony in front of Congress. 

This IMF webcast is highly anticipated in the crypto community, and the chairman's attendance speaks volumes to its importance in traditional finance. Central bank digital currencies (CBDCs) have increasingly been on the minds and lips of those who govern our money for obvious reasons," Mati Greenspan, the founder of market analysis firm Quantum Economics, said via Telegram, ahead of the conference. 

However, the participants of the panel mostly repeated the information that has been already known: the FED is in no hurry to launch its digital currency as it wants to access the risks, while other regulators see the benefits and feel the need to counter the surging popularity of private money. Read more details here.

At the time of writing, BTC/USD is changing hands at $11,600. The pioneer digital coin hit the intraday high at $11,647 amid the comments from the global regulators. Despite the upside move, BTC has stayed mostly unchanged from this time on Sunday.

BTC/USD daily chart

Bretton Woods moment

Notably, Ms. Georgieva, the first person from an emerging economy to lead IMF, recently noted the global economy had reached the tipping point that requires decisive actions to fight the crisis and create a more sustainable and equitable world.

We face what I have called a Long Ascent for the global economy: a climb that will be difficult, uneven, uncertain—and prone to setbacks.

Meanwhile, the digital currencies may become part and parcel of the new world order. Recent developments prove that global regulators have been moving away from denial of cryptocurrencies to embrace the concept. 

Basically, it means that the regulators are ready to admit that the future of money is digital. The same is confirmed by the poll launched by the IMF ahead of the conference.

The IMF's poll

Source: IMF Twitter

As shown above, over 84% of the respondents believe that they will be sending money abroad with digital currency in five years. Obviously, the central banks don't want to miss out. 

The part of a bigger picture

Raoul Paul, the Founder, and CEO of Global Macro Investor, shares the view that the introduction of CBDC will trigger a significant overhaul of the global financial system. 

He believes that today's IMF discussion is a part of a bigger shift, initiated by Mark Carney from the Bank of England e year ago. Speaking at a Jackson Hole Symposium 2019, he introduced the idea of creating a network of central bank digital currencies as a basis for a new systemic private payments system. 

Now nearly all major central banks are engaged in developing CBDC. According to the recent research published by the Bank of International Settlements (BIS), the essential motivation behind creating the digital asset is n providing a CBDC for payments, enabling broad access to central bank money, and providing resilience.

CBDC projects status

Source: BIS

Implications for the cryptocurrency industry

According to Raoul Paul, the launch of CBDC will change the global financial system and have massive implications on the cryptocurrency industry. He believes that this development will bring the end of the fiat and push the massive cryptocurrency adoption, which will be beneficial for Bitcoin and other decentralized digital assets.

While the regulators and authorities may try to suppress Bitcoin usage once they launch their own digital assets, they will hardly be able to do that.

Yes, there is a chance that CB's will try to suppress #bitcoin in the further future, but much like suppressing gold, it is highly unlikely to work due to the incentive value of owning it.

Considering that fiat will continue devaluating, hard assets like Gold or Bitcoins will become a way to escape the inflationary system. Apart from that, countries, companies, and individuals will be able to move to a hard currency system to attract capital.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Bitcoin sticks near $19K as most Cryptos spend the weekend in the red

Bitcoin sticks near $19K as most Cryptos spend the weekend in the red

With a couple of brief detours higher, bitcoin remained below $19,000 throughout the weekend. The largest cryptocurrency by market capitalization was recently trading at about $18,800, down slightly less than a percentage point over the past 24 hours.

More Bitcoin news

LUNA Classic price hints at a 25% crash as Do Kwon under Red Notice from Interpol

LUNA Classic price hints at a 25% crash as Do Kwon under Red Notice from Interpol

LUNA Classic price reveals a bearish outlook that could unfold over the course of this week. A minor run-up seems plausible, but it is just a move to squeeze the bulls. Therefore, market participants should be ready for a quick reversal. 

More Luna Classic news

Ethereum Price Prediction: Assessing the possibility of a post-Merge rally

Ethereum Price Prediction: Assessing the possibility of a post-Merge rally

Ethereum price trades at $1,323 on Sunday, several days after sliding to $1,200. It was a surprise that the largest smart contracts token would give up most of its gains during and after the much-publicized Merge. On-chain data shows a significant reduction in the Ethereum Supply.

More Ethereum news

Why Chainlink price could lose momentum at $8.00

Why Chainlink price could lose momentum at $8.00

Chainlink price is among the few crypto assets in the green on Sunday. The smart contacts’ price feed oracle token defied the bear market this week to post 23.7% gains. As discussed earlier in the week, the V-shaped pattern matured at LINK brushed shoulders with $8.00.

More ChainLink news

Bitcoin makes a bullish comeback amid regulatory tension, but lacks confirmation

Bitcoin makes a bullish comeback amid regulatory tension, but lacks confirmation

Bitcoin price takes the first step to recovery but needs solid confirmation that will arrive after a flip of the $19,539 level into a support floor. After a successful flip, investors could expect a move up to an intermediate hurdle at $20,737.

Read full analysis