Report: 70% of Central Banks are Studying Digital Currencies

Approximately 70% of the banks surveyed by the Bank for International Settlements (BIS) said they have already started working on a central bank digital currency (CBDC) or they are considering the development of their own virtual currency.

50% Of Banks Surveyed Have Moved To "Proof-of Concept" Stage

The Bank for International Settlements (BIS) is an institution owned by major central banks worldwide and it focuses on providing improved “international monetary and financial cooperation.” There were reportedly a total of 63 banks that participated in BIS’ survey and these institutions represented jurisdictions covering over 80% of the world’s population. The banks responding to the survey account for over 90% of the global economic output.

As mentioned in a report published by BIS, the financial institution’s survey involved conducting conceptual research on the process of creating CBDCs. Several banks worked cooperatively to develop a “common understanding of this new field of study.” Around half, or 50%, of the respondents have now moved to “hands-on” proof-of-concept activities to determine the feasibility and desirability of introducing a CBDC.

IMF Head: CBDCs Are "Safe" And "Cheap"

85% of the banks surveyed by BIS said it is unlikely that they’ll issue their own virtual currency in the short-term, or the next 1-3 years.

As CryptoGlobe reported in mid-November 2018, Christine Lagarde, the head of the International Monetary Fund (IMF), had recommended that all financial insitutitions should consider launching their own digital currency. Lagarde believes blockchain-based currencies are “safe, cheap, and potentially semi-anonymous” and would help in “supplying money to the digital economy.

However, there are many other senior banking and traditional financial market professionals worldwide who think that both CBDCs and decentralized cryptocurrencies may not be beneficial to the world’s financial system. In September 2018, the European Central Bank (ECB) had clarified it was not planning to launch its own CBDC.

Uruguay And Sweden Have Reported Making Considerable Progress In Developing CBDC

As pointed out by the research group at the St. Louis Fed (in December 2018): 

Once you add a central bank and remove the “permissionless” network—with nodes that can leave and join as they wish, there isn’t much left to the cryptocurrency you started with.

Despite concerns regarding whether they’re appropriate for a centrally managed financial system, some central banks are still considering exploring the idea of a CBDC. The BIS report revealed that Uruguay’s central bank had been testing out a general purpose CBDC.

Notably, the BIS research report also mentioned that Uruguay and Sweden had made considerable progress in creating their own CBDC and they had also publicly shared most of their findings in order to help banks in other countries.

Billionaire Novogratz: Altcoins Won't Pump Like In 2017 Bull Run, Bitcoin Will Dominate

It appears that cryptocurrency prices have finally begun to recover after enduring an extended bear market which lasted throughout 2018.

As the market capitalization of Bitcoin (BTC) and other major cryptoassets continues to rise, several analysts have been drawing comparisons between what they’re seeing in the current market and what they observed during the historic bull market of late 2017 and early 2018.

Commenting on the recent crypto market price movements via Twitter, Ran NeuNer, the host of the CNBC Africa Trader show, remarked:

The market is running but we still haven’t seen the crazy alt pumps, pumps where coins do 40% in a day...is it coming?

Bitcoin To “Outperform” All Other Cryptos “This Time”

As the bitcoin price begins to recover, there have been many predictions made regarding the anticipated performance of altcoins. Twitter user “Crypto Bitlord” (@Crypto_Bitlord), a widely-followed digital asset market analyst, believes XRP, which currently has a market cap of around $16.3 billion, may trade as high as $10.

However, prominent crypto investor Michael Novogratz believes that digital asset traders are a lot smarter this time, when compared to some of the bad investment decisions they might have made during the initial coin offering (ICO) craze of 2017.

Novogratz, who’s the founder and CEO of Galaxy Digital, a full-service crypto merchant bank, has predicted that in this market run, Bitcoin will “outperform” all other cryptoassets.

On May 16th, 2019, the Bitcoin price surged to a 2019 high of $8,373 according to CryptoCompare data. In response to bitcoin’s recent price movements, Juan Villaverde, the Chief Analyst at Weiss Crypto Ratings, told CryptoGlobe: 

Bitcoin could fall to as low as $4,400. But [if] it does, it will be the best Bitcoin buying opportunity since 2015.

“More Good News For New Bitcoin Users”

Villaverde, an econometrician and mathematician focused on developing various crypto index models at Weiss Ratings, believes bitcoin would be a great buy at a lower price (as suggested above) because of the following reasons:

  • “The usage of Bitcoin is near all-time highs – 450,000 transactions per day. That’s up from a low of 150,000 in April of 2018 and approaching the all-time high of 490,000 in December of 2017.”
  • “Despite the high transaction volume, fees on the Bitcoin network are at their lowest levels since August of 2017 – more good news for users.”
  • “The Bitcoin block size is now greater than ever before, thanks to the Segwit technology upgrade.”

Villaverde further noted that the predictions are “based on studying the time patterns in Bitcoin's rises and falls throughout its 9 year trading history.” He explained that the time patterns have been analyzed by using an “algorithm-based market cycles model.”

The Chief Analyst at Weiss Ratings also mentioned that the bear market “ended on December 15th 2018 and the model confirmed this shift in trend on March 26th of this year.”

He added:

Then, after the rally that took place starting on April 25th, the same model told me a new bull market was now underway. The same model indicated a 30% to 45% correction due as of late April-early May and we seem to be experiencing that right now.