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.

Crypto Market-Maker Altonomy Receives $7 Million in Funding from Polychain Capital

Altonomy, a New York-based cryptoasset trading, advisory, and asset management company, has completed a $7 million fundraising round from Polychain Capital, a leading hedge fund and venture capital firm.

Co-founded by Ricky Li, a former Manager of Research and Product at the CME Group, Altonomy has also received funding from 7 Blocks.

Additional Capital Will Allow Altonomy to Have More Inventory

Commenting on how the additional capital could help Altonomy’s business operations, Li said: 

As a liquidity provider for altcoins, more funding will allow us to have more inventory, taking larger exposure and managing risk more effectively.

Li added that the extra funding would allow Altonomy’s trading desk to provide better services - as the platform would not need to “put constraints” on customers at settlement.

Funds May Be Used to “Source Liquidity for Customers”

Olaf Carlson-Wee, the Founder and CEO at Polychain Capital, remarked:

As a long-time user of Altonomy’s trading services, it was an easy decision for us to invest in their business when the opportunity became available.

Carlson-Wee, a former Product Manager and Head of Risk at Coinbase, also mentioned that the additional funding would help “source liquidity for customers, regardless of token type, order size, market cap, or whether the asset trades on centralized or decentralized exchanges.”

According to Coindesk, Li had suggested to investors in January 2019 that they “liquidate enough ETH so they would have at least two years of runway.” However, Li is now anticipating that cryptocurrency prices may continue to recover - after enduring a long bear market that lasted throughout 2018.

Altonomy Introduces Cloud Service for Crypto Mining

In addition to providing crypto trading and asset management services, Altonomy introduced a new product last year, called the AltMiner. According to Li, AltMiner’s cloud service allows Altonomy’s bigger investors to mine various cryptocurrencies.

Altonomy’s management claims that the AltMiner has a “superior return profile” with the “newest generation of miners, low electricity costs and a secure hosting site.”

During an interview with CryptoGlobe in May 2019, Lee explained how Altonomy’s crypto trading services were developed and their potential benefits.

One of Altonomy’s main services, called electronic execution, allows mining firms, investment companies and crypto exchanges to “enter and exit positions as an outsourced execution desk.”

As a high-frequency market-maker, Altonomy also provides liquidity for various tokens to several crypto spot and derivatives trading platforms.