Page 7 - February 2018 Disruption Report Flip Book

CRYPTOCURRENCY
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digital economy, more driven by domestic consumption that exports. India has begun the process of moving from paper currenecy to a fiat digital currency. India’s policies on private cyptocurrencies is uncertain at this time.
Superpowers that may set the de facto standard. Concerned with capital flight, China tends to be adverse to cyrptocurrencies. However, the government is conflicted with how to deal with its current role as a big player in bitcoin mining.
The U.S. has been the locus of innovation in the past, but is hobbled by battles between States, such as New York and California, which have different views on bitcoin. The European Union could fill the leadership role on cryptocurrencies abbrogaed by the U.S. and China. (Daily Fintech, Bernard Lunn, 12/16/17)
In a February 6 speech, Bank for International Settlements General Manager Agustin Carstens argued that there is a “strong case” for regulators to rein in the 1,500 digital currencies and cryptoassets in existence today and police the “digital frontier” because of their links to the established financial system. Carstens argued:
Cryptocurrencies piggyback on the institutional infrastructure that serves the wider financial system, gaining a semblance of legitimacy from their links to it. ...Bitcoin is not functional as a means of payment, but it relies on the oxygen provided by the connection to standard means of payments and trading apps that link users to conventional bank accounts. If the only “business case” is use for illicit or illegal transactions, central banks cannot allow such tokens
to rely on much of the same institutional infrastructure that serves the overall financial system and freeload on the trust that it provides.
...If authorities do not act pre-emptively, cryptocurrencies could become more interconnected with the main financial system and become a threat. Most importantly, the meteoric rise of cryptocurrencies should not make us forget the important role central banks play as stewards of public trust. Private digital tokens masquerading as currencies must not subvert this trust. (Bloomberg Technology, Catherine Bosley and Alessandro Speciale, 02/06/18; MarketWatch, Tom Fairless, 02/06/18)
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