The Central Bank of Spain published its Strategic Plan for 2020-2024, describing the objectives and strategies it will follow to boost its economy and adapt the country’s finances to the requirements of the modern era, and a CBDC is one of its priorities.
The digital world is stealing the attention of the Spaniards. In its “Analysis and research priorities for the Banco de España: 2020-2024“, the Central Bank said it will prioritize the study of the legal, technological and financial framework surrounding the issuance of a possible CBDC to optimize the efficiency of banking processes.
Publicamos las prioridades de análisis e investigación del @BancoDeEspana para 2020-2024 en el contexto de nuestro #PlanEstratégico https://t.co/dGbwsx7adc
El gobernador #bdeHdeCos lo explica 📽️ https://t.co/81br6OLqpk #bdePrensa pic.twitter.com/iXFdUXPwGf
— Banco de España (@BancoDeEspana) October 16, 2020
A Spanish Currency on a Cadena de Bloques?
In a chapter dedicated to the development of “new technologies,” the Central Bank of Spain describes these innovations as a challenge for banks —which is why fintechs grew so much in recent years— but emphasizes the need to implement new solutions as society demands for more efficient processes over time.
The development of a digital currency falls within these “new technologies,” and the report shows an optimistic outlook on its potential:
Also, the use of these technologies can improve services the central bank provides, such as those relating to payment means, allowing for possibilities such as the introduction of digital currency, whose implications and design should be analyzed in depth.
There is a strong movement around the use of blockchain beyond token speculation in Spain. As an example, telecom corporation Telefonica deployed the largest private blockchain in the country, the Alastria association has developed multiple blockchain applications for digital identity, supply chain tracking, and enterprise solutions, and several regional universities started to apply this technology to combat the academic fraud so common in the region.
Considering this, it comes as no surprise that the Central Bank of Spain considers a CBDC to be a priority. The Bank didn’t give many details about the CBDC but assured it will consider various technological options to build that solution:
The implications for the financial system and the economy as a whole of the introduction of a central bank digital currency will be analyzed, considering various design proposals and including aspects relating to digital identification.
Spain is Not The Only Country Competing For The World’s First CBDC
This shift in interest is also a reaction to the global geopolitical landscape. The president of the Central Bank of Europe -and former president of the International Monetary Fund- Christine Lagarde, has shown her interest in a Digital Euro without ruling out blockchain technology for its development.
There is also a silent race to digitize the economy and get ahead of China in this aspect. Italy, The Netherlands, Estonia, France, Japan and even the United States have shown interest in developing a CBDC or at least using blockchain technology on their banking infraestructure, but are working slower than the Asian giant.
As with any strategic plan, the various divisions and autonomous agencies now need to define the multiple actions and goals aimed at fulfilling the Central Bank of Spain’s vision within their Annual Operational Plans. And although we are still far from seeing a Spanish currency running in the blockchain, the foundations laid by this plan allow for a clearer image of the future.
Market Watch: After a Bloody Wednesday, Bitcoin Struggles At $13,000 As ETH Below $400
Bitcoin went on a roller-coaster ride in the past 24 hours from a new yearly high of nearly $14,000 to dipping below $13,000. Most altcoins mimicked their leader, and the total market cap has dropped by $15 billion.
Bitcoin’s Wild 24H Ride
As CryptoPotato reported yesterday morning, everything seemed to be going in BTC’s way. The cryptocurrency was surging and peaked at another 2020 high. In fact, with a price of $13,865, it came inches away from breaking last year’s record as well.
However, it was not to be as the situation reversed rather vigorously. In the following hours, Bitcoin plummeted in value. This resulted in a daily low of about $12,920 (on Bitstamp). In other words, the primary cryptocurrency lost nearly $1,000 in just a few hourly candles.
Since then, though, Bitcoin has recovered some of its losses. After reclaiming back the $13,000 price level, BTC has increased to its current position – around $13,150.
On its way down, BTC found support somewhere around the $12,950 line. Should another price dip occur and Bitcoin breaks below it, the next support level is at $12,800. Contrary, BTC has to overcome the resistance at $13,500 to return to its recent bull run.
Red Dominates The Altcoins
As it typically happens, when Bitcoin plummets, so do most of the altcoins. The scenario repeated yesterday, and despite most of them recovering some of the losses, red is still the predominant color.
On a 24-hour scale, Ethereum has dropped by 2.3% and struggles to stay below $390. Ripple (-2.5%) has dipped below $0.25. Binance Coin (-3.3%), Chainlink (-2.4%), Polkadot (-4.6%), Litecoin (-4.25%), and Bitcoin SV (-1.3%) have also painted red.
Crypto.com Coin has lost the most value since yesterday – 10%. CRO trades beneath $0.09. The cryptocurrency’s price hasn’t enjoyed October so far as it has dropped by more than 40% since the start of the month.
Aragon (-8.5%), Ocean Protocol (-8%), Maker (-7%), Celo (-7%), and Yearn. Finance (-7%) follow. In total, the cumulative market capitalization of all digital assets has dropped from $410 billion to $391 billion.
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Bitcoin Won’t Attract The Unbanked, Says Mastercard SEO
Cryptocurrencies, in general, will not help for the inclusion of unbanked individuals into payment systems and banks, claims Mastercard CEO Ajay Banga. However, the company is far from ignoring digital currencies altogether.
Trying To Get 1 Billion Into The Banking System
As per a recent news report, Mastercard CEO Ajay Banga, who’s on a mission to bank upwards of 1 billion unbanked people across the world, doesn’t see much of a use in digital currencies for that.
Banga’s opinion is that assets like Bitcoin will not make such a significant pull towards financial inclusion.
According to the CEO, high volatility serves as a downfall for cryptocurrencies. He has highlighted that the value of the most popular one of them (Bitcoin) fluctuates by large amounts, emphasizing that just this year, one BTC changed its dollar value from less than $5,000 in March to almost $14,000 recently.
“Bitcoin per se is volatile in its valuation,” Banga said, adding, “Can you imagine someone who is financially excluded trading in a way to get included through a currency that could cost the equivalent of two Coca-Cola bottles today and 21 tomorrow? That’s not a way to get them included. That’s a way to make them scared of the financial system.”
Five years ago, Mastercard’s CEO embarked on a mission to help 500 million people worldwide get access to the financial system and bank services. This year the plan has upgraded up to one billion. According to Banga, people without bank accounts suffer the lack of access to credit while paying much higher fees for financial transactions via payday lenders, etc.
However, Trust In Crypto Remains
What MasterCard’s CEO failed to outline, however, is the censorship-resistant nature of decentralized cryptocurrencies, as well as the non-existing barriers to entry.
In other words, anyone with access to the internet can become a part of the network without having to go through lengthy and, in many cases, impossible registration procedures to open a simple bank account, for example.
Moreover, once they become a part of it, there’s no central authority that can ‘shut you down’ per se, regardless of your economic situation or current location.
There’s merit to his words, nonetheless, because some of the inherent challenges remain. For instance, people need a relatively high understanding of technology and a working computer and internet connection to become part of Bitcoin’s network – something that a lot of citizens in third-world countries simply don’t have.
Despite the CEO’s opinion, MasterCard has been on the road to adopting digital currencies for a while now. As CryptoPotato reported recently, the company partnered with UK-based payment processor Wirex to expand its cryptocurrency program and aid “adoption and create innovative experiences in the crypto space.”
Featured image courtesy of CNBC
ETH Spiked 50% On Binance, Just To Crash 50% Immediately After
Atypical performance isn’t something new for cryptocurrency assets. Flash crashes and massive positive wicks have taken place in the past.
Just yesterday, ETH went through something similar. The price of the asset shot up by almost 50% only to crash immediately down to $197 and settle to where it’s currently trading on Binance.
ETH Price Going Crazy on Binance Perpetual Contract
In the span of a few hours yesterday, October 28th, the price of ETH on Binance’s perpetual contract went parabolic.
In a single massive candle, ETH shot up to $571, charting a 45% increase before retracing back to its regular trading price at around $390. While this might sound awkward enough, that’s not all.
A couple of hours later, the price wicked to the downside, touching a low of $197, charting a decline of about 50%, and immediately returned to its regular rates.
This happened on ETHUSD Perp futures. It was caused by one trader, both ways. We believe this may be intentional sabotage from a competitor. The trader lost lots of money himself. But also caused other stop orders to trigger. We will make a few changes to reduce in the future.
Since then, the price of ETH has stayed relatively stable, and it’s currently trading at around $387 for a 6.6% decrease in the past 24 hours.
No Strangers to Flash Moves
As mentioned above, the community is absolutely no stranger to massive wicks of the kind. CryptoPotato reported in late November 2019 that ETH went through a flash crash on the popular cryptocurrency exchange Poloniex.
Back then, the price fell by as much as 20%. The main difference is that it was trading against Bitcoin.
On another occasion, Bitcoin’s price dropped to a low of $680 trading against the USDS stablecoin. This also happened on Binance back in December 2019.
Flash moves of the kind are usually categorized by their speed. In other words, the price would move in any direction, charting a massive decrease or increase in a few seconds or minutes, and it would then return back to its standard range.
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