With the power of digital currencies, America is facing the confusion between creativity and defeat, the rise of the digital dollar encrypted market to protect its currency.
Practically and according to the global market numbers for digital currencies.Encrypted“Cryptocurrencies have attracted huge interest in the past few months, with the recent bullish wave appearing to be more sustainable than other previous waves, historically famous for extreme and rapid volatility – even attracting the attention of officials worldwide in an unprecedented way.
Bitcoin dominance and the rise of Ethereum
The value increased Bitcoin By more than 100% this year only, to record its highest levels near $ 65,000 in April, and in the meantime the value of the second most expensive digital currency has doubled, EthereumSeveral times, to jump from $ 735 at the beginning of the year, then it has now surpassed the level of $ 4,000, taking advantage of the “non-exchangeable tokens” revolution.
Dogecoin … a joke that turns into reality
What is more, the currency “Dogecoin”, which started as a joke, rose by more than 20000% last year, and increased several times this year, to attract the interest of many, including the billionaire investor “Elon Musk”.
This awakening not only attracted the interest of investors and companies such as “Tesla” and “PayPal”, but also affected the comments of financial officials around the world, as China retreated from its hard-line stance on Bitcoin and described it as an “investment alternative” and said that the increase in its value increases interest in a project The “digital yuan” has also attracted widespread attention.
Interest in the Chinese digital currency was somewhat different, as it is a cryptocurrency supported by a central authority, which has promising prospects to compete with the dollar’s position in international transactions and shake the corners of the global financial system.
Meanwhile, the comments of the Federal Reserve and the European Central Bank regarding their plans to launch their own digital currencies have been calmer and reduce the need for haste that “may destabilize the past regime,” but thus give hope that there are relevant future plans.
This scramble and rising wave of virtual currencies has highlighted the efforts of governments and central banks to prepare for the next digital world, and there may be a more revolutionary outcome of these efforts, namely the creation of government digital currencies, which aim to allow people to deposit money directly in the central bank, bypassing traditional lenders.
These government digital currencies are the new embodiment of money. They promise to make finance work better but also shift financial power from individuals to the country, change geopolitics and change how capital is distributed.
The Ghost of the Lehman Brothers Collapse
More than a decade ago, in the midst of the Lehman Brothers ’collapse, Paul Volcker, the former chairman of the Federal Reserve, complained that the last useful innovation for banks was the ATM, but since the crisis the industry has accelerated its pace and banks have developed their faltering systems.
Entrepreneurs have built an experimental world of decentralized finance, of which Bitcoin is the most popular part, and which also contains the kind of riot of digital currencies and their databases and platforms that interact to varying degrees with traditional finance.
At the same time, financial platform companies now have more than 3 billion customers using e-wallets and payment applications. Besides PayPal, there are other specialists such as Ant Group, Grab, Mercado Pago, and the most famous companies such as Visa, and even in Silicon Valley such as Facebook.
More than 50 monetary authorities, representing the bulk of global GDP, are already exploring digital currencies, the Bahamas has issued digital money, and China has introduced its pilot program to more than 500,000 people, and the European Union wants a virtual euro by 2025, and Britain has formed a working group for the same The purpose, as America seeks to launch the e-dollar.
The origin of the idea of digital currencies
Government or central bank digital currencies are the next step, but it comes with a hurdle, as it will centralize power in the country rather than distributing it across networks or giving it to private monopolies.
The idea behind it is simple; Instead of maintaining an account with a retail bank, this can be done directly with a central bank through a platform similar to “Alipay” or “Venmo” applications. Instead of writing paper checks or paying online, the cheap central bank network can be used.
The depositors’ money will be guaranteed by state authority and not a fault-prone bank, and if one needs to buy a quick meal or even provide financial assistance to a relative; There is no need to deal with customer service in commercial banks or incur fees for electronic transactions such as “MasterCard”, the central banks will be in service (and cheaper).
One of the motives of governments and central banks is the fear of losing control if payments, deposits, and loans move from banks to the digital world run by the private sector, and then central banks will struggle to manage the economic cycle and pump money into the system during crises, and private networks may turn into a monster of fraud and privacy violations.
Another motivation is a better financial system: Uninsured depositors can suffer if the banks fail, and at the same time Bitcoin has not yet been widely accepted, and credit cards are expensive, but government virtual currencies will score high levels of safety, because they are guaranteed from State and cheap cost.
The Digital Dollar Project
In the United States, the Digital Dollar Project, a partnership between the consulting firm Accenture and the Digital Dollar Foundation, led by former organizers and executives, has announced 5 pilot projects to see how the central bank’s digital currency works.
The purpose of the Digital Dollar Project is to encourage public research and discussion on potential benefits, bring together thought leaders and actors in the private sector, propose possible models for public sector support, and will coordinate programs with interested stakeholders to measure value and establish practical steps that can be taken to create a digital dollar.
The five pilot projects will assess whether the digital dollar benefits individuals who do not deal with banks or who have very little exposure to banks, as well as individuals with access to banking services, and small businesses.
The Digital Dollar Foundation was launched last year by Accenture and former US Commodity Futures Trading Commission Chairman J. Christopher Giancarlo, former LabCFTC director Daniel Gorfin and investor Charles Giancarlo.
The purpose of the project
While the purpose of the project is to design and defend the digital dollar, one of the project’s directors, David Treat, says it is a special effort separate from the research the Fed has conducted, even though the two groups have been in contact, and he refuses to disclose the specific details of the spin-off projects.
These expanded and discreet efforts may reflect the great interest of the United States in launching the digital dollar after meeting all the requirements for success and warding off any related concerns, not only to catch up with the global rally, but also to preserve its dominant position in the international financial system, and not to allow its exchange with decentralized cryptocurrencies or Even centralized like a “digital yuan.”