THere are those among us who like the idea of sliding and making our way through life, armed with a life of digital information when they enter buildings, to reserve online appointments and take walks by train at work.
Others are not so lively, fearing that Big Brother’s databases will be filled with personal details will one day control their movements, if this does not already happen.
In the case of cryptocurrencies, and even their more beautiful cousins - Stablecoins – The potential for users to be followed and traced is roughly, with the additional perspective of a transition to digital money leading to financial planting inducing unemployment even more frequently than in the past.
All the major financial centers, including London, have started to adopt laws and consult rules to govern a future that is lubricated by digital money, pushing a lot of money on one side.
The governor of the Bank of England, Andrew Bailey, said last week that he wanted to “put the United Kingdom at the forefront of an exciting innovation” and that it meant finding a way to facilitate competing stabiscoins, supported by a robust regulatory regime.
Although Bailey has not excluded the most secure form of digital money – a program by the central bank itself – it clearly emerges from how its officials approach the subject, this ship has sailed.
Q&R
What is a Stablecoin?
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Stablecoin, as the name suggests, is a type of cryptocurrency which is supposed to have a stable value, like US $ 1 per token. The way they realize this varies: the largest, as the USD attachment and part, are indeed banks. They have large cash reserves, liquid assets and other investments, and simply use these reserves to maintain a stable price.
Others, known as “algorithmic stablescoins”, try to do the same but without reservations. They were criticized as being effectively supported by Ponzi diets, as they require continuous silver entries to make sure they are not collapsing.
Stablecoins are an important part of the cryptocurrency ecosystem. They provide a safer place for investors to store capital without going through the removal of the collection entirely, and allow assets to be denominated in conventional currencies, rather than other extremely volatile tokens.
Thus, like that or not, many digital and varied currencies arrive, by being part of the population, except a minority of the population with an impenetrable jargon and an incredibly long list of options.
As with all financial services, the desire to tackle the fear and greed of customers is irresistible when it means that the supplier can get their hands on someone’s savings and transform it into something more exciting, more profitable and with the risk of lack of return to the customer (sorry, you have lost all your money) or the taxpayer (sorry, my bank is the rocket, can reverse it).
A government that has supported a digital currency of the Central Bank (CBDC) would rightly say to the financial industry, we have to control this thing because we are in a grip when it is bad.
The argument in favor of privatization is based on the moral danger created by an explicit promise by the public sector to replenish the losers. Much better to maintain the pretension that financial services companies, when taken in a collective fall, will be authorized to crash.
Rachel Reeves is one of the many people who want to take the private road, attracting more and more funding companies in the United Kingdom.
There could be immediate and practical advantages. The costs will also be lower, we are told, because without a bank between the customer and the seller, the costs on credit transactions could drop from 1.5% to 3% to 0.1%. Weekend payments would not have to wait until Monday to reconcile.
Donald Trump is the architect of the most extreme version of private digital money. A well-known supporter of cryptocurrency, he also put pressure on a financial service regime which supports the stablecoins supported in dollars.
The Congress has not yet committed the vast shortcomings of the Act on Engineering, which has been adopted in summer with bipartite support, so it is difficult to know exactly how risky the stablecoins will be.
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An index can be found in the explicit ban on the federal reserve participating in the new regime. Such a decision, unlike the stablecoin of China, newly retired and managed by the State, tells us that the United States will really be the far west of digital currencies in the world.
Like the economics teacher and the Nobel Prize winner, Simon Johnson, said to the Guardian: “We have already been here. I couldn’t tell you when the crash (stablecoin) will come or how serious it will be, but you know it happens. “
Health warning: Nigel Farage would promote Trumpian free-for-all.
For the United Kingdom, following continental Europe was an option. He has already embarked on a CBDC and has nine European banks in a consortium aligning a stablecoin for the launch next year.
Although the United Kingdom has rejected the American model, it must be legitimate to fear Trump’s carelessness of the carelessness when many American banks have long in London, as well as many most naked financial companies in the world.
In 2021, when the former vice-government Sir Jon Cunliffe launched the stable debate in a series of speeches, the message was clear: even if the regulations are tight, it would be too heavy and too slow to prevent risky behavior from quickly becoming a systemic problem and even a complete banking crisis.
At the time, it seemed that the United Kingdom and the EU moved in locking. In the years that followed, London’s position has evolved west, in a Middle Atlantic place which is supposed to capture the security that Brussels seeks with the competitive spirit which underlies the American model.
Perhaps the British central bank is intelligent enough to develop a system that is both safe and competitive. It is a major challenge.
