While bitcoin is gradually licking its wounds after the big drop we witnessed over the weekend, major investment bank Morgan Stanley made a statement that digital currencies, which will be issued by central banks of many countries, will not pose a threat to the existence of cryptocurrencies in the near future. The bank is confident that both types of digital currencies can coexist with each other because they serve different purposes and have different attractiveness.
Digital national currency and crypto industry
The European Central Bank made a similar statement recently, noting that digital currencies have little to do with cryptocurrencies, which the bank considers speculative assets.
Morgan Stanley is confident that after the launch of digital currencies, cryptocurrencies will still exist, as they serve slightly different purposes and are used in very different ways - for example, as a store of value. There are a number of people who do not trust fiat money and banks - cryptocurrencies are quite an appropriate alternative for them. Bitcoin and other tokens can also act as a pretty good speculative instrument. The report indicated that investor interest in cryptocurrencies has recently grown along with an unprecedented response from governments to the coronavirus pandemic through monetary and fiscal policy. But for whom digital currencies pose a risk, so it is for stablecoins.
Recently, an increasing number of central banks have shown great interest in issuing their own digital currencies. The Bank for International Settlements (BIS) reports that 86% of the world's central banks study digital currencies at various stages.
In his recent speech, President of the Federal Reserve Bank of Dallas Robert Kaplan also noted that he considers bitcoin a "store of value," highlighting the differences between cryptocurrencies like bitcoins and central bank digital currencies. One of the main problems with bitcoin is that it is not completely clear how widely it will be accepted by society. According to Kaplan, the world's first cryptocurrency is nothing more than the role of savings.
China loses grip on the crypto industry
The Chinese authorities no longer intend to wage an active fight against cryptocurrencies, which was launched by the government four years ago. It seems that now the tone of the Central Bank has changed. According to a recent statement from the chairman of the People's Bank of China, the regulator is working to create a good cryptocurrency regulatory framework that can be relied on in future decisions. Li Bo stated that he views bitcoin and stablecoins as crypto assets. First of all, these are investment alternatives. Cryptocurrency is not a currency per se. "The main role we see for crypto assets in the future is investment direction," said the chairman of the People's Bank of China. Such a statement implies an unprecedented change in Beijing's tone on cryptocurrencies.
Today it also became known that the Biden administration is not going to sit still and is preparing a new legislative framework for regulating cryptocurrencies. Treasury Secretary Janet Yellen and her deputy Wally Adeyemo will lead the drafting of new laws that will focus on crypto infrastructure and taxation.
Let me remind you that recently the SEC has changed its chairman, who is known for his loyalty to the cryptocurrency market. Gary Gensler is a cryptocurrency expert - and he has expressed his opinion on numerous occasions. It is expected that the SEC will soon develop clearer rules for regulating this area. The new chairman, Gary Gensler, recently announced in an interview with Bloomberg that the topic of cryptocurrencies and the regulation of this area coincides with the goals of the SEC, and this issue has been closely monitored by the regulator.
As for the technical picture of Bitcoin, it has stabilized a little. At the moment, trading is carried out within the side channel of $53,400-$57,300, and the further direction of the cryptocurrency depends on which of these levels is broken. A breakout of $53,400 will lead to an immediate fall to the support area of $49,400 and $44,900. If buyers are active and manage to pull BTC above $57,300, a rapid rise to $61,000 and $64,500 can be expected.
Facebook - Libra - Diem
And in conclusion, I would like to briefly tell you that Facebook will soon launch testing of its Diem stablecoin. It is scheduled to launch in the second half of this year. Let me remind you that initially, Facebook was planning to release a token called Libra, which was conceived as a universal digital means of payment. However, the SEC did not like this very much, and the company decided not to cut the regulator, postponing this idea for the future. At the moment, the developers are working on the release of several stablecoins, backed by different national currencies.