Central bank digital currencies face uphill battle to win over crypto fans

Central bank digital currencies face uphill battle to win over crypto fans
Most holders of cryptocurrencies are investors who don't use them as money. (Reuters)
Short Url
Updated 29 August 2021

Central bank digital currencies face uphill battle to win over crypto fans

Central bank digital currencies face uphill battle to win over crypto fans
  • CBDCs hope to head off financial risks from so-called stablecoins
  • Privacy remains one of the biggest hurdles to adoption

LONDON: As central banks look increasingly serious about launching their own digital currencies, the challenges they face are also coming into focus.

Some are further along than others. China has been working on a digital yuan for seven years and the European Central Bank has a target date of 2025 for the introduction of a digital euro, while the Federal Reserve and the Bank of England have been moving more slowly, with Fed Board Governor Christopher Waller recently describing CBDCs as a “solution in search of a problem.”

One of the issues that Waller has raised is shared by the cryptocurrency community at large: privacy.

CBDCs are issued directly by central banks without an intermediary, so everything you do with them is stored and can be seen by the central bank. Governments can get access to your transaction history through your bank with varying degrees of ease depending on where you live, but CBDCs would provide no privacy at all.

HIGHLIGHTS

Bitcoin nudged up 0.9 percent to $48,684.57 at 4:45 p.m. in London.

Ethereum was a little changed at $3,236.33.

One option is to adopt a token-based system whereby the money would be authenticated but not the owner, but that would represent a backwards step in the fight against money laundering and the ability to enforce sanctions.

One of things that CBDCs would hope to achieve is stop stablecoins – private crypto assets designed to imitate the currencies they’re pegged to – from becoming dominant and creating big risks in the financial system.

However, many of the people who are attracted to cryptocurrencies like them for exactly that reason – it puts them outside the traditional financial system and makes them feel as though they’re sticking it to the man.

A comparison can be made with illegal marijuana use in the US, which has continued to thrive in states where it has been made legal. While some of that can be put down to taxes and other regulatory burdens, it can also be attributed to the reason that many people smoke weed in the first place – it makes them part of a sub-culture.

Of course, the flipside is also true: millions of people who would never use bitcoin because it’s unregulated could be attracted to a CBDC with all the security that brings.

Add to that the fact that most owners of bitcoin and its brethren are investors who have no intention of using them as money anyway and the task for central banks wanting to replace independent cryptocurrencies looks harder still.

On the markets today, bitcoin nudged up 0.9 percent to $48,684.57 at 4:45 p.m. in London, while Ethereum was little changed at $3,236.33.


TASI closes 0.3 percent higher at 11,940 points: Market Wrap

TASI closes 0.3 percent higher at 11,940 points: Market Wrap
Updated 28 sec ago

TASI closes 0.3 percent higher at 11,940 points: Market Wrap

TASI closes 0.3 percent higher at 11,940 points: Market Wrap

RIYADH: The Tadawul All-Share Index was up 35 points on Thursday, or 0.3 percent, closing at 11,939,58 points.

Some 202.4 million of shares changed hands in 305,000 deals.

Al Rajhi Bank, SABIC and Saudi Aramco rose by 1 percent.

Baazeem was the top gainer, rising 5.6 percent, to SR124.80, with about 2.2 million shares traded.

Sulaiman Al Habib jumped 5.2 percent, to SR178.20.

Alinma Bank, Arab Sea, Sipchem and Saudi National Bank recorded their highest closings since the listing.

The parallel market index “Nomu” decreased by 719.49 points, or 2.94 percent, and closed at 23730.47 points. The liquidity amounted to about SR15.6 million.

Makkah Construction declined 1.9 percent to SR77.10. In Q3 2021, the company recorded a net profit of SR12 million.

NADEC and National Gypsum closed at SR34.95 and SR46.80, respectively.


Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap

Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap
Updated 5 min 43 sec ago

Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap

Cryptocurrencies benefit from Bitcoin's gains: Crypto wrap

RIYADH: Leading cryptocurrencies have mirrored Bitcoin’s gains with strong performances in the past 24 hours.

Ethereum and Solana are up more than 10 percent, after Bitcoin surged above $66,000 on Wednesday.

Edan Yago, the lead contributor to the Bitcoin DeFi protocol Sovryn, said: “As big as Bitcoin is now, it’s a mere fraction of what it will be.

“An entire borderless economy will be powered by sound money. An economy far larger than our current global economy. Why? Bitcoin finally brings property rights and economic access to billions of people.”

 Ruud Feltkamp, CEO of cloud-based automated crypto trading bot Cryptohopper predicted that Bitcoin’s value will continue to grow.

“As expected, Bitcoin reached its all time high. It’s expected that the long volatile route to the top starts now, where I expect Bitcoin’s peak around Christmas. We often see that when Bitcoin makes a move, the altcoins follow in the two weeks after, which could explain the latest surge in Ethereum and Solana,” he said.

Trading
 

Bitcoin, the leading cryptocurrency in trading internationally, traded lower on Thursday, falling by 0.55 percent to $65,286 at 4:49 pm Riyadh time.

Ether, the second most traded cryptocurrency, traded at $4,251 up 6.74 percent, according to data from Coindesk.


'stc' profits hit $2.3 billion in 9 months, an increase of 3.5%

'stc' profits hit $2.3 billion in 9 months, an increase of 3.5%
Updated 2 min 58 sec ago

'stc' profits hit $2.3 billion in 9 months, an increase of 3.5%

'stc' profits hit $2.3 billion in 9 months, an increase of 3.5%
  • stc attributed the increase during the third quarter of 2021 to the rise in revenues by and a decrease in operating expenses. 

Saudi telecom giant 'stc’ reported a 3.5-percent increase in its net profit for the first 9 months of 2021, compared to the same period last year, reaching SR8.7 billion ($2.32 billion). 

The company’s net profit in the third quarter alone of 2021 increased by 5.71 percent, reaching SR2.9 billion. 

stc attributed the increase during the third quarter of 2021 to the rise in revenues by and a decrease in operating expenses. 


India's Reliance gets shareholders' nod to add Aramco chairman as director

India's Reliance gets shareholders' nod to add Aramco chairman as director
Updated 15 min 50 sec ago

India's Reliance gets shareholders' nod to add Aramco chairman as director

India's Reliance gets shareholders' nod to add Aramco chairman as director

BENGALURU: India's Reliance Industries Ltd said on Thursday that a required majority of its shareholders have passed a resolution to appoint Saudi Aramco Chairman Yasir Al-Rumayyan as an independent director to the conglomerate's board.
A little over 98% of the total votes polled on the resolution were in favour of Al-Rumayyan's addition, Reliance said in a statement https://bit.ly/3B233xd.
Last month, Reliance said Al-Rumayyan met all regulatory criteria for his appointment as an independent director, pending the shareholder vote on the decision.
That announcement came after media reports of shareholder California State Teachers' Retirement Fund saying it would vote against the move, based on U.S. proxy advisory research firm Glass Lewis' recommendation.
Al-Rumayyan's inclusion was earlier widely seen as part of a process to formalise Reliance's agreement to sell a 20% stake in its oil-to-chemical business to Aramco for $15 billion. The Indian conglomerate, however, said last month that his appointment has no connection to the deal.
Al-Rumayyan has been the governor of the Public Investment Fund of Saudi Arabia since 2015. 


Potential $100 per barrel oil price is unlikely to be sustainable: Jadwa

Potential $100 per barrel oil price is unlikely to be sustainable: Jadwa
Updated 21 October 2021

Potential $100 per barrel oil price is unlikely to be sustainable: Jadwa

Potential $100 per barrel oil price is unlikely to be sustainable: Jadwa

Riyadh: Oil prices could surge to $100 per barrel but only for a brief period, according to Saudi-based capital market company Jadwa.

The firm’s quarterly oil market report said the rise was conditional on an acceleration in gas-to-liquid substitution during the winter months, combined with any unforeseen outages in oil production.

However, this soaring level of prices is unlikely to persist, if it does indeed hit $100, Jadwa said.

The high level of prices would possibly drive OPEC+ to increase production over the current stated levels to stabilize the markets. Moreover, OPEC expects a decrease in global oil demand in the first quarter of 2022. Both of these developments will diminish the possibility of oil prices remaining at $100 in the short term, Jadwa explained.

Jadwa kept their expectation for 2022 Brent oil at $65. Meanwhile, they stated that there is an increasing risk on their full-year 2021 Brent oil forecast of $67.