According To One Industry Executive
A central bank digital currency (CBDC) and cryptocurrencies like Bitcoin BTC $16,943 may interact in mutually advantageous ways, says one industry executive.
Itai Avneri, chief operating officer and deputy CEO of the cryptocurrency trading platform INX, says that this does not preclude there from being a balance between the two.
By doing so, such financial instruments would especially be made more widely known while also offering cryptocurrency investors “comfort and confidence to trade in a regulated atmosphere.”
The executive stated that he is not aware of any current initiatives that would make it possible to purchase cryptocurrencies like Bitcoin using CBDCs or any potential interactions between CBDCs and cryptocurrencies.
Additionally, Avneri emphasized the significance of mixing regulation and decentralization because complete decentralization excludes rules like Know Your Customer (KYC) controls, which “comes with a price that is sometimes not favorable for investors.” He said:
“I believe customers must be recognized when thinking about dealing with governments and central banks as it will serve their interests and will create the essential ecosystem trust.”
SEC official: Be “extremely careful” of crypto proof-of-reserve audits
Investors shouldn’t have too much faith in a business that can pass a proof-of-reserves audit, according to acting top accountant of SEC Paul Munter.
Investors have been cautioned by a senior Securities and Exchange Commission official to be “extremely careful” when relying on a cryptocurrency company’s “proof-of-reserves.”
In an interview with The Wall Street Journal on December 22, Paul Munter, the acting top accountant of the SEC, stated, “We’re telling investors to be very skeptical of some of the claims that are being made by crypto firms.”
Since the demise of the cryptocurrency exchange FTX, many crypto companies have requested proof-of-reserves audits to allay concerns regarding the stability of their exchange.
Investors shouldn’t put too much faith in a company’s claims that it has proof-of-reserves from an audit firm, according to Munter, who also noted that the outcomes of these audits aren’t always a sign of the company’s sound financial status.
He continued by saying that these proof-of-reserve filings “lack” the information necessary for stakeholders to assess the company’s ability to cover its liabilities.
On December 12 in Washington, D.C., Munter also gave a speech at the Association of International Certified Professional Accountants Conference, where he reportedly expressed displeasure over the continually changing structure of cryptocurrency organizations.
Munter told WSJ that the SEC may submit a situation to the division of enforcement or additional consideration if it discovers “troublesome” fact patterns.
What will 2023 bring to the cryptocurrency market now that 2022 is officially over
If 2022 served as any kind of a guide for estimating what the cryptocurrency market would have in store for investors in the future, it would have been extremely challenging to forecast. The global crypto market capitalization was brutally shocked, falling by slightly over 60% from $2.2 trillion to roughly $797 billion so far this year. The two biggest cryptocurrencies by market cap, BTC and ETH, fell by 64% and 67%, respectively, during the same period, while the alt market also experienced a decline at the same time.
These price declines and the closure of the FTX exchange were not anticipated events by many if any. Furthermore, since certain cryptocurrency projects and venture funds still have treasury accounts on the exchange, the consequences of the FTX fiasco is not yet ended.
Nevertheless, if 2022 was genuinely chaotic, then 2023 must have something more promising to offer, but growth is probably going to be sluggish in the first quarter, if not the entire year.
Q1. Is CBDC a danger to cryptocurrency?
In fact, by certifying the underlying blockchain technology, central bank digital currencies (CBDCs) would assist increase trust among skeptics rather than endanger cryptocurrencies.
Q2. What cryptocurrency will be utilized for CBDC?
The most popular consortium blockchains in CBDC are Quorum, Hyperledger Fabric, Corda, and Ethereum. These projects’ primary application scenarios include settlements, cross-border payments, inner-bank payments, and inter-bank payments.