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Analyst Presents Top 10 Cryptos To Turn $5,000 Into $500,000 By 2025
In a thread on X (formerly Twitter), the popular crypto analyst known as cyclop (@nobrainflip) delivered a bold forecast to his substantial following of 394,000. He proclaimed, “We are close to the biggest altseason in history. Everyone will make x50-x100 on their entire portfolio. k portfolio will be around 0k-0k in 2025. All you need is to buy the right lowcaps.”
This assertion hinges on a strategic selection of low market capitalization cryptocurrencies, which, according to Cyclop, are poised for an exponential surge in value. Cyclop elucidates his strategy by detailing the liquidity flow typically observed during a bull market phase, a sequential process starting with Bitcoin (BTC) and cascading down to meme coins.
He explains, “Here is a typical bull run liquidity flow: 1: BTC pump 2: ETH pump 3: High cap alts pump 4: Low caps pump 5: Memecoin pump.” Importantly, he highlights that high cap memecoins have already experienced their growth phase, suggesting that “lowcap/lowcap memecoins – next” are primed for significant value appreciation.
Within this framework, Cyclop underscores the potential for staggering returns without the necessity for professional day trading expertise. “It’s cause each coin has its maximum, and if its MC is already high, it’s not so far away. But when the market cap is almost at zero, the potential is enormous,” he advises, promoting a hands-off investment strategy focused on the ‘right’ coins.
Crypto Watchlist: Top-10 Lowcap Coins
Cyclop’s watchlist is a selection of ten recently launched projects with low market caps and, in his view, substantial growth potential:
#1 Wolf Wif (BALLZ): A meme coin that took the Solana blockchain by storm, achieving a million market cap within a day of its launch. Despite a subsequent correction, Cyclop views this as an optimal entry point, confidently stating, “I’m holding my BALLZ tight.”
#2 Entangle (NGL): Positioned as a potential leading messaging infrastructure for the Web3 space, Entangle aims to enhance liquidity within the ecosystem. It offers secure, flexible, and interoperable solutions for blockchain data communication, positioning itself as a critical infrastructure for dApps and builders.
#3 StarHeroes (STAR): This esports-centric, multiplayer third-person space shooter game is making waves with its dynamic and competitive gameplay. Cyclop sees this as a revolutionary blend of gaming and blockchain technology, offering intense gaming emotions and a new avenue for esports within the crypto realm.
#4 Heroes of Mavia (MAVIA): A blockchain strategy game that allows players to build bases, engage in battles for cryptocurrency rewards, and form partnerships with landowners. Cyclop highlights its potential in the play-to-earn space, marking it as a standout project.
#5 VoluMint (VMINT): This project introduces a decentralized, AI-driven market-making service, aiming to redefine market-making in the era of blockchain. Cyclop is bullish on its ability to unlock the potential of crypto projects, emphasizing its innovative approach.
#6 SatoshiVM (SAVM): As a decentralized Bitcoin ZK Rollup Layer 2 solution, SatoshiVM bridges the gap between Bitcoin and Ethereum’s EVM, using BTC as gas. This project aims to combine the value and security of Bitcoin with the programmability of Ethereum, creating a powerful ecosystem for decentralized applications. Cyclop notes, “SAVM’s unique positioning as a bridge between BTC and EVM ecosystems presents a groundbreaking opportunity for growth.”
#7 Graphlinq Chain (GLQ): Offering a no-code interface for automating blockchain tasks, Graphlinq Chain simplifies the creation and deployment of blockchain automations. Its suite of tools, including an IDE, App, Engine, and Marketplace, is designed to make blockchain automation accessible to a wider audience. “GraphLinq Protocol demystifies blockchain automation, paving the way for innovative applications and efficiencies,” Cyclop remarks.
#8 zKML (ZKML): This project addresses the pressing need for privacy in digital transactions and communications. By combining zero-knowledge proofs, homomorphic encryption, and multi-party computation (MPC), zKML offers a secure and private framework for blockchain interactions. “ZKML’s focus on privacy-enhancing technologies is timely and critical, offering a secure haven for digital transactions,” observes Cyclop.
#9 Monai (MONAI): Monai stands out for its development of uncensored generative AI tools, integrated with its blockchain, Monad. It features an advanced, unrestricted Large Language Model as its flagship product, aiming to revolutionize the way we interact with AI. “Monai’s pioneering approach to generative AI within the blockchain space is a game-changer, offering unparalleled possibilities,” Cyclop asserts.
#10 EMC Protocol (EMC): Dedicated to AI applications, EMC Protocol is a blockchain network that includes a computing power consensus mechanism. It aims to facilitate the execution of AI tasks within a decentralized framework, including validator, smart router, and computing power nodes. “EMC’s innovative approach to integrating AI and blockchain could redefine the landscape of decentralized applications,” Cyclop concludes.
At press time, cyclop’s top pick – BALLZ – traded at .04231, down almost 50% from its alltime-high.
Curtain Fell: Ideal Cooperation Blockchain (ICB) Presents Advanced Blockchain Network at ICO Level
PRESS RELEASE. Singapore, February 5th, 2024 – ICB Crypto Services eagerly announces the initiation of Ideal Cooperation Blockchain (ICB), a prominent venture introduced by ICB Labs. After its recent inception a few years ago, ICB Labs is going to organize an official launch of the blockchain network at the ICO level in Q1 2024, setting new standards within the blockchain industry.
Ideal Cooperation Blockchain network, also known as ICBX, is a promising project focusing on smart contracts and intermediary-free transactions. Addressing the reported troubles and issues found in other blockchains, the ICB blockchain’s foundational layer introduces significant changes, enhancing efficiency and rapid responsiveness.
Brief Description
The PoS Consensus Algorithm in ICBX offers an innovative method for verification and block formation, implementing advanced technologies to increase network performance and trust. CertiK, a leading security-focused ranking platform, has officially approved the ICB project, affirming the measures and precautions taken.
ICB Network’s blockchain bonding mechanism allows participants to lock their tokens as collateral, showcasing commitment and enthusiasm towards supporting decentralized applications within the network.
The democratic governance model within ICB empowers token holders to participate in network decision-making, boosting transparency and active engagement.
Efficient Technical Solutions
ICB Network’s compatibility with the Ethereum Virtual Machine (EVM) empowers developers to create smart contracts securely and efficiently. Adherence to standards like ERC-20, ERC-721, and ERC-1155 ensures accurate smart contract definition and interaction with other EVM applications.
ICB Scan, an explorer within the ICB network, enhances transparency with open-source features, precise transaction tracking, and contract details checking. The ICBX project’s testnet phase and DAO implementation contribute to sustainable and secure development.
About ICB
Established in October 2020, ICB Labs marks the company’s breakthrough into the blockchain industry. With a mission to provide quick, affordable, and advanced blockchain technology, ICB is going to enrich the industry and restore trust through crypto’s potential.
ICB’s ecosystem, ICB NETWORK BIT, is part of a wider interconnected system, aiming to deliver the best possible experience. The ICB token serves as a versatile digital currency, facilitating transactions, network governance, and incentivizing active participation.
Ideal Cooperation Blockchain (ICB) possesses winning features, modern technologies, and commitment to efficiency and security. The launch at the ICO stage will definitely contribute to blockchain development, promising transparency, accessibility, and trust within the ICB ecosystem.
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For more information, visit the official website at https://www.icb.network/ or check the latest news via the channels specified below:
https://twitter.com/icbxnetwork
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https://t.me/icbnetwork_official
Medium
https://readicbnetwork.medium.com/
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Terra Classic Validator Presents ‘Legally Absolved Route’ To Burn 800 Million USTC
Back in August 2023, the Terra Classic community passed a proposal that would see 800 million USTC incinerated. This move came about as the community worked to help the token recover and be re-pegged back to the US dollar. Naturally, the proposal passed and the community prepared for the massive burn. That is until the plan hit a snag.
Terra Classic Validators Worried About Code Changes
The 800 million USTC mentioned in the proposal to be burned are the tokens held in the community treasury and managed by Risk Harbor. After the proposal was passed, the community turned toward carrying out the burn, until validators raised an issue with the plan.
According to Risk Harbor, they no longer had the keys to the wallet which happens to be a multi-sig wallet. So by default, these USTC coins are no longer accessible. But to burn the token, validators would be required to update the codes on their nodes and the legalities around this move have been questioned.
As a result of this, validators have begun to vote no to carrying out the burn, citing these legal issues. This is derailing the massive burn which is expected to reduce the token supply by around 8% in a single go.
In response to this, a Terra Classic validator known as Lunanauts has proposed what they say is a “legally absolved route” to completing the burn. Basically, Lunanauts has devised a way in which validators would not have to update the codes on their nodes and thus, avoid any legal issues.
Legal Way To Burn 800 Million USTC
In a proposal made on the Terra Classic community forum titled “Burn of 800m USTC Funds – legally absolved route,” Lunanauts suggests using a smart contract to actually burn the tokens. The objective of the proposal, Lunanauts explained, is to still carry out the burn but eliminate legal repercussions for validators.
The process would involve creating a smart contract carrying a “sole MsgSend to transfer all holdings to Anxu.” Once this is done, the multis contract can then be transferred via governance to the code id create. So there is no need for any code changes by validators. As Lunanauts explains, “The proposed method achieves the same effect as (proposal 11913) without requiring validator installations.”
Lunanauts’s ‘solution’ comes hot on the heels of Proposal 11832 which has taken another route to address validators’ legal concerns. The proposal wants to blacklist the multisig wallet holding the 800 million USTC instead, making it impossible to transfer tokens from that wallet.
The two proposals are currently going head to head. As always, token holders are able to vote on the proposal they want to support. Once voting ends, whatever proposal passes will determine what happens to the 800 million USTC in the community wallet.
Nevertheless, all of this is being done with the endgame of re-pegging USTC to the US dollar. The token is still trading about 96% below its peg with a 9.78 billion total supply.
B2BinPay v18 Presents Account Merge – A New Way To Manage Crypto
PRESS RELEASE. Not too long after the significant v17 release, B2BinPay is advancing significantly to establish new benchmarks in quality. B2BinPay continues its commitment to excellence by introducing a new chapter for the platform with the release of the v18 edition.
This edition makes managing crypto transactions easier by integrating the Enterprise and Merchant models into a single account system. The v18 edition also includes a redesigned front end and elevated regulatory compliance to guarantee safety and improve user experience.
Let’s investigate these intriguing additions and see how they fit into the current digital ecosystem of B2BinPay.
How Account Unification Simplifies Everything
With the release of the v18 version, the most notable enhancement for B2BinPay users is account unification, also known as Merge, which provides an entirely new method of using the platform’s primary functionalities.
This update simplifies the platform by merging the two primary B2BinPay account types—Enterprise and Merchant—into a single, easy-to-use interface. Customers may now handle transactions directly within a single digital system and change features to suit their needs. This invention streamlines every process step while supplying clients with more options, accessibility and control over their on-platform activities. The account merge function provides several fresh possibilities for customers, further enriching the offerings of B2BinPay.
Effortless Administration And Account Creation
B2BinPay has combined the Merchant and Enterprise user accounts to form a comprehensive service centre. Users may now access the capabilities of both service kinds with only one account. This also simplifies the registration process, allowing customers to use B2BinPay’s wide range of services without understanding the intricate details of each type. Businesses may start using B2BinPay services immediately and focus on what matters: their company’s growth instead of wasting time with needless red tape and bureaucracy.
Near-Instant Onboarding
With the v18 update, onboarding has been transformed into a straightforward, one-time procedure. No hidden fees or additional charges will be required. Customers don’t have to worry about extra costs or laborious administrative processes when they want to switch payment providers to accommodate their growing company needs after onboarding. It’s a simple procedure that respects the client’s time and encourages a proactive approach to using the B2BinPay platform.
A brand-New Front-End With Quality-Of-Life Features
In addition to having a smooth user interface, B2BinPay v18 offers a fresh aesthetic that goes hand-in-hand with the iconic B2Broker design. B2BinPay’s enhanced system security and speed have enabled clients to access a dependable and robust front-end ecosystem. To provide a seamless and organic transition to this improved platform, B2BinPay has kept the key components that users have grown accustomed to. The following features underwent extensive renovations:
Redesigned Wallets And Payments
The redesigned interfaces and faster procedures make it much easier to utilise B2BinPay’s services without any hassle. Additionally, B2BinPay has enhanced the bank withdrawal, exchange, and payment user interfaces, optimising all financial procedures and saving consumers much time. Almost every action within the platform can be conducted swiftly and in minutes.
Overhauled Account Menus With Additional Security
B2BinPay has enhanced the account administration interface’s security and usability. Managing API access, establishing preferences, and personalising client profiles are all made simple by the new Account Menu. Adding two-factor authentication (2FA) raises the overall security even further. The Payment Page has also been modified to adhere to the new, user-friendly design approach, offering a convenient and secure way to conduct transactions.
Limitless Invoicing Period
With the removal of the seven-day merchant invoice expiry restriction, consumers now have greater freedom and choice in monitoring their invoices. With this update, companies can set the invoicing cycles to perfectly fit their business operations and workflow periods.
Enhanced Customer Support
Quick access to multilingual support within a well-defined schedule has significantly improved the Helpdesk user experience. It’s now easier than ever to stay in the loop regarding your helpdesk tickets with the new sticker alerts for incoming messages.
Rates UX Revisions
The Rates UX now boasts improved favourites and filtering options. Furthermore, the wallets section now offers rates as part of a top-level menu, enhancing user access and control of currency rates.
FATF Travel Rule Compliance
In all critical metrics, B2BinPay is committed to maintaining the highest regulatory compliance standards within the industry. To ensure adherence to Financial Action Task Force (FATF) Travel Rule criteria, B2BinPay has partnered with Notabene, an established provider of travel rule solutions.
The FATF Travel Rule is a regulatory framework that mandates acquiring and exchanging personal information in crypto transactions to prevent money laundering and other illicit actions. Fund transfer originators and recipients must disclose specific personal information about themselves to Virtual Asset Service Providers (VASPs). This rule is necessary to identify activities that could be tied to illegal funds.
Final Takeaways
Businesses can conduct crypto transactions overseas easily, securely, and efficiently thanks to B2BinPay, the leading cryptocurrency payment platform. The platform’s primary goal is to provide users with convenient, secure and diverse options to transfer cryptocurrencies.
B2BinPay is all about creating a one-stop solution for crypto owners, giving them every bit of utility and functionality they need without hassle. The v18 update was designed to be a significant step toward fulfilling this mission, enhancing the platform’s accessibility and security for its customers.
This is a press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.
Crypto Analyst Presents Uniswap’s UNI As The Next Coin Primed For Breakout
Several altcoins are currently on the rise following Bitcoin’s resurgence, and popular crypto analyst Ali Martinez has singled out the Uniswap UNI token as one of those tokens that could rally further as he projects that UNI is set to break out soon from its current resistance level.
Why Uniswap Is Poised For A Breakout
In a post shared on his X (formerly Twitter) platform, Martinez noted that the majority of UNI holders were positioned ‘Out of the Money,’ which suggests that the token was preparing for a breakout. Accompanying his post was data from the crypto analytics platform Intotheblock based on the ‘Historical In/Out of the Money’ metric.
The data shows that over 75% of the token holders are ‘out of the money’, which means that they were yet to break even in their investments as the average cost price at which they bought these tokens is greater than its current price.
More addresses are out of the money | Source: IntoTheBlock
Furthermore, the crypto analyst explained that selling pressure has gotten exhausted and that the UNI token has been able to build “an important support” level at around . This could serve as a lift-off point for the altcoin.
Key Supply Walls UNI Needs To Break
To further support his breakout theory, Martinez noted two supply walls that UNI “needs” to overcome in order to signal a bullish breakout. According to him, one of these supply walls is at .23, where data from Intotheblock shows that 7,000 addresses have bought 14.24 million worth of UNI.
The other supply wall is at .45, where data from Intotheblock shows that 2,000 Uniswap addresses have accumulated 10.28 million worth of UNI. Whales and institutional players may also be aware of this potential breakout and may be looking to position themselves, as Martinez noted.
The crypto analyst also recently commented on a potential Ethereum breakout. In a different post on his X platform, he said that the second largest cryptocurrency by market cap will need to overcome the huge supply wall at ,960, where data from Intotheblock showed that 1.14 million addresses bought close to 33 million ETH.
Meanwhile, Martinez believes that now is a good time for people to accumulate Bitcoin based on his examination of the past two cycles from the market bottom and the present Bitcoin trend. According to him, a similar trajectory points to the next Bitcoin market top being around October 2025.
At the time of writing, the UNI token is trading at around .10, according to data from CoinMarketCap.
Cardano (ADA) Getting Ready To Explode: Analyst Presents 16,500% Blowout
Cardano (ADA) has been stuck in an accumulation zone for a couple of months now and has not seen the kind of run-up other large cryptocurrencies have experienced. This continued accumulation as well as trading in a very tight range could mean a very significant breakout when it finally happens and one crypto analyst has predicted an incredible surge along these lines.
Cardano Could See A 16,500% Surge
Tim Warren, one of the hosts of the Investing Broz show on Discord, took to X (formerly Twitter) to share a rather bullish Cardano chart. In the chart, Warren points out Cardano’s previous price performance which has been nothing short of phenomenal.
As the chart shows, the ADA price had fallen around 98% from its prior all-time high which it had hit in 2018. By 2020, ADA’s price was sitting as low as .018, but the imminent turnaround would take the entire market by surprise. ADA would go on to rally a total of 16,500% by the time it hit its new all-time high of .10 in 2021.
Applying this historical performance to the current price level of ADA could suggest another such rally. Cardano’s price is currently sitting around 92% below its all-time high, which puts it close to the same level it was back in 2020.
If ADA sticks to this historical performance and does a repeat, a 16,500% surge from the current price level would put the digital asset’s price at at its peak.
The Value Proposition Of ADA
Responding to Warren’s post, another X user, Chris O chimes in with the value proposition of the digital asset. Chris, who is the founder of Ghost Fund DAO, a protocol on Cardano, explained that ADA’s previous 16,500% surge had happened without having support for smart contracts and decentralized finance (DeFi), among others. But now that the network supports this, the founder believes this could trigger a large rise.
Chris points to the presence of DeFi, a rising Total Value Locked (TVL), non-fungible tokens (NFTs), and sidechains which are now prominent on the network. He also points out the various protocols which have been launched on the network across these different sectors.
#Cardano fam, simple chart showing FUTURE opportunity. Without SC, CNT’s, Defi, $ADA did 165x from bear bottom.
Now with SC, Defi/booming TVL, NFT’s, Projects such as @book_io, @CornucopiasGame, @Indigo_protocol, @IagonOfficial, etc…, along with Hydra, Marlowe, Mithril,… https://t.co/EChPO0SSLH
— Chris O (@TheOCcryptobro) October 14, 2023
As Chris points out, ADA had done a “165x from bear bottom” without Cardano having support for all of the sectors listed above. So he believes that “A 25x – 40x is a very reasonable expectation. Drown out the noise.”
Related Reading: Meme Coins That Are Ripe For The Picking Following .2 Billion Crash
Chris referred to Warren’s chart as a “simple chart showing FUTURE opportunity.” However, if ADA were to make a repeat of its 2020-2021 rally, a 40x would only be the beginning for the digital asset.
Crypto Analyst Presents Data To Prove That XRP Is Deflationary
In the past, many have argued whether or not the XRP token was deflationary or not. In support of the former, pro-XRP crypto analyst Panos Mekras has provided data that suggests that the token has deflationary characteristics.
Number Of Tokens Burned So Far
In a tweet shared on his X (formerly Twitter) platform, Mekras referenced another tweet showing that over 11 million tokens had been burned. This stat undoubtedly suggests that the token is deflationary since its total supply has decreased over time due to the burn mechanism.
However, another X user (@hasen_van) argued that the token was only deflationary in “respect to all XRP in existence” and that the token will continue to be inflationary as long “as Ripple keeps on selling into the open market.”
true with respect to all XRP in existence, but from a holders point of view – given that mostly all exchanges are using circulating supply (x price) to measure market cap, XRP is inflationary as long as ripple keeps on selling into the open market. #fridayfacts
— VanHasen (@hasen_van) October 6, 2023
In response, Mekras tried to correct the belief that some XRP tokens were not yet “in existence” as he stated that XRP’s total supply of 100 billion has existed since “day 1,” meaning that 100% of its supply has been circulating from the beginning and some XRP tokens cannot be classified as ‘non-existent’ yet.
This debate seems to stem from the fact that Ripple has an escrow system in place. As such, some (like VanHansen) believe that the XRP in escrow lockups does not fall under its circulating supply and that this escrow system affects XRP’s deflationary status. However, people like Mekras argue that the escrow system doesn’t change the fact that the token is deflationary.
VanHansen further argued that the token cannot be deflationary (except technically) as XRP’s circulating supply gets inflated every time “Ripple releases XRP from the escrow.” Both sides seemed to look at it from different angles, with Mekras abiding by what deflationary meant in the strict sense while VanHansen was trying to provide a context.
Is XRP Deflationary Or Not?
It is worth mentioning that the XRP Ledger doesn’t exactly have a built-in mechanism to decrease the token’s total supply, unlike some other networks. For instance, Ethereum implemented the London hard fork, which introduced a fee-burning mechanism with some Ether burned immediately after processing a transaction.
Related Reading: When Are AMMs Coming To XRP Ledger? Ripple CTO Gives Clear Answer
However, in XRP’s case, these token burns have occurred coincidentally rather than being a deflationary model on the network. In July, an engineer at Ripple explained that the monumental increase in the burn rate was mostly because of the XRPL account deletions. He mentioned that 2 XRP are usually burned when an account is deleted.
He further noted that 85,556 old accounts on the Ledger were deleted in June, which led to over 100,000 XRP being burned. Hence, the burned token figure rises every time an account is deleted.
Analyst Presents 4 Charts That Prove Crypto Is Not Dead
As the crypto market faces constant volatility challenges and regulatory pressures, major cryptocurrencies have experienced significant declines and slowed growth over the years. However, a new chart report has revealed that despite these downward trends, the crypto industry is still achieving new milestones in terms of adoption.
Chart Reveals Crypto Adoption On The Rise
The broader crypto market has been recovering at a snail’s pace since the crypto crash in 2021. Cryptocurrencies were at their peak during this time, and Bitcoin had the highest growth rate, reaching a price of over ,000 while Ethereum’s price was around ,000.
However, the upward trend was short-lived and the industry was hit with many challenges including regulatory hurdles that restricted its advancement into different regions and market forces which constantly caused instability in crypto prices.
Amid all this, DeFi Researcher, Thor Hartvigsen has presented in an X (formerly Twitter) post, chart reports that display the continuous growth in adoption of the crypto industry despite negative trends in the ecosystem.
Hartvigsen disclosed the four charts showed an increase in crypto adoption in the industry. One of the charts shows a spike in total daily wallets for users in the Ethereum and Layer 2 (L2) landscape which was previously in a bear market.
Another chart reveals a surge in traction in decentralized stablecoins which have been in decline since August 2022.
The third chart illustrates Ethereum’s growth rate over the years, surpassing billion in revenue and promoting the emergence of innovative businesses in the crypto industry.
The last chart shows liquid staking at an all-time high, growing from .9 billion to more than billion in 2023. This report also adds to recent data which revealed a spike in liquid staking platforms in the United States after hitting 370,000 Ether (ETH) in only five days and reaching a new milestone of million staked ether.
Major Incentives Driving Growth Rates
The evolution of the crypto industry has been pushed back a couple of years following the Terra Luna crash which saw one of the largest stablecoins declining by 99%.
After the LUNA crash, the crypto industry suffered another loss from the FTX descent and insolvency. The industry has been under scrutiny by major regulatory authorities like the United States Securities and Exchange Commission (SEC).
There have also been multiple crypto scams, rug pulls, and cyber attacks over the years on major exchange platforms and marketplaces in the industry.
Presently, the crypto industry is slowly gaining back its strength and advancing rapidly, as seen in some major innovative developments like the integration of spot Bitcoin ETFs, and Ethereum spot ETFs.
The ecosystem is also thriving with new infrastructure upgrades and improvements in the DeFi ecosystem, ensuring the sustainability and longevity of the industry.
American Bankers Association States a CBDC Is ‘Unnecessary’ and Presents ‘Unacceptable Risks’ to the US Financial System
The American Bankers Association (ABA), an organization that represents banks custodying trillion in deposits and processing trillion in loans, believes that issuing a central bank digital currency (CBDC) in the U.S. is “unnecessary” and would introduce “unacceptable risks” to the financial system, given that the dollar “is already digital.”
ABA Opposes Idea of U.S. CBDC
The American Bankers Association (ABA) has criticized the proposal of issuing a central bank digital currency (CBDC) in the U.S., stating that it would introduce disturbances to the banking system. In a prepared statement directed to the U.S. House Financial Services Committee, the ABA emphasized that introducing a digital dollar would be “unnecessary” and presents “unacceptable risks and costs to the financial system.”
For the ABA, the U.S. dollar is already digital, and is supported by a wide array of payment systems, including debit and credit cards, Zelle, ACH, wire, RTP, Paypal, Venmo, Cashapp, and other fintech apps that facilitate the movement of dollars inside and outside the U.S.
Even on the institutional side, the ABA explains that Fednow, the financial institution-focused payment system, allows wholesale transactions 24 hours a day without needing a new tool. However, the association states that banks are researching the implementation of distributed ledger tools for payments, but without the need or involvement of a CBDC.
The ABA comments that a CBDC would debilitate the role that banks serve in the U.S. financial system, constituting an “advantaged competitor to retail bank deposits,” as these would migrate to the Federal Reserve, limiting or eliminating the ability for banks to issue credit.
Wholesale CBDC
Nonetheless, the ABA accepts that another kind of CBDC, not directed to be used by the general public, might warrant further evaluation. Wholesale CBDCs, which would be used just for transacting between financial institutions and the Federal Reserve, could be used by the financial system in various ways.
A pilot for this use case, in which payments between financial institutions were settled using a wholesale CBDC, was carried out by the New York Federal Reserve Innovation Center with the involvement of BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo. A results report issued in July revealed that the wholesale CBDC system “could operate successfully as a payment system on a new technology platform.”
What do you think about the position of the American Bankers Association on issuing a digital dollar? Tell us in the comments section below.