Friday, December 3

World Economic Forum publishes document on digital currencies

The World Economic Forum (WEF) has launched an extensive document, divided into eight parts, about digital coins. Its focus is on both public and private currencies, citing the importance of this technology for society.

The document was supported by more than 85 members of the WEF Digital Currency Governance Consortium. Among the contributors are two Brazilians, Aristides AC Neto and Rafael S. de Almeida, both from the Central Bank of Brazil. In addition to representatives of large institutions such as Visa, Mastercard, Ripple, PayPal, Accenture, UNICEF, among others.

Twelve years after the creation of Bitcoin, governments now need to race against time to update not only on cryptocurrency regulation, but also on reviewing their monetary policies. After all, with more and more options to choose from, fiat currencies are not losing their purchasing power, but also their credibility and, ultimately, their use.

Three themes and eight documents

The document launched by the WEF is divided into three themes: Regulatory options, Value proposition for those who do not have access, and Technological options.

Document on digital currencies made by the World Economic Forum. Source: FME

The first theme — regulatory options — , divided into three parts, addresses the role of the public sector and public-private cooperation in expanding the era of digital currencies. Followed by gray areas in the regulation of these assets and, the third document deals with consumer protection.

The second theme — value offer — is the shortest, divided into just two documents that address the financial inclusion of stablecoins and also the use of digital currencies for international aid.

The third and last theme — technological options — is divided into three sections. Trust and privacy options for CBDCs, interoperability, and finally technology considerations for CBDCs.

Bitcoin was the bad guy, now it’s the future

For a long time, governments as well as banks and other institutions criticized Bitcoin in various aspects, such as financial and technological. While some leaders still make such criticisms, others are trying to adapt to this new technology, which is more than a decade old.

“How global leaders in the public and private sectors develop, coordinate and regulate these digital currencies will have profound implications for society’s ability to harness their benefits and avoid the potentially significant risks they introduce.”, points out the introduction of the FME document series.

Note that these documents are not global guidelines but rather a reference material for both governments and businesses to gain a better understanding of the role and functioning of digital currencies and then make the best choices.

This new era of global financial connectivity could be marked by the disappearance of multiple national currencies as citizens will have greater power of choice, as well as we may see the emergence of numerous private currencies.

All this will happen with or without the participation of governments and banks, now it is up to them to decide what actions will be taken. While unlikely, this global competition is expected to prompt governments to adopt better monetary measures, otherwise they will continue to lose ground to currencies like Bitcoin.

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