Forex Analysis & Reviews: 23.11.2021 - BoE believes in success of...

23.11.2021 06:47 AM

BoE believes in success of CBDC. Pure starts development of its own CBDC

Bitcoin stopped its 3-day rally with a rapid decline to almost its one-month low. Although there are some technical factors, the interview with the BoE's representative also caused a drop in BTC. Jon Cunliffe said that there was a trend away from physical cash in many advanced economies, thus showing the necessity of a new digital currency.

Jon Cunliffe

The central bank's Deputy Governor Jon Cunliffe said that "technology including the internet and the popularity of credit and debit cards are reducing the role cash played in transactions". He supposes that authorities will have to adapt to the new conditions to keep cash in the financial system. "Central bank state-issued money is disappearing," Cunliffe said. These announcements are expected to urge consumers to support a new form of money that "could be as secure as cash but as flexible and useful online as cards and crypto currencies".

Notably, the Bank of England and Treasury together with other central banks from all over the world are studying various ways to use the digital currency along with cash. Unlike deposits in banks, CBDC ( Central Bank Digital Currency) will be regulated by the government itself. The new CBDC will be developed to work with online payments.

The BoE emphasizes that until 2016, cash was the main payment method in the UK. However, it was replaced by bank cards and other payment methods. The pandemic made online payments even more popular.

He also added that people thought of money as pound or dollar notes. The fact is that people need a safe currency supported by the government in times of stress. CBDC could be used as cash as it does not require consumers or enterprises to handle the bulk of paper bills. "On the downside there will be a hit to banks," Cunliffe said. "If people move their deposits into CBDC there will be a hit to banks, and banks will have to adjust. People will use it, but you don't want them to use it in such a disruptive way that we can't adjust."

According to the latest news, the Central Reserve Bank of Peru is planning to develop its own digital currency. The announcement was made by Julio Velarde, the Chairman of the Central Reserve Bank of Peru. He supposes that the currency will be primarily used as a means of payment. However, he also admits that it is not the best time for changes since economies and markets are facing some uncertainty.

The regulator's chairman also said that they were already working on the digital currency creation. He believes that the development of such a currency will be necessary in the high-tech future. The regulator is cooperating with central banks from other countries, including India, Singapore, and Hong Kong. They consider digital currencies to be a new financial sphere. Although the regulator has just started the development of CBDC, Velarde thinks that their digital currency could be compared to other digital assets created by the ECB and the Fed.

The announcement surprised experts since Pure always opposed cryptocurrencies. The country is still in the initial stages of introducing cryptocurrencies. In addition, it does not have a legal basis for it. Thus, the process could be very long.

Technical analysis of BTC

After a rise to $68,800, BTC rapidly lost its gains on Monday. Buyers became active when the asset hit the level of $56,500. Now, everything depends on bulls ability to regain control over the resistance level of $60,000. If the price reaches this level, it is likely to jump to $64,000. If it declines below $56,4000, BTC may slide to $53,600 and $50,900.

Technical analysis of ETH

Yesterday, ETH slid to a new support level of $4,110. However, bulls managed to keep this level and returned the price to the resistance level of $4,360. It is a rather difficult area for buyers. If the price breaks this level, it will return to $4,578. If ETH breaks the level of $4,110, it may decline to $3,885 and $3,682.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.