As the artificial intelligence bubble continues to inflate, cryptocurrencies have benefited from another highly symbolic development: BlackRock's intention to launch a spot ETF. Bitcoin and ETFs have a long-standing history together, as they have been eagerly anticipated since 2017, and we have never been closer to their realization. This could herald a new phase of significant growth for Bitcoin, particularly in the current gloomy landscape of US regulations.
IMF recall global ledger that works with CBDCs
Tobias Adrian, an IMF advisor suggests using a global ledger that integrates with central bank digital currency (CBDC) platforms. This ledger would enhance cross-border payments, improve transparency, and reduce costs. The proposed XC platform enables seamless settlement across multiple fiat currencies without introducing a new settlement token. It allows for automated currency swaps and separates settlement and non-settlement services. The advisor also proposes domestic CBDC platforms that can connect to the global ledger. However, further testing and legal frameworks are needed. The IMF sees potential in private blockchain networks for faster and more secure payments.
This technology is already available and usable at Fipto through stablecoins issued by regulated private companies.
Stablecoins are already available and used today in global payments, but they will continue to be useful even after the introduction of CBDCs. First, stablecoins are built on decentralized blockchain technology, appealing to those who value decentralization and wish to avoid reliance on central banks or government-controlled entities. Secondly, some stablecoins offer a higher degree of privacy compared to CBDCs, allowing users to keep their financial transactions and information more confidential.
Additionally, stablecoins foster faster innovation as they are often issued by private companies or projects, driving ongoing advancements and the introduction of new features. They also feature global accessibility, enabling individuals and businesses to engage in cross-border transactions without being limited by specific national policies.
Stablecoins leverage established blockchain networks, such as Ethereum, benefiting from their scalability and security. Moreover, stablecoins have diverse use cases beyond traditional payments, finding applications in decentralized finance (DeFi), remittances, and global trade.
BlackRock Delves into Bitcoin ETF
BlackRock, the world’s largest asset manager with $9.1 trillion in assets as of March, is making a notable move in the crypto market. The firm has filed paperwork with the SEC for a spot bitcoin ETF, aiming to achieve what many of its competitors have attempted without success - launching a direct bitcoin investment product in the US.
BlackRock's proposed iShares Bitcoin Trust will have Coinbase serve as the custodian of the bitcoin holdings, subject to SEC approval. This development signifies a significant step forward in the crypto sphere, offering a more familiar and accessible option for potential investors. It could also open the doors for the rest of the 80% of Americans who have yet to engage with bitcoin.
This filing comes at a time when the regulatory landscape for cryptocurrencies is under scrutiny. Despite this, BlackRock is taking bold steps to integrate crypto into its offerings, with its iShares and Blockchain Tech ETF (IBLC) launched in April 2022. It also follows on the heels of their partnership with Coinbase last August.
Though the journey towards a spot bitcoin ETF in the US has been filled with regulatory challenges, BlackRock's attempt could mark a new chapter for crypto in the US financial sector.
After Blackrock, Fidelity ?
Fidelity, the third-largest global asset manager, is reportedly considering a significant move in the crypto markets. One option being explored is the potential acquisition of Grayscale, a prominent player in the cryptocurrency space. Alternatively, Fidelity may choose to file an application for a Bitcoin spot ETF, similar to BlackRock's recent filing. If successful, these moves could establish Fidelity and BlackRock as dominant forces in the US digital asset market. Grayscale has faced challenges in converting its Bitcoin Trust into a spot Bitcoin ETF due to regulatory hurdles.
Sources: Blockworks, Cointelegraph