{"id":160008,"date":"2022-07-22T07:15:04","date_gmt":"2022-07-22T07:15:04","guid":{"rendered":"https:\/\/swissfederalism.ch\/denaro-senza-confini-mondo-caldo-piatto-affollato\/"},"modified":"2022-07-25T07:47:58","modified_gmt":"2022-07-25T07:47:58","slug":"borderless-money-crowded-world","status":"publish","type":"post","link":"https:\/\/swissfederalism.ch\/en\/borderless-money-crowded-world\/","title":{"rendered":"Borderless money in a hot, flat and crowded world"},"content":{"rendered":"<h1><span class=\"font-377884\">Borderless money in a hot, flat and crowded world<\/span><\/h1>\n<h3><span class=\"font-377884\"><em>Countries are beginning to realize that they can benefit from more inclusive forms of device-centric money, payments and financial services.<\/em><\/span><\/h3>\n<figure id=\"attachment_159953\" aria-describedby=\"caption-attachment-159953\" style=\"width: 840px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/swissfederalism.ch\/denaro-senza-confini-mondo-caldo-piatto-affollato\/cryptocurrency-photo-by-gerd-altmann-on-pixabay\/\" rel=\"attachment wp-att-159953\"><img decoding=\"async\" class=\"size-large wp-image-159954\" src=\"https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/cryptocurrency-Photo-by-Gerd-Altmann-on-Pixabay-1024x683.jpg\" alt=\"cryptocurrency Photo by Gerd Altmann on Pixabay\" width=\"840\" height=\"560\" srcset=\"https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/cryptocurrency-Photo-by-Gerd-Altmann-on-Pixabay-1024x683.jpg 1024w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/cryptocurrency-Photo-by-Gerd-Altmann-on-Pixabay-300x200.jpg 300w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/cryptocurrency-Photo-by-Gerd-Altmann-on-Pixabay-768x512.jpg 768w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/cryptocurrency-Photo-by-Gerd-Altmann-on-Pixabay-1536x1024.jpg 1536w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/cryptocurrency-Photo-by-Gerd-Altmann-on-Pixabay.jpg 1920w\" sizes=\"(max-width: 840px) 100vw, 840px\" \/><\/a><figcaption id=\"caption-attachment-159953\" class=\"wp-caption-text\"><span class=\"font-377884\">Digital currency increasingly used Photo by Gerd Altmann on Pixabay<\/span><\/figcaption><\/figure>\n<h3 class=\"toc-only\" style=\"text-align: center;\"><span class=\"font-377884\" style=\"color: #ff0000;\">In a nutshell<\/span><\/h3>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span class=\"font-377884\">Many governments are considering digital currencies<\/span><\/li>\n<li><span class=\"font-377884\">CBDCs are unlikely to replace traditional money<\/span><\/li>\n<li><span class=\"font-377884\">Rather, they could accelerate innovation in finance<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p class=\"has-drop-cap\"><span class=\"font-377884\">Until recently, the idea that the world would be locked in a digital-currency space race seemed like an abstraction or science fiction. Yet today 105 countries, representing 95 percent of the world\u2019s gross domestic product (GDP), are either researching, prototyping or deploying a digital national currency.\u00a0<\/span><\/p>\n<p><span class=\"font-377884\">This does not necessarily mean the digital currency race will be won by the public sector, but rather that countries around the world still fear being left in the dust if big tech enters the digital currency market. While one public sector fear was never realized with the abandonment of Meta\u2019s Diem project (formerly Libra), the other \u2013 that China would launch a digital renminbi \u2013 has come to pass and has raised the stakes for many countries to keep pace.\u00a0<\/span><\/p>\n<p><span class=\"font-377884\"><strong><a href=\"https:\/\/swissfederalism.ch\/en\/canton-of-ticino-says-yes-to-payments-to-the-state-in-bitcoin\/\">Canton of Ticino says yes to payments to the state in Bitcoin<\/a><\/strong><\/span><\/p>\n<h2><span class=\"font-377884\">Digital currency space race<\/span><\/h2>\n<p><span class=\"font-377884\">China\u2019s e-CNY debuted at the Beijing Winter Olympics and according to some estimates more than 300 million active accounts may already be using it. By itself, the number of users may not be a cause for geopolitical concern, since much of the motivation for the People\u2019s Bank of China\u2019s (PBOC) digital currency efforts are domestically focused and aimed at putting the country\u2019s big tech players in check. The real concern is that Beijing\u2019s digital currency could result in a parallel payment system that may not be responsive to international norms, including post-9\/11 financial crime compliance and sanctions regimes.<\/span><\/p>\n<h3 style=\"text-align: center;\"><span class=\"font-377884\"><em>Whether or not to implement a CBDC remains a deep technological, policy and regulatory debate, with many complex and not yet fully understood risks.<\/em><\/span><\/h3>\n<p><span class=\"font-377884\">These regimes, like the current technologies that move value around the world, are looking decidedly antiquated and vulnerable. Yet, as economic sanctions against Russia have demonstrated, countries do not weaponize their currencies, but rather the underlying delivery mechanisms. When it comes to geopolitics and economics, the payment system matters more than the amount transferred.\u00a0<\/span><\/p>\n<p><span class=\"font-377884\">As value transfer becomes not only digital, but also distributed and decentralized with the emergence of device-centric banking and payments (and software-intermediated capital markets), borders may soon disappear. Digital money has met Thomas Friedman\u2019s hot, flat and crowded world and central banks are none too pleased with the prospect of eroding monetary sovereignty or accelerating digital dollarization.<\/span><\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_159958\" aria-describedby=\"caption-attachment-159958\" style=\"width: 840px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/swissfederalism.ch\/denaro-senza-confini-mondo-caldo-piatto-affollato\/criptovalute-photo-by-miloslav-hamrik-on-pixabay\/\" rel=\"attachment wp-att-159958\"><img decoding=\"async\" class=\"size-large wp-image-159959\" src=\"https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Criptovalute-Photo-by-Miloslav-Hamrik-on-Pixabay-1024x678.jpg\" alt=\"Criptovalute Photo by Miloslav Ham\u0159\u00edk on Pixabay\" width=\"840\" height=\"556\" srcset=\"https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Criptovalute-Photo-by-Miloslav-Hamrik-on-Pixabay-1024x678.jpg 1024w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Criptovalute-Photo-by-Miloslav-Hamrik-on-Pixabay-300x199.jpg 300w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Criptovalute-Photo-by-Miloslav-Hamrik-on-Pixabay-768x509.jpg 768w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Criptovalute-Photo-by-Miloslav-Hamrik-on-Pixabay-1536x1018.jpg 1536w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Criptovalute-Photo-by-Miloslav-Hamrik-on-Pixabay.jpg 1920w\" sizes=\"(max-width: 840px) 100vw, 840px\" \/><\/a><figcaption id=\"caption-attachment-159958\" class=\"wp-caption-text\"><span class=\"font-377884\">Cryptocurrencies Photo by Miloslav Ham\u0159\u00edk on Pixabay<\/span><\/figcaption><\/figure>\n<h2><span class=\"font-377884\">The demise of cross-border payments<\/span><\/h2>\n<p><span class=\"font-377884\">If the internet democratizes access to knowledge and information through the removal of friction and traditional intermediaries, blockchain-based financial services (what some refer to as Web3) may chart a similar course for the movement of money. We do not send cross-border emails, but rather exchange freely and globally with trusted counterparties. Payments could become equally borderless as both retail and institutional adoption of digital currencies continues to grow.\u00a0<\/span><\/p>\n<p><span class=\"font-377884\">If Web3 augurs the emergence of an internet of value, it would stand to reason that Western values of democracy, openness, trust and transparency should be hardwired into its code and conduct. This may well be the technological contest of our times, with close parallels to the 5G wars. The choice of standards and hardware and software providers could closely align to either an open vision for connectivity and competitiveness, or an authoritarian one.<\/span><\/p>\n<p><span class=\"font-377884\"><a href=\"https:\/\/swissfederalism.ch\/en\/chuck-adams-we-love-switzerland-and-its-creed-of-freedom\/\"><strong>Chuck Adams: &#8220;We love Switzerland and its creed of freedom&#8221;<\/strong><\/a><\/span><\/p>\n<h2 id=\"h-to-cbdc-or-not-to-cbdc\"><span class=\"font-377884\">To CBDC or not to CBDC<\/span><\/h2>\n<p><span class=\"font-377884\">In the face of these choices, central banks around the world are wrestling with questions about how and whether to launch central bank digital currencies (CBDC). While the concept of a nationally issued digital currency is not new, based on central bank speeches, the idea only came into favor in the summer of 2019, the very time Libra was announced (possibly catalyzing China\u2019s national blockchain strategy).<\/span><\/p>\n<p><span class=\"font-377884\">Whether or not to implement a CBDC remains a deep technological, policy and regulatory debate, with many complex and not yet fully understood risks. Some countries are beginning to question the merits of turning central banks into retail banking institutions, not to mention the specter of central banks becoming an economic monitoring device. This much was clear in the United Kingdom\u2019s parliamentary inquiry on CBDCs, which deemed the idea of a CBDC \u201ca solution in search of a problem.\u201d Others appear to be advancing apace.\u00a0\u00a0<\/span><\/p>\n<h3 style=\"text-align: center;\"><span class=\"font-377884\"><em>Responsible digital currency innovations are unlikely to destabilize their underlying reference currency or erode monetary sovereignty.<\/em><\/span><\/h3>\n<p><span class=\"font-377884\">Meanwhile, major economies are starting to turn away from the idea that the private sector has no role to play in responsible digital currency innovation. Rather, some of the world\u2019s largest and most sophisticated economies, from the United States, to the state of California (the fifth-largest economy in the world), to the UK, (where Queen Elizabeth II mentioned digital assets in a recent speech), to Singapore, are espousing whole-of-government approaches to Web3 economic competitiveness.<\/span><\/p>\n<p><span class=\"font-377884\">In a world where global financial needs do not take bank holidays, while traditional analog brick and mortar financial services have reached a point of diminishing returns, embracing always-on device-centric financial services should be a natural priority \u2013 even if these innovations cross borders and traditional boundaries. Indeed, the lack of broadly available open technology-powered services (digital public goods) proved to be a major pre-pandemic vulnerability amounting to nothing short of a Great Correction.<\/span><\/p>\n<figure id=\"attachment_159962\" aria-describedby=\"caption-attachment-159962\" style=\"width: 840px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/swissfederalism.ch\/denaro-senza-confini-mondo-caldo-piatto-affollato\/dollari-in-bitcoin-photo-by-gerd-altmann-on-pixabay\/\" rel=\"attachment wp-att-159962\"><img decoding=\"async\" class=\"size-large wp-image-159963\" src=\"https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Dollari-in-bitcoin-Photo-by-Gerd-Altmann-on-Pixabay-1024x438.jpg\" alt=\"Dollari in bitcoin Photo by Gerd Altmann on Pixabay\" width=\"840\" height=\"359\" srcset=\"https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Dollari-in-bitcoin-Photo-by-Gerd-Altmann-on-Pixabay-1024x438.jpg 1024w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Dollari-in-bitcoin-Photo-by-Gerd-Altmann-on-Pixabay-300x128.jpg 300w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Dollari-in-bitcoin-Photo-by-Gerd-Altmann-on-Pixabay-768x329.jpg 768w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Dollari-in-bitcoin-Photo-by-Gerd-Altmann-on-Pixabay-1536x658.jpg 1536w, https:\/\/swissfederalism.ch\/wp-content\/uploads\/2022\/07\/Dollari-in-bitcoin-Photo-by-Gerd-Altmann-on-Pixabay.jpg 1920w\" sizes=\"(max-width: 840px) 100vw, 840px\" \/><\/a><figcaption id=\"caption-attachment-159962\" class=\"wp-caption-text\"><span class=\"font-377884\">Dollars in bitcoin Photo by Gerd Altmann on Pixabay<\/span><\/figcaption><\/figure>\n<h2><span class=\"font-377884\">Scenarios<\/span><\/h2>\n<p><span class=\"font-377884\">Like the original space race, the ongoing digital currency race is not a zero-sum game where one country wins at another\u2019s expense. Rather, the whole world can benefit from more inclusive forms of device-centric money, payments and financial services. By this measure, the U.S. is currently ahead and the dollar is fast becoming the currency driving responsible, rules-based free market internet innovation. Money after all, whether physical or digital, relies on market trust in its underlying institutions.\u00a0<\/span><\/p>\n<p><span class=\"font-377884\">Another likely scenario following the normalization and harmonization of digital currency is not that it will substitute traditional banking and money, but rather accelerate innovation in this sector. Notably, privacy could be improved through preserving digital and decentralized identity standards, as well as through an open-source technological road map for a veritable HTTP (hypertext transfer protocols are the set of rules enabling file transfers on the internet) standard for the movement of money on the internet. Neither of these standards would compete with traditional systems.\u00a0<\/span><\/p>\n<p><span class=\"font-377884\">Responsible digital currency innovations are unlikely to destabilize their underlying reference currency or erode monetary sovereignty. Rather, the sum of these innovations would complete a lot of unfinished work in the global economy, potentially reaching the billions of people who cannot currently access the formal banking system \u2013 which is in itself a source of deep global instability and risk.<\/span><\/p>\n<p><span class=\"font-377884\">Author: <strong>Dante Disparte<\/strong> chief strategy officer and head of global policy at Circle.<\/span><\/p>\n<p><span class=\"font-377884\">Source:<\/span><\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"UwR3tLAmN3\"><p><a href=\"https:\/\/www.gisreportsonline.com\/r\/digital-currencies\/\">Borderless money in a hot, flat and crowded world<\/a><\/p><\/blockquote>\n<p><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Borderless money in a hot, flat and crowded world&#8221; &#8212; GIS Reports\" src=\"https:\/\/www.gisreportsonline.com\/r\/digital-currencies\/embed\/#?secret=jpPjxy7sTp#?secret=UwR3tLAmN3\" data-secret=\"UwR3tLAmN3\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Countries are beginning to realize that they can benefit from more inclusive forms of device-centric money, payments and financial services.<\/p>\n","protected":false},"author":14,"featured_media":159963,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[256,985,988,260,210,1999],"tags":[2157,795,962,2156],"class_list":["post-160008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-finance","category-geopolitics","category-highlights","category-magazine","category-technology","tag-digital-currencies","tag-economy","tag-innovation","tag-money"],"_links":{"self":[{"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/posts\/160008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/comments?post=160008"}],"version-history":[{"count":2,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/posts\/160008\/revisions"}],"predecessor-version":[{"id":160010,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/posts\/160008\/revisions\/160010"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/media\/159963"}],"wp:attachment":[{"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/media?parent=160008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/categories?post=160008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swissfederalism.ch\/en\/wp-json\/wp\/v2\/tags?post=160008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}