Bitcoin Boom: Central Banks Examining How To Launch Digital Versions Of Their Own Currencies

The crypto industry witnessed an advanced surge, with Bitcoin touching all-time highs. 2021’s beginning marked Bitcoin trading at $29,000, which reached $68,000 in October, up a 130% surge.

MicroStrategy – a dynamic business firm, announced the purchase of Bitcoins worth $250 million. 2021’s mid-months witnessed Bitcoin’s popularity because large institutional investors started investing in the coin. Major institutional players & global banks like Morgan Stanley, Goldman Sachs, JP Morgan, and BlackRock entered Bitcoin’s world. This added further exposure to crypto-assets.

Owing to the comprehensible framework of regulators encouraged institutional investors to invest primarily for crypto assets across jurisdictions. This resulted in the exploding decentralized finance (DeFi) ecosystem.

Revolution in the blockchain industry is fattening. The year passed by and witnessed remarkable growth as the total value locked (TVL) in the DeFi market cap surpassed $250 billion in the 1st seven days of November. Non-fungible tokens (NFTs) have been the major use case of crypto, which popped up in 2021.

Overview of Central Bank Digital Currencies (CBDCs)

In December 2017, China was the 1st nation to operate its digital currency – the digital renminbi (or e-CNY). Eventually, many other countries began surveying and announcing the national blockchain-based digital currency strategy for enhancing cross-border trade.

2022 could most probably adopt more countries launching their own central bank digital currencies (CBCDs). CBDCs are expected to be influential in aiding the government’s public policy objectives for the direct transfer of benefits. For Central Banks, Digital Currencies come with 100% transparency.

Structured Crypto Ordinances Over Jurisdictions

With more and more people investing in cryptocurrencies, the government plans to provide investment security and promote innovation.

Since major countries are up to introducing Central Bank Digital Currencies, a dominancy will arise, leading other countries to merge crypto as a part of their financial systems.

India is also proceeding with plans to regulate the crypto industry and bestow increased lucidity to investors and crypto businesses. This nation is expected to witness a positive and progressive regulatory framework stimulating technology & innovation very soon.