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HEALTH, WEALTH, AND HAPPINESS

June 21, 2022

"With extreme wealth comes extreme responsibility. And the responsibility for me is to invest in creating new businesses, create jobs, employ people, and to put money aside to tackle issues where we can make a difference."

- Richard Branson

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Join Us at Crypto Seminar NYC! Bitcoin Market Journal publisher John Hargrave will be joined by Shark Tank's Daymond John, Unchained host Laura Shin, former White House Communications Director Anthony Scaramucci, and many others for a high-value day of investor insights and networking.


Mark your calendars for Sept. 24 in New York City at the Marriott Marquis, and use promo code JohnH to get 10% off. Register here!

Whale Reads



Whale Reads

Worthy news for aspiring whales


The Future Monetary System(Bank for International Settlements): The BIS, which calls itself a "central bank for the central banks," just released a sneak preview chapter from its upcoming 2022 Annual Report.


The topic is crypto. 


Unsurprisingly, the BIS doesn't think much of a decentralized money system, so the first half of the chapter explains why crypto is inherently flawed, before laying out a solution: CBDCs. 

Courtesy Bank for International Settlements


In a nutshell, the BIS is proposing to keep central banks in charge but to leverage Central Bank Digital Currencies (think regular money on blockchain technology) to make things faster.


CBDCs could then presumably interface with the crypto ecosystem: you could use a "digital dollar" to buy an NFT or slice of tokenized real estate.


Investor takeaway: What the report shows, more than anything, is that central banks are getting serious about responding to crypto. They're no longer ignoring or mocking us, but coming up with ways to preserve their power, while co-opting crypto.


In our view, the plan above is unlikely to work, because of the frozen-molasses speed of governments rolling out their own CBDCs, compared to the heat-lightning speed of crypto innovation.


Instead, the political winds are blowing toward the regulation of stablecoins, which are the likely "bridge" between the worlds of digital and traditional currency, more like this:

"Fixed it for ya."


TLDR: Stablecoins are issued by private companies and can move at the speed of crypto. CBDCs are issued by governments and will take years to fully develop. Long-term, we'll probably end up with a mix, but stablecoins are the ones to watch first.

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The Big Picture

with Evamarie Augustine


Hi everyone,


While the United States dollar continues to be the world’s reserve currency, is its influence beginning to wane?


Recent data from SWIFT shows that the greenback is still overwhelmingly the top currency used for global payments. However, figures from April 2022 have declined from the same period two years ago, while the use of China’s renminbi has increased.


% of global payments by country

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Even Fed Chair Powell noted as much in a speech last week:


“Rapid changes are taking place in the global monetary system that may affect the international role of the dollar.”


While the Federal Reserve investigates the possibilities of a central bank digital currency, the FedNow service that facilitates instant payments for businesses and individuals is expected to go live in 2023. The real-time payment service is currently in a testing phase, with over 120 financial organizations participating in the pilot.


The Fed issued a white paper in January about a potential U.S. CBDC that requested comments. There were several, shall I say, interesting comments made by the public, and I encourage you to give them a read.


There are currently several CBDC projects under investigation in the U.S., one of them being Project Hamilton.

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Named after the first Secretary of the Treasury, Project Hamilton is a collaboration between the Federal Reserve of Boston and the Massachusetts Institute of Technology that seeks a better grasp on the challenges and opportunities of a U.S. central bank digital currency. The project has completed its first phase, which focused on the performance and feasibility of resilient transactions. 


During the testing, between 170,000 to 1.7 million transactions were processed per second (TPS). While the digital dollar was in test mode, it far surpassed the currency processing speed of China’s digital renminbi, at 10,000 TPS. The future capability of the e-yuan is expected to be 300,000 TPS.


Why a CBDC?

CBDCs are being explored across the globe—in the past two years, the amount of countries exploring a CBDC has shot up by 200%, according to the Atlantic Council. And there are varied reactions. In the United States, concerns center around disintermediation and privacy, while in the UK, a recent survey found that over 25% of citizens did not support a CBDC.


However, feedback from emerging countries such as Ghana has been “enthusiastic.” Citizens of these countries struggle with costly and unavailable payment systems.


No immediate need. Or is there?

A recent paper by the Federal Reserve Bank of Richmond cited “no immediate need for the U.S. to issue a CBDC,” but did state that the technology should be explored for possible future use. As the overwhelming majority of Americans—94%—have access to banking, reaching the unbanked is not an issue in America. 


So what would push the Fed to issue a digital dollar? According to the Richmond Fed, the reasoning would be to future-proof the US payment system against stablecoins and other CBDCs. Recent events might spur the U.S. central bank to move ahead faster than originally planned.


A U.S. CBDC is very much a question of when, not if, it will happen.

Best Regards,


Evamarie Augustine

Market Analyst

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The banks want CBDCs.

But stablecoins are coming first.

Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.


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