Cryptocurrencies were broadly higher on Friday morning, ending a volatile week on a high note, as Venezuela’s government-backed digital currency kicks into gear and the US Federal Reserve chair said he has no intentions of banning crypto.
Venezuela had announced in August that it is revamping its national currency, the bolivar and launching its central bank digital currency (CBDC) — the digital bolivar – on 1 October.
The digital bolivar will use an SMS-based exchange system to facilitate payments and transfers between users.
Some analysts believe the CBDC could be a temporary solution for the country, which is facing hyperinflation.
Meanwhile, in the US, Fed chairman Jerome Powell was asked if he planned “ban or limit the use of cryptocurrencies.” Powell’s answer was a resounding “No.”
When asked about stablecoins, Powell said “they’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated.”
The chair of the Securities and Exchange Commission, Gary Gensler, said that a bitcoin exchange-traded fund, based on Chicago Mercantile Exchange traded bitcoin futures, would have “significant investor protection” due to the Investments Company Act of 1940.
Meanwhile Visa (V) announced it’s ready to move forward with a blockchain interoperability platform that will link fiat money, CBDCs, stablecoins, and traditional blockchain currencies like bitcoin and ether in a solution called the Universal Payment Channel.
“Executing such projects is more than just a technical matter. In fact, one might argue that navigating the global regulatory challenges is far more difficult then the coding itself,” said Mati Greenspan, CEO of Quantum Economics.
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