Central banks investing in crypto in 2018?

«Currently, the G7 is only concerned with the “appropriate regulation” of cryptocurrencies and not with the asset class potential of cryptocurrencies. Bitcoin, ether and zcash are nowhere to be found on the list of eligible instruments and currencies that central bankers are allowed to trade.

In 2018, things will be different. G7 central banks will start buying cryptocurrencies to bolster their foreign reserves.

The times they are a-changin’.»

https://www.coindesk.com/2018-year-central-banks-begin-buying-cryptocurrency/

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Yes. This is bigly for the bitcoin mothership!

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Really guys! The G7 has so much on their plate that the thought of adding Crypto to their list is totally unfathomable. First of all, they have NO resources able to even dip a toe in this subject.

I consider this one FAKE NEWS!!

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@Peter_Rehm , what resources are you talking about specifically? Knowledge? Technical means?

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I can see them still doing this but slow. Govt is always slow but they end up doing things over time. Why is this fud?

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Bitcoin and other select cryptocurrencies will be added to the list of eligible securities and currencies. Central bank money will pour into cryptocurrencies.

Most G7 central banks will likely use external fund managers to invest in cryptocurrencies over this new epoch. But don’t expect this information to be freely available.

This will happen in the dark. Old habits die hard.

Eugene Etsebeth is a former central banker with the South African Reserve Bank. There, he notably chaired the virtual currency and distributed ledger working group.

Well, we can admit it seems more speculative than fact, but to me it seems entirely plausible.

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And what will happen when the banks can print all the money = buy all the bitcoin that they want?

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Waldbach,

Not attacking your views. Am only adding to the discussion based on my knowledge of banking (I’m an ex-banker) and world-wide economics.

The items required to make this occur are, in my opinion, resources, technical knowledge, and political savvy.

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We HODL and play chicken with them.

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Yes, hopefully hodlers won’t sell. But at some point, greed might take over…

I guess we could all jump to another currency after the banks have exhausted their reserves on BTC. Dangerous game for them?

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I think all the bubbles that they created are the dangerous games for them. BTC is going to shine the light on this.

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@Peter_Rehm , oh, I was not offended at all. Just curious as to what you meant by resources. Thanks for clarifying that!

And… good to have an ex-banker on board bringing in knowledge from “the other side”! :wink:

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I do not see this as unfathomable @Peter_Rehm. The banks will find a way to either invest or control. I would also be curious as to why you say they do not have the resources to do so. As they have all the same resources you and I do plus others.

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Waldbach,

Resources = Human Resources

I’ve run into a bunch of blockchain entrepreneurs and, of course, they complain about a dearth of programming talent. Some even go so far as to say they can’t afford to hire people who are “already wealthy” from their early investments in coins. So we are talking about young people here who generally have no political capital.

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That’s an interesting point, Peter. I have wondered about this in general, how hard is it to come by good crypto-programmers, even in general? @peter talked about a 200% increase in crypto-related jobs in one of DecentralizedTV’s broadcasts. It made me wonder, how scarce is this type of staff and what salaries are we looking at?

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Not necessarily for you to answer that, btw. Just pondering… I may dig into this matter myself for a bit…

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But seriously, would this even work? The more they put into crypto, the less their national currencies are worth. It would make more sense for them to attempt their own blockchains.

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Nekko;

The elephant in the room with the banks are the regulators.

The big issue that regulators are enforcing is KYC and AML. No banker wants to be accused of breaking those regs as the possible penalty is the “corporate death penalty”. In the US this phrase refers to a state’s (typically Delaware) attorney general ability to revoke a corporate charter for “abuse, misuse or nonuse of its corporate powers, privileges or franchises”.

Right now every bank in the US is running “lean”. About the only way they can invest is to do so directly (ala the Ripple investors). To do so within the confines of the bank would risk regulatory scrutiny after completing the year end regulators checklists. Assuming you are the CEO or CFO how would you like answering that crypto currency questionnaire (however it’s phrased)? They just cannot unilaterally “pivot” into a new and unregulated business.

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But it isn’t unregulated and depending on the coin it can be completely transparent. A bank could easily invest in bitcoin and provide an address or through say coinbase and meet all KYC/AML regulations. All it will take is for one large bank to take this leap or even a small division of a bank and the flood gates will open.

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Amendment:

The OCC (Office of the Comptroller of the Currency) may, in the future, create federally chartered fintech banks which would lead to those types of banks being able to transact in cryptocurrencies.

At present Comptroller of the Currency Joseph Otting has not weighed in on the fate of a fintech charter. The proposal was created in May 2017 by the Obama-era Comptroller who was subsequently pushed out by President Trump.

Don’t hold your breath on this one. It will take some time to come up with a proposal and for it to work its way through the legislative process.

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