The Blockchain Bulletin: US not close to digital dollar according to Fed Reserve

Blockchain Bulletin

Payment Expert’s Blockchain Bulletin analyses how the world of blockchain is constantly evolving and heavily impacting the payments industry, with cryptocurrencies, NFTs and the metaverse revolutionising the space. 

Some major regulatory announcements have been made over the past week regarding digital assets on both sides of the Atlantic, whilst some prominent commercial players have stepped up efforts in blockchain utilisation.

UK govt proposes NFT regulation shakeup

In its latest move to regulate digital and crypto assets, the UK government has proposed new guidelines governing companies which issue NFTs.

UK authorities’ primary motivation behind this decision is a desire to improve anti-money laundering controls. HM Treasury, the UK government’s finance department, is the body proposing the changes.

Under the proposed changes, digital asset providers which specialise mostly in NFTs could fall outside the remit of the Financial Conduct Authority (FCA).

Mastercard not letting up on blockchain

Despite cutting ties with controversial cryptocurrency exchange Binance, US payments giant Mastercard has kept up the momentum with its blockchain engagement.

The company partnered with MetaMask last week to develop an on-chain payments card utilising blockchain technology with the goal of creating a ‘seamless’ crypto payments offering.

“Mastercard is committed to co-innovating across the industry to enable access to crypto and blockchain technology,” said Raj Dhamodharan, Executive Vice President, Blockchain and Digital Assets at Mastercard.

An active month for MetaMask 

Mastercard was not the only company to partner with MetaMask this month. The blockchain wallet provider has also signed a deal with one of the world’s leading challenger neobanks, Revolut.

The firm has been working with London-based Revolut on the launch of the ‘Revolut Ramp’ product, a new solution designed with the goal of adding crypto to a self-custody wallet easier.

“By teaming up with Revolut, we’re making crypto more approachable and less complicated,” said Lorenzo Santos, Senior Product Manager at Consensys, the company behind MetaMask.

US dollar CBDC nowhere near launch

Amid extensive debate around the potential launch of a Central Bank Digital Currency (CBDC) in the US, the Chair of the Federal Reserve has weighed in.

According to Jerome Powell, the launch of a US dollar CBDC is not ‘remotely close to happening anytime soon’. He informed Congress that the Fed is not working on the framework for any planned digital dollar.

With a presidential election coming up this year, development and launch of a CBDC has become a political topic in the US. Former President and 2024 Republican candidate Donald Trump has been very vocal in his opposition to a digital dollar.

Blockchain’s game-changing potential

Payment Expert spoke to Nelson Castellanos, Chief Partnership Officer – International of HDI Embedded, about the role emerging technologies can play in finance, including blockchain.

“Getting blockchain into existing systems is no walk in the park,” he said. “It takes a lot of time and expertise to make it happen, which can be a hurdle. However, in theory, it has the potential to be a game-changer for the insurance industry.

“Insurers can use blockchain to keep a super secure and transparent record of all transactions, as well as ensure easier and safer data sharing among partners to cut down on fraud and assess risks more effectively.”

Two big US banks jump on Bitcoin ETF 

Following the approval of the Spot Bitcoin ETF by the US Securities and Exchange Commission (SEC) last month, Wells Fargo and Bank of America have moved to position themselves favourably.

The two prominent US banks have launched their own Bitcoin ETFs in the aftermath of the SEC approval. Following the regulatory decision, the price of Bitcoin has skyrocketed to 2021 value levels.