The future of money will be here faster and be more diverse than you think. What are cryptocurrency and digital currency? The terms are not synonymous. While all cryptocurrencies could be considered digital currencies, not all digital currencies need to be official sovereign-backed currencies.
Official digital currencies are issued by the central banks of a nation-state that oversees the banking system in that country–such as the Federal Reserve in the U.S. Whereas, in the case of cryptocurrency, there is no single issuing authority. Cryptocurrencies are usually developed by teams as a piece of code used for issuance through ‘mining’. Creation, as well as use, is maintained through a distributed ledger. They transmit value across a decentralized network of users. Thus while digital currencies are centralized, cryptocurrencies are decentralized.
Confused? Hang in there. This program will bring together representatives from the public and private sector for a discussion that aims to address–the different forms of digital currency; the role of blockchain in digital currency; the developing regulatory framework; the value in including digital currencies and fintech in an investment portfolio, and more.
Richard Bard of Bard Capital moderates this program featuring Bob Bench of the Boston Federal Reserve and Puneet Singhvi of Citi.
Tonight, we will be discussing digital currencies, possibly what the future of money looks like.
Our timing couldn’t be better, as you will soon hear. After an amazing ramp-up in acceptance and valuation, volatility has resurfaced and valuations are sinking. And, the Federal Reserve has in the last week published its first comments on crypto.
For your reference, the following are common terms used in cryptocurrency:
- Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009. The system is peer-to-peer; users can transact directly without an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain.
- Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. This deters fraud, allowing the participants to verify and audit transactions inexpensively.
- Stablecoins: The main characteristics of backed Stablecoins are:
- Their value is fixed to one or more commodities and redeemable for such (more or less) on demand.
- There is a promise to pay, by unregulated individuals, or even regulated financial institutions.
- The amount of commodity used to back the Stablecoin reflects the circulating supply of the Stablecoin.
Access this .pdf for more info: Money and Payments: The U.S. Dollar in the Age of Digital Transformation