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Another successful test of CBDC. UK Parliament objects to introducing digital currencies

Bitcoin and ethereum are hovering near important resistance levels and it's still unclear whether the bullish rebound seen at the beginning of this week will continue. Amid the panic of no further growth, traders may start to fix profits, which is likely to trigger another collapse of the cryptocurrency market. However, I would like to bring up the topic of CBDC before we take a deep dive into technical analysis.

Digital currencies may become bright future or collapse of banking system

The Swiss National Bank and its partner organizations successfully conducted the second phase of the experiment to process digital currencies in the financial system of the country. During the three-day test, five commercial banks - Citigroup Inc, Credit Suisse Group AG, Goldman Sachs Group Inc, Hypothekarbank Lenzburg AG, and UBS Group AG - integrated the central bank's digital currency into their existing core banking systems, and received positive results.


The joint press release states that the test covered a wide range of interbank, monetary and international transactions in Swiss francs. The test was conducted as part of an experiment known as Project Helvetica, which aims at identifying the practical complexities, legal issues and political implications of the central bank's digital currency issuance.

The main goal of the project is to determine whether such exchanges are technically feasible, so that banks can use this system at any time. As project participants note, there are no immediate plans for a third phase of Project Helvetica. While it is technically feasible to exchange digital currency between the SNB and commercial banks, the only question is about cybersecurity.

Israel is considering to use digital currencies

The Bank of Israel has already got used to testing the limits of monetary policy. It is also looking forward to exploring the possibilities of digital currencies. According to Yoav Soffer, head of the Digital Shekel Project, policymakers in Jerusalem have already announced an expansion of their research into digital currencies in order to ascertain from stakeholders the risks and benefits of the new project. However, the introduction of digital currencies in this country is to be considered.

After running experiments using ethereum, the central bank is planning further technical studies in the year ahead to assess the viability of different types of digital money, Soffer said in an interview. "Right now, we are increasing the resources devoted to the digital shekel project, both in terms of finances and people," he said. "A digital shekel has great potential to increase competition and innovation within the payment industry."

UK Parliament raises objections

In the UK, a group of lawmakers from the UK Parliament cracked down on the Bank of England's efforts to launch a digital currency, saying that officials had not provided a compelling reason why it was necessary.


Notably, the House of Lords economic affairs committee has expressed concern that the project could threaten the stability of the banking system and raise privacy concerns. "The introduction of a UK central bank digital currency would have far-reaching consequences for households, businesses, and the monetary system," said Lord Forsyth of Drumlean, chair of the House of Lords economic affairs committee.

The BoE officials, led by Deputy Governor John Cunliffe, have recently been increasingly stating the need for the CBDC. They have noted that the dramatic reduction in the use of cash is leading to more and more control of money by private companies that have no explicit government guarantee.

Opponents of CBDC point out that digital currency would allow the government to better control people's spending and choices. It could also disrupt the banking system if consumers move traditional deposits to CBDCs backed by the central bank.

As for the technical picture of bitcoin


Bitcoin is trading above support at $40,520 and is likely to reach the target resistance at $44,300. If the price breaks through this level, it may touch the high of $47,840, and even a higher level of $51,800. If the pressure on the trading instrument returns soon, and there is a breakthrough of $40,520, in this case the asset is unlikely to go upwards. I recommend staying patient and waiting for the retest of the lows at $37,380 and $33,830.

As for the technical picture of ethereum


Ethereum has rebounded from the lows and now bulls need to hold the price above $3,430. The 200-day MA is located there, indicating the development of a bearish scenario in the near future. As long as trading is carried out below this range, the pressure on the trading instrument may remain. A breakthrough of $3,430 is needed for the return of demand, which is likely to open a direct road to the highs at $3,670 and $3,880. Bulls may face problems as soon as the ethereum falls below $3,220. In this case, there is a great probability of testing the low of $2,980 followed by a fall towards $2,720 and $2,440.

The material has been provided by InstaForex Company -