deVere Investor Insight - Q1 2021

Earlier this year, a BIS survey showed 86 per cent of the 65 central banks polled are working on CBDCs, either in the formof research, proofs of concept or pilot development. Furthermore, 15 per cent are progressing towards actual research for pilots. In April 2020, the People’s Bank of China announced it would begin testing its own central bank digital currency, a first for a major economy. In the U.S., key figureheads within the Biden administration are being urged by the Blockchain Association Group to assist Treasury Secretary Janet Yellen to “understand the value of crypto networks”. The group added: “Our number one priority is helping Yellen understand crypto goes beyond the financing of criminal enterprises.” Elsewhere, in the UK, following a reviewof the country’s fintech sector in 2020 headed by former WorldPay boss Ron Kalifa, the report proposed the Bank of England could create its own CBDC. The report said a CBDC "would be a significant development which could help support the adoption of new technologies such as blockchain in financial services." Moreover, Deputy Governor of the Bank of Italy, Piero Cipollone, told CNBC in February that the heightened focus on CBDCs stems from the widespreadmove away from cash, which he said “could undermine one of the basic functions of the central bank.” He added that “in an environment where cash is used less and less by both the customer and themerchant because the whole ecosystem is shifting towards (being) digitalized ... you want to replace the functionality of cash with something that is digital but is as conceptually as close as possible to cash.” Taking into account the principal drivers, whether it be increasing institutional investor interest, celebrity endorsements, the coronavirus pandemic and subsequent moves by central banks to bolster economies or decisive action towards the introduction of CBDCs, it is becoming ever more apparent that cryptocurrencies are becoming a better fit. As such, this will serve to boost prices in the cryptomarket further, a sentiment echoed by Kraken CEO Jesse Powell, who predicts Bitcoin will hit the $1 millionmark over the coming decade: “In the near term, people see it surpassing gold as a store of value, so I think a million dollars as a price target within the next 10 years is very reasonable.” Here’s to the crypto future and beyond!