Cryptocurrency prices are soaring today, in part thanks to Amazon’s huge fourth-quarter revitalizing markets. This comes as Bank of America analysts said they think a digital dollar is inevitable, predicting it could arrive as soon as 2025.
The bitcoin price is up 3% with bulls eyeing a return to $40,0000. Ethereum is surging, up 9%, as fears of further hacks recede following this week’s $325 million Wormhole attack.
Solana has also bounced back, up 8%. Further down the charts, Terra’s luna, polkadot and avalanche are climbing, all up around 6%.
24-hour crypto market snapshot
Bitcoin (+3%) $37,934
Ethereum (+9%) $2,838
Solana (+8%) $104.62
Avalanche (+7%) $71.20
Look out today… for this morning’s payrolls report that’s likely to give some complicated signals to the market. Growth is expected to have slowed and the unemployment rate to have steadied at 3.9% after several months of rapid declines as a wave of Omicron cases sidelined workers and shuttered businesses.
Digital dollar incoming? A move toward a digital dollar is gaining steam
The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology’s Digital Currency Initiative, dubbed Project Hamilton, have revealed their initial designs for a central bank digital currency (CBDC) that could eventually form the basis of a digital dollar. One of the two possible code bases was capable of handling 1.7 million transactions per second—MarketWatch points out that’s more than 2.5 times the number of transactions Visa can handle on its network.
Catch up quick: Begun in 2020, the project is exploring different designs that would optimize the functionality of a CBDC, which could be used in retail, e-commerce and person-to-person payments. The 35-page white paper on the findings can be read here. The project is separate from the Federal Reserve’s study on the possible benefits and risks of a U.S. CBDC. Fed chair Jerome Powell has said he won’t move forward with a government-backed coin unless it has the support of the White House and Congress.
Seeing is believing: The transaction processing software, OpenCBDC, was released under an open-source license, allowing anyone to inspect, modify, and enhance the code. “We believe that this is the best way to ensure that OpenCBDC is vetted by a large number of people–all of whom will bring unique knowledge, skills, and ideas for improvement,” Neha Narula, director of MIT’s Digital Currency Initiative, said on a call with reporters, it was reported by Bloomberg.
Risky business: It’s thought a fully-fledged digital dollar could help the U.S. maintain its global financial services dominance as China and Europe move forward with their own digital currencies. However, the Fed has warned of a possible reduction in the amount of deposits in the traditional banking system. Last month, a report from the Board of Governors of the Federal Reserve argued that if the Fed were to issue a digital dollar, it would be intermediated by the existing financial system, which would provide consumers with digital wallets or accounts for storing digital dollars.
The bottom line: Bank of America analysts have said they think a digital dollar is inevitable, predicting it could arrive as soon as 2025. This latest development supports that.
In other news, the Chicago-based Jump Trading Group has stepped in to prevent contagion spreading from the huge hack that hit its Wormhole cross-blockchain bridge this week.
Described by Bloomberg as “a quiet giant of financial markets,” crypto venture capital and trading company Jump moved quickly to fully refund the losses from Wednesday’s hack, replenishing the lost ethereum.
The decentralized finance (DeFi) space was rocked this week by a hack that saw the Wormhole solana-ethereum bridge attacked and used to fraudulently mint 120,000 ether worth around $325 million.