Recently, Michael Wu, co-founder and CEO of Amber Group, was invited to participate in an online roundtable event organized by Bank of China Hong Kong. In the roundtable discussion, Michael Wu, together with Henri Arslanian, PwCs global cryptocurrency leader, and Jack Poon, a practice professor at the School of Accounting and Finance of the Hong Kong Polytechnic University, discussed central bank digital currency (Central Bank Digital Currency) on the theme of CBDC: Today and the Future. The impact and significance of Bank Digital Currencies, hereinafter referred to as CBDC) were discussed, and a reasonable analysis was made on the recent rise of Bitcoin and future trends.
CDBC will promote wider adoption of encryption technology
Since 2020, a relay race on CBDC has continued to be staged in many countries around the world. According to statistics from the Bank for International Settlements, as of mid-July this year, at least 36 national central banks have issued digital currency plans. In October of this year, the European Central Bank also released a comprehensive report on the possible issuance of digital currency, and the Bank of Japan directly announced plans to launch the first phase of CBDC experiments in early fiscal 2021.
The worlds major central banks are increasingly interested in and supporting CBDC. What signal does this signal for the encrypted financial industry? As the founder and CEO of Amber Group, the worlds leading encrypted financial service provider, Michael Wu said that encryption technology will be more widely recognized and applied. Although there are obvious differences between CBDC and cryptocurrencies (such as BTC, ETH) in form, they are similar in design concept and infrastructure. The exploration and pilot of the digitalization of legal currency by major central banks around the world is the recognition of the concept of digital currency. It is very constructive to help people build awareness and acceptance of cryptocurrencies,” said Michael.
DC/EP will accelerate the internationalization of RMB
In promoting the development of CBDC, China has always been at the forefront. In October of this year, China has launched a digital renminbi red treasure pilot project in Shenzhen, which has aroused widespread attention at home and abroad. Although DC/EP (Digital Currency Electronic Payment, digital currency electronic payment) has not been used for cross-border payment testing, its cross-border payment potential still makes everyone look forward to the direction of RMB internationalization.
As a former macro trader, when the last round of RMB internationalization started in 2015, Michael was working as a foreign exchange rate trader at Morgan Stanley, making a market for RMB in the offshore market. Now, as a practitioner in the cryptocurrency industry, Michael has always been very concerned about the internationalization of RMB. Michaels answer to whether DC/EP will accelerate the internationalization of RMB is very positive: DC/EP will accelerate the internationalization of RMB without a doubt, and it will be carried out in an innovative way that we have never imagined or seen.
In Michaels view, DC/EP is not just a digital currency, but an ecosystem. Based on the programmability of DC/EP, he made a bold vision: It is possible to build an ecosystem with smart contracts and encrypted financial applications like Ethereum. In this ecology, DC/EP can be used as a payment and settlement benchmark; To be more innovative, other countries, such as countries that have joined the Belt and Road Initiative or Asian trade agreements, can issue their own digital assets on the DC/EP ecology and open up with DC/EP; even, they can also open up transactions with the entire encrypted asset.” He pressed Then he said: For an encrypted financial company driven by technological innovation like Amber Group, this will be a historic business opportunity that makes people eager to try.
CBDC will redefine the role of banks and regulators
In every age, with every new technology, it seems to herald the end of the middleman. Although the Internet era has not completely eliminated the middleman, it has even created many technology and business giants that use the Internet as an intermediary. Regarding the coming CBDC era, Amber Group CEO Michael Wu boldly predicted that the traditional banks model of benefiting from middlemen may be changed.
With the formation of a financial service ecosystem based on DC/EP, all services will become transparent and open, and the fees that banks can charge will be greatly reduced. At the same time, banks will face increasingly fierce competition. Competition, because driven by the digital economy driven by CBDC, the boundaries between financial companies and technology companies will no longer exist. Therefore, Michael believes that banks should rethink their future positioning and consider how to provide differentiated services. Contribute value to subdivided fields and deepen cultivation.
In addition to banks, Henri Arslanian, PwCs global cryptocurrency leader, also mentioned the challenges regulators will face. And Michael sees this as both a challenge and an opportunity. Their work will become both complex and simple, Michael continued to explain: With big data, blockchain and other technologies, regulators need to monitor the implementation of policies in real time and react and adjust in real time (to some extent Similar to the community governance of the DeFi ecology), which increases the challenge; on the other hand, regulators no longer have to have the pressure of missing a tiny bit, making a huge difference, because dynamic supervision brings them opportunities for real-time improvement.
Encrypted financial infrastructure is becoming more mature, and the future of Bitcoin is worth looking forward to
The strong rebound of Bitcoin in the second half of this year has attracted the attention of many insiders and outsiders. Talking about the reasons behind the soaring price of Bitcoin, Michael agreed that there are factors driven by institutional capital inflows, such as MicroStrategy, Fidelity, and the entry of investors like Paul Tudor Jones. In addition, combined with Amber Group’s data analysis, Michael observed that users’ attitudes and understanding of cryptocurrencies have also changed a lot, “In the past, we may have spent a lot of time educating users and dispelling their doubts and doubts; Net-worth clients and family offices come to us to learn about alternative assets such as cryptocurrencies and how to invest in Bitcoin.” Of course, Michael also said that this is inseparable from the more mature infrastructure of the entire cryptocurrency market, “There are more like Companies like Amber Group that provide safe and convenient products and services covering the entire value chain of encrypted finance, including asset management, liquidity, and structured products, allow users to quickly and safely enter the cryptocurrency market.”
After Bitcoin broke through to a record high of $19,768.17, many people have made big guesses about when Bitcoin will break through the $20,000 mark. Michael believes that there may be a breakthrough trend at the end of December this year or the first quarter of next year. He also added: No matter what price you buy Bitcoin at now, you will find that your purchase price is still lower in 5-10 years. Because from the perspective of the long-term value of the Bitcoin market, it is still only in the The initial stage.” So for those who are still eager to try, the most important thing at the moment is to get involved. Whether it is for investment or learning purposes, users can start with a safe, convenient, and easy-to-use product like Amber App, and allocate 2-3% or about 5% of cryptocurrency assets as Fidelity recommends.
Finally, when asked when will the world enter a cashless society, Michael predicts that most of the world or at least Asia will enter a cashless society within 3-5 years, and this process will be promoted through digital currency.
Disclaimer: The opinions in this article do not constitute investment advice, please pay attention to investment risks.
