Experts: Stable cryptocurrencies are inevitably coming as an alternative to “banknotes”

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They expected it to ascend to the money throne within 5 years

Commenting on Al-Watan’s report regarding the advisory paper on issuing “stable” cryptocurrencies that the Central Bank of Bahrain published on its website, economists and cryptocurrencies experts expected that it would dislodge the banknote from the throne of circulation within 5 years, and that it would inevitably be the future of trading and financial transactions, stressing that The Central Bank of Bahrain’s approach to developing proactive regulatory frameworks is in line with the innovation policies supported by the Government of the Kingdom of Bahrain.

Bahrain has been characterized by financial innovation for a long time, and the economic expert, Dr. Omar Al-Obaidli pointed out that these currencies represent a remarkable innovation that should be considered, because it seeks to address one of the loopholes of traditional cryptocurrencies, which is the instability of their prices against non-crypto assets such as traditional currencies and precious metals. However, due to the nature of the financial assets market and the risks that appear in it, not enough time has been spent to evaluate this experience. Regarding the Kingdom and what was stated in the consultation paper on the stable cryptocurrency, Dr. explained. Al-Obaidli said that Bahrain is a pioneering country in the field of financial technology, and therefore its participation in these experiments is in line with the financial innovation policy. He added: “The success of these currencies may be based on the quality of supervision, which is an area in which the Kingdom of Bahrain has historically distinguished itself, as the Central Bank of Bahrain has won awards for its excellence.” Management of the financial sector.

Hamid’s approach from the Central Bank anticipates the event

In turn, economic expert Noura Al-Faihani confirmed that the information on the stable cryptocurrency, which was published in the research paper on the website of the Central Bank of Bahrain, clearly shows the upcoming trends in trading, as countries of the world, including the Kingdom of Bahrain, will witness a transition from paper currency to dealing in numbers and codes.

Al-Faihani said that this research paper sets out all the details of the standards and procedures for creating this stable cryptocurrency, and it is expected that banks or other financial institutions will enter into it as it is a modern trading formula that needs to be regulated by the state. It is a good direction from the Central Bank of Bahrain to anticipate the event and put It has a comprehensive vision that can confront the great acceleration in cryptocurrency systems.

Regarding the fact that this encrypted currency is “stable,” the economic expert explained that this description of the encrypted currency is considered a global trend by countries to confront the irrational rises in the prices of other encrypted currencies, as is happening today in Bitcoin and some other currencies, especially since these currencies will be linked to their real currencies. A tangible reality for traders and natural people, especially since they will be guaranteed by the countries’ central banks. She said: “I expect that the impact of stable cryptocurrencies will be negative on virtual currencies in the foreseeable future.”

The advanced version of paper currencies

For his part, the expert in cryptocurrency trading and former director of the “Rain” trading platform, Muhammad Ateeq, confirmed that several countries in the world today are considering applying these systems to stable cryptocurrencies, while countries have begun to take actual measures to issue these currencies, pointing to the “Aber” project for digital currency. , which was launched by the Kingdom of Saudi Arabia and the United Arab Emirates through the Central Bank of Saudi Arabia and the Central Bank of the United Arab Emirates on January 29, 2019, with the aim of proving the feasibility of issuing a joint digital currency bilaterally, and using it as a tool for financial settlement. Locally and across the border between the two countries.

Ateeq said that cryptocurrencies will be the developed version of paper currencies that will witness a decline in circulation and use, due to their many benefits for countries that can follow all financial movements, and combat money laundering and terrorist financing crimes through those currencies that will take the place of current cryptocurrencies or take over a percentage. Larger than today’s active traders.

Ateeq praised the initiative of the Central Bank of Bahrain and its anticipation of the event by issuing a peer-reviewed research paper that touched on all the details of launching a stable cryptocurrency, stressing that this development in the content of currencies and trading is undoubted and inevitably coming, hoping that Bahrain will be one of the first countries to create these currencies, while Expect these currencies to spread within 5 years and be present in all countries of the world.

Stable cryptocurrencies also rely on blockchain technology, just like the cryptocurrencies known in the market, and use artificial intelligence to achieve stability and security in financial markets, because they are linked to a currency such as the dollar or dinar and other currencies. Stable cryptocurrencies are considered one of the most trusted options for investors because of their ability to… Reducing government convergence and interference, and increasing confidentiality and security in financial transactions.

Countries that have adopted stable cryptocurrency

Many countries have adopted the system of stable cryptocurrencies (CBDCs) or are considering adopting them, such as China, which has experimented with stable cryptocurrencies in several regions, such as Shanghai and Shenyang, and the United States of America, where the US Federal Reserve is studying the effects and possibilities of stable cryptocurrencies, as well as India. It is working on developing its own system for stable cryptocurrencies, and the United Kingdom, as the British Central Bank is considering adopting stable cryptocurrencies, and Australia, which is working on developing its own system for stable cryptocurrencies.

Al-Watan had published a report on a consultation paper issued by the Central Bank of Bahrain, regarding the issuance of “stable” cryptocurrencies linked to monetary currencies such as the dinar and the US dollar, and the requirements for issuing licensed currencies to the public.

The paper indicated that the issuance of stable currencies must comply with the Central Bank Law, and meet the conditions and requirements, as it allows the issuance of a single fully supported currency in one of the paper currencies in force in the Kingdom, in addition to the availability of high-quality reserve assets.

The paper provided details about submitting the application for the license, the beneficial owners, the primary market for the business, the potential customer with whom the applicant deals in business, the addresses of associated websites, and the products and services provided, along with a description of the applicant’s proposed, current, and historical business.