ECB’s Lagarde opens to stablecoins
The newly elected president of the European Central Bank, Christine Lagarde, opened the door to stablecoins, the digital currencies anchored to fiat currencies of physical assets.
In a tweet published by the ECB on December 12, she wrote that: ‘My personal conviction on the issue of stable coins is that we better be ahead of the curve. There is clearly demand out there that we have to respond to.’
In early September, when Lagarde was still at the helm of the International Monetary Fund, she has already opened the doors to the industry, by saying that ‘in the case of new technologies – including digital currencies – that means being alert to risks in terms of financial stability, privacy or criminal activities, and ensuring appropriate regulation is in place to steer technology towards the public good. But it also means recognising the wider social benefits from innovation and allowing them space to develop.’
Later in September, the IMF had recognized that stablecoins could have brought significant benefits to customers and society but are not without risks, adding that banks could lose their role as intermediaries, as consumers would switch to stablecoin providers, urging financial institutions to compete by developing their own innovations.
This is a great step by Lagarde and ECB. Previous ECB’s presidents thought differently. Jean-Claude Trichet has recently expressed doubt that cryptocurrencies could ever become the future of money, as he believes buying crypto is, in many respects, just speculation and that even stablecoins are surrounded by a lot of speculation, which he concluded is “not healthy.”
Mario Draghi had a more positive approach towards new technologies, but he thought that stablecoins and cryptocurrencies in general were of little value.
Ethereum still misses mass adoption
On December 5, Matter Labs, a developer of scaling and privacy engine for Ethereum, announced a solution to the mass adoption of Ethereum, by introducing a vision for the ZK Sync solution and launching its developer network. If enforced, this system would allow Ethereum to process over 3,000 TPS, preserving privacy and security while remaining decentralized.
‘This would be a huge improvement since at present, Ethereum can process 15 TPS at peaks. Compared, Visa processes 2,000 TPS, while Bitcoin 7 TPS’.
However, Ethereum’s developers did not say when this solution might be implemented, only saying that ‘the v0.1 devnet is the first step on the long journey’ and ‘it will take a lot of research, experimentation and development effort.’
Therefore, traders haven’t taken well this declaration, since December 5, Ethereum has been trading sideways, mostly moving together with the rest of the market. They were hoping for Etherum to come back to 2017’s upward trend, given the optimism of developers and implementations of the Constantinople and Istanbul upgrades, on the way to Ethereum 2.0, which should make the network faster, particularly addressing the scaling and mining issues.
Bitcoin and Altcoins recovery still might fail In near term
The last trading week, a downside extension in Bitcoin below the $7,400 and $7,350 support levels was observed. BTCUSD cross traded below the 7,200 support before it found support near 7,150. The price has recovered then, with still many hurdles near 7,250, 7,350 and 7,400.
Also the majority of altcoins has risen, including Ethereum, XRP, bitcoin cash, litecoin, EOS, BNB, ADA, TRX and XLM. ETHUSD traded above $142, struggling to clear 144 and 145. XRPUSD traded below 0.218 dollars.
According to the technical analysis provided by Aayush Jindal (Cryptonews.com), “after Bitcoin price tested the $7,150 area, it started a consolidation phase. Recently, BTCUSD started an upside correction above the $7,200 level. However, there are many key resistances on the upside, starting with $7,250. The first key resistance is near the $7,350 level, followed by the main hurdle near $7,400. On the downside, the price could find support near $7,150 or $7,140. Any further losses may perhaps push the price below the $7,020 and $7,000 support levels.
Ethereum price is holding the $140 support area and it is currently correcting above $142. However, the $144 and $145 resistance levels are preventing further gains. If there is a clear break above $145, ETHUSD could recover towards $150.
On the downside, if the bulls fail to defend the $140 support, the price could extend its decline towards the $135 level.
Bitcoin cash price is still trading above the $205 and $200 support levels. BCHUSD is up around +1.5% and it is approaching the $210 level. If the price gains strength above $210, it could attempt to surpass the $220 resistance. If not, the bears are likely to aim a break below the $200 support.”
At the end of the last trading week, a few small cap altcoins have risen more than +5.0%, including KNC, ENG, XTZ, THETA, VET, RLC, FTT, SOLVE, ATOM, HEDG, QTUM and SNX. Out of these, KNC has risen more than +22.0% and ENG nearly +18.0%.