When asked about Facebook’s forthcoming Libra stablecoin, Powell said that the project would need to comply with higher standards and regulatory and supervisory expectations specifically due to the social media company’s large user base. Powell added that it is not clear how this would happen under the current regulatory system.
Chairman of the United States Federal Reserve Jerome Powell said that the United States Federal Reserve is monitoring digital currencies carefully, but not working on its own at the moment.
Speaking at a forum in Zurich, Switzerland, on Sept. 6, Powell addressed the issue of cryptocurrencies, arguing that central banks would likely will not release their own digital currency in the near future. Powell added that cryptocurrencies raise a range of concerns including cyber security issues:
“If you think about one currency that was for the United States, it would really need to be cyber secure because it’s one thing to be able to counterfeit paper currency, it’s another thing to hack into a cyber currency and create, with a computer, however much of it you want.”
Powell thus reiterated his previous statement on Libra, when he indicated that it needs to reach a high bar before the cryptocurrency project can proceed. He said that the Federal Reserve does not “have plenary authority over cryptocurrencies as such”, though he claims the Fed still has “significant input into the payment system.”
In July, Powell acknowledged the possibility of a preeminent cryptocurrency redrawing the current financial landscape – yet noted that as of yet, this has fell short of becoming a reality.
Fidelity’s VC Arm Leads $13M Series A for Blockchain-Based B2B Network Clear
The Singapore-based startup said Wednesday the round had been led by Fidelity’s investment arm, Eight Roads (formerly Fidelity Ventures). The venture subsidiaries of telecommunications companies Telefonica, Deutsche Telekom, Hong Kong Telecom (HKT) and Singtel also participated in the round.
Clear says it can reduce friction in complex global business trade, which was valued at $150 trillion in 2018, with blockchain technology. There is an “unbelievable amount of friction” in B2B trading, said co-founder Eran Haggiag, and that allows banks and other middle-men to collect fees amounting to over $140 billion a year.
A Clear spokesperson added: “The amounts enterprises spend on processing these payments, managing the contracts around them, checking data and invoices each month, deploying and managing the software to support them is a few times the cost of those fees, costing trillions globally each year.”
The startup believes it can save global commerce a good chunk of that expenditure by using an interoperable technology stack that can cut through all these friction-inducing processes. It’s said to be able to automate data management, payments and clearing to reduce transaction fees and human error, and offer instant cross-border settlements.
A smart contract layer can also speed conflict resolution processes so they can take place on an ongoing basis rather than at the end of the month, as is currently the case.
In order to encourage as many companies as possible to use Clear, the platform can support and operate on multiple blockchain protocols, the spokesperson said.
Although the company has plans to be integrated across a wide range of industries, Clear has initially focused on the telecoms sector where, since 2018, it has facilitated sales cumulatively worth millions of dollars between multiple mobile and network providers.
Highlighting that blockchain added a new layer of trust to its operations, Guenia Gawendo, Telefonica’s chief innovation officer, said the company could use Clear to “significantly decrease friction in the processes of financial settlement between carriers and operators.”
HKT Group Managing Director Susanna Hui said the Clear integration could prove “immensely important” for creating new products and services with the rollout of 5G network capabilities. “Enterprises can now push boundaries and allow faster innovation and faster go-to-market of products and business models,” she said.
Clear plans to use its investment to expand its 30-strong team and telecoms operations. It will also take the opportunity to explore possible integrations in other industries, including the financial services and energy sectors.