"Fresh from the Mint", the newsletter of the MINTS Unit, delivers you a selection of MINTS's latest research on complementary and alternative currencies.
Issue 0 - A Defining Moment for Cryptocurrencies and Monetary Innovation
The month just ended has been labelled by many commentators as a "defining moment" for cryptocurrencies. In the inaugural issue of our newsletter we explore why.
The main reason is related to the war in Ukraine and the subsequent financial sanctions imposed by the West on Russia. The sanctions offer cryptocurrencies the opportunity to prove their claim not only to be true currencies, but also to be better monetary instruments than traditional currencies, being decentralized and "censorship resistant". The first section of the newsletter is dedicated to the question: are cryptocurrencies a way to evade sanctions?
In the meantime, the crypto industry and the traditional financial system come closer every day. Last month has seen many operations with traditional financial firms investing in crypto ventures and vice versa. While it is still early to draw conclusions, this trend could result in the assimilation of the crypto world inside the perimeter of traditional financial regulation. In the second section, you will find the latest news on the increasing connections between crypto finance and traditional finance.
In this development, states and international policymakers are central players. While there are signs of a more accommodating attitude towards cryptocurrencies, CBDC projects, aimed at counteracting cryptocurrencies' potential threats to monetary sovereignty and financial stability, continue to proceed at a fast speed. The third section tells about the states' evolving attitude towards private cryptocurrencies and the concurrent development of CBDC projects.