Bitcoin, Ethereum Rise As Venezuela Launches Digital Currency

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An advertisement for bitcoin and cryptocurrencies. Photo: Reuters

Cryptocurrencies were significantly higher on Friday morning, ending a volatile week on a good note, as the Venezuelan government-backed digital currency shifts into high gear and the U.S. Federal Reserve Chairman said he had no intention of banning crypto.

Bitcoin (BTC-USD) rose about 3% to trade at $ 44,537 (33,108) while Ethereum (ETH-USD) the world’s second largest crypto by market cap rose 2.3 % to trade at $ 3,074.

Venezuela announced in August that it is reorganizing its national currency, the bolivar, and is launching its central bank digital currency (CBDC) the digital bolivar on October 1.

The digital bolivar will use an SMS exchange system to facilitate payments and transfers between users.

Some analysts believe the CBDC could be a temporary fix for the country, which is facing hyperinflation.

Bitcoin was up Friday morning Chart: Yahoo Finance UK

In the United States, Fed Chairman Jerome Powell has been asked if he plans to ban or limit the use of cryptocurrencies. Powell’s response was an emphatic no.

When asked about stablecoins, Powell said they were to some extent outside the regulatory scope and it was appropriate that they were regulated. “

“A large chunk of investors are turning to stablecoins and other crypto assets derived from more tactical procedures,” Kunal Sawhney, CEO of stock research firm Kalkine Group, told Yahoo Finance UK.

Securities and Exchange Commission (SEC) Chairman Gary Gensler said that a bitcoin exchange-traded fund, based on the Chicago Mercantile Exchange bitcoin futures contracts, would benefit from “significant protection of investors ”due to the Investment Company Act of 1940. He also said that the SEC was reviewing numerous ETF deposits for bitcoin.

Wael Makarem, senior market strategist at trading broker Exness, said this “provides clear support to investor sentiment.”

“Major cryptocurrencies are set to cut losses from last week. Laws that would provide decent protection for investors could also boost global adoption of crypto,” he added.

The story continues

Read more: How a Bitcoin court case in Japan can create crypto millionaires

Meanwhile, Visa (V) has announced that it is ready to move forward with a blockchain interoperability platform that will link fiat currency, CBDCs, stablecoins and traditional blockchain currencies like bitcoin. and ether in a solution called Universal Payment Channel.

The execution of such projects is more than just a technical matter. In fact, one could argue that tackling global regulatory challenges is far more difficult than the coding itself, said Mati Greenspan, CEO of Quantum Economics.

Watch: What are the risks of investing in cryptocurrency?

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