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Bitcoin Unmoved As SNB Announces Digital Currency Partnership

Bitcoin price BTCUSD
Bitcoin – BTCUSD

Will the Swiss National Bank (SNB) become the first central bank to start issuing a digital currency similar to Bitcoin? Well, this may very well be the case if the latest reports are anything to go by.

An announcement has just been made by the SNB to the effect that it is entering into a partnership with the Bank of International Settlements (BIS) to explore the prospects of digital currencies. The project is to be carried out in the Innovation Hub Centre of the BIS, located in Switzerland and designed to handle technology projects for the SNB.

The so-called Central Bank Digital Currency (CBDC), which is the expected form of digital money to be issued by the SNB if its intentions run to completion, will be developed at this state-of-the-art centre. The centre will also be responsible for monitoring of markets in real-time.

The CBDC project is expected to be run in two phases.

The first phase is to work on the blockchain integration of CBDC, converting it into a distributed ledger asset. The digitalized form of CBDC that would be thus created, would be used for purposes of settlement of transactions conducted with tokenized assets, much like what is done presently with fiat money.

The second component of this project will be to develop newer ways of tracking and monitoring the digital transactions that would arise from the adoption and use of digitalized CBDC by banking institutions. This would also find ways to aid banks keep up with the new and emerging technologies in a banking space that would become more digitally oriented than now.

Presently, there are no indications that other central banks will tag along this path anytime soon. Opposition to Facebook’s Libra project has been vociferous and universal by finance ministers and central bankers in the US and in other parts of Europe. As at this weekend, MasterCard, PayPal, VISA, Stripe and eBay have all abandoned the project, putting its launch in jeopardy.

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Short-term Outlook for Bitcoin (BTCUSD)

The announcement by the SNB was largely ignored by crypto traders, as Bitcoin (BTCUSD) continued to trade in a very tight range around the key 8289 price level. A break below this level brings the 7710 area (September 30 and October 7 lows) into focus. However, a short-term support pitstop exists at the price zone that extends from 8000 to 8100.

If BTCUSD is able to resume its uptrend, it will need to push up from 8289 to target 8500 (daily pivot) and above this level, 8653 (October 9 and 10 highs). These are all short term price targets.

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