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Jonny Fry
ClearBank Group Head Digital Assets Strategy | CryptoAM Influencer of the Year 2022 | Editor Digital Bytes Weekly analysis of Blockchain & Digital | Expert Global Trends in Digitization | Chairman GemCap Uk Ltd
Jonny Fry is a prominent figure in the finance and digital assets sector, currently serving as the Group Head of Digital Assets Strategy at ClearBank. He is also the CEO and co-founder of TeamBlockchain Ltd, an organization focused on promoting blockchain technology in finance. With over 25 years of experience in the investment industry, Fry has held various leadership roles, including Non-Executive Chairman at GemCap and Project Development Manager at Integratis.
Fry's expertise encompasses a wide range of areas, including UK investment regulations, stock broking, and financial strategy. He has a background in business studies, having completed a BA sponsored by Wimpey Construction. His contributions to the field have made him a recognized influencer in the crypto and fintech sectors, where he actively engages in discussions about the future of digital payments and financial innovation.12
Highlights
Interesting observations from Ulrich Bindseil is Director General of Market Infrastructure and Payments at the European Central Bank and Richard Senner was working at the Directorate General, Macroprudential Policy and Financial Stability at the European Central Bank Why macroeconomic predictions of CBDCs need questioning- The rise of digital payments has led to declining cash usage, raising concerns about competition, privacy, and state autonomy in payment systems. In response, central banks have explored issuing Central Bank Digital Currency (CBDC) to maintain the balance between public and private payment methods. Central banks have outlined CBDC design features such as no remuneration, holding limits, and restricted access, aiming to preserve the role of central bank money in a digital world. However, macroeconomic models on CBDC often fail to consider these design choices, potentially leading to incorrect conclusions about its effects. Some of the effects which could be
· not issuing a CBDC could be worse than issuing one · CBDCs are expected not to pay interest thus, “it is difficult to specify a clear difference between CBDC and cash in macroeconomic models” · it is more likely that the combined decline of banknotes in circulation (relating to their lesser use) and the announced CBDC design features will lead to a declining volume of central bank money in circulation, · a combination of a decline in the use of physical cash and “the announced CBDC design features “will lead to a declining volume of central bank money in circulation” “If retail payments are exclusively left to the private sector and central bank money would be marginalised, then the amount of central bank money in circulation will significantly shrink, the length of central bank balance sheets would decline and the banks would benefit from deposit inflows, payment costs will increase (due to increasing market power of the successful firms), monetary and financial stability will be weakened”
Should future research focus on the consequences of not issuing CBDC and better reflect real-world CBDC characteristics to understand its true macroeconomic impact? CBDC is seen as a tool to ensure economic stability and prevent the marginalization of central bank money as digitalization progresses. https://lnkd.in/eD5CAjYY Thank you OMFIF John Orchard
Stablecoins, such as Tether (USDT) and USD Coin (USDC), which together account for a significant portion of the over $160 billion USD stablecoin market as of July 2024, are increasingly impacting traditional FX trading. Research has shown that blockchain markets where these stablecoins are traded, such as the EURC/USDC pair on Uniswap V3, operate with impressive efficiency, keeping prices within 20 basis points of traditional EUR/USD market prices.
Despite this, challenges like high gas fees and Ethereum market volatility remain, increasing trading costs and limiting the scalability of blockchain-based FX trading. The study also revealed that blockchain market movements can predict traditional FX rates, with a one million change in EURC order flow leading to a 3.96% increase in the Reuters EUR/USD return.
However, information asymmetry among traders suggests that while blockchain markets contribute to price discovery, they are not yet ready to fully compete with traditional FX markets. As these markets evolve, they hold the potential to address inefficiencies in traditional FX trading, but regulatory challenges and market frictions must be carefully managed.
Source: https://lnkd.in/ejrdmDAW
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