Bitcoin, Blockchain, and Central Bank Digital Currencies
The Crypto Journey: From BTC to CBDCs
Bitcoin has come a long way since its humble beginning in 2008. But how much Bitcoin currently exists? How does a stablecoin differ from other cryptoassets? And how is it that blockchain technology can facilitate trust? These and other questions about the fundamental nature of cryptocurrencies are answered in the first section of papers listed below.
The other two sections delve into some of the applications of blockchain technology, the tokenisation process, and the likelihood of widespread adoption of central bank digital currencies (CBDCs).
BITCOIN AND OTHER CRYPTOCURRENCIES
Blockchain Blockbuster: Digital currencies (MetLife Investment Management, 2021)
MetLife Investment Management walks the reader through the advent of blockchain and a history of distributed ledger technology, before diving into Bitcoin, altcoins, stablecoins, and CBDCs.
The Guide to Bitcoin, Blockchain, and Cryptocurrency (CFA Institute, 2021)
Matt Hougan and David Lawant of Bitwise Asset Management explain the fundamentals of cryptoassets and their relevancy for investment professionals.
The Builder’s Guide to Bitcoin (Invesco, 2020)
For compliance reasons, this paper is only accessible in certain geographies
This Invesco model posits that the fair market value of Bitcoin is closer to $9,000 than the $19,000 price at the time of writing. (Editor's note: the Bitcoin price has risen even higher since this Invesco paper was written.)
10 Years On: The evolution of the cryptocurrency universe (NN IP)
NN Investment Partners looks into the development and evolution of the cryptocurrency universe over the past decade. Much has happened since the introduction of Bitcoin back in 2009.
Bitcoin is Not a New Type of Money (FRBNY, 2020)
What's so new and unique about Bitcoin? The authors of this short article argue that Bitcoin and cryptocurrencies like it are not a new type of money but are instead a new type of exchange mechanism.
FX Wars, Currency Wars & Money Wars: Fiat money vs crypto (Amundi AM, 2020)
For compliance reasons, this paper is NOT accessible in the United States
From an economist's understanding of the nature of money to the rise of cryptoassets and CBDCs, Amundi Asset Management describes the 11 'wars' between different types of money that are either currently taking place or are potentially on the horizon.
Bitcoin: Magic internet money (Research Affiliates, 2021)
The author of this article urges potential Bitcoin investors to proceed with extreme caution given the current astronomical price movements and other flaws inherent within BTC.
Efficient Price Discovery in the Bitcoin Markets (Wilshire Phoenix, 2020)
Analysis conducted by Wilshire Phoenix suggests that CME Bitcoin Futures reflect macroeconomic information and other types of information more efficiently than the spot market.
Podcast: Application and adoption of digital assets (State Street, 2020)
State Street presents a four-part series of podcasts on the regulatory environment for digital assets, the myths surrounding them, tokenisation, and other related issues.
BLOCKCHAIN AND TOKENISATION
Tokenisation: Future of real estate investment? (University of Oxford, 2020)
The tokenisation of real estate (or other assets) involves equating a fractional ownership interest in that asset with an amount of blockchain-based tokens. This paper delves into the tokenisation process as it relates to single assets, debt, and funds.
2020 Global Blockchain Survey: From promise to reality (Deloitte)
This annual survey from Deloitte polled the opinions of around 1,500 executives about blockchain technology. Most business leaders now view this type of technology as critical to future innovation.
What Every Investor Needs to Know about Blockchain (BCG)
This brief paper from Boston Consulting Group is a great introduction to blockchain. It explains that blockchain enables rapid validations and is a means of facilitating trust. Blockchain technology also has a wide variety of potential applications.
Digital Currencies: Risks, opportunities, and challenges (Group of Thirty, 2020)
This 48-page report by Group of Thirty, an international body of leading financiers and academics, examines digital currencies in detail from Bitcoin and other cryptocurrencies to digital currencies that could be deployed by central banks. It also surveys the regulatory landscape for these assets.
CBDCs
Central Bank Digital Currency Policymaker Toolkit (WEF, 2020)
This document seeks to provide guidance to policymakers on CBDCs including risk awareness, governance, deployment advice, and other related issues.
CBDCs and the Central Bank of the Future (VoxEU, 2020)
The authors of this article discuss a range of CBDC architectures, their potential to complement current payment systems, and their other implications for the future of central banking and the financial system as a whole.
Understanding Central Bank Digital Currencies (IFoA)
The Institute and Faculty of Actuaries provides a comprehensive overview of CBDCs for investment industry professionals.
Money We Trust: Designing cash's digital counterpart (Positive Money, 2020)
This paper explores the features of a CBDC that would minimise disruption within the traditional financial system. CBDCs need to be compatible with monetary policy objectives and also increase overall financial stability.
