It 2021 in the digital world we live fast. The understanding of the global digital development of the last 10 years and its geopolitical, social and economic impact, more particularly in the financial world, extends and becomes essential for making strategic decisions.
Concepts, terms, proposals and developments, new and known, are progressing in their use with a high media impact for those interested in the sector. We are in an era where the borders of the digital companies with the largest capitalization are diluted with the national geographic borders, and we find actions like the"European Digital Services Act”, Within the framework of the strategic priorities of the European Commission for the period 2019-2024, within the program“A Europe fit for the digital age”(A Europe“ fit ”for the digital age).
La market capitalization It is one of the well-known methods to estimate the economic value of a company, it is the result of the price of its share in the Stock Market multiplied by the number of its shares in circulation. In the world of decentralized digital technology, the term market capitalization is used to determine the value of a "cryptocurrency" and compare it with other "cryptocurrencies." In this case, the metric is calculated by multiplying the value in fiat currency at which each unit of a cryptocurrency is traded, with the current market circulating supply. Known term, method and diverse technological base, the capitalization value, in this case, is not necessarily equivalent to the inflow of money for a project or company, so it may not necessarily represent how much money is in the market, but it alerts us to trends around liquidity and of the development of some global digital projects.
This conceptual difference between a fiat currency and a "crypto" is relevant in the medium-long-term projection of the evolution of macroeconomic strategies. The concepts around value have a high mathematical basis and in the evolution of exchange methods, risks must be mitigated and strategies adapted as long as we are sure that we are comparing apples to apples. The financial system in which the exchange of value is quantified in fiduciary currencies is established in a normative, juridical-legal framework and with exchange rules and a market with a digitalization guided in an innovation and digital transformation plan in which the participants participate. various actors. The digital world that is born with bitcoin, with a use and with a certain digital architecture and evolving platforms entails a diverse understanding of the exchange of value between peers. This exchange of "crypto" securities is just one part of the many proposals offered by this decentralized disruptive digitization. The work in progress on the convergence of this technology with developments in artificial intelligence and with the capillarization of the connection to the Internet of Things (with sensors), makes us intuit that shortly the capitalization of companies may be related to the adoption of this new digitization and that the capitalization of "crypto" will vary in conception and stability in the long term.
This summer of 2021, focusing on the United States, to analyze the effects, which after 50 years, has had the decision of President Richard Nixon to unlink gold from its fixed price in dollars, suspending the convertibility of dollars into gold by foreign governments and central banks, and go on to print dollar bills with no other support than trust in the US financial system, we must add the analysis of the ups and downs of "crypto" in the United States, and the message from the Governor of the American Federal Reserve Board on their work with the Boston Federal Reserve and the Massachusetts Institute of Technology (MIT), in order to "build and test a hypothetical digital currency" oriented to the Central Bank's own uses, highlighting that the lessons, advances and the base code that is developed will be offered as open source software so that anyone interested can implement and experiment with it.
And if we consider the news that comes from China of the realization of large-scale digital yuan pilot programs in various cities, with a launch forecast in 2022-2023, initially coexisting with the yuan, could promote the establishment of a digital payment system with certain characteristics similar to cash: accessible to all, low-cost, anonymous and in accordance with the international regulations of the FATF, coming to compete with traditional financial market assets in a global digital medium, which increases its role in international trade.
In this international context, on July 14, 2021, the Governing Council of the ECB reported that it agreed to go ahead with a two-year pilot project to explore the benefits and risks of introducing a digital version of the euro. The digital euro may be used in 19 eurozone countries, in parallel with the euro, allowing faster digital transactions, independent of factors external to the community bloc, and supporting European sovereignty and stability, in monetary and financial aspects. This pilot will consider the technical aspects, design, and participation of the banking sector, and with the efficiency and anonymity of cash. We add to this news, those that come about the evolution of the bill of the Regulation of Cryptoactive Markets of Europe (MICA), which could be approved in early 2022, and which gives the CNMV and the Bank of Spain the power to control and safeguard the legality of "crypto assets", and thus we can already establish that at the end of 2021 the drawing of a promising future of the digital economy begins.
Aware of imperfections and frictions that make it difficult for borrowers and lenders to meet directly in the markets and create, to minimize them in the same financial system, the set of intermediaries and institutions and infrastructures, and that the answer to the imperfection must be found in commercial and civil laws, etc., of general application, or in sectorial actions of an administrative nature, we can also adapt our vision and bet on the analysis and adoption of the advantages of the decentralized digital world in search of new geopolitical balances.
As Richard Feynman told us, American physicist and Nobel laureate: "Light is not a material of instantaneous propagation, it has a speed, and it is finite", so must be the realization of CDBC's projects together with the appropriate dialogue bridge on the development and understanding of "cryptos" to move closer to a more balanced and sustainable global value exchange system.
Montse Guard, member of the Advisory Council of the Observatory of Ethics in Artificial Intelligence of Catalonia (OEIAC).