Cryptocurrency roundup: bitcoin continues to slide as Lords say no need for a digital pound

Bitcoin continued its slide this week and fell below $40,000 for the first time since September 2021, as many digital currencies fell amid the “risk-off” sentiment sparked by a more hawkish Federal Reserve. The week was full of developments for the sector; the House of Lords suggested that Britain doesn’t need a central bank digital currency to American television Kim Kardashian facing a lawsuit for an alleged crypto “pump and dump” case. Here are the top stories that caught our eye. The House of Lords says Britain doesn’t need a digital pound The House of Lords – the second chamber of the UK parliament – said this week that there is no merit in the Bank of England’s efforts to develop a digital pound as it believes that concerns for financial stability and protection of privacy outweigh potential benefits that could come with a digital sterling. Alarmed by the growth in digital currencies in 2021, the Bank of England is one of many central banks across the world, including the European Central Bank and the People’s Bank of China, that are exploring the possibility of launching a central digital bank currency (CBDC). CBDCs are a digital form of a country’s fiat currency. Unlike traditional money, it is not in physical form.

But the Lords’ report has complicated Britain’s CBDC ambitions. Michael Forsyth, who sits in the Lords as Lord Forsyth of Drumlean and is chair of the House of Lords Economic Affairs Committee, said the “the introduction of a UK central bank digital currency would have far-reaching consequences for households, businesses, and the monetary system”. There are two main security risks posed by a CBDC, say the Lords. The first is the risk that individual accounts could be compromised by taking advantage of weaknesses in cybersecurity, and there is the threat of the centralised ledger being hacked by hostile state and non-state actors. The report also suggested that CBDCs would infringe peoples’ privacy as it would give the state greater surveillance over peoples’ financial decisions. However, the committee was not all downbeat on the digital pound. It said that the case for a digital pound could change in the future and proposed the government and Bank of England take action to “shape global standards which suit the UK’s values and interests, for example with regard to privacy, security and operational standards”. China plans to deploy infrastructure to support NFTs China may have banned cryptocurrencies last year, but that hasn’t stopped it from steering clear of non-fungible-tokens (NFTs). China’s state-backed Blockchain Services Network (BSN) is planning to launch infrastructure at the end of the month that will support non-fungible tokens, reports the South China Morning Post. He Yifan, chief executive of technical support company Red Date Technology, the company behind the NFT infrastructure launch, told the paper that the NFT market will not encounter any legal issues so long as the sector distances itself from cryptocurrencies.