Central bank digital currencies surge. ‘We’re believers,’ says Mastercard CEO

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Bitcoin’s star has been rising lately. The pioneering cryptocurrency bottomed out around $5,000 at the beginning of the pandemic in March, but this week traded above $13,800.

Helping to spur those moves is increasing corporate bullishness on cryptocurrency—as evidenced by Square’s recent $50 million Bitcoin buy and last week’s announcement that PayPal will offer Bitcoin and other crypto trading. Even J.P. Morgan is now predicting a coming liftoff for Bitcoin.

Cryptocurrencies like Bitcoin remain controversial, but their growing acceptance is likely also accelerating the arrival of their well-hyped cousin: Central bank digital currencies.

That was clear yesterday as I hosted the Fortune Global Forum, where I interviewed fintech leaders including Mastercard CEO (and soon to be executive chairman) Ajay Banga; Visa Europe CEO Charlotte Hogg; and Sebastián Kanovich, co-founder and CEO of dLocal, a Latin American payments startup that recently became Uruguay’s first billion-dollar unicorn.

While Bitcoin is too volatile for mass usage, said Banga, it’s “central bank digital currencies we’re believers in.” Mastercard is now “one of the largest patent holders in the space of central bank digital currencies,” he added. Mastercard recently rolled out a set of tools for banks exploring the technology.

“I believe that fiat currencies, if they were to go digital, would they be helpful in cross-border trading flows and improving the efficiency of those?” explained Banga, “Yes, for sure.”

Hardcore Bitcoin purists are bound to insist that any currency issued by a central bank is not a true cryptocurrency, because it’s not decentralized. But the CEO of Binance—the world’s largest Bitcoin exchange—Changpeng Zhao, better known as CZ, disputed that view when we spoke with him last week on our show Balancing the Ledger.

“People will probably argue about the semantics of it and different definitions of it, but I think that that’s not super important,” Zhao said. “What’s important is what will people use at the end of the day, and how much adoption each different currency will get?…I think there could be centralized versions of cryptocurrencies that will get high adoption.”

He added: “I think as long as people use it, it will have value.”

Indeed, even in emerging markets where local currencies can be volatile and less reliable, people still aren’t turning as much to cryptocurrencies as proponents perhaps thought they would.

Kanovich, whose company dLocal operates largely in Latin America and other developing countries, didn’t think cryptocurrency would matter much to his business until central banks got on board with the technology.

“We are super bullish at the personal level; we don’t count on it at the company level,” he said. “We need to make sure that the central banks are feeling comfortable.”

Besides, he added, even among the current fractured landscape of cryptocurrencies, with Bitcoin and its thousands of younger siblings, none has really caught on yet with consumers. “We need to make sure that users are paying the way they want to pay. And yet, they’re not choosing crypto,” Kanovich added. “We would love to see it happening, but we haven’t seen it happening yet, and we do believe we have other fights to fight than driving adoption in the crypto world.”

Maybe a digital currency backed by a central bank would change that.

Jen Wieczner

@jenwieczner

jen.wieczner@fortune.com

DECENTRALIZED NEWS

Credits

ConsenSys will work with Societe Generale on central bank digital currency tech ... Coinbase announces crypto-linked debit card ... Banking-for-freelancers startup Lili raises $10m ... Bahamas launches national digital currency ... Expensify CEO warns customers that Trump is a threat to democracy ... JPMorgan's digital currency, JPM Coin, goes live ... JPM is also in discussions with crypto firms to partner for custody services ... Deutsche Bank delivers earnings beat.

Debits

Visa's acquisition of Plaid could hit an antitrust bump ... Coinbase goes down in the middle of a crypto bull market ... Trump campaign website hacked by crypto-scammers ... Grayscale report finds COVID has been good for bitcoin ... SEC's Bill Hinman to step down ... FTC finds a big surge in COVID-related financial scams ... CoinDesk's crypto influencer nominees list is less than 10% female ... Ripple names 5 countries it might move to ... Harvest is the latest DeFi project to steamroll penny-pluckers with $34 million hack.

FOMO NO MO'

Mr. Kurson then targeted the doctor’s supervisor, the complaint said. Using the alias “Eddie Train,” Mr. Kurson emailed the supervisor’s wife claiming to be an employee at Mount Sinai. The email said that her husband was having an affair with the female doctor … In late 2015, the Mount Sinai doctor informed the hospital that she would be relocating to a new apartment and said her email had been hacked.

From federal cyberstalking and harassment charges filed on Friday, Oct. 23 against longtime Trump family ally Ken Kurson. Kurson allegedly harassed two people and cyberstalked three others, including a doctor he apparently blamed for his 2015 divorce. Kurson had previously served as editor of the New York Observer under then-owner Jared Kushner. Kurson was named to the board of directors of crypto-fintech company Ripple in 2017, but is no longer listed as a board member. Kurson also founded Modern Consensus, an above-average if little-read news outlet focused on cryptocurrency, in 2018

Also of note: Though prior to Kurson's tenure at Kushner's Observer, New York Times reporter David Enrich has pointed to a friendly 2013 Observer profile of Deutsche Bank's Rosemary Vrablic as a possible attempt by Kushner to influence the bank's lending to Trump and his allies, which remained generous despite huge defaults.

BUBBLE-O-METER

$13,880

The peak price of Bitcoin ... in June of 2019. Yesterday, Tuesday October 27, Bitcoin reached a price of $13,843, according to data from Goingecko - but dropped nearly 3% in the following hours.