Is crypto currency ready for prime time? | Worldline

01 / 09 / 2021

With the various crypto initiatives currently in development, I’m exploring the viability and use case of these efforts in today’s world


Central banks and crypto currency

When Libra announced in 2019 the creation of a non-profit organization in Switzerland to foster the development and distribution of its new cryptocurrency, the Libra, some central bankers were concerned. Jerome Powell, the US Federal Reserve Chairman, explained in July 2019: “It’s something that doesn’t fit neatly or easily within our regulatory scheme”. In a similar tone, Jose Manuel Campa, chair of the European Banking Authority (EBA), raised the issue that “there is a big gap in between where most of these assets fall”. To many outside observers, it didn’t come as a surprise that regulators started to put pressure on Libra to explain what they were planning to do.

Libra was a wake-up call for central banks. But, even before the marketing splash of Libra, central bankers had started to seriously consider the opportunities of a legal digital tender – now known as CBDC or central bank digital currency – to provide alternatives to the likes of Bitcoin and Ethereum. Libra may have accelerated these plans. However, the motivations behind these plans differ. For example, the e-yuan, which the Chinese central bank started to develop in around 2014, is often seen as a way to increase regulatory controls over mobile payments. Consequently, the Chinese government cracked down on Bitcoin mining and cryptocurrency exchanges.

Venezuela started a CBDC initiative back in 2017 and just recently declared Bitcoin to be legal tender. This is pure pragmatism given that the government is also having to manage hyperinflation.

The US Federal Reserve as well as the European Central Bank (ECB) have both announced CBDC studies. The ECB has indicated that it would like to study the topic in earnest over the next two years to assess the opportunities for CBDC.

As governments around the world have started to invest time and resources into the question of CBDC viability, Libra had to reassess its original proposal and decided to rebrand the venture to “Diem” and reduce the original idea, of a stable coin with a basket of currencies and securities, down to a simple stable coin pegged to the US dollar.

Digital assets & blockchain

While the crypto currency debate continues, it is becoming clearer that the underlying technology of blockchain and distributed ledger could help improve efficiency in the financial service industry. Blockchains offer immutability and support for trustless environments which can enable new use cases, one of which is the creation of tokens that are proxies for liabilities or assets, and which can be accessed and distributed via the blockchain. Decentralizing access to these assets or liabilities also enables broader adoption and allows for fractional investment or ownership. 

Commercial banks and financial service infrastructure providers have started to invest in technology and business opportunities by building or investing in digital exchanges and custodial services for these tokens. For example:

  • SIX (the operator of the Swiss stock exchange) is launching its digital bourse for digital assets
  • Euronext is investing in tokenizing digital assets
  • DBS is launching a digital exchange with custodial services
  • Japan Exchange Group (owner of the Tokyo stock exchange) is working to bring blockchain to their capital market infrastructure

With digital exchanges and custodial services, come new asset types, for example the DaVinci Gold Token (in partnership with Worldline) that allows one to buy and sell physical gold represented by a digital token. As another example, Swiss crypto bank Sygnum released Wine-tokens to celebrate Switzerland’s new token securities law.

In theory, every asset or liability could be tokenized and traded on a digital exchange, not unlike the existing infrastructure of stock and commodity exchanges, but with the benefits of much easier accessibility to illiquid assets or liabilities (to tokenize the asset or liability as well as providing access to these tokens), greater efficiencies at lower costs (for example, real-time settlements), and complete transparency (given that the blockchain is immutable, traceable and can operate in a trustless environment).


I believe, while cryptocurrencies potentially represent the most dramatic change to money since the adoption of fiat currency, it is difficult to assess the viability of broad adoption today, since, in developed nations, they do not immediately address an obvious need. This may be different in nations with currency instability and an underbanked or nonbanked population. However, there is a real chance for CBDC to ultimately replace the current monetary system, over time. As indicated by many central banks, the topic is being seriously studied with several pilot projects running – should such a development take place, in my experience, it would most certainly be phased in given that both infrastructure and culture would need to adapt.

On the other hand, blockchain technology and tokenization, particularly where a trust or efficiency challenge needs to be addressed, continue to evolve with increased velocity; there is potential to lower barriers of entry by democratizing and decentralizing access to assets or liabilities that previously had limited reach. 

Worldline is represented and engaged in all these developments; we have built expertise and developed products and infrastructure for our customers; we believe in strong partnerships to navigate these new oceans of finance. 

Urs Gubser

Head Innovation Merchant Services
Urs started his professional live as a software engineer in securities trading. Originally from Switzerland, he brought his skill and know how to New York and Hong Kong. While on assignment in Hong Kong, he caught the payment bug. He and his family finally moved back to Switzerland in 2015 after 17 years abroad where he joined SIX Payment services as head eCommerce. Today, Urs is focused on customer experience and seamless end to end user journeys. Urs holds an MBA from Manchester University, UK.