GitHub - OceanBase
"OceanBase is an enterprise distributed relational database with high availability, high performance, horizontal scalability, and compatibility with SQL standards."
U.S. SEC Chair Gensler calls on Congress to help rein in crypto 'Wild West'
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler called on Congress to give the agency more authority to better police crypto-asset trading, lending and platforms, a "Wild West" he said is riddled with fraud and investor risk. He said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks. He also focused on stablecoins and how they "may facilitate those seeking to sidestep a host of public policy goals connected to our traditional banking and financial system: anti-money laundering, tax compliance, sanctions, and... national security, too... Further, these stablecoins also may be securities and investment companies. To the extent they are, we will apply the full investor protections of the Investment Company Act and the other federal securities laws to these products." https://www.sec.gov/news/public-statement/gensler-aspen-security-forum-2021-08-03
Analyzing Tether and USDC Usage Patterns
"USDC and other stablecoins are being adopted for many reasons, but one major benefit of stablecoins over traditional settlement infrastructure (e.g. Fedwire) is that they run on crypto-native payment rails that operate 24/7, 365. The heatmap below breaks down USDC activity by day of week. On-chain data show that USDC is mainly used during weekdays, but has some activity during the weekends when traditional infrastructure is largely unavailable."
PBoC’s Digital Research Institute Partners With Ant Group
In April 2021, the Digital Currency Research Institute of the People’s Bank of China reportedly signed a strategic cooperation agreement with Ant Group. The two will jointly work on promoting the platform for the digital yuan. The platform will be based on Ant Group’s proprietary distributed database called OceanBase and mobile development platform mPaaS.
Fed's Brainard: Can't wrap head around not having U.S. central bank digital currency
U.S. Federal Reserve Governor Lael Brainard reportedly laid out a range of reasons for "urgency" around the issue of developing a U.S. central bank digital currency (CBDC), including the fact that other countries such as China are moving ahead with their own. "The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC offering, and the U.S. doesn't have one, I just, I can't wrap my head around that... That just doesn't sound like a sustainable future to me." She also pointed to the risk of stablecoins proliferating and fragmenting the payment system.
ECCB Launches DCash in Saint Vincent and the Grenadines
The Eastern Caribbean Central Bank (ECCB) has made DCash, the digital version of the EC Dollar, available for public use in Saint Vincent and the Grenadines, as part of its continuing central bank digital currency (CBDC) pilot launched on March 31, 2021. The initial rollout took place in Antigua and Barbuda, Grenada, Saint Lucia and St. Kitts and Nevis.
Ukraine central bank now officially allowed to issue digital currency
The National Bank of Ukraine (NBU) is now officially authorized to issue a central bank digital currency (CBDC). Ukrainian President Volodymyr Zelenskyy has signed a new Payment Services law, officially enabling the country’s central bank to issue a CBDC, the digital hryvnia. The new law authorizes the NBU to set up regulatory sandboxes for testing payment services and instruments based on emerging technologies. The new legislation also requires close collaboration between the Ukrainian central bank and local startups in the payment market, taking into account the demand of the private sector. https://www.president.gov.ua/ru/news/glava-derzhavi-pidpisav-zakon-pro-platizhni-poslugi-69849
IMF sees critical role as world transitions to digital money
International Monetary Fund (IMF) staff called for a ramping up of the institution's resources devoted to monitoring, advising on, and helping to manage the "far-reaching and complex transition" to digital money. According to one of the background papers, "the Fund has a critical role to play to help its members harness the benefits and manage the risks of digital money [which] must be regulated, designed, and provided so countries maintain control over monetary policy, financial conditions, capital account openness, and foreign exchange regimes".
A Fed-issued digital dollar could print money — for the people
With such a system of “auto-stabilizers,” families would not need to wait for the political system to wrangle over ad hoc relief programs, nor suffer costs and delays inherent in our outdated payments system. The Fed could distribute funds directly to digital wallets held by households, and/or use regulated digital payment providers to help consumers set up digital wallets and custody their CBDC.
A New Solution – Blockchain and eID
"Eesti Pank carried out a research project into the technical possibilities for a digital euro alongside the European Central Bank and seven other central banks of the euro area. The experiment established that a novel blockchain-based solution could in theory support almost unlimited numbers of payments being processed at the same time with a very large money supply and with a smaller carbon footprint than the card payment system. The blockchain-based solution would also permit a good balance between privacy and the need to meet anti-money laundering requirements."
Why is the United States Lagging Behind in Payments
According to this paper by Diem/Novi's Christian Catalini and Andrew Lilley there are at least three ways to remove frictions in payments and rapidly expand the number of individuals and businesses that can access the financial system and cheaply transact in real time. The first is to bring deposits on a single ledger through a central bank digital currency (CBDC), so that transfers between banks are not limited by external liquidity constraints or third-party rails. The second approach is to follow countries such as India and Mexico and increase the throughput of always-on real-time gross settlement (RTGS) systems, the model the US Federal Reserve is pursuing with the introduction of FedNow, targeted for 2023. The third approach is to facilitate the growth of interoperable, stablecoin payment rails by creating the right regulatory framework for these new types of networks to safely increase competition in payments.
Evergrande/Tether/China Credit Situation Update
Now is not the time for central bank digital currencies
Steve Cecchetti and Kim Schenholtz argue that rather than rushing to offer CBDC for fear of being left behind, central banks should go slowly to ensure a safe design. In our view, that means stopping well short of issuing universal, unlimited, interest-bearing CBDC.
Tether Executives Said to Face Criminal Probe Into Bank Fraud - Bloomberg
A U.S. Department of Justice (DoJ) probe into Tether is homing in on whether executives behind the USDT stablecoin committed bank fraud, a potential criminal case that would have broad implications for the crypto-asset market. The DoJ is scrutinizing whether Tether concealed from banks that transactions were linked to crypto-assets.
Cash and COVID-19: The impact of the second wave in Canada
The Bank of Canada published some survey-based insights into how COVID-19 has affected the demand for, and the usage of, cash. Cash in circulation increased from $83 billion before the pandemic to more than $100 billion by the end of 2020, mostly due to large-denomination bank notes ($50 and $100). Actual cash usage was more prevalent among older, less-educated and low-income individuals.
Central bank digital currency for the UK
This column summarizes the findings from a Centre for Macroeconomics survey of experts on the UK economy, who were nearly unanimous in agreeing that a Bank of England-issued digital currency would benefit the British economy. Half of the panel also believed that a digital currency would have limited impact on the UK banking system.
Mondex Memories and CBDC
"We still feel that an offline capability is essential for a CBDC. Even though the world is obviously much more connected now than then, networks break, whether through lack of coverage, software or hardware failure, high demand or cyberattack (or even physical attack). It’s better if the wheels of commerce can keep turning in any of these circumstances."
Chinese Electric Bills To Become Payable Using Digital Yuan
The People's Bank of China digital yuan wallet app will reportedly include an electricity bill payment feature designed by the country’s State Grid. Users will be able to pay their electricity bills through the digital yuan app directly and do not need to link payment to a bank card. The new function will be tested in nine cities and regions, including Xiong’an New Area, Suzhou, Chengdu, Shanghai, Xi’an, Dalian, Changsha and Qingdao, and at the Winter Olympics in Beijing in 2022.
CBN's digital currency CBDC set for October 1
The Central Bank of Nigeria (CBN) is reportedly launching a central bank digital currency (CBDC) proof of concept (PoC) by October 1, 2021. The source is said to be the information technology director for the bank, Rakiya Mohammed, who disclosed that the CBN had been researching since 2017 to develop and adopt the digital currency. The project called ‘GIANT’ will run on the hyper-ledger fabric blockchain. The announcement was supposedly made at the 306th Banker’s Committee meeting, but I have found no mention of it on the CBN website. Also there's some confusion about whether it's a pilot or PoC, because the article says that a "pilot" will be launched by October 1, but a PoC wouldn't happen until year end, which is obviously back assward. If anyone out there has more concrete information please pass it on!
The dollar isn't a meme
"What sort of credit is fiat money? There are many different kinds of credit instruments, from bonds to deposits to banknotes, each with its own unique features. To see where central bank money fits, I've made a chart that illustrates how credit instruments differ across three different criteria (click to expand)."
India Eyeing Phased Roll Out of Central Bank Digital Currency
The Reserve Bank of India (RBI) is considering a “phased introduction” of a central bank digital currency (CBDC) including running pilot programs. CBDCs are desirable not just for the benefits they create in payments systems, but also might be necessary to protect the general public in an environment of volatile private virtual currencies. Hence, the RBI is currently working towards a phased implementation strategy and examining use cases which could be implemented with little or no disruption, including both retail and wholesale CBDC. Hence, it would appear that the RBI is still in the very early stages of it CBDC deliberations, even though it has been exploring the pros and cons of introducing CBDCs for quite some time. https://www.rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1111
Paxos lawyer: Tether and USDC not ‘real stablecoins’
Paxos Trust lawyer and chief compliance officer Dan Burstein claims that Tether's USDT and Circle's USDC are unregulated "stablecoins" in name only. Paxo-issued Paxos Standard (PAX) and Binance Dollar (BUSD) are approved and regulated by the New York State Department of Financial Services (NYDFS). That means each token is backed by reserves in the safest instruments, such as bank deposits insured by the US Federal Deposit Insurance Corporation or short-term maturity US Treasuries. Gemini Dollars (GUSD) issued by Gemini Trust Company, are similarly NYDFS regulated
A Regulated Stablecoin Means Having a Regulator
"Neither USDC nor Tether is a regulated digital asset, for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are “stablecoins” in anything other than name. These tokens are backed by illiquid and risky debt obligations – a critical weakness that no prudential regulator would allow to exist as this creates undue risk for their customers."
Bitcoin's gold rush was always an illusion
"Through successive booms and busts, the price of Bitcoin has been manipulated by a handful of large players, using fake transactions, imaginary assets and sophisticated timing. In doing so they created real demand, as celebrities and financial institutions responded to the attention and encouraged millions of people to gamble money on a product they barely understood, in the hope that it would make them rich."
The time to embrace central bank digital currencies is now
"Choices have to be made. In the process, old players may disappear and new ones emerge. But the fundamental requirement is the same as always, namely, reliable systems in which the public can place their trust. Central banks will play a leading role in ensuring this. They can do so by embracing the possibilities of the new technologies, while preventing a chaotic free for all. The BIS provides an excellent outline of the issues. Now is the time for progress."
Digital yuan pilots expand to insurance industry for the first time
The People's Bank of China e-CNY is reportedly being piloted with Pingan Property Insurance, a subsidiary of China’s leading insurer, Ping An. The project involves a new insurance policy tailored to medical workers in Shenzhen’s Nanshan district, offering them various levels of compensation for diagnosis of or death due to COVID-19. Applicants are eligible for exclusive preferential allowance if they use the digital yuan wallet to make payments.
The Positive Case for a CBDC
This Bank of Canada staff discussion paper discusses the competition and innovation arguments for issuing a central bank digital currency (CBDC). A CBDC could be an effective competition policy tool for payments. On innovation, it argues that a CBDC could be necessary to support the vibrancy of the digital economy by helping solve market failures and fostering competition and innovation in new digital payments markets. Overall, the paper finds that competition and innovation are valid supporting arguments for issuing a CBDC.
Circle Reveals Assets Backing USDC Stablecoin
Circle published a breakdown of the assets backing its USDC stablecoin in its latest attestation report. According to the report, on May 28 bout 61% of its tokens were backed by cash and money market funds. Yankee certificates of deposit (i.e., issued by non-US banks) comprise a further 13%, short-term U.S. Treasury securities account for 12%, unsecured commercial paper accounts for 9%, and the remaining tokens are backed by unsecured short-term municipal and corporate bonds.
By "short-term" is meant a maximum term to maturity of three years, and the overall portfolio weighted average maturity is limited to 1.5 years. There are also credit rating limits based on S&P scales. The overall portfolio must main an average credit rating must of A or better, commercial paper holdings must be rated A1 on the short-term scale, and for bonds issued by corporations and financial institutions must be rated BBB+ or higher on the long-term scale.
Bank of Korea selects provider for CBDC blockchain simulations
Ground X reportedly won the tender to lead the Bank of Korea's central bank digital currency (CBDC) proof-of-concept work. Ground X, the blockchain subsidiary of Kakao, Korea’s largest social network, partnered with ConsenSys to create the Klaytn Ethereum-based public-permissioned blockchain that the PoC will be run on. Ground X will start work in August, with the first phase to be completed by December.
Banque de France, Banque Centrale de Tunisie in wholesale cross border CBDC trial
An experimental wire transfer was carried out between two individuals, located respectively in France and Tunisia, in commercial bank money through transfer of wholesale central bank digital currency (CBDC) between Banque de France and Banque Centrale de Tunisie. The operation took place on the Instaclear interbanking transaction solution based on the private distributed ledger operated by Prosperus, and both central banks have exchanged CBDC tokens in secured conditions. Bank Wormser Frères, la Banque Internationale Arabe de Tunisie and its French subsidiary BIAT France, were also part of this operation.