Ethereum (ETH)-Based Stablecoin To Be Issued By ConsenSys
Joseph Lubin presented the framework of regulated Ethereum-based stablecoins at the Davos Economic Forum.
Vodafone Is the Latest Big Company to Quit Facebook-Founded Libra Association
Vodafone is no longer part of the Libra consortium. Vodafone will dedicate resources previously intended for Libra to its well-established and successful digital payment service M-Pesa, which the company plans to expand beyond the six African nations currently served.
Central Bank group to assess potential cases for central bank digital currencies
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home jurisdictions.
Digital Dollar Project
The Digital Dollar Project has been created to formally lead the initiative of educating policy makers, organizing key industry stakeholders, and proposing a U.S. CBDC strategy.
Binance Launches 1:1 Conversion Function for Selected Stablecoins Into BUSD
Binance has launched a function allowing users to instantly convert from other stablecoins into BUSD. The ratio to convert PAX, USDC and TUSD into BUSD will be set at 1:1 with zero fees. The ratio to convert USDT into BUSD will vary based on the current market price.
Libra Association forms 5-member committee to oversee technical development of the project
The Libra Association has set up a 5-member “Technical Steering Committee” to oversee the development of the stablecoin project.
Where a retail digital currency could thrive
The introduction of a digital currency really requires a country-by-country approach, taking into consideration local needs, circumstances and policies. Nonetheless, the demand for digital currency is more likely to rise in those places where the financial system is less developed and more fragmented.
Digital money: Implications for emerging market and developing economies
Proposals for global stablecoins have put a welcome spotlight on deficiencies in financial inclusion and cross-border payments and remittances to emerging market and developing economies. This column, part of the Vox debate on digital currencies, argues however that stablecoin initiatives are no panacea. Moreover, they pose particular development, macroeconomic and cross-border challenges for emerging market and developing economies. It remains to be seen whether stablecoins can offer a decisive comparative advantage over fast-moving fintech innovations in these countries that are built on or improve the existing financial plumbing.
Former Regulator Known as ‘Crypto Dad’ to Launch Digital-Dollar Think Tank
A former top American financial regulator dubbed “Crypto Dad” for his embrace of cryptocurrencies is setting up a think tank to promote the idea of digitizing the U.S. dollar.
China’s sovereign digital currency plan in doubt with concerns raised about wider application
Some have called for caution with regards to China’s digital currency, with the urgency to rush through Beijing’s own plan now lessened as Libra, which is perceived by Beijing as a major threat to China’s financial sovereignty, faces major regulatory obstacles worldwide.
Money's Past is Fintech's Future: Wildcat Crypto, the Digital Dollar, and Citizen Central Banking
As central banks worldwide upgrade their payments systems, the Fed will begin issuing a ‘digital dollar’ that leaves no licit function for what I call ‘wildcat crypto.’ But the imminent change heralds far more than a shakeout in ‘fintech.’ It will also make possible a new era of what I call ‘Citizen Central Banking.’ The Fed will administer a national system of what I call ‘Citizen Accounts.’
The Democratic Digital Dollar: A Peer-to-Peer Savings & Payments Platform for Fully Inclusive State, Local, and National Money & Banking Systems
This document sketches a smart-device-accessible peer-to-peer (‘P2P’) platform – the ‘Digital Dollar Platform’ – which, thanks to new payment technologies, can easily be put into place and administered by any unit of government with a view to supplying this critical commercial and financial infrastructure to all of its constituents.
The Reserve Bank of Australia on crypto-assets, stablecoins and central bank digital currency
The Reserve Bank of Australia believes a "digital Australian dollar" would be an unnecessary disruption to the existing financial system, particularly for retail use. The bank cites research by accounting firm Ernst & Young that also found a CBDC would be the least effective solution for promoting growth in the Australian fintech sector.
Russia’s Central Bank Is Now Testing Real Asset-Pegged Stablecoins
The Bank of Russia has reportedly started testing stablecoins pegged to real assets in a regulatory sandbox.
ECB's Lagarde: We Want to Develop Digital Currencies but Won't Discourage Private Initiatives
The European Central Bank is eager to expand its role in developing central bank digital currencies (CBDCs), but that doesn't mean private enterprises can't join the party, said President Christine Lagarde.
Dominant Currency Paradigm | Gita Gopinath
"Most trade is invoiced in very few currencies. Yet, standard models assume prices are set in either the producer’s or destination’s currency. We present instead a ‘dominant currency paradigm’ with three key features: pricing in a dominant currency, pricing complementarities, and imported input use in production. "
Banking, Trade, and the making of a Dominant Currency
"We explore the interplay between trade invoicing patterns and the pricing of safe assets in different currencies. Our theory highlights the following points: 1) a currency’s role as a unit of account for invoicing decisions is complementary to its role as a safe store of value; 2) this complementarity can lead to the emergence of a single dominant currency in trade invoicing and global banking, even when multiple large candidate countries share similar economic fundamentals; 3) firms in emerging-market countries endogenously take on currency mismatches by borrowing in the dominant currency; 4) the expected return on dominant-currency safe assets is lower than that on similarly safe assets denominated in other currencies, thereby bestowing an “exorbitant privilege” on the dominant currency. The theory thus provides a unified explanation for why a dominant currency is so heavily used in both trade invoicing and in global finance."
IMF Chief Economist: Digital currencies will not displace the dominant dollar
"Despite high hopes, it is difficult to see how technology can hasten the creation of a “synthetic hegemonic currency”. Trade and financial contracts continue to be denominated overwhelmingly in a single currency, rather than a basket of currencies. For such a public synthetic alternative to work, central banks, whose currencies underlay it, would have to co-ordinate to ensure its stability and reduce perceived risks. But global needs can conflict with monetary policy objectives at home, significantly reducing the attraction for leading reserve currencies to participate."
Problems Escalate in Venezuela as Millions Rush to Spend Petros
According to the Venezuelan government, millions of families have used the petro, the country’s national digital currency, to pay for goods and services. As shoppers rush to spend their coins, merchants are reportedly struggling, effectively forced to sell goods at a deep discount. At least one merchant is said to have been arrested.
People’s Bank of China ‘Progressing Smoothly’ With Digital Yuan
People’s Bank of China (PBoC), reports that it is “progressing smoothly” with its development of a government-backed digital currency.
ECB’s Weidmann Urges Euro-Area Banks to Battle Facebook’s Libra
European Central Bank policy maker Jens Weidmann called on banks to come up with cheaper and faster systems for transferring money to combat alternatives such as Facebook Inc.’s Libra, and said there’s no pressing reason yet for the ECB to develop its own digital currency.
Tiered CBDC and the financial system
This ECB paper reviews the advantages and risks of CBDC issuance, and proposes two-tier renumeration to reduce the risk of structural disintermediation of banks and centralization of the credit allocation process within the central bank and (ii) risk of facilitation systemic runs on banks in crisis situations.
An elegy for cash: the technology we might never replace
We have three avenues for the future of digital money, none of which offers the same mix of freedom and ease of use that characterizes cash. How big a problem is this? That depends on where you live, how much you trust your government and your fellow citizens, and why you wish to use cash.
Bahamas rolls out first phase of CBDC pilot
“We chose Exuma because we wanted to perfect the experience in one of the islands where there is not full access to financial services,” governor John Rolle. “We also liked the structure of Exuma, it has a scattered geography, and it gives us the opportunity to build out and rely on a communications infrastructure for payments transactions.”
China Brings Law to Categorize Crypto Passwords Ahead of CBDC Launch
China implemented a new law governing the cryptographic passwords. This law came into effect ahead of the launch of the People’s Bank of China-backed digital currency, which is expected to hit the market this year.
The Financial System of the Future — Who Benefits From CBDCs?
"The best solution that minimizes negative spillovers is likely not the elimination of cash or the total disintermediation of banks, but a “three-way” financial system in which various payment systems coexist in equilibrium, balancing the needs of all economic participants."
A Blockchain-based Framework for Central Bank Digital Currency
This paper presents a blockchain-based framework for CBDC with three layers, including supervisory layer, network layer and user layer, and describe the key business processes of the CBDC’s entire lifecycle of issuance-circulation-withdrawal in detail.
Money Creation in Fiat and Digital Currency Systems
This IMF paper concludes that the mere disappearance of physical cash would not imply that monetary policy’s bearing on economic dynamics be in any way reduced. Hence, the disappearance of cash cannot be the argument for calling for CBDCs from that perspective. More relevant arguments for digital instead of physical cash include instead the objective to be better able to counteract money laundering and combat the financing of terrorism and tax evasion.
Stablecoins in Cryptoeconomics. From ICOs to CBDCs
This Article aims to highlight the factual interconnections linking ICOs, cryptocurrencies, stablecoins and CBDCs: although these entities belonging to different contexts (securities law and capital formation, payment systems, monetary policy), they are intertwined and are part of the same evolution.
Summary of the Report of the BoJ Study Group on CBDC Legal Issues
Based on four stylized models of CBDC issuance, this Bank of Japan (BoJ) report discusses what legal issues would arise within the Japanese legal framework if the BoJ were to issue its own CBDC.