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Texas Bill Would Create State-Issued Gold-Backed Digital Currency
Texas Bill Would Create State-Issued Gold-Backed Digital Currency
Bills introduced in the Texas House and Senate would require the state comptroller to establish a digital currency that is fully backed by gold and fully redeemable in cash or gold. The comptroller would be required to create a mechanism to use this digital currency in everyday transactions. In practice, individuals would be able to purchase digital currency from the state. The state would then use the money to purchase gold that would be held in the Texas Bullion Depository or another secure vault. The bills must next be assigned to committees, after which they must get a hearing and pass by a majority vote before moving forward in the legislative process.
#Fintech#CBDC#GovCoins#UnitedStates#Stablecoins#DFC
·schiffgold.com·
Texas Bill Would Create State-Issued Gold-Backed Digital Currency
What makes for a successful CBDC adoption?
What makes for a successful CBDC adoption?
G+D has compiled a handy checklist of aspects that constitute a successful central bank digital currency (CBDC) exploration and implementation strategy.  It starts with finding the proper balance between pain points, motivations, and opportunities for all stakeholders in that particular ecosystem. Successful implementation could be based on an innovative use case that solves one or more pain points, or it could also offer an opportunity that was previously unavailable. Also, all ecosystem stakeholders - consumers, financial service providers, and merchants – should feel that their interests are kept in mind. Finally, CBDC should not be just a solution to a particular problem in itself, but rather, it is should also provide a platform for innovation that enables new business models.
#Fintech#CBDC#G+D#DFC
·gi-de.com·
What makes for a successful CBDC adoption?
USDC Boasted Transparency. It Didn't Help When Silicon Valley Bank Got Into Trouble
USDC Boasted Transparency. It Didn't Help When Silicon Valley Bank Got Into Trouble
"Had Circle been as opaque as its competitors, no one would have known that Silicon Valley Bank was its banker and the weekend run on USDC probably would never have occurred. The lesson would seem to be: Don't be transparent or, if you need to be transparent, don't be transparent about your shortcomings."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#SiliconValleyBank#DFC
·coindesk.com·
USDC Boasted Transparency. It Didn't Help When Silicon Valley Bank Got Into Trouble
Wyoming to issue stable tokens
Wyoming to issue stable tokens
Wyoming's governor has signed SF 127 enacting the Wyoming Stable Token Act, creating the Wyoming stable token commission, and authorizing the issuance of stable tokens in the state. Under the Act, a Wyoming stable token is “a virtual currency representative of and redeemable for one United States dollar held in trust by the state of Wyoming” that may only be issued in exchange for a USD. The Act also outlines criteria relating to liability limitations and requires that the commission issue at least one Wyoming stable token no later than December 31, 2023.
#Fintech#CryptoAssets#Stablecoins#Wyoming#DFC
·jdsupra.com·
Wyoming to issue stable tokens
Banco Central de Reserve del Peru is actively exploring CBDC
Banco Central de Reserve del Peru is actively exploring CBDC
Banco Central de Reserve del Peru (BCRP), with technical assistance from the International Monetary Fund (IMF), is actively investigating the benefits and risks of central bank digital currency (CBDC). Possible benefits include lowering financial inclusion barriers, as well as strengthening monetary and financial stability, and the security and efficiency of payment systems. A survey has been issued to learn the views of the stakeholders, including market agents, on key aspects contained accompanying white paper.
#Fintech#CBDC#LATAM#Peru#DFC
·bcrp.gob.pe·
Banco Central de Reserve del Peru is actively exploring CBDC
Russia touts common digital currency between Russia, China, India
Russia touts common digital currency between Russia, China, India
The Deputy Chairman of the State Duma, Alexander Babakov, suggested that Russia, China and India should trade using a common digital currency, which could be a digital ruble, rupee or yuan. "India, Russia, and China are the countries that now create a multipolar world that is backed by the majority of countries. Its creation should be based on establishing new financial ties based on a system that does not safeguard today's dollar and euro, but rather creates a new currency capable of serving our goals," he said. https://tass.com/economy/1596017
#Fintech#CBDC#Stablecoins#Russia#China#India#AMLCFT#DFC
·ledgerinsights.com·
Russia touts common digital currency between Russia, China, India
Kuwait central bank studying potential CBDC issuance
Kuwait central bank studying potential CBDC issuance
Central Bank of Kuwait (CBK) Governor Basel Al Haroon in an interview published in the Banker discussed the central bank's ongoing central bank digital currency (CBDC) research. The bank has formed a team of experts from various fields within the CBK to study the topic. According to Al Haroon, any such issuance would need to be accomplished in a way that preserves monetary and financial stability, while maintaining confidence in Kuwait’s payment system.
#Fintech#CBDC#Kuwait#MiddleEast#DFC
·laraontheblock.blogspot.com·
Kuwait central bank studying potential CBDC issuance
The Electronic Purse (1995)
The Electronic Purse (1995)
"The electronic purse, a new payments instrument offering advantages to both consumers and merchants, may soon replace currency in many routine transactions. Widespread use of the electronic purse could, however, raise concerns about consumer protection and the safety and soundness of the instrument. "
#Fintech#CBDC#Offline#Payments#DFC
·papers.ssrn.com·
The Electronic Purse (1995)
Swiss Payments Vision - an ecosystem for future-proof payments
Swiss Payments Vision - an ecosystem for future-proof payments
The Swiss National Bank (SNB) plans to continue with the wholesale central bank digital currency (CBDC) securities settlement experimentation (Project Helvetia) that was concluded in January 2022. That had tested the issuance and settlement of tokenized securities with wholesale CBDC on the SIX Digital Exchange (SDX). In the next phase, the SNB will issue wholesale CBDC on SDX and test selected transactions with market participants. They will also test the use of "synthetic" wholesale CBDC (privately-issued stablecoins backed by SNB deposits) in a similar context. The SNB will also experiment with the processing of tokenized securities in which the payment leg is synchronized via a link to the Swiss Interbank Clearing (SIC) real-time gross settlement (RTGS) system, which also tested in the first phase of Project Helvetia. Such synchronization turned out to be technically possible but clunky compared to integrated processing, since the DLT functionalities had been restricted. As part of the new project, it will be investigated whether these disadvantages can be minimized by making adjustments to the SIC system or to the link itself.
#Fintech#CBDC#wCBDC#Settlement#Switzerland#DFC
·snb.ch·
Swiss Payments Vision - an ecosystem for future-proof payments
European banking industry sets out a vision for digital euro EBF
European banking industry sets out a vision for digital euro EBF
The European Banking Federation (EBF), which represents the vast majority of the European banking sector, published a paper on a digital euro ecosystem. It argues that a retail digital euro could be envisaged in the mix of new tools and solutions to meet evolving payment needs, as long as it adds value to consumers, is appropriately designed, in close cooperation with the private sector, and mitigates ex ante the accompanying risks. a retail digital euro could – if properly designed – support the strategic autonomy of Europe and ensure a monetary anchor role of the euro. A wholesale digital euro based on distributed ledger technology (DLT) for the settlement of interbank transfers and related wholesale transactions in central bank reserves, would support the international role of the euro, enhance global cross-border payments and match the needs arising from digital finance.
#Fintech#CBDC#Eurozone#DFC
·ebf.eu·
European banking industry sets out a vision for digital euro EBF
National Bank of Denmark Governor says low cash usage doesn't justify retail CBDC
National Bank of Denmark Governor says low cash usage doesn't justify retail CBDC
National Bank of Denmark (NBD) Governor, Signe Krogstrup, delivered a speech on March 9, 2023 arguing that the decline in the use of cash in Denmark does not necessarily justify the issuance of a retail CBDC. He does not believe that the decline in cash per se is a substantial risk to monetary and financial stability, and doesn't reflect the sort of erosion of trust that would warrant a retail CBDC. He argued that commercial banks still have to hold central bank reserves, so central bank money is still at the core of the financial system. https://www.nationalbanken.dk/en/pressroom/speeches/Pages/2023/Governor-Signe-Krogstrups-speech-at-Danmarks-Nationalbanks-conference-New-types-of-digital-money.aspx
#Fintech#CBDC#Denmark#DFC
·ledgerinsights.com·
National Bank of Denmark Governor says low cash usage doesn't justify retail CBDC
Ghana: e-Cedi launch delay due to economic challenges – BoG
Ghana: e-Cedi launch delay due to economic challenges – BoG
The Bank of Ghana (BoG) is delaying the launch of its e-Cedi central bank digital currency (CBDC) due to the impact of economic dislocation caused in 2022. The pilot phase has been completed, with selected consumers at Sefwi Asafo in the Western North Region using the currency to buy items, goods, food and services, including when users were offline. "At a certain point, [the BoG] will go back to the e-Cedi project and decide on the launch date.” https://www.facebook.com/thebankofghana/videos/889240668812916
#Fintech#CBDC#Africa#Ghana#Offline#DFC
·african-markets.com·
Ghana: e-Cedi launch delay due to economic challenges – BoG
Swedish inquiry calls for state-run digital ID and low-risk bank accounts
Swedish inquiry calls for state-run digital ID and low-risk bank accounts
According to a Swedish government-appointed investigation “too many people are stuck outside the digital system” and suggested pressuring banks in Sweden to offer so-called “low-risk accounts” with limited functions (such as, for example, limits on international payments). It also calls on the government to to develop and run its own digital ID system, or to put out a tender for one which would be run by a private provider, to replace the private bank-run BankID system that excludes foreigners, such as refugees, foreign students, and people working on short-term contracts, making it impossible for them to identify themselves and use digital payment systems.
#Fintech#CBDC#Sweden#DigitalID#DFC
·thelocal.se·
Swedish inquiry calls for state-run digital ID and low-risk bank accounts
Sweden does not yet need CBDC, inquiry finds
Sweden does not yet need CBDC, inquiry finds
Sweden does not yet need a central bank digital currency (CBDC) according to a government-appointed investigation. After more than two years’ work, the Payments Investigation presented over 900 pages of analysis to the government. The inquiry, led by Anna Kinberg Batra, concluded the case for a Swedish CBDC or e-krona is not yet strong enough. It recommended Sveriges Riksbank continue to study CBDC and return to Sweden’s parliament in 2024 with new proposals, if warranted. https://betalningsutredningen.se/wp-content/uploads/2023/03/prm-betalningsutredningen-final-31-mars-2023.pdf
#Fintech#CBDC#Sweden#DigitalID#DFC
·centralbanking.com·
Sweden does not yet need CBDC, inquiry finds
What Consumer Surveys Say about the Design of a U.S. CBDC for Retail Payments
What Consumer Surveys Say about the Design of a U.S. CBDC for Retail Payments
To understand how a CBDC could provide a good user experience, the Kansas City Fed's Franklin Noll analyzed recent surveys in the United States and in other countries that have asked consumers about their wants and needs for a potential CBDC. Overall, a majority of polled consumers prefer a CBDC to be dependable, secure, and convenient—a reliable and secure digital payment method that is simple, fast, and makes their lives easier. U.S. respondents indicated that they were generally comfortable with government access to their transactional and financial data if it was clear what information the government could access and under what circumstances. European consumers responded similarly, indicating that they do not have particular concerns about an issuer of a payment instrument knowing their transaction details and that a “medium level of financial privacy” is acceptable. At this level of privacy, non-detailed transaction data is stored by the bank and only shared with the government as legally required.
#Fintech#CBDC#Privacy#DFC
·kansascityfed.org·
What Consumer Surveys Say about the Design of a U.S. CBDC for Retail Payments
Public money as a store of value, heterogeneous beliefs, and banks: implications of CBDC
Public money as a store of value, heterogeneous beliefs, and banks: implications of CBDC
The bulk of euro-denominated cash is held for store of value purposes, with such holdings sharply increasing in times of high economic uncertainty. We develop a Diamond and Dybvig model with public money as a store of value and heterogeneous beliefs about bank stability that accounts for this evidence. Consumers who are sufficiently pessimistic prefer to hold cash. In our model, the introduction of a central bank digital currency (CBDC) as a store of value that is superior to cash leads to bank disintermediation as some depositors opt for switching to CBDC based on their beliefs. While CBDC partially replaces deposits, long-term lending decreases less than proportionally as remaining depositors are, on aver-age, more optimistic about bank stability and banks re-balance their portfolio accordingly. The appropriate calibration of CBDC design features such as remuneration and quantity limits can mitigate these effects. We study the individual and social welfare implications of introducing CBDC as a store of value.
#Fintech#CBDC#ECB#DFC
·ecb.europa.eu·
Public money as a store of value, heterogeneous beliefs, and banks: implications of CBDC
Russia delays digital ruble launch testing due to lawmaking process
Russia delays digital ruble launch testing due to lawmaking process
The next phase of the Bank of Russia’s central bank digital currency (CBDC) testing, slated to start on April 1, 2023, has been delayed because relevant legislation has only passed through the first reading in the State Duma — the Federal Assembly’s lower house. However, the legislation may be enacted by early May. Meanwhile, the number of private banks participating in the pilot has also changed from 15 to 13. Some of the banks’ employees would become the test participants for CBDC retail payments, as well as one of the largest insurance companies in the country, Ingosstrakh. Hence, although the April 1 launch was being billed as a "pilot" is appears to be either further proof-of-concept or prototyping work, since none of the general public isn't involved in the testing. https://tass.ru/ekonomika/17382789
#Fintech#CBDC#Russia#DFC
·cointelegraph.com·
Russia delays digital ruble launch testing due to lawmaking process
Opening of the BIS Innovation Hub Eurosystem Centre
Opening of the BIS Innovation Hub Eurosystem Centre
The Bank for International Settlements (BIS) Innovation Hub Eurosystem Centre, a joint effort by the BIS and all Eurosystem central banks, opened on March 28, 2023. The Centre will have offices in Frankfurt and in Paris, hosted and supported by the Deutsche Bundesbank and the Banque de France. The European Central Bank will coordinate the interactions of the Eurosystem with the Centre. The Centre's project focus areas will be decentralized finance (DeFi), wholesale central bank digital currency (CBDC), cyber security and green finance. Projects include Atlas, which will create an open-source data platform to provide information on DeFi and crypto-asset market capitalization, economic activity and international flows of crypto-assets, and Mariana, which will explore automated market-makers (AMM) for the cross-border exchange of Swiss franc, euro and Singapore dollar wholesale CBDCs.
#Fintech#CBDC#CryptoAssets#BIS#DFC
·bis.org·
Opening of the BIS Innovation Hub Eurosystem Centre
The Bank of Japan’s Framework for Participation in the CBDC Forum
The Bank of Japan’s Framework for Participation in the CBDC Forum
Norbert Gehrke has written up a summary of the terms of engagement for participating in the Bank of Japan's (BoJ) central bank digital currency (CBDC) prototyping work. (The BoJ calls it a "pilot" but there are no end users taking part, so it sounds more like "prototyping" to me.) "The BoJ will select participants and contractors for developing the experimental system, proceeding with discussions and explorations with the participants and the development of the system."
#Fintech#CBDC#Japan#DFC
·medium.com·
The Bank of Japan’s Framework for Participation in the CBDC Forum
Fed explains why Custodia got an 'F' on its examination
Fed explains why Custodia got an 'F' on its examination
The Fed’s Board of Governors released its final order on crypto-centric, Wyoming-based Custodia Bank’s application to become a member of the Federal Reserve system. The central bank raised strong doubts about Custodia’s management team, financial condition and business model in rejecting the application. https://www.federalreserve.gov/newsevents/pressreleases/files/orders20230324a1.pdf
#Fintech#CryptoAssets#Stablecoins#Regulation#UnitedStates#Custodia#DFC
·theblock.co·
Fed explains why Custodia got an 'F' on its examination
Project Polaris - Invitation to a deep-dive event for offline CBDC solutions
Project Polaris - Invitation to a deep-dive event for offline CBDC solutions
"Many central banks considering potential implementation of CBDC deem offline functionality as an important requirement, citing reasons such as resilience, crisis, financial inclusion, cash resemblance, privacy, accessibility as well as others. The requirement for and degree to which offline functionality will be provided or utilised will likely vary significantly by country, region, demographics, scenarios as will the solutions that best meet diverse needs. The Nordic Centre is now inviting solution providers to participate in a technical deep dive. The findings of the deep dive may help guide central banks in understanding the applicability, suitability and readiness of the variety of solutions available, the risks and trade-offs and the maturity of the solutions."
#Fintech#CBDC#Offline#BIS#DFC
·bis.org·
Project Polaris - Invitation to a deep-dive event for offline CBDC solutions
Successful testing paves way for CBDC use cross-border
Successful testing paves way for CBDC use cross-border
SWIFT published the results of their experimental central bank digital currency (CBDC) interlinking solution in a sandbox environment with 18 central and commercial banks. It was successfully tested across almost 5,000 transactions between two different blockchain networks and a traditional fiat currency. SWIFT concluded that their solution can meet the needs of CBDC interoperability, ensuring CBDCs can be successfully used in cross-border payments.
#Fintech#CBDC#SWIFT#Interoperability#CrossBorder#DFC
·swift.com·
Successful testing paves way for CBDC use cross-border
The “Too Much Finance” literature
The “Too Much Finance” literature
"A large and growing body of academic research supports the finance curse analysis: academics sometimes call it the “Too Much Finance” (TMF) literature. The core proposition is that as a country’s financial sector grows it helps the local economy, but only up to an optimal point, after which it turns bad. Most advanced countries, and some developing countries, passed that point long ago."
#Fintech#CBDC#FinancialStability#FinancialInclusion#DFC
·financecurse.net·
The “Too Much Finance” literature
CBUAE Central Bank Digital Currency strategy launched
CBUAE Central Bank Digital Currency strategy launched
The Central Bank of the United Arab Emierates (CBUAE) has engaged with G42 Cloud and R3 as the infrastructure and technology providers respectively for its central bank digital currency (CBDC) implementation. The first phase, which is expected to complete over the next 12 to 15 months, comprises (1) the soft launch of mBridge to facilitate real-value cross-border CBDC transactions for international trade settlement, (2) proof-of-concept (PoC) work for bilateral CBDC bridges with India, and (3) PoC work for domestic CBDC issuance covering wholesale and retail usage.
#Fintech#CBDC#UAE#R3#DFC
·wam.ae·
CBUAE Central Bank Digital Currency strategy launched
Digital Currency and Banking-Sector Stability
Digital Currency and Banking-Sector Stability
"Digital currencies provide a potential form of liquidity competing with bank deposits. We introduce digital currency into a macro model with a financial sector in which financial frictions generate endogenous systemic risk and instability. In the model, digital currency is fully integrated into the financial system and depresses bank deposit spreads, particularly during crises, which limits banks’ ability to recapitalize following losses. The probability of the banking sector being in crisis states can grow significantly with the introduction of digital currency. While banking-sector stability suffers, household welfare can improve significantly. Financial frictions may limit the potential benefits of digital currencies."
#Fintech#CryptoAssets#CBDC#FinancialStability#Stablecoins#DFC
·financialresearch.gov·
Digital Currency and Banking-Sector Stability
CSA Staff Notice 21-332 Crypto Asset Trading Platforms
CSA Staff Notice 21-332 Crypto Asset Trading Platforms
from the Ontario Securities Commission: "We would not expect to provide consent in respect of a VRCA (stablecoin) that is not fully-backed by an appropriate reserve but rather maintains its value through an algorithm. Also, a CTP providing a PRU, or a registered CTP, may not be able to satisfy their PRU commitments or regulatory obligations in respect of VRCAs that maintain their value through an algorithm, including know-your product, account appropriateness or other PRU commitments or regulatory obligations to clients."
#Fintech#CryptoAssets#Stablecoins#Regulation#Canada#DFC
·osc.ca·
CSA Staff Notice 21-332 Crypto Asset Trading Platforms
Circle's Payment Stablecoin Policy Principles
Circle's Payment Stablecoin Policy Principles
"The following policy principles reflect Circle’s real-world experience operating the world’s leading regulated dollar digital currency, USD Coin (USDC), which stands at more than $54 billion in circulation. USDC has safely powered more than $5 trillion in on-chain transactions and is available through a global network of thousands of digital wallets, exchanges and other products and services in more than 190 countries, lowering the fundamental cost of payments and financial services and establishing dollar payments utility as a native feature of the internet.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·circle.com·
Circle's Payment Stablecoin Policy Principles
Macroprudential Considerations for Tokenized Cash
Macroprudential Considerations for Tokenized Cash
"This paper examines the financial stability risks associated with tokenized cash, a subset of stablecoins fully reserved with cash and cash equivalents. Using a combination of on-chain data together with uniquely collected wallet address labels, we construct empirical measures of liquidity ratios and run off rates on the largest cash token and characterize its users and their behavior. The overall circulation of tokenized cash is largely insulated from crypto price movements, though price changes correlate with re-balancing between smart contracts and private wallets. A liquidity ratio calculation, similar in concept to Liquidity Coverage Ratio (LCR), indicates that tokenized cash has at least two times the amount of High-Quality Liquid Assets (HQLA) when compared to the worst observed gross outflow over 30-day ahead periods. We discuss the implications of tokenized cash on safe asset creation, credit supply, and monetary policy transmission. The adoption of tokenized cash can reduce moral hazard risks from public guarantees and expand credit provision through market-based lending enabled by smart contracts. "
#Fintech#CryptoAssets#Stablecoins#MacroPru#DFC
·papers.ssrn.com·
Macroprudential Considerations for Tokenized Cash
Monetary Policy Implications Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems
Monetary Policy Implications Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems
The IMF published a paper on the potential impacts of central bank digital currency (CBDC) on monetary policy, through their effects on money velocity, bank deposit disintermediation, volatility of bank reserves, currency substitution, and capital flows. Countries most vulnerable are those with banking systems dominated by small retail and demand deposits, low digital payments usage, and weak macro fundamentals. Caps on CBDC holdings and zero remuneration can moderate disintermediation risks, but they are not sufficient. Jurisdictions with Islamic banking systems could be more vulnerable to deposit disintermediation because of the predominance of unremunerated deposits and retail deposits in banks. The underdeveloped nature of Islamic financial markets and Sharia’h compliant liquidity management tools could also limit the central banks’ scope to respond to liquidity shocks.
#Fintech#CBDC#MonetaryPolicy#DFC
·imf.org·
Monetary Policy Implications Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems