Eastern Caribbean Central Bank to Test Blockchain Legal Tender - CoinDesk
"The pilot is launching this month and, after roughly 12 months of development and testing, will be followed by rollout and implementation in pilot countries for about six months. The ECCB will also launch educational initiatives to raise public engagement with DXCD across the union."
Central Bank Digital Currency and Banking by Jonathan Chiu, Seyed Mohammadreza Davoodalhosseini, Janet Hua Jiang, Yu Zhu :: SSRN
"This paper builds a model with imperfect competition in the banking sector. In the model, banks issue deposits and make loans, and deposits can be used as payment instruments by households. We use the model to assess the general equilibrium effects of introducing central bank digital currency (CBDC). We identify a new channel through which CBDC can improve the efficiency of bank intermediation and increase lending and aggregate output even if its usage is low, i.e., CBDC serves as an outside option for households, thus limiting banks' market power in the deposit market. We then calibrate the model to evaluate the quantitative implication of this channel."
Exclusive: Mexican central bank in talks with Amazon about new mobile payments | Reuters
"Mexico’s central bank is in talks with Amazon.com Inc to launch a new government-backed mobile payment system that would allow consumers to pay for online purchases using QR codes, the bank’s head of payments said."
Philadelphia Is First U.S. City to Ban Cashless Stores
Philadelphia is the first major U.S. city to ban cashless stores, placing it at the forefront of a debate that pits retail innovation against lawmakers trying to protect all citizens’ access to the marketplace.
Marshall Islands Rejects IMF Concerns to Launch 'Sovereign' (SOV) Digital Currency as Legal Tender
Neema, the firm managing the Marshall Islands cryptocurrency program, has made a list of countries potentially open to a cryptocurrency as legal tender, looking for smaller countries that don't have their own currencies and which vote alongside Israel in the United Nations. Neema’s law firm Yigal Arnon & Co are reportedly helping the Marshall Islands central bank to create the legislation needed to operate its own currency.
Israeli company partners with Marshall Islands to launch digital currency | The Times of Israel
"The Marshall Islands is gearing to release a digital currency this year, although officials acknowledged Friday there is much work still to be done to alleviate concerns of United States financial regulators."
Governor Antoine Addresses the ECCU Media on Launch of FinTech Pilot Project
The ECCB CBDC pilot involves a digital version of the EC dollar (DXCD) distributed by licensed ECCU financial institutions. The DXCD will be used for transactions between consumers and merchants, between people, all using smart devices. IBM Hyperledger Fabric was selected as the blockchain platform.
The introduction of an interest-bearing CBDC increases financial inclusion, and while it reduces monopoly profit, it need not disintermediate banks in any way. A CBDC may, in fact, lead to an expansion of bank deposits if the resulting competition compels banks to raise their deposit rates.
The UK Access to Cash Review Final Report calls for action now to ensure cash remains viable or risk leaving millions behind. The action plan includes a “Guarantee to Cash Access” for all, including those in remote and rural areas, and for those providing essential services to be required to allow consumers to pay by cash.
Bahamas to explore CBDC access to government securities - Central Banking
The Bahamas CBDC pilot is scheduled to be introduced in the remote Exuma district in 2020. The central bank is currently finalising the contractual onboarding of its chosen technology solutions provider, NZIA. Be cause the CBDC aims to complement and not replace existing banking services, the currency will not be interest-bearing. However, users may be able to invest in government securities via the CBDC wallet.
Public versus private digital money: Macroeconomic (ir)relevance
Markus Brunnermeier and Dirk Niepelt argue that concerns about central bank digital currency choking investment, cutting into banks’ profits, or increasing the likelihood of bank runs are misplaced.
Riksbank reports positive feedback on second e-krona report - Central Banking
Sveriges Riksbank published positive feedback from 20 Swedish institutions and organizations on its 2nd e-krona report, including from the Finansinspektionen, the National Debt Office and the national tax agency. However, most entities called for a government inquiry; something the central bank has requested.
John A Rolle: The Bahamian payment system modernisation - advancing financial inclusion initiatives
The Central Bank of the Bahamas will impose a ceiling on how much of their CBDC can be maintained in mobile wallets. High volume use will require a pass-through flow of funds to personal bank accounts. The wallet’s integration with commercial banks or other licensed entities would be required in order for account holders to have access to foreign exchange services.
"Like cash, a prepaid debit card is permissionless. Since anyone can buy a card, consumers need not get the approval of a bank to join the payments system. And since non-reloadable prepaid debit cards do not require giving up personal data, neither the bank, government, nor retailers can glean as much user information from a prepaid debit card transaction as they can from a regular one."
The BIS continues to sound warnings about CBDC. Aside from the run risk, they warn that CBDC could impact monetary policy implementation by changing the demand for base money and its composition in unpredictable ways, and possibly modifying the sensitivity of the demand for money to changes in interest rates. Also, CBDC could lead to a larger central bank balance sheet, which may require it to purchase additional assets, which could interfere with key markets functioning or dry up liquidity.
Launching a CBDC entails large risks as potential economic disruption could outweigh the desired, but mostly untested benefits. However, what is right for some developed economies may not be true for developing ones, where risks and benefits are inherently different.
Cash Use Across Countries and the Demand for Central Bank Digital Currency
"The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. "
Fintech in Latin America and the Caribbean: Stocktaking
"This paper documents the evolution of fintech in LAC. In particular, the paper focuses on financial development, fintech landscape for domestic and cross border payments and alternative financing, cybersecurity, financial integrity and stability risks, regulatory responses, and considerations for central bank digital currencies."
Prepaid debit cards. The other anonymous payments method
"When it comes to financial privacy, good old fashioned banknotes and privacy cryptocurrencies like Zcash & Monero get all the attention. But let's not forget about prepaid debit cards."
" There are better options than bans on cashless stores. Rather than imposing banknote acceptance by force, why not work towards improving the product? If cash were better, then store owners and consumers might choose to deal in it of their own accord."
Pakistan Central Bank Eyes Digital Currency Launch by 2025
Pakistan's central bank is considering the launch of a digital currency by 2025, in order to promote financial inclusion and reduce inefficiency and corruption. The central bank is also planning to make its services fully digitized and technology equipped by the year 2030.
Over 40 Central Banks Are Considering Blockchain Currencies: Davos Report - CoinDesk
More than 40 central banks worldwide are experimenting with blockchain technology, including central bank digital currencies, says a new report by the World Economic Forum.
National Bank of Cambodia to deploy blockchain payments system in 2019 - Central Banking
"The National Bank of Cambodia looks set to be one of the first central banks to use blockchain technology in its national payment system, according to a report released by the World Economic Forum."
Tunisia is looking to be a pioneer in implementing blockchain as the country’s central bank explores the use of the technology for a national digital dinar.
Real-time-payments monopoly puts financial system at risk
"The Federal Reserve Board is considering a decision about the future of digital banking that goes well beyond the narrow question of whether now is the time to transition to immediate payments. The board will decide whether the Federal Reserve will continue to play an operation role in digital payments."
"In a utility model, the distribution and handling of banknotes and coins is more consolidated and may be handled by a single large firm. The utility is often owned and operated by banks and other market participants with the central bank’s participation. Both Finland and Sweden have deployed such a system, and the Netherlands is planning to implement something similar."
Review of BIS Survey on Central Bank Digital Currency
This review concludes that the usefulness of the BIS's recently released survey on CBDC derives from three factors; comprehensive coverage, quantifiable results and segmentation between developed economies and emerging markets.
Central Banks and the Future of Money | C.D. Howe Institute
Central banks around the world are now giving serious consideration to the pros and cons of making central bank digital currencies available to the general public, says a new study from the C.D. Howe Institute.
Cambodia's National Bank Working on Blockchain-Based Payment System Renewal
The National Bank of Cambodia's Project Bakong is a Hyperledger Iroha-based payment system renewal project. A pilot with dozens of banks will soon be launched. The ultimate target is to provide instant payments via a mobile app.
