Analytical Report on the E-hryvnia Pilot Project
The National Bank of Ukraine has been doing some serious work on central bank digital currency, including a limited pilot!
French central bank floats European wholesale CBDC
The potential role of a DLT-based wholesale CBDC is in worth considering if not desirable according to the Banque de France's Denis Beau, and the central bank is quite open for experiments in that direction, together with the ECB and other central banks of the Eurosystem.
Benoît Cœuré: Towards the retail payments of tomorrow - a European strategy
“[A central bank digital currency] could take a variety of forms, the benefits and costs of which the ECB and other central banks are currently investigating, being mindful of their broader consequences on financial intermediation.”
Ghana could issue digital currency in ‘near future’
Ghana could issue a digital form of the nation's currency, the cedi, in the "near future” and is in talks to develop a pilot project in a sandbox environment. https://www.bog.gov.gh/wp-content/uploads/2019/11/23rd-Annual-Banking-Conference_Speech_Governor_final.pdf
Saudi-UAE agree to build oil refinery and plan to launch joint digital currency
The Crown Princes of Saudi Arabia and the United Arab Emirates (Mohammed bin Salman and Sheikh Mohamed bin Zayed) reached agreement to develop a digital currency to enable trading between banks in the two countries.
BoJ Report on "Legal Issues Around CBDC Issuance
This Bank of Japan report published in September delves into the main legal issues related to the issuance of CBDC in Japan. It concluded that under current legislation, banknotes are considered tangible whereas so the current law would need to be revised in order to grant legal tender status to CBDC.
President Lagarde on Central Bank Digital Currency
"A central bank digital currency would allow citizens to use central bank money directly in their daily transactions. However, depending on its design, a central bank digital currency could pose risks. For instance, they could alter the way in which monetary policy is conducted and transmitted to the real economy. They could also carry implications for the functioning of the global financial system and its stability. The question of central bank digital currencies and their optimal design therefore warrants further analysis."
Banque de France to experiment with wholesale central bank digital currency
We are particularly keen to take part in experiments to integrate a “wholesale” CBDC into innovative procedures for exchanging and settling tokenised financial assets. Our actions will naturally contribute to the work of the Eurosystem, which should make looking into the possibility of an “e-euro”... Beyond this, we intend to take part in the work of the BIS Innovation Hub.
Note by the ECB for the Economic and Financial Affairs Council on the retail payment landscape
The ECB will continue to assess the costs and benefits of issuing a central bank digital currency (CBDC) that could ensure that the general public will remain able to use central bank money even if the use of physical cash eventually declines. Prospects of central bank initiatives, however, should neither discourage nor crowd out private market-led solutions for fast and efficient retail payments in the euro area.
Central bank talk of launching cryptocurrencies is all bluff
For all the talk of central banks issuing digital currencies, many of them are secretly hoping the private sector will come up with solutions that make this unnecessary.
Hong Kong, Thailand to roll out two-tier tokens in digital currency prototype to speed up cross-border trade settlement
The monetary authorities of Hong Kong and Thailand are poised to roll out a two-tier digital token, part of the process for creating a prototype for cross-border fund transfers between the two economies.
Central Bank of Thailand and Hong Kong Monetary Authority Launch Project LionRock-Inthanon
Thailand and Hong Kong have launched Project LionRock-Inthanon, a collaboration to use wholesale CBDC to facilite real-time cross-border payments between banks in the two countries.
Report: China's central bank to test digital currency in two cities, partnering with state-backed banks and telecoms
The People's Bank of China will reportedly start small-scale testing its digital currency (CBDC) in Shenzhen this month (December). The test will be performed in a “horse race” model, with each of four participating banks proposing a different payment model. While some of the banks chose to collaborate with the three telecom firms participating in the pilot to develop SIM cards with built-in digital wallets, others have built their independent wallet apps. Suzhou may test the new currency as well.
Central Bank Mu Changchun talks about Libra and digital currency
Under the PBOC DC/EP CBDC model, commercial banks will first obtain the digital currency from the PBOC by depositing RMB reserves. Users and businesses can then register digital wallets with these commercial banks to use the new digital currency, according to an online course on Libra and cryptocurrency given by PBOC's digital currency director Mu Changchun.
H.E. Chea Serey, Director General of the Central Banking, National Bank of Cambodia
On November 25th, 2019, H.E. Chea Serey, Assistant Governor and Director General of the Central Banking, National Bank of Cambodia, participated as a speaker and presented on the topic “Experiences of the National Bank of Cambodia on the use of Blockchain Technology in Bakong Project to reduce the use of cash in the country” at the 22nd ASEAN Banking Conference and the 49th ASEAN Banking Council Meeting at Sokha Hotel, Phnom Penh.
CBDC – in the whirpool of discussion
This Bank of Lithuania paper presents the CBDC concept and typology, surveys the literature, documents initiatives undertaken by other central banks, and discusses monetary policy and financial stability implications.
Central banks should collaborate on multicurrency CBDC
In a report detailing the progress of CBDC development around the world, the Central Bank of Lithuania says the little researched idea of a multi-currency CBDC deserves more consideration.
Central Bank Digital Currencies: 4 Questions and Answers
"We generally think that central banks should remain engaged in examining the full range of issues associated with CBDC, including the potential to offer synthetic CBDC, and deepen their familiarity with new technologies."
ECB to accelerate digital currency research says Lagarde
President Christine Lagarde confirmed that the ECB will accelerate the work of the task force exploring central bank digital currencies (CBDC). The aim is to deliver a paper around mid-2020.
ECB Should Be 'Ahead of the Curve' on Digital Currency-Lagarde
"My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects... we'd better be ahead of the curve because there is clearly demand out there that we have to respond to."
The WEF has created a global community to help central bank blockchain exploration and innovation
The World Economic Forum’s Centre for the Fourth Industrial Revolution Network has built a global community of central banks, international organizations and leading blockchain experts to identify and leverage innovations in distributed ledger technologies (DLT) that could help usher in a new age for the global banking system.
The World’s Cash Is Disappearing. Bankers Aren’t Sure Where It Went
Banks are issuing more notes than ever and yet they seem to be disappearing off the face of the earth. Central banks don’t know where they have gone, or why, and are playing detective, trying to crack the same mystery.
Swiss Federal Council publishes report on central bank digital currency
Universally accessible central bank digital currency would bring no additional benefits for Switzerland at present. Instead, it would give rise to new risks, especially with regard to financial stability. The Federal Council approved a report examining the opportunities and risks of introducing a cryptofranc (e-franc), and they and the Swiss National Bank will continue to monitor developments in this area closely.
The Riksbank sign an agreement with Accenture for its CBDC pilot
The Riksbank will sign a deal with Accenture to create a pilot platform for its e-krona digital currency. The public procurement resulted in eleven requests to participate, from which the Riksbank selected three suppliers who were invited to present tenders. The Riksbank intends to sign an agreement before the end of the year. https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/notices/2019/riksbank-develops-an-e-krona-in-a-test-environment/
Countries Where Retail CBDC Is Being Explored
Here's my updated master list of countries where retail central bank digital currency (CBDC) is being actively explored, according to publicly-available information. There are no new entries but some links have been updated (e.g., Australia, Brazil and New Zealand).
Banks do not create money out of thin air
In recent years, some have claimed that banks create money ‘ex nihilo’. This column explains that banks do not create money out of thin air. From an economic viewpoint, commercial banks create private money by transforming an illiquid asset (the borrower’s future ability to repay) into a liquid one (bank deposits); they would quickly be insolvent otherwise. In addition to bank solvency representing a constraint on private money creation, banks require access to liquid reserves in order to be able to engage in money creation.
World's largest printer of money is running out of money
Despite the rise in cashless payments, the market for cash is expected to continue to grow. The amount of banknotes in circulation is expected to increase annually between 3 percent and 4 percent, according to Edison, exceeding gross domestic product growth rates in most areas. The reason: In uncertain times, cash is still king.
The design of digital financial infrastructure: lessons from India
Digital finance has the potential to transform emerging market and advanced economies alike. India's approach rests on the principle of providing digital financial infrastructure as a public good. It offers an important case study where the results are relevant and applicable for all economies, irrespective of their stage of development.
Maduro Plans to Airdrop Petro to Municipal Leaders and Eligible Citizens
Venezuela President Maduro announced that next week there will be an airdrop of 0.5 PTR ($30) to eligible citizens who register with the Petro App.
Exploring anonymity in central bank digital currencies
A new ECB paper shows that it is possible to build a simplified CBDC payment system while safeguarding users’ privacy for low-value transactions and ensuring that higher-value transfers are subject to AML checks.