Japan ruling party lawmakers to float idea of issuing digital currency
A group comprised of about 70 Liberal Democratic Party lawmakers are working on a proposal for Japan to issue its own digital currency. The digital currency could be a joint initiative between the government and private companies, Norihiro Nakayama, parliamentary vice minister for foreign affairs, told Reuters.
Bahrain Becomes Next Country to Trial Digital Currency
The central bank of Bahrain is the first to pilot a new toolkit developed by the world economic forum. This toolkit will help Bahrain’s central bank determine if a Central Bank Digital Currency (CBDC) is the right fit for the gulf kingdom. Other nations considering CBDCs will also be using the toolkit in the future.
Avant Card — a central bank digital currency from 1990s Finland
As Stephen King said “sooner or later, everything old is new again!” In the 1990s Finland experimented with central bank digital currency in the form of its Avant stored-value card. It was never very popular and was discontinued in 2006.
The MIT Digital Currency Initiative "Redesigning Digital Money" paper considers three important features from crypto-asset design - decentralization, programmability and privacy - and assesses their applicability to a central bank digital currency. bility to a CBDC.
The Future of Payments - Part I. Cash: the Dinosaur Will Survive ... For Now
"When people discuss the future of payments they tend to predict the end of cash. Our view is different. Not only does Deutsche Bank think cash will be around for a long time, it sees the transition to digital payments as having the potential to do no less than rebalance global economic power."
Bahamas Sand Dollar CBDC pilot enrollment at 1,200 participants
The Central Bank of the Bahamas announced that its Sand Dollar CBDC pilot project has ‘exceeded’ its expectation of 500 participants with enrollment currently at 1,200.
NBC’s digital payments to go live in next few months
The National Bank of Cambodia (NBC) will launch a blockchain-based, P2P payment and money transfer platform in the next few months. Project Bakong (https://bakong.nbc.org.kh) was launched on a trial basis in July with the support of 11 banks, with many more expected to join.
"Simplify your life with Cambodia’s only all-in-one mobile payment and banking app. Bakong redefines mobile payment and banking by combining e-wallets, mobile payments, online banking and financial applications within one easy-to-use interface for any preferred bank account. Stop switching between apps todayand enjoy unrivalled simplicity, convenience and security with Bakong."
"Welcome to our CBDC Hub! We've compiled a collection of quality information and insights related to central bank digital currencies and the future of financial technology."
Lael Brainard: The digitalization of payments and currency - some issues for consideration
The Federal Reserve is looking at a broad range of issues around digital payments and currencies, including policy, design and legal considerations around potentially issuing its own digital currency.
Central Bank Digital Currency: Central Banking For All?
The introduction of a central bank digital currency (CBDC) allows the central bank to engage in large-scale intermediation by competing with private financial intermediaries for deposits. Yet, since a central bank is not an investment expert, it cannot invest in long-term projects itself, but relies on investment banks to do so. We derive an equivalence result that shows that absent a banking panic, the set of allocations achieved with private financial intermediation will also be achieved with a CBDC. During a panic, however, we show that the rigidity of the central bank’s contract with the investment banks has the capacity to deter runs. Thus, the central bank is more stable than the commercial banking sector. Depositors internalize this feature ex-ante, and the central bank arises as a deposit monopolist, attracting all deposits away from the commercial banking sector. This monopoly might endangered maturity transformation.
China Files 84 Patents For Central Bank Digital Currency
According to the Financial Times, China’s central bank has filed 84 patents relating to its plans to launch a digital currency electronic payments DCEP system. The number of CBDC-related patents by the PBOC came after an investigative study by the U.S. Chamber of Digital Commerce.
Could a Digital Dollar Compete on Privacy? Fed Chairman Powell Hints It Might - CoinDesk
In testimony before Congress this week, Powell was asked whether the Fed had any “visibility” into China’s progress developing a central bank digital currency (CBDC). “Yes, we certainly have that,” Powell said. “But they’re in a completely different institutional context. For example, the idea of having a ledger where you know everybody’s payments, that’s not something that would be particularly attractive in the United States context. It’s not a problem in China.”
Complete Bahamian digital dollar roll-out by year-end
The digital Bahamian dollar will be rolled-out throughout all islands during the 2020 second half after being introduced to Abaco by the end of February.
IMF economist Marco Gross and Oxford University researcher Christoph Siebenbrunner emphasise the importance of thinking about how loans would be granted in a world of central bank digital currencies (CBDCs). They argue that a CBDC, if paying interest, could lead us at least partially towards the kind of “full money” system envisioned in the Chicago Plan of the 1930s, in terms of its implications for central banks’ control over the economy.
Central Bank Digital Currency: A Provocation of a Paradigm
"In principle, individuals should have the ability to interface directly with the central banks as they do with physical money and not be forced to use commercial banks. Even if consumers voluntarily choose to perform a majority of their financial interactions through commercial banks, the option to exit the relationship should be maintained. Otherwise, the government would be removing consumer choice and mandating patronage of a highly concentrated sector."
How do we give the general public access to a non-cash financial instrument that is as safe and liquid as cash and which provides a similar degree of privacy, finality and instantaneity? That is the key question of CBDC... Either the central bank itself issues e-money, or it merely safeguards the funds that commercial e-money issuers collect from their customers. The latter option is much easier to implement while delivering practically the same outcome. In effect, the central bank would become not just a central bank but also a kind of central e-money institution.
Cleveland Fed on Modernizing the US Payments System
The status of the U.S. dollar as a global reserve currency, the stable demand for U.S. bank notes, and the mature, developed nature of the U.S. financial system are all distinguishing factors that would need to be taken into account when considering the benefits vs. the costs of central bank digital currency in the U.S.
The Riksbank to test technical solution for the e-krona
The Riksbank is conducting a pilot project with Accenture aimed at developing a proposal for a technical solution for a digital krona (“e-krona”). The technical solution will be based on Distributed Ledger Technology.
Swedish central bank will test DLT-based digital currency prototype
The Riksbank CBDC pilot project will focus on developing a test environment where simulated agents can safely use a CBDC. The project will test holding e-krona in a digital wallet, completing payments, and making deposits and withdrawals via a mobile app. Users should also be able to complete payments via both wearable devices such as smart watches, and more traditional means of payments including cards.
The U.S. House Subcommittee on National Security to Discuss Digital Currency
March 24 at 2:00 PM – The U.S. House Committee on Financial Services Subcommittee on National Security, International Development, and Monetary Policy will convene for a hearing entitled, “A Review of Domestic and International Approaches to Digital Currencies.”
Bank of Canada on Money and Payments in the Digital Age
"Canadians are well-served by the existing payment ecosystem, so we believe there is no need for the Bank of Canada to issue its own digital currency at this time. But the world can change very quickly, so we need to get ready in case one is needed... The Bank of Canada can imagine scenarios in which we would consider issuing a CBDC so we can continue to provide Canadians with trustworthy methods of payment."
Ukraine’s Central Bank: E-Hryvnia Threatens Landscape of Banking System
Despite considerable testing and research, the prospect of a central bank digital currency (CBDC) still raises significant concerns for central bankers in Ukraine. However, the central bank apparently is still concerned about such a currency’s effect on financial stability as well as the possible threat to the traditional banking system.
Coronavirus Stalls China’s Progress with Central Bank Digital Currency
The coronavirus outbreak is reportedly delaying progress on China’s central bank digital currency (CBDC) project. However, officials say Beijing is keen to see the pilot test happen before the end of the year.
Bank of Canada Prepares for Digital Currency “In Case One Is Needed”
Although the Bank of Canada has no plans for issuing a digital currency immediately, the Central Bank is not ruling out the possibility of launching one due to potential mass adoption of private digital currencies — and the possibility of cashless societies.
Ukraine’s Central Bank: E-Hryvnia Threatens Landscape of Banking System
The National Bank of Ukraine presented the results of testing its e-hryvnia CBDC project, concluding so far that it raises significant concerns. It is particularly concerned about the effect on financial stability as well as the possible threat to the traditional banking system.
While no decision has been made to pursue the issuance of a central bank digital currency (CBDC), this paper explores the technological approach to constructing a CBDC system for contingency planning purposes. Any design needs to be determined by policy choices about the attributes of the CBDC (e.g., privacy, resilience); the business model (considering, e.g., partners, end-user channels and the cost model); and the qualities the system supports (e.g., user experience, security). This note explores these options and describes the potential limits that the underlying technology may impose on the mix of policy objectives.
Design Practices for Wholesale Central Bank Digital Currencies
This paper presents a survey of selected DLT-based wholesale central bank digital currency experiments with completed proof-of-concepts to enable the understanding of the practices, motivations and technologies for W-CBDC experiments.
