Some thoughts on CBDC operations in China
People’s Bank of China deputy governor Fan Yifei outlines why he favours an indirect approach to introducing a CBDC in China.
Cash Is King in COVID-19
Worries about the coronavirus and the government’s response are turning people to banknotes. Over the last two weeks, the supply of Federal Reserve banknotes has increased by around $70 billion to $1.876 trillion, a week-to-week increase of 1.75%. This is the fastest weekly increase in cash in circulation since December 1999.
Securing macroeconomic and monetary stability with a Federal Reserve–backed digital currency
"The U.S. Fed needs new tools to meet its mandates of price stability and maximum employment, and to preserve the safety and soundness of the financial system in a rapidly digitizing world. A Fed-backed digital currency can solve both problems."
Paper stimulus checks could be delayed by up to 5 months
Individuals who receive their stimulus relief payments by mail could be in for a long wait, according to one Congressional timeline. Individuals who do not have their personal bank account information on record will be at the biggest disadvantage, and that often includes the elderly and disabled.
Sweden joins ECB’s instant payments settlement platform
The European Central Bank, the Eurosystem and Sveriges Riksbank concluded a cooperation agreement offering Sweden access to the Eurosystem’s TARGET Instant Payment Settlement (TIPS) to support the Swedish instant payment service, called RIX-INST. Based on this agreement, electronic payments made in Swedish krona can be settled on the settlement platform for instant payments operated by the Eurosystem.
People’s Bank of China Continues CBDC Development Talks
The People’s Bank of China held a teleconference on April 3 in Beijing, China. One of the main points confirmed during the call involved the institution’s continued research and development of a central bank digital currency, or CBDC.
South Korea's Central Bank Launches Digital Currency Pilot Program
The Bank of Korea launched a pilot program to assess the logistics of issuing a central bank digital currency. While it has no immediate plans to introduce such a currency, the pilot scheme will ensure that it is prepared to do so in the face of changing market conditions.
People's Bank of China Continues to Advance CBDC Research & Development
The People’s Bank of China confirmed its intent to "unswervingly advance the research and development of CBDC" during an April 3
Digital Dollars for All
There are several ways to streamline and universalize an American national payment system. One easy way would be to build on the existing network of TreasuryDirect accounts. Any citizen or legal resident of the U.S., including any business, can open a digital account with the Treasury through which to transact with it. Accounts take five minutes to open and begin using. All the country would need to add is peer-to-peer connectivity between accounts, and then allow dollars to flow over the network.
Frances Coppola: How to Get Coronavirus Money to Folks Fast
These days, by far the fastest and most efficient way of delivering money is via smartphones and mobile devices. The U.S. government should simply provide a general portal to a wide range of payment delivery mechanisms. Visa and Mastercard are easily capable of handling these payments, especially as their normal transaction volumes have fallen significantly due to the shutdown. But the government should also work with platforms such as Venmo, Zelle, Square Cash, Paypal, Apple Pay and Google Pay [Chime, a San Francisco fintech startup, says it's piloted a way to distribute the $1200]. And it could also offer payment in cryptocurrency as an option.
BoE poll signals convertibility is key to CBDC demand
Convertibility will be the most important factor in influencing demand for a retail central bank digital currency, according to a new poll conducted by the Bank of England.
Bank of England Central Bank Digital Currency Webinar
Link to the April 7 Bank of England Central Bank Digital Currency webinar.
Central Bank Digital Currency: A Primer
This Banque de France paper documents the benefits, costs, difficulties and risks associated with potential wholesale and retail CBDC implementation. It concludes that the need for retail CBDC, which raises the thorniest issues, seems less pressing in developed economies.
Central bank digital currencies can also protect identity
"The implementation of a digital dollar solution would quite likely precipitate future developments in the digital identity space, given the synergy of a dual-architecture solution."
Amazon, Walmart and a coronavirus low-income grocery-shopping divide
SNAP program restrictions for online grocery shopping and delivery contribute to public health threats faced by as many as 35 million low-income Americans during the coronavirus. Major sources of groceries, like Amazon and Walmart, offer online grocery shopping for SNAP benefits through a preexisting USDA pilot program, but only in a handful of states. The incomplete access is another example of social inequity and internet divide exposed by the pandemic.
The Fed’s dangerous resistance to digital dollars
"The Federal Reserve and Treasury oppose issuing digital currency to ordinary citizens. That burdens the economy, handicaps fiscal policy, and threatens the international status of the dollar."
Has China’s digital currency gone into public beta? - Decrypt
Screenshots of what appear to be China’s upcoming digital yuan flooded WeChat today. It appears to be part of a trial being conducted by a half dozen banks, including the Agricultural Bank of China, in Shenzhen, Xiongan, Chengdu, and Suzhou.
Chinese state-owned bank releases test app for central bank's digital currency
When The Block tried to register an account in the app to investigate these features, the system said that an account cannot be created because the personal information provided does not match with the "white list" – likely a list of approved users for the test.
China’s Central Bank to Run Simulations of Digital Currency Use
State-owned Chinese banks are conducting internal, hypothetical-use tests of a People’s Bank of China digital currency as if it were being used in Suzhou, Xiong’an, Chengdu and Shenzhen, the people said, asking not to be named as they’re not authorized to speak on the topic.
The Coronavirus Stimulus Money Is Needed Now. Stop Dawdling
"The administration is taking great care in deciding what will appear on the front of the stimulus checks. Americans would be better off if the government put similar effort into getting out as much money to as many people as quickly as possible."
Chinese local government employees to receive central bank digital currency in May - report
Citing an official document, China Star Market said that Suzhou municipal government employees would receive 50% of their May transportation subsidies in DCEP. The digital currency will be issued to them by four state-owned banks, including the Agricultural Bank of China, the Industrial and Commercial Bank of China, the Bank of China, and the China Construction Bank.
‘Digital Dollar’ Reintroduced by US Lawmakers in Latest Stimulus Bill
Congresswomen Rashida Tlaib and Pramila Jayapal introduced a new stimulus proposal, Automatic BOOST to Communities Act brings back the idea of a digital dollar, describing the concept using similar language to a series of bills introduced last month. Under the ABC Act, Congress would authorize the Federal Reserve to create “FedAccounts,” meaning “Digital Dollar Account Wallets,” which would allow U.S. residents, citizens and businesses located in the country to access financial services.
Chris Giancarlo: Don't Rush Digital Dollar During COVID-19
"Our proposed digital dollar would be tokenized. Tokenization is the act of turning an asset, good, right or currency into a digital representation with properties sufficient to attest and transfer ownership. In today’s current world, cash is a physical token. To verify the transaction, you only need to confirm the authenticity of the bill. Because each bill is unique, it is impossible to spend the same bill more than once. This differs from account-based electronic money, which uses a reconciliation-intensive, message-based approach to adjust entries in a ledger."
A full analysis of DC/EP
"The PBoC has no official document to elaborate systematically on DC/EP design. Several high-level officials, including former governor ZHOU Xiaochuan and current governor YI Gang, have discussed DC/EP in their public speeches and writings. After combing and comparing information from those public channels, I believe DC/EP should have the following key characteristics."
DN: Digital currency issued by central banks can protect public interests in payment systems
The Dutch central bank (DNB) said it would like to experiment with a digital currency issued by itself and other European central banks, as the use of cash rapidly diminishes.
CBDC: Considerations for the Digital Euro
While the development of a digital Euro will likely take extensive planning, the potential merits further exploration. This report explores the various technical choices and their benefits or deterrents. It concludes that a blockchain based CBDC has the potential to greatly improve speed, security, privacy, and efficiency. The decentralised nature of blockchain, while difficult to implement with a centralised financial system, provides enough new possibilities that it merits serious consideration.
Starbucks, McDonald’s Among 19 Firms to Test China’s Digital Yuan: Report
Starbucks and McDonald's are reportedly among 19 restaurants and retail shops that will be involved in testing China's central bank digital currency in the country's Xiong'An new district.
Issue digital cash or lose trust in money, report warns
This "Positive Money" report explains how a central bank digital currency could be introduced to give policymakers more effective tools to support the economy, particularly during times of crisis such as the coronavirus pandemic, while maintaining financial stability.
Central bank digital currency: Central banking for all
"The possibility and logistics of developing a central bank digital currency for the general public has attracted significant attention. Such an initiative would require central banks to be involved in financial intermediation and maturity transformation. This column explores the implications of such a venture by central banks using a classic banking model. With sufficient competition, a central bank digital currency can be beneficial and achieve the optimal allocation of funds. However, it also risks giving central banks excessive monopoly power, which could result in inferior outcomes."
The US Postal Service should be allowed to deliver low-cost financial services to poor and rural communities
U.S. Senator Kirsten Gillibrand introduced the Postal Banking Act that would grant the U.S. Postal Service (USPS) the power to provide basic financial services, including low-cost small loans, small checking accounts and interest-bearing savings accounts (alone or in partnership with depository institutions), transactional and remittance services, and other basic financial services in the public interest. However, the USPS would not be granted a bank charter, or become an insured depository institution.