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Digital Currencies and Stablecoins: Risks, Opportunities, and Challenges Ahead
Digital Currencies and Stablecoins: Risks, Opportunities, and Challenges Ahead
The Group of Thirty (G30) published a report on digital currency. It includes a definitive description of the digital currency that will be issued by the People’s Bank of China. The report then goes on to highlight the key issues that policymakers have to consider in responding to these developments. Among its recommendations are that national authorities must play an active leadership role in setting standards and providing public infrastructure for payments, which cannot be left to market forces alone. Also, because new technologies may require a sufficiently long phase-in period in order to be tested fully, multiple payment alternatives should be introduced so that the payments system gains a measure of resilience and includes adequate competition. Also, existing technologies that allow faster retail payments, which drastically increase competition and lower costs to businesses and consumers, should be implemented more widely.
#Fintech#CryptoAssets#CBDC#DFC
·group30.org·
Digital Currencies and Stablecoins: Risks, Opportunities, and Challenges Ahead
Central Banks Are Privacy Providers of Last Resort
Central Banks Are Privacy Providers of Last Resort
More than anything else, the debate over whether to issue a so-called central bank digital currency, or CBDC, is driving the debate on payments and privacy. A privacy-friendly CBDC is a complex and ambitious project. But designing something from scratch is forcing central banks to ask themselves whether they have an obligation to provide the public with digital privacy and, if so, how private dare they make the stuff. It’s difficult to know for sure whether a central banker’s “balanced” approach to privacy will meet the bar that is being set by an emerging group of privacy consumers.
#Fintech#CryptoAssets#CBDC#Privacy#DFC
·coindesk.com·
Central Banks Are Privacy Providers of Last Resort
Two Ex-Fed Officials Offer a Faster Way to Make Stimulus Payments
Two Ex-Fed Officials Offer a Faster Way to Make Stimulus Payments
Simon Potter and Julia Coronado have proposed the creation of recession insurance bonds (RIBs). RIBs would be zero-coupon securities distributed to households with payouts that are recession contingent - eg if policy rates reach the zero lower bound or there is a 0.5% increase in the unemployment rate. Basically it's narrow bank-type model that’s small and fit for purpose, with a per person cap (e.g., $10,000). https://www.piie.com/publications/policy-briefs/reviving-potency-monetary-policy-recession-insurance-bonds https://www.piie.com/publications/policy-briefs/securing-macroeconomic-and-monetary-stability-federal-reserve-backed
#Fintech#CryptoAssets#CBDC#DFC
·bloomberg.com·
Two Ex-Fed Officials Offer a Faster Way to Make Stimulus Payments
West Africa launches new currency in break with France
West Africa launches new currency in break with France
The central banks of West Africa have taken a major step towards breaking their monetary ties with Europe, launching their long-awaited “eco” currency and cutting some historic ties with France. On December 21, the Economic Community of West African States (Ecowas) declared the bloc’s currency would be renamed from the CFA franc to the eco, to be overseen by the Central Bank of West African States (BCEAO). Those adopting the eco are currently Benin, Burkina Faso, the Ivory Coast, Guinea Bissau, Mali, Niger, Senegal and Togo.https://www.bceao.int/fr/communique-presse/communique-de-presse-reforme-du-franc-cfa
#Fintech#CBDC#DFC
·centralbanking.com·
West Africa launches new currency in break with France
The future of retail payments in the United States
The future of retail payments in the United States
The U.S. Fed announced the core features of its new FedNow end-to-end 24/7 fast payments service, set to go live in 2023 or 2024. It is seen as "a catalyst for innovation in the market by providing a neutral platform on which the private sector can build to offer safe, efficient instant payment services to users across the country." It will operate alongside the private-sector Clearing House RTP instant payment service.
#Fintech#PaymentSystems#FastPayments#CBDC#DFC
·federalreserve.gov·
The future of retail payments in the United States
Design Choices for Central Bank Digital Currency: Policy and Technical Considerations
Design Choices for Central Bank Digital Currency: Policy and Technical Considerations
An NBER paper enumerates the fundamental technical design challenges facing CBDC designers, with a particular focus on performance, privacy, and security. Through a survey of relevant academic and industry research and deployed systems, it discusses the state of the art in technologies that can address the challenges involved in successful CBDC deployment. It also present a vision of the rich range of functionalities and use cases that a well-designed CBDC platform could ultimately offer users.
#Fintech#CryptoAssets#CBDC#DFC
·nber.org·
Design Choices for Central Bank Digital Currency: Policy and Technical Considerations
Chinese state-run banks start testing PBoC’s ‘e-wallet’
Chinese state-run banks start testing PBoC’s ‘e-wallet’
China’s largest state-owned banks have reportedly started testing the “electronic wallet” component of the People’s Bank of China’s (PBOC's) “digital yuan” project. The tests are being conducted in cities including Shenzhen, which borders Hong Kong. The municipal government of Shenzhen said it would cooperate in efforts to test the system for different applications. Banks are testing the e-wallet application to transfer money and make payments using the PBoC’s digital yuan. The e-wallet, which can be downloaded as a mobile application, will be linked to a user’s national ID number or telephone number to enable fund transfers.
#Fintech#CryptoAssets#CBDC#DFC
·centralbanking.com·
Chinese state-run banks start testing PBoC’s ‘e-wallet’
The Boston Fed announces collaboration with MIT to research digital currency
The Boston Fed announces collaboration with MIT to research digital currency
The Federal Reserve Bank of Boston announced a multiyear collaboration with the Digital Currency Initiative at the Massachusetts Institute of Technology to perform technical research related to a central bank digital currency. The research project will explore the use of existing and new technologies to build and test a hypothetical digital currency platform. The first phase will involve jointly building and testing a hypothetical central bank digital currency for wide-scale, general purpose use. The objective in this phase will be to determine how to architect a scalable, accessible cryptographic platform to meet the needs of a theoretical U.S. dollar CBDC, including stringent design requirements for speed, security, privacy and resiliency.
#Fintech#CryptoAssets#CBDC#DFC
·bostonfed.org·
The Boston Fed announces collaboration with MIT to research digital currency
Comparing Means of Payment: What Role for a Central Bank Digital Currency?
Comparing Means of Payment: What Role for a Central Bank Digital Currency?
This Federal Reserve Board paper looks at the potential benefit that a central bank digital currency (CBDC) could provide in the context of existing payment mechanisms. A comparison of a general-purpose CBDC with existing means of payments across seven categories reveals how an appropriately designed CBDC could provide value in certain areas. These technological benefits could include a digital form of a bearer instrument, more cost-effective payment services, greater anonymity than current digital transactions, and a catalyst for greater innovation through programmable money.
#Fintech#CryptoAssets#CBDC#DFC
·federalreserve.gov·
Comparing Means of Payment: What Role for a Central Bank Digital Currency?
FRB Governor Brainard on on Digital Currencies"
FRB Governor Brainard on on Digital Currencies"
The Federal Reserve is conducting in-house experiments with a hypothetical digital dollar for research purposes, though it hasn’t yet committed to issuance that would require a formal policy process involving the government and other stakeholders. A multidisciplinary team, with application developers from the Federal Reserve Banks of Cleveland, Dallas, and New York, is working with a policy team at the Fed to study the implications of digital currencies on the payments ecosystem, monetary policy, financial stability, banking and finance, and consumer protection.
#Fintech#CryptoAssets#CBDC#DFC
·federalreserve.gov·
FRB Governor Brainard on on Digital Currencies"
Apollo Fintech Announces Completion of the First Blockchain National Currency Platform
Apollo Fintech Announces Completion of the First Blockchain National Currency Platform
Apollo Fintech launched its blockchain-based central bank digital currency (CBDC) National Payment Platform (NPP). It faciliatates the build out of a multi-tier digital currency ecosystem, from commercial banks and other agents, to merchants and users, enabling to peer to peer transactions using its app, SMS, QR codes, cards, offline codes. Authorized banks can onboard users and merchants for mainstream transactions including currency deposits and withdrawals, currency exchange, money transfers and payments for goods and services. https://aplfintech.com/apollo-national-currency-system/
#Fintech#CryptoAssets#CBDC#DFC
·prnewswire.com·
Apollo Fintech Announces Completion of the First Blockchain National Currency Platform
R3 Webinar Recap: Building CBDC–The Race to Reality
R3 Webinar Recap: Building CBDC–The Race to Reality
Digital currencies issued by central banks (CBDCs) raise a number of questions, ranging from deciding the scenarios in which such changes are desirable, to how they can effectively be implemented. A recent R3 webinar featured 12 leading experts participating in the most advanced CBDC projects in the world, including the IMF's Tobias Adrian and the BIS's Raphael Auer. They provided extensive insights into the future of CBDCs and his post highlights the key takeaways.
#Fintech#CryptoAssets#CBDC#DFC
·r3.com·
R3 Webinar Recap: Building CBDC–The Race to Reality
Central banks should not rush into digital currencies
Central banks should not rush into digital currencies
Central bank time and effort would be better spent on upgrading existing payment networks rather than pursuing digital currencies that, for all their innovation, could create more problems than they solve. In some states, however, digital currencies now look unavoidable. With Libra no longer an imminent threat, central banks should not rush them out. With so many challenges to consider, it is vital to get it right.
#Fintech#CryptoAssets#CBDC#DFC
·ft.com·
Central banks should not rush into digital currencies
Digital Currencies: Public and Private, Present and Future
Digital Currencies: Public and Private, Present and Future
This paper from Singapore's DBS Bank takes stock of the latest developments in the world of digital currencies, public and private. Integral developments in the system of payment and settlements are examined. A list of resources on the latest expert-level thinking is provided at the end of the report. We plan to publish quarterly updates on this game-changing field.
#Fintech#CryptoAssets#CBDC#DFC
·dbs.com·
Digital Currencies: Public and Private, Present and Future
Central bank digital currencies in the interconnected future
Central bank digital currencies in the interconnected future
With many countries moving towards central bank digital currencies (CBDCs), we can begin to imagine a future where all countries utilise national currency networks, each interconnected to facilitate exchange and trade, as well as many new use cases yet to be developed. While the goals of introducing CBDC networks may vary from country to country, a number of common elements apply, including the synergistic effects of having multiple CBDC networks integrated with one another despite the geopolitical and economic specifics of the countries involved.
#Fintech#CryptoAssets#CBDC#CrossBorder#DFC
·oecdonthelevel.com·
Central bank digital currencies in the interconnected future
Money That Rots Like Potatoes, Money That Rusts Like Iron, Hot Money And CBDCs
Money That Rots Like Potatoes, Money That Rusts Like Iron, Hot Money And CBDCs
If CBDCs existed, stimulus payments could have been made with the proviso that they would become worthless within a certain period unless spent on food, rent or other targeted needs. Since CBDCs are programmable, this can be done through a multi-token standard, where the stimulus payments would carry an expiry date and strict control on where the stimulus can be spent. Such forms of money exist today, like food stamps in the US or gift cards that expire. Distributing stimulus to the poor who do not have access to stored cash in a time of unemployment ensures that they spend it.
#Fintech#CryptoAssets#CBDC#Gesell#DFC
·forbes.com·
Money That Rots Like Potatoes, Money That Rusts Like Iron, Hot Money And CBDCs
Soramitsu Case Study – Hyperledger
Soramitsu Case Study – Hyperledger
The National Bank of Cambodia (NBC) partnered with Soramitsu to modernize the country’s legacy retail payments using the Hyperledger Iroha blockchain framework. The project, called Bakong, allows users to transfer money and buy from merchants with a simple smartphone app. Merchants gain a fast, cashless, and secure payments system. And banks can do interbank transfers at much lower cost. A pilot project went live in July 2019 and ran successfully with more than 10,000 users. The next step is to let everyone in the country know that the system is available and working, and launch country-wide later in 2020.
#Fintech#PaymentSystems#CBDC#Blockchain#Hyperledger#DFC
·hyperledger.org·
Soramitsu Case Study – Hyperledger
A Global Look at Central Bank Digital Currencies
A Global Look at Central Bank Digital Currencies
The Block Research published a white paper that explores the history, motivations, early technical designs and implementations of the world’s most advanced central bank digital currency (CBDC) proposals. It is based on a review of central bank and international organization literature, plus interviews with various stakeholders, including yours truly (see page 38).
#Fintech#CryptoAssets#CBDC#DFC
·theblockcrypto.com·
A Global Look at Central Bank Digital Currencies
The Federal Reserve And Central Bank Digital Currencies
The Federal Reserve And Central Bank Digital Currencies
This Davis Polk & Wardwell LLP memo delivers key takeaways on the Federal Reserve’s recent announcement about its research into central bank digital currency, along with some useful resources. It also places the Federal Reserve’s recent announcement, in a speech by Governor Lael Brainard, in the overall international context.
#Fintech#CryptoAssets#CBDC#DFC
·davispolk.com·
The Federal Reserve And Central Bank Digital Currencies
Rise of the central bank digital currencies: drivers, approaches and technologies
Rise of the central bank digital currencies: drivers, approaches and technologies
A new BIS paper sets out a database of central bank digital currency (CBDC) technical approaches and policy stances on issuance. Most projects are found in digitised economies with a high capacity for innovation. Work on retail CBDCs is more advanced where the informal economy is larger. More and more central banks are considering retail CBDC architectures in which the CBDC is a direct cash-like claim on the central bank, but where the private sector handles all customer-facing activity. It concludes with an in-depth description of three distinct CBDC approaches by the central banks of China, Sweden and Canada.
#Fintech#CryptoAssets#CBDC#DFC
·bis.org·
Rise of the central bank digital currencies: drivers, approaches and technologies
Cryptoconvert: Why A 168-Year Old Banknote Printer Will Soon Be Churning Out Digital Drachmas For Central Banks
Cryptoconvert: Why A 168-Year Old Banknote Printer Will Soon Be Churning Out Digital Drachmas For Central Banks
In 2019, German banknote printer Giesecke & Devrient (G&D) unveiled its Filia distributed ledger technology-based central bank digital currency (CBDC) issuance platform. Already six of G&D’s central bank clients are in negotiations about using Filia to issue CBDC. More recently, G&D led a $17 million Series A into Metaco, a Swiss startup providing crypto-asset custody services via its Silo software. Silo, is a user-interface between banks' human operators and the distributed ledgers powering the crypto-assets for which they act as custodians.
#Fintech#CryptoAssets#CBDC#DFC
·forbes.com·
Cryptoconvert: Why A 168-Year Old Banknote Printer Will Soon Be Churning Out Digital Drachmas For Central Banks
Not a strong public-policy case for CBDC issuance in Australia
Not a strong public-policy case for CBDC issuance in Australia
The Reserve Bank of Australia still considers that at present there is not a strong public-policy case for central bank digital currency (CBDC) issuance, given that the electronic payments system in Australia compares very favourably with those in many other countries and access to cash remains good. Nonetheless, they will continue to closely watch the experience of other jurisdictions. They are also continuing to research the technological and policy implications of a wholesale form of CBDC and work to develop a proof-of-concept with external parties to explore aspects of wholesale CBDC, building on research they did in their Innovation Lab last year.
#Fintech#CryptoAssets#CBDC#DFC
·rba.gov.au·
Not a strong public-policy case for CBDC issuance in Australia
Major Chinese Bank Launches Central Bank Digital Currency Wallet Briefly
Major Chinese Bank Launches Central Bank Digital Currency Wallet Briefly
State-owned China Construction Bank (CCB) reportedly opened up registration for wallets using the country’s central bank digital currency (CBDC) for a few hours. The wallet's services included payment, redemption, transfer, and credit card recharge, and there were four levels of wallet with varying balance (500,000, 300,000, 50,000 and 10,000 yuan) and payment limits. The bank was issuing each wallet with a unique identification number linked to the customer’s information, including their name, password, mobile phone number, email address, customer number, and bank card number. However, CCB quickly disabled the feature from public users.
#Fintech#CryptoAssets#CBDC#DFC
·news.bitcoin.com·
Major Chinese Bank Launches Central Bank Digital Currency Wallet Briefly
China’s Digital Currency Will Rise but Not Rule
China’s Digital Currency Will Rise but Not Rule
For all the hype about its central bank digital currency (CBDC), China’s Cross-Border Interbank Payment System (CIPS) is a more important innovation because it makes it easier to use the renminbi for international transactions. Although China's CBDC may eventually be linked up to cross-border payments systems, this by itself will not elevate the renminbi's reserve currency status. However, the CIPS is able to bypass the Western-dominated SWIFT system for international payments and thus circumvent U.S. financial sanctions. Nevertheless, elevating the renminbi's reserve currency status will require more fundamental changes, like the continuation of financial markets reforms and the removal of capital flow restrictions.
#Fintech#CryptoAssets#CBDC#CrossBorder#DFC
·project-syndicate.org·
China’s Digital Currency Will Rise but Not Rule
FACTBOX-China's onshore yuan clearing and settlement system CIPS
FACTBOX-China's onshore yuan clearing and settlement system CIPS
Backed by the People’s Bank of China (PBOC), China launched the Cross-Border Interbank Payment System (CIPS) cross-border clearing and settlement services system in 2015 to internationalise yuan use. It allows global banks to clear cross-border yuan transactions directly onshore, instead of through clearing banks in offshore yuan hubs. For now, CIPS still largely relies on SWIFT for cross-border financial messaging but it has the potential to operate independently and have its own direct communication line between financial organisations. For Chinese banks and corporates, CIPS can serve as a messaging system without the risk of exposing transaction information to the United States.
#Fintech#CryptoAssets#CBDC#CrossBorder#DFC
·reuters.com·
FACTBOX-China's onshore yuan clearing and settlement system CIPS
China's global yuan push makes inroads in Asia and Africa
China's global yuan push makes inroads in Asia and Africa
As of the end of July, 984 financial institutions from 97 countries and regions were part of China's Cross-Border Interbank Payment System (CIPS). The system was created in 2015 to help globalize the yuan, by providing an easier way for participants to settle and clear yuan-denominated payments. Members can choose to either take part in CIPS directly, meaning they maintain their own accounts within the system, or indirectly, meaning they work through direct members. More than 70% of participants are in Asia, followed by 124 in Europe, 40 in the Americas, and 37 in Africa. The African presence is due to China's economic clout in the region, especially with its Belt and Road infrastructure-building initiative.
#Fintech#CryptoAssets#CBDC#CrossBorder#DFC
·asia.nikkei.com·
China's global yuan push makes inroads in Asia and Africa
Digital Yuan May See a Hardware Wallet
Digital Yuan May See a Hardware Wallet
CoinDesk grabbed a copy of the Terms and Services that users were required to agree to follow when signing up for the China Construction Bank (CCB) DC/EP central bank digital currency wallet, before it was pulled from the bank's website. It showed that apart from DC/EP wallets within CCB’s mobile app that was offered, separate hardware wallets for DC/EP may also be in the works. It would be offered in a four-tier system; a user could only maintain a balance of up to 10,000 ($1,500) yuan in a tier-2 DC/EP wallet. The cap for a single transaction would be less than 5,000 yuan daily and annual accumulated spendings could not exceed 10,000 yuan and 300,000 yuan, respectively. Similarly, tier-3 and tier-4 DC/EP wallets would have tighter caps on wallet balances as well as daily and annual spendings but the Terms did not indicate if there will be any limit on tier-1 wallets.
#Fintech#CryptoAssets#CBDC#DFC
·coindesk.com·
Digital Yuan May See a Hardware Wallet
Ghana planning central bank-issued digital currency
Ghana planning central bank-issued digital currency
The Bank of Ghana, continues to explore central bank digital currency. The new digital currency will reportedly be named the "e-cedi" and the Bank is in talks with key stakeholders to finalise the details of the project. In a recent keynote address, Governor Addison reportedly described the move as a “pilot project” which will initially be trialled in a sandbox environment.
#Fintech#CryptoAssets#CBDC#DFC
·naija247news.com·
Ghana planning central bank-issued digital currency