Search Results for: central bank digital currency

U.S. crypto giant, Coinbase, negotiates with top-tier Canadian banks to bring crypto banking mainstream in Canada, amidst regulatory ambiguity back home. The company’s director, Lucas Matheson, praises Canada’s ‘engagement-focused regulation’ allowing companies like Coinbase to explore and grow whilst staying within regulatory norms.

Binance, a popular cryptocurrency exchange, circumvented sanctions on two Russian banks by renaming them for local payment options. Critics argue this move may increase regulatory control over crypto markets. Meanwhile, supporters believe it demonstrates crypto’s independence from traditional financial systems and governmental interference. Binance’s actions have raised questions about crypto exchanges’ responsibility to respect international regulations.

“The European Parliament has passed a bill allowing banks to hold up to two percent of their capital in cryptocurrencies from January 2025, signaling evolution in global cryptocurrency regulation. However, Stefan Rust, ex-CEO of Bitcoin.com, views the bill as favoring financial institutions more than common investors.”

The Reserve Bank of Australia’s (RBA) central bank digital currency (CBDC) project results suggest a potential to enhance efficiency and resilience in the payment system. However, obstacles such as “legal, regulatory, technical and operational considerations” might delay the actual implementation of CBDC in Australia.

Sam Bankman-Fried faces allegations of fraud and money laundering involving his crypto exchange, FTX. Meanwhile, the Bank of International Settlements and financial stability directors raise concerns about crypto’s potential to enhance financial risks in underdeveloped economies. Balancing financial stability with fostering innovation remains a critical challenge.

“Emerging economies are becoming cryptocurrency adoption centers due to unstable fiat currencies and limited banking access. However, a study by the Bank for International Settlements suggests that cryptocurrencies have “amplified financial risks”. The authors propose regulation rather than an outright ban, aiming to channel innovation into socially useful directions.”

The Russian Central Bank’s proposal classifies the digital ruble, as a “high-quality liquid asset”. This could usher a dramatic reconfiguration of how financial institutions perceive and maintain liquid assets, potentially revolutionizing cross-border payment methods. However, this shift is viewed with apprehension among commercial banks.

Experts from Brazil anticipate BRICS summit discussions on a potential digital fiat currency, with workgroups likely being established for the initiative. A collective digital currency could potentially replace the US dollar in trade deals among BRICS nations despite sceptical voices. Individual nations within the BRICS alliance, including China, Russia, and Brazil, have already initiated their own Central Bank Digital Currency (CBDC) projects.

“The Central Bank of Russia is testing the digital ruble, a central bank digital currency (CBDC), with potential benefits like offline payment capability discussed. However, journalist Anastasia Tselykh raises concerns over benefits for ordinary citizens, and the implications of easier tracking of citizens’ money.”

Shanghai and Suzhou cities aim to accelerate the adoption of China’s Central Bank Digital Currency, Digital Yuan. The move follows the People’s Bank of China’s revelation that $250 billion worth of Digital Yuan transactions have been processed nationwide. Despite the significant figure, it represents a minor part of the Chinese economy, motivating these bustling cities to advance digital currency promotion.

“Mr. Chen, a Chinese individual, was sentenced to nine months for aiding a $13,104 USDT transaction. Viewed as money laundering by authorities due to Chen’s personal bank information involvement, this reflects China’s stringent crypto stance linked to capital control regulations.”

“The adoption of blockchain technology, like Russia’s digital ruble, offers potential to combat corruption by shrinking the shadow economy. It provides transparency in transactions and the possibility of reducing grey economy risks. Special offline wallets also allow it to reach areas where the internet hasn’t yet penetrated.”

Zimbabwe’s Reserve Bank is preparing to release Gold-Backed Digital Tokens (GBDT), also known as ZiG, designed for public use. This nationwide project aims to educate Zimbabweans on the benefits and usage of digital currency, while managing inflation and offering an alternative investment to the US dollar.

Zimbabwe’s central bank is contemplating the introduction of gold-backed digital tokens (GBDT) for retail transactions as an alternative to the heavily relied upon US dollar. The GBDTs are backed by physical gold reserves and offer divisibility, making them more convenient and value-preserving. These could potentially help in combating the crippling inflation rate and provide a base for a future central bank digital currency ecosystem.

Brazil’s Congress is considering a bill to tax cryptocurrency as “financial assets”, specifically those held by Brazilians overseas. If passed, the legislation would level the tax field between crypto and traditional assets, potentially benefiting local exchanges. The bill might attract greater activity to Brazil’s national crypto exchanges and global players to establish local offices. However, there are concerns that the increased taxation could hamper the growth of the sector or deter foreign investment.

The Bank of Canada’s recent report examines the potential adoption of Central Bank Digital Currencies (CBDCs), noting that Canadians currently see no compelling reason to switch from traditional forms of payment. The report suggests that the elimination of physical cash could result in the majority relying more heavily on electronic payments and might significantly impact those dependent primarily on cash transactions. Despite potential interest, the bank warns of considerable barriers to universal CBDC acceptance. The bank proposes enhancing internet access, providing low-cost banking options, and fostering collaboration with retail and financial sectors to facilitate digital payment integration, while maintaining efficiency and confidence in the cash system.

The Bank of Canada questions the adoption of Central Bank Digital Currencies (CBDCs) in a recent study, pointing to Canadians’ weak incentives for a switch given their well-established financial system. The discussion emphasizes on the continued importance of cash, especially for emergencies, listing out barriers for both users and merchants to broadly adopt a CBDC.

“The Bank of England is advancing in the world of cryptocurrencies, establishing a new Central Bank Digital Currency (CBDC) Academic Advisory Group. Tasked with facilitating interdisciplinary discussions on a potential digital pound, this group is aimed at managing a multifaceted assembly of expertise, spanning from monetary policy to law, marketing and more. Their success could pave the way for a sustainable and successful digital pound in the future.”

India’s Ministry of Electronics and Information Technology plans for a web browser that will allow users to use crypto tokens for digital signatures. This, despite the absence of legislative guidelines for cryptocurrency, marks a compelling development in India’s ambiguous stance on cryptocurrencies.

China’s digital yuan adoption is surging, with tax payments through the currency totaling $51.3 million from January to June 2023. However, most transactions occur through a CBDC tax payment platform operated by Postal Savings Bank’s Hunan Branch, raising questions about true adoption rates.