The UK is a step closer to launching a central bank digital currency

After the publication of a consultation document that explains the planned digital pound, which the general public has dubbed “Britcoin,” the United Kingdom is one step closer to creating a central bank digital currency (CBDC).

The Bank of England (BoE) and the United Kingdom Treasury both contributed to the publication of the 116-page consultation document on February 7th. In addition to that, a technology working paper that delves into the technical as well as economic design issues was published.

CBDCs such as the digital pound may co-exist in what the authors of the article believe to be a “mixed payments economy,” despite the increase of privately-issued stablecoins over the last few years, according to the findings of the paper.

“The digital pound does not need to be the predominate form of money in order to accomplish its public policy aims in the same way that cash coexists alongside private money. It is possible that the digital pound will coexist with other types of currency, such as stablecoins.

Although the Bank of England (BoE) and the Treasury Department (Treasury) have expressed optimism that a digital version of the pound would be introduced by 2025 “at the earliest,” they are not yet one hundred percent positive that this will really occur.

According to the report, “The Bank and HM Treasury assess it is likely to be necessary in the UK to have a digital pound,” however there is currently no decision that can be made to adopt such a currency.

According to the paper, the primary objective behind the launch of the digital pound is to “promote innovation, choice, and efficiency in domestic payments” and to ensure that the money issued by the central bank of the United Kingdom continues to serve as “an anchor for confidence and safety” in the monetary system of the country.

“For the digital pound to play the role that cash plays in anchoring the monetary system, it needs to be usable and sufficient adopted by households and businesses,” this quote from the Financial Times reads. “For the digital pound to play the role that cash plays in anchoring the monetary system, it needs to be usable and sufficient adopted by households and businesses.”

Users will have access to e-GBP after they have established a connection to an API that is managed by the private sector and that, in turn, links to the core ledger.

Additional programmability capabilities, including as smart contracts and atomic swaps, which make it possible for assets to be moved across networks, will be made available.

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The Bank of England and the United Kingdom’s Treasury are working on a digital asset

The Bank of England (BoE) and the Treasury of the United Kingdom are moving on with plans to establish a digital currency that might “offer a new method to pay” without necessarily replacing cash. These ideas are in the early stages.

A joint consultation paper on central bank digital currencies (CBDCs) is scheduled to be released on February 7, with the Bank of England and the Treasury seeking views on how and if they should continue with establishing a CBDC. The topic of the document is central bank digital currencies (CBDCs).

Jeremy Hunt, the Minister of Finance, made an announcement to the public on February 6 indicating that the two organizations will collaborate in an effort to build a modernized digital payments system that does not necessarily exclude the usage of cash.

“While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that is trusted, accessible, and easy to use,” he said. He continued by saying that “we want to investigate what is possible first, while always making sure that we protect financial stability.”

Officials from the Bank of England and the Treasury Department anticipate that large technology firms will provide a government-backed alternative to privately produced stablecoins over the next few years. This will be another significant area of attention that will be addressed.

As part of the statement, Governor of the Bank of England Andrew Bailey highlighted the fact that a “digital pound would enable a new method to pay, benefit companies, retain faith in money, and better safeguard financial stability.”

“However, there are a number of ramifications that will need to be thoroughly considered by our technical work. This consultation, together with the further work that will be done by the bank at this time, will provide the groundwork for what would be a major choice for the nation about the manner in which we use money.

A speech by BoE Deputy Governor Jon Cunliffe is also scheduled to take place on February 7. The purpose of this address is to provide the financial sector with an update on the central bank and Treasury’s CBDC work to far.

It was proposed that even if they choose to continue ahead with the project, the construction of the blockchain-based infrastructure that would support the digital pound would not take place until at least the year 2025.

Related: According to new study, London has become the world’s most crypto-ready city for commercial use.

Rishi Sunak, the current prime minister and a former finance minister, issued an order in April 2021 mandating that the Bank of England and the Treasury work together to establish the Central Bank Digital Currency Taskforce. The two individuals are essentially entrusted with supervising the investigation as well as the possible deployment of the digital pound.

Although it seems to have been a slow burn so far, given how cautious the BoE and Treasury’s stances are, the latter did post a job listing to LinkedIn on January 24 calling for a team lead for its Payments and Fintech Team of approximately 20 people focused exploring on a “potential digital pound.” Despite the fact that it appears to have been a slow burn so far, given how cautious the BoE and Treasury’s stances are, the Treasury did post the job listing.

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CBDC Activity Subsidizes Consumption During Lunar New Year

Over the course of the Lunar New Year holiday, the Chinese central bank distributed an amount of its digital currency (CBDC) worth millions of dollars around the nation in an effort to encourage more people to use it.

A story that was published on February 6 in the Global Times, an English-language subsidiary of the state-run newspaper People’s Daily, said that over the Christmas season, about 200 “events” for the e-CNY were launched across the nation.

The government attempted to “encourage consumption” through these events, which marked the first time it had done so since the COVID-19 limitations had been recently loosened.

According to reports, many localities together dispersed CBDC worth more than 180 million yuan ($26.5 million) via various schemes including subsidies and consumption coupons.

According to one example provided by the source, the local government in Shenzhen distributed e-CNY worth more than 100 million yuan ($14.7 million), which was done in order to aid the catering business in the city.

According to a story published in China Daily on February 1st, the city of Hangzhou gave each citizen an e-CNY certificate worth 80 yuan (about $12). The entire cost of the gift to the city was close to 4 million yuan, which is equivalent to $590,000.

It turned out that a number of these projects were quite well received by the locals.

According to a story published by the Global Times, which cited information obtained from the e-commerce site Meituan, the e-CNY that the municipal government of Hangzhou distributed to its citizens as part of the New Year’s festivities were used up in only nine seconds.

Over the course of the last several months, the government has implemented a number of additional goals and features designed to increase the number of people using the CBDC.

On February 1st, top governing party leaders in the city of Suzhou established a provisional key performance indicator by the end of 2023 of having 2 trillion yuan worth of e-CNY transactions in the city. This equates to around $300 billion in current U.S. dollars.

The objective is lofty taking into consideration that the total value of all e-CNY transactions has barely surpassed 100 billion yuan ($14 billion) as of October, two years after the introduction of the CBDC.

The e-CNY wallet software added the capability to send “red packets,” also known as hongbao in China, in late December of the previous year in an effort to entice new users. These “red packets” include money and are traditionally given as gifts during the holiday season.

An upgrade was released for the wallet app at the beginning of January, enabling users to make contactless payments using their Android phones. These payments may be made even if the user’s device is not connected to the internet or has power.

During the month of December, a former official from the Chinese central bank said that the outcomes of the e-CNY experiments were “not ideal,” and that “use has been minimal, very inactive.”

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Montenegrin Prime Minister Dritan Abazovic has announced a pilot digital currency project

On Twitter, the Prime Minister of Montenegro, Dritan Abazovi, made the announcement that his nation is exploring the possibility of establishing a digital currency in collaboration with Ripple. At Davos, Abazovi had a meeting with the CEO of Ripple, Brad Garlinghouse, and the vice president of Ripple, James Wallis.

Ripple has appointed Wallis to the position of vice president for central bank interactions and CBDCs. According to what Abazovi indicated in the conversation, he was evidently thinking of something similar to a central bank digital currency (CBDC) when he made his announcement:

However, due to the fact that Montenegro does not yet have its own national currency, it is unknown what the precise characteristics of the hypothetical future digital money will be. Despite the fact that it is neither a member of the Eurozone nor the European Union (EU), the Balkan nation of Montenegro has adopted the euro as its official currency ever since it was first introduced in 2002. This has occurred despite the fact that Montenegro is not a part of the European Union (EU). In 2008, Montenegro submitted its application to join the EU.

Since the beginning of this year, the government of Montenegro has been actively pursuing opportunities in the cryptocurrency market. It has garnered a reputation for its openness to the use of cryptocurrencies, and in April it hosted a panel with the catchy title Future Now! that Ethereum co-creator Vitalik Buterin participated in. It was believed at this period that Buterin was awarded citizenship in Montenegro.

When the announcement on the partnership with Ripple was made on January 18, it received extensive coverage by local news sources; nevertheless, it took several days for the news of the partnership to reach the worldwide audience.

In the previous year, a Ripple consultant made a statement that the business will be increasing its engagement under CBDC agreements, explicitly noting Bhutan and Palau as two of “many trials in process.” In addition, the firm was a founder member of the Digital Dollar Project, and in February of 2022, it became a member of the Digital Euro Association.

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Custodia Bank’s Application to Join Federal Reserve Rejected

The application that Custodia Bank submitted to join the Federal Reserve System was denied by the Board of Governors of the Federal Reserve System in the United States. The Federal Reserve noted in its statement that the application “was not compatible with the relevant conditions under the law.” In addition to this, it asserted that Custodia possessed a management framework that was “insufficient,” and it referred to an earlier joint declaration made by the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, which concluded that cryptocurrency assets are incompatible with safe banking procedures.

In spite of the fact that the bank’s application for a master account was denied, the bank said in a tweet that the application is still in the processing stage. Because of what is known as a “master account,” a financial institution is able to carry out crucial tasks such as making international money transfers. Custodia, which is led by Caitlin Long, submitted an application for the master account in 2020 and filed a lawsuit against the Fed in June due to the prolonged delay in the Fed’s consideration of the application.

According to a statement released by Custodia, the Fed set the bank a deadline of three days and three nights to withdraw its application. Custodia aggressively sought federal oversight, going above and beyond all of the rules that apply to ordinary banks, the report noted.

In August, when it became apparent that digital asset banks may have a difficult time acquiring an account, the Fed did not provide rules for the issuance of master accounts until after it had become evident that digital asset banks could have a difficult time receiving an account. “Institutions that engage in novel activities and for which authorities are still developing appropriate supervisory and regulatory frameworks would undergo a more extensive review,” the Fed said in a statement at the time. “Institutions that engage in novel activities and for which authorities are still developing appropriate supervisory and regulatory frameworks.”

In October, the Federal Reserve granted the BNY Mellon bank permission to provide cryptocurrency custody services. As a result, the BNY Mellon bank became the first major U.S. bank to offer simultaneous custody of digital assets and conventional investments on the same platform. Custodia Bank was established in Wyoming in 2020, taking advantage of the crypto-friendly state’s opt-in custody laws for “blockchain banks” that were implemented in 2019.

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Deal Box offers $125M blockchain and Web3 venture fund

According to a news statement dated January 18, the capital markets advice and token offering platform Deal Box, which is located in the United States, has formed a new venture capital arm with a total of $125 million in funding targeted to blockchain and Web3 firms.

Deal Box Ventures is the name given to the fund that will be used to make investments in businesses operating in the rising growth, real estate, fintech, funtech, and social impact industries.

Thomas Carter, founder and chairman of Deal Box, issued the following statement in response to the recent development: “Deal Box Ventures is an important milestone in our journey to invest in the most promising and disruptive blockchain startups. We will provide these startups with the tools and funding ecosystem they require to be successful by simplifying and reimagining the traditional financing models.”

Deal Box has made first investments in the companies Total Network Services, Rypplzz, and Forward-Edge AI by purchasing shares in each of those companies.

Blockchain technology is used by Rypplzz in order to link digital and physical things for the purpose of creating location-based experiences.

While Total Network Services claims to have created a blockchain Universal Communication Identifier to increase supply chain security, Forward-Edge AI claims that it employs the same technology to strive to better the human condition.

Deal Box was an industry leader in offering legal, accounting, and capitalization table advisory services to startup founders before it launched its investment arm.

The issue of tokenized bonds or stock by companies as a means of gaining access to investor money is one of the aspects of its emphasis that pertain to digital securities.

The company claims to have more than 500 customers since it was established in 2005.

At the World Economic Forum (WEF) 2023, which was hosted in Davos, Switzerland, South African Reserve Bank (SARB) governor Lesetja Kganyago addressed some of the difficulties that surround the adoption of central bank digital currencies (CBDCs).

A panel discussion at the World Economic Forum in 2023 titled “In the Face of Fragility: Central Bank Digital Currencies” will be held. Kganyago shared his thoughts on CBDCs and questioned if there is a genuine issue that can be remedied by using this innovative technology.

Kganyago questioned whether or not this was a case of a solution seeking for a problem, or whether or not there was a genuine issue that needed to be addressed.

The governor of the central bank also brought up the fact that the nations who are looking into CBDCs and doing research on them have cited a number of different reasons for wanting to establish them.

This involves bringing the central bank up to date, improving the efficiency of national payment systems, addressing the failure of domestic markets, and ensuring that everyone has access to sufficient financial resources.

On the other hand, the official from the government brought up the issue of demand.

Before CBDCs can be implemented, there has to be a discussion on a national level, as Kganyago pointed out.

He stated that before making this available to the general public, central banks should first determine whether or not the general public is interested in using it.

In light of these arguments, Kganyago said that the South African Reserve Bank (SARB) is approaching the issue of CBDCs with extreme caution. According to what he had to say, ” We are going to be excellent pupils when it comes to retail CBDCs,” and ” I would rather be a follower than a first mover.”

Back in 2021, the governor of the SARB expressed his disagreement with the notion that cryptocurrencies should be classified as currencies.

The official from the government said that cryptocurrency only satisfies two of the three standards for currencies, and argued that it does not have widespread usage.

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SARB governor: CBDCs must tackle a “serious challenge” at WEF 2023.

At the World Economic Forum (WEF) 2023, which was hosted in Davos, Switzerland, South African Reserve Bank (SARB) governor Lesetja Kganyago addressed some of the difficulties that surround the adoption of central bank digital currencies (CBDCs).

Kganyago shared his thoughts on CBDCs at a panel discussion at the World Economic Forum 2023 titled “In the Face of Fragility: Central Bank Digital Currencies.” He questioned whether or not there is a genuine issue that can be handled by this new technology.

Kganyago questioned whether or not this was a case of a solution seeking for a problem, or whether or not there was a genuine issue that needed to be addressed.

The governor of the central bank also brought up the fact that the nations who are looking into CBDCs and doing research on them have cited a number of different reasons for wanting to establish them.

This involves bringing the central bank up to date, improving the efficiency of national payment systems, addressing the failure of domestic markets, and ensuring that everyone has access to sufficient financial resources.

On the other hand, the official from the government brought up the issue of demand.

Before CBDCs can be implemented, there has to be a discussion on a national level, as Kganyago pointed out.

He stated that before making this available to the general public, central banks should first determine whether or not the general public is interested in using it.

In light of these arguments, Kganyago said that the South African Reserve Bank (SARB) is approaching the issue of CBDCs with extreme caution. According to what he had to say, ” We are going to be excellent pupils when it comes to retail CBDCs,” and ” I would rather be a follower than a first mover.”

Back in 2021, the governor of the SARB expressed his disagreement with the notion that cryptocurrencies should be classified as currencies.

The official from the government said that cryptocurrency only satisfies two of the three standards for currencies, and argued that it does not have widespread usage.

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