Tag: Digital Innovation

BIS Survey: 93% of Central Banks Engaged in CBDCs, 15 Retail and 9 Wholesale CBDCs Expected by 2030

by Blockchain News

The Bank for International Settlements (BIS) has released a survey revealing that 93% of central banks are now engaged in some form of Central Bank Digital Currency (CBDC) work, with retail CBDCs taking the lead over wholesale CBDCs.

The survey, which gathered responses from 86 central banks, shows that over half of these institutions are not just exploring CBDCs but are conducting concrete experiments or working on pilots. The progress in retail CBDCs is more advanced, with almost a quarter of central banks piloting a retail CBDC.

The BIS survey also highlights the perceived value of CBDCs. More than 80% of central banks see potential benefits in having both a retail CBDC and a fast payment system (FPS). The unique properties and additional features that a retail CBDC can offer are seen as key advantages.

The emergence of cryptoassets and stablecoins has been a significant influence, accelerating CBDC work for nearly 60% of the respondent central banks. However, the survey also notes that stablecoins and other cryptoassets are rarely used for payments outside the crypto ecosystem.

The survey suggests that by 2030, we could see 15 retail and nine wholesale CBDCs in public circulation. This projection reflects the growing interest in digital currencies by central banks worldwide.

In terms of motivation, central banks in emerging market and developing economies (EMDEs) are more likely to be driven by financial inclusion-related motivations in their CBDC work. On the other hand, the desire to enhance cross-border payments primarily drives the work on wholesale CBDCs.

Currently, four central banks have issued a live retail CBDC: The Bahamas, the Eastern Caribbean, Jamaica, and Nigeria. This development marks a significant milestone in the global adoption of CBDCs.

The BIS survey provides a comprehensive overview of the current state of CBDC development and offers valuable insights into the future trajectory of digital currencies. As the exploration and experimentation with CBDCs continue, their role in the global financial system is set to become increasingly significant.

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Digital Currencies Impede US Treasury Sanction Efforts, Report says

by Blockchain News

A new report issued by the United States Treasury Department revealed that digital currencies are posing a critical impediment to its sanctions policies, a trend it is determined to put an end to. 

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Cryptocurrencies as a Tool to Bypass U.S. Sanctions

Per the 9-page report, the Treasury Department highlighted digital currencies as one of the primary technological innovations that make its sanctions efforts ineffective.

“Technological innovations such as digital currencies, alternative payment platforms, and new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions. These technologies offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system,”

The report also reads, adding that these cryptocurrencies “also empower our adversaries seeking to build new financial and payments systems intended to diminish the dollar’s global role. We are mindful of the risk that, if left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions.”

The U.S. Dollar, as the reserve currency, is considered as part of global integration. The United States has long utilized financial sanctions to weaken state actors and non-state actors, such as political entities, that seem to threaten the country’s national security. Amongst the countries under related sanctions is Afghanistan, in which the U.S. froze billions of dollars since the Taliban took over the country’s regime.

Many sanctioned countries, including North Korea and Venezuela, are already exploring alternatives through digital currencies, a move that has proven to be of grave concern to the U.S. Treasury Department.

Cryptocurrencies: Tool for Financial Freedom

One of the primary goals of digital currencies like Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) is to serve as a tool for financial freedom for everyone. Cryptocurrency transactions occur in a peer-2-peer manner and cannot be blocked by any financial regulator as they appear on the blockchain, which is not under the control of one entity.

While the U.S. perceives digital currencies as a flawed tool that it hopes to learn more from to mete out its sanctions, adopters of the technologies consider crypto as one of the most innovative discoveries in the 21st Century, with all thanks to Satoshi Nakamoto.

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Nigeria’s comms minister links blockchain to national digital innovation efforts

by Cointelegraph

Speaking during Wednesday’s annual Digital Africa conference, Isa Pantami, Nigeria’s Minister of Communications and Digital Economy, identified blockchain as part of the government’s focus on emerging technologies, according to a report by Voice of Nigeria.

Highlighting the conference theme — “Building a New Africa with AI and Blockchain” — Pantami stated that the government was working towards establishing innovation centers.

According to Pantami, these innovation centers will explore capacity-building protocols for artificial intelligence, internet of things, robotics, cloud computing, and blockchain technology, among other fields.

As part of his address, the communications minister said the move was part of efforts to promote an innovation-driven culture in Nigeria, adding:

“We are also actively preparing to take advantage of Blockchain technologies for our digital economy, and we recently developed a National Blockchain Adoption Strategy.”

Back in October 2020, Nigeria’s National Information Technology Development Agency (NITDA) issued a draft strategy framework for blockchain. The document included a six-point agenda for utilizing the novel technology including national digital identity and regulatory sandboxes for pilot implementations.

Addressing the conference, NITDA director-general Kashifu Inuwa stated that Nigeria can be a growth driver for AI and blockchain in Africa. In November 2020, Inuwa remarked that the country could generate up to $10 billion in revenue from blockchain by 2030.

Pantami’s ministry has been spearheading a mandatory national identity program in the country, a move that has generated significant controversy over the compulsory linkage of phone numbers to national ID data.

Related: Nigeria hopes blockchain will generate $10B revenue by 2030

While addressing privacy and data security concerns, the minister’s address did not include any mention of possible blockchain adoption in the area of safely storing national ID records.

Back in February, Nigeria’s vice president Yemi Osinbajo stated that crypto and blockchain will revamp Nigeria’s financial landscape. The vice president’s comments followed on the heels of a ban imposed by the central bank, prohibiting financial institutions from servicing cryptocurrency exchanges.