Major financial regulators in the United States are considering establishing an interagency group dedicated solely to cryptocurrency matters. Michael Hsu, the new head of the Office of the Comptroller of the Currency, announced that the agency has been in talks with the U.S. Federal Reserve and the Federal Deposit Insurance Corporation about setting up an “interagency policy sprint team” focused “just on crypto.” At a virtual hearing of the House Financial Services Committee on Wednesday, the OCC head said that he discussed the initiative with Fed vice chairman of supervision Randal Quarles and FDIC chairman Jelena McWilliams. “This is a …

Central bank digital currencies, or CBDCs, could pose a threat to financial systems if related risks are not managed, Big Three credit agency Fitch Ratings has warned. Fitch Ratings released a report on Monday entitled “Central Bank Digital Currencies: Opportunities, Risk and Disruption,” which discussed the major trade-offs between risks and benefits associated with CBDCs. Fitch Ratings stated that the key benefits of a retail CBDC lie in its potential ability to expand government-backed cashless payments in an effort to keep up with the wider digitalization of society. The biggest reasons to explore a CBDC for central banks and some …

The Bank of England's deputy governor Jon Cunliffe has argued that a sea change in the issuance and circulation of public and private monies could make general access to a digital form of central bank money crucial for ensuring financial stability in future. In a speech at the OMFIF Digital Money Institute in London, Cunliffe reflected on past, present and future trends in the widespread use of private money issued by commercial banks, noting that the COVID-19 pandemic has accelerated existing trends away from public to private money for everyday payments. About 70% of respondents to a recent Bank of …

The government of Bahrain, the third-richest Arab country, is working with American investment bank JPMorgan Chase on a digital currency settlement pilot. The Central Bank of Bahrain officially announced Tuesday that the bank is now collaborating with JPMorgan and the Arab Banking Corporation BSC, or Bank ABC, in a pilot scheme to introduce an instant cross-border payment solution based on digital currency technology. Aiming to cut settlement processing time, the new digital currency pilot will involve transferring funds from and to Bahrain in U.S. dollars for payments from buyers and suppliers. The central bank emphasized that it could move forward …

The Digital Currency Institute of the People’s Bank of China and the Hong Kong Monetary Authority are quickly moving forward with their joint testing of the use of the digital yuan for cross-border payments. According to Bloomberg, this week, the HKMA staff confirmed that the first phase of testing for the currency’s cross-border use had been successful. The initial tests involved multiple parties, including selected merchants and a bank designated by mainland Chinese authorities. HKMA said that plans for the next phase of pilots are already underway: “We have tested the use of the related app, system connectivity and certain …

How can this CBDC design trilemma be overcome? An identity-based, meta-blockchain can achieve all three design goals of identity, privacy and programmability. While blockchain systems can be structurally decentralized, the operation itself can be very much centralized and sequential. The problem lies in how transactions cannot be processed in parallel — and multiple smart contracts cannot be operated simultaneously. A meta-blockchain that can operate smart contracts in parallel could be the answer here, as it can ensure that a user’s information is kept secret at all times. SovereignWallet Network (SWN) Global believes it has found the solution for tackling the …

The Bank of Israel is accelerating its research for the potential issuance of a central bank digital currency, or CBDC. In a statement from the central bank on Tuesday, the Bank of Israel said it was preparing an action plan to explore the benefits of a digital shekel to the economy. Though the bank said it had not yet decided whether to issue a central bank digital currency, it added it would be prepared to do so should the benefits “outweigh the costs and potential risks.” The central bank said it may consider issuing a CBDC if it could meet …

Alipay, the mobile payment platform owned by Ant Group, is set to allow some of its users to participate in the emerging digital yuan commerce ecosystem. According to a report by China Securities Journal on Monday, this new feature is a result of MYbank’s participation in the country’s expanded digital currency electronic payment testing protocols. The news further cements Ant Group’s participation in China’s central bank digital currency project. Indeed, the conglomerate owns a majority stake in MYbank — one of the largest internet-only banks in the country. In a statement quoted by CNBC, Ant Group confirmed its involvement in …

Kazakhstan’s central bank is planning to examine the potential benefits and risks of adopting a state-backed digital currency. The National Bank of Kazakhstan, or NBRK, published Wednesday a report on a digital tenge pilot project and opened a public consultation on the potential central bank digital currency. According to the report, the digital tenge would be a new form of money issued by the NBRK to enable the “further development of the national payment system and reduce reliance on cash settlement using unique technical features.” The bank emphasized that the CBDC is not intended to replace either cash or cashless …

The National Bank of Georgia said that it is considering launching a central bank digital currency, or CBDC. In an announcement on Wednesday, the central bank hinted at the issuance of a CBDC in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The NBG said it would be inviting fintech firms and other financial institutions to participate in the project, named "Digital Gel" after the symbol for the country’s fiat currency, the lari. “CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” says the announcement. “The …

The Central Bank of the Bahamas is preparing a national push for its digital currency this summer to get more Bahamians signing up for the Sand Dollar. In another move toward the adoption of the Bahamas’ central bank digital currency, the CBOB is now focused on connecting mobile Sand Dollar wallets with commercial banking systems, CBOB Governor John Rolle announced. According to a Wednesday report by the Nassau Guardian, Rolle said that the Bahamian government has initiated a number of measures to prepare itself and the Sand Dollar ecosystem. “There is a focus now on enrolling individuals on those various …

Cryptocurrencies like Bitcoin (BTC) and Ether (ETH) will co-exist “for a while” with more restrictive digital currencies like China’s digital yuan, Binance CEO Changpeng Zhao said in a Bloomberg interview on Monday. According to Zhao, some of the key features of cryptocurrencies like Bitcoin (BTC) — freedom of use and limited supply — won’t be offered by central bank digital currencies. “At the end of the day, those are core properties that users care about,” he stated. Zhao said that the differences between the two types of digital assets could make central bank-issued currencies unattractive to people in the crypto …