CBDC

CBDC will improve tax collection — Argentine central banker

October 5, 2023 Coin Telegraph

Argentina

Juan Agustín D’Attellis Noguera publicly supported Sergio Massa in promoting a central bank digital currency as a remedy for the national economy.

Juan Agustín D’Attellis Noguera, a director of Banco Central de la República Argentina, the country’s central bank, publicly supported the Minister of Economy Sergio Massa in his promotion of central bank digital currency (CBDC) as a remedy for the national economy.

Giving commentary on local television, Noguera expressed his belief that the “digital peso” could help stabilize the Argentine economy as soon as 2024. In the official’s opinion, the key feature of the CBDC is its traceability, which would help the government to collect taxes:

“By having traceability of operations with a digital currency because it is not known who does them, but there is evidence that they were done, you broaden the tax base. This will allow you to raise more without having to raise taxes and even lower them.”

The CBDC will also help to solve the nation’s monetary problem, as the unstable local currency, the Argentine peso, often competes with the United States dollar even as a payment method, according to Noguera.

Noguera spoke about the digital peso in a very definite manner, assuring that the CBDC would be introduced gradually, coexisting with cash, with a complete replacement of paper fiat currency happening at the final stage of the project.

On Oct. 2, Massa, who is also a presidential candidate, pledged to launch a CBDC if elected to “solve” Argentina’s long-lasting inflation crisis. According to election polls, Massa is slightly trailing Javier Milei, a pro-Bitcoin (BTC) and anti-central bank candidate who wants to adopt the U.S. dollar as Argentina’s currency.

CBDC lays foundation for new global monetary system: French central bank

October 4, 2023 Coin Telegraph

BIS

The first deputy governor at Banque de France calls central bank digital currency “the catalyst for improving cross-border payments.“

Representatives of Banque de France, the French central bank, have embraced the global perspective on the central bank digital currency (CBDC) discussion, touting it as the foundation of a new international monetary system.

On Oct.3, Denis Beau, the first deputy governor at Banque de France, called the CBDC “the catalyst for improving cross-border payments by enabling the build-up of a new international monetary system.” The official emphasizes the necessity of considering cross-border issue around CBDCs from the outset and not as an afterthought.

Beau sees several paths for developing a CBDC. The first is the development of common standards and interoperability between wholesale CBDCs and legacy systems. The second — promoted by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) — is the development of regional or global CBDC platforms. Wholesale CBDCs could be standardized to be exchanged directly on these platforms and perform payment versus payment and delivery versus payment transactions.

Beau cited the example of Project Mariana, which explored the possibilities of an automated market maker (AMM). The project, involving the Banque de France, the Monetary Authority of Singapore and the Swiss National Bank, successfully concluded in late September.

The official talked not only about the CBDCs but also about the tokenization of finance. He expressed his belief that the public sector must support the private sector more to enable the full potential of blockchain while limiting the risks. In his opinion, tokenized “central bank money availability” and tokenized assets are allies rather than competitors.

Bank of Korea to start CBDC infrastructure pilot

October 4, 2023 Coin Telegraph

BIS

The pilot will include private banks and public institutions, while the Bank for International Settlements (BIS) will support it with technical expertise.

South Korea joins a growing number of nations researching central bank digital currencies (CBDCs). The Bank of Korea (BOK) will launch the pilot project, exploring the technical infrastructure for a digital currency.

The joint announcement of the CBDC pilot by the BOK, the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS) was published on Oct.4. According to the document, the project will assess the viability of a future monetary system grounded on "wholesale CBDCs."

The pilot will include private banks and public institutions, while the Bank for International Settlements (BIS) will support it with technical expertise. The BOK is going to test both retail and wholesale types of CBDC. Within the experimental framework of the latter, the banks will tokenize their deposits and circulate them in the network, monitored by the BOK, FSC and FSS. The live testing of the retail CBDC should begin right after the system setup in Q4 2024.

As it usually goes with the CBDC tests, the BOK notes that the exploring doesn’t equal the inevitable implementation. However, the First Deputy Governor of the FSS, Lee Myung-soon, called the pilot a step to the future monetary system:

"The BOK has persistently pursued technological research related to CBDC. This test, building upon past achievements, represents a significant step towards creating a prototype for the future monetary system."

These words resonated with a statement made by one of the chief executives of France’s Central Bank on Sept. 3. In his speech, Denis Beau, the first deputy governor at Banque de France, called the CBDC “the catalyst for improving cross-border payments by enabling the build-up of a new international monetary system.”

BIS and Three Central Banks Successfully Complete CBDC Experiment Using DeFi Networks

October 3, 2023 The Daily Hodl

Georgia preparing limited live CBDC pilot, considering Ripple among tech providers

September 29, 2023 Coin Telegraph

CBDC

As the country is considered for EU membership, the digital lari is seen as a way of providing interoperability with a digital euro but preserving monetary freedom.

The National Bank of Georgia (NBG) has announced that it will advance its research on a digital lari central bank digital currency (CBDC) in a limited-access live pilot environment. Nine companies, including Ripple Labs, will take part in the project and one of them will be selected to move forward to the next stage of testing.

In a paper released in February, the NBG stated that it was considering a two-tier design for its CBDC, with wallets provided by a third party. It would be programmable and support asset tokenization.

NBG head of fintech Varlam Ebanoidze said in an interview in June that use cases for a digital lari, or GEL, include provision of agricultural insurance and automation of real estate transactions. He added:

“We are thinking about integration into the European Union and we want to be interoperable with the digital euro, but have monetary freedom.”

The NBG announced that it was considering issuing a CBDC in May 2021, without providing a timeline for it. The NBG announced in January that it was soliciting expressions of interest from fintechs to participate in a limited live pilot.

The NBG announced on Sept. 8 that it would participate as an observer in the Bank of International Settlements' (BIS) Project mBridge, which involves China, Hong Kong, Thailand and the United Arab Emirates, joining about ten other observer countries. It said it would also “leverage knowledge and expertise” from the BIS’s Project Aurum.

GEORGIA #CBDC ➡️ DIGITAL LARI PROJECT @Ripple

NBG (NATIONAL BANK OF GEORGIA) has shortlisted 9 companies that have demonstrated sufficient technology potential, maturity, capacity, relevant experience, and desire to join our on-field exploration:

Ripple Labs, Inc.
… https://t.co/ewdXQuFssB pic.twitter.com/JGs6GwOJhe
— XRP DROPZ (@DROPZXRP) September 29, 2023

In addition to Ripple, participants in the pilot are Augentic, Bitt, Broxus Holdings, Currency Network, DCM, eCurrency Mint, FARI Solutions and Sovereign Wallet. Ripple is known to be involved in CBDC projects around the world. Countries where it is active include Colombia, Montenegro, Hong Kong, Bhutan and Palau.

Magazine: In Georgia, crypto is a crucial tool for refugees escaping the war

France, Singapore and Switzerland test cross-border CBDCs

September 28, 2023 Coin Telegraph

BIS

Project Mariana was developed under the aegis of the Bank for International Settlements.

The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland concluded a joint test of the cross-border trading and settlement of wholesale central bank digital currencies (CBDCs). The Banque de France issued the report on Sept. 28.

The so-called Project Mariana was developed by the Banque de France, the Monetary Authority of Singapore and the Swiss National Bank under the aegis of the BIS. It has tested the cross-border trading and settlement of hypothetical euro, Singapore dollar and Swiss franc CBDCs between simulated financial institutions using decentralized finance (DeFi) technology concepts on a public blockchain.

The concept works by using a common token standard on a public blockchain, bridges for the seamless transfer of CBDCs between different networks, and a specific type of decentralized exchange to trade and settle spot foreign exchange transactions automatically.

According to the release, the participants consider the experiment successful, though “further research and experimentation is needed.” It also makes a reservation about the experimental nature of Project Mariana, stating:

“Project Mariana is purely experimental and does not indicate that any of the partner central banks intend to issue CBDC or endorse DeFi or a particular technological solution.”

The day before the release of Project Mariana went public, BIS general manager Agustín Carstens spoke about the necessity of clarifying the national legal frameworks in those countries where the central banks don’t have a right to issue CBDC.

The BIS remains the principal promoter of cross-border CBDCs, with several pilot tests being run around the globe. Thus, in September, the central banks of Hong Kong and Israel released the results of their Project Sela, while Hong Kong Monetary Authority CEO Eddie Yue announced the expansion of the Project mBridge, which has already included the central banks of China, Thailand and the United Arab Emirates.

Brazil’s crypto surge prompts central bank to tighten regulation

September 28, 2023 Coin Telegraph

Brazil

According to the central bank’s data, from January to August 2023, imports of crypto rose by 44.2% compared with the same period in 2022.

The governor of Banco Central do Brasil, Brazil’s central bank, said the bank has noted a significant surge in crypto adoption in the country and intends to react by tightening the digital assets regulation.

During his speech to the parliamentary Finance and Taxation Commission on Sept. 27, Roberto Campos Neto reported the rise of “cryptocurrency imports” by Brazilians. According to the central bank’s data, imports of crypto rose by 44.2% from January to August 2023 when compared with 2022. The total funds were about 35.9 billion Brazilian reals ($7.4 billion).

Campos Neto separately emphasized the popularity of stablecoins, which, according to him, are being used more for payments than investments. He said the bank will respond to these tendencies by tightening regulation and bringing crypto platforms under its supervision. He added that problems related to crypto could include tax evasion or illicit activities:

“We understand that a lot is connected to tax evasion or linked to illicit activities.“

Brazil handed the central bank a primary role in crypto regulation in June 2023. However, the token projects that qualify as securities continue to fall under the purview of the Comissão de Valores Mobiliários — Brazil’s equivalent of the United States Securities and Exchange Commission.

The Brazilian central bank is also working on its own digital currency, Drex. In August, it revealed the brand and logo of the central bank digital currency. In a previous controversy, Brazilian blockchain developer Pedro Magalhães reportedly discovered functions in the Drex code that would allow a central authority to freeze funds or reduce balances.

Global Monetary System and CBDCs Must Evolve Amid Demand for Digital Forms of Cash: Banking Titan Agustín Carstens

September 27, 2023 The Daily Hodl

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CBDC frameworks must guard user privacy, monetary freedom of choice – BIS chief

September 27, 2023 Coin Telegraph

BIS

BIS general manager Agustín Carstens stresses the importance of legal frameworks that protect CBDC user privacy and maintain monetary freedom of choice.

Legal frameworks that ensure that user privacy and the freedom to choose between central bank digital currencies and other forms of money will be key in driving CDBC adoption, according to the head of the Bank of International Settlements.

Speaking at the BIS Innovation Hub conference in Switzerland on Sept. 27, BIS general manager Agustín Carstens stressed that legal frameworks remain a key consideration in the development and proliferation of CBDCs around the world:

“Most fundamentally, the legitimacy of a CBDC will be derived from the legal authority of the central bank to issue it. That authority needs to be firmly grounded in the law.”

He added that different countries' laws specify what types of money their central bank can issue, which typically includes physical cash as well as credit balances on current and reserve accounts:

“According to an IMF paper published in 2021, close to 80% of central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is unclear.”

Carstens also referred to a BIS study that indicates 93% of the world’s central banks are engaged in developing CBDCs at various different stages. Considering that most of these institutions are actively looking to meet public demand for digital forms of fiat, The BIS chief said outdated or unclear legal frameworks hindering their deployment was unacceptable.

Criticisms aimed at the potential misuse of CBDCs in regard to social credit scores or standings by their issuers were also addressed. According to Carstens, a CBDC needs to function with a framework of defined rights and obligations.

The BIS general manager says that three core elements are imperative. This includes preserving the privacy of CBDC users and their data, the integrity of the financial system as well as the right of people to choose between a CBDC and other forms of money.

Carstens noted that different countries have differing trends relating to the use of cash and adoption of digital payments and that a retail CBDC may well be expected to coexist alongside cash and commercial bank money:

“A central bank that introduces a CBDC should increase the choices for society, not diminish them.

As previously reported by Cointelegraph, China continues to drive the development and use of its Digital Yuan CBDC program. The latest update to its pilot e-CNY app now allows tourists heading to China to pre-charge their digital yuan wallets using Visa and Mastercard payment.

Meanwhile the CBDC “Anti-Surveillance State Act” bill aimed at preventing the U.S. Federal Reserve from issuing a CBDC passed a vote in the the House Financial Services Committee on Sept. 21. The bill will head to congress next as it looks to fight “state control over currency” .

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