The European Commission has proposed a legislative plan for the launch of a new digital euro payments system, one that it says will not replace the use of physical cash. In a new announcement, the Commission says that it acknowledges that the use of physical cash is still preferred by the majority of Europeans, but […]
The post Digital Euro System Now Underway in Europe, EU Commission Says It ‘Won’t Replace Cash’ appeared first on The Daily Hodl.
The Swiss National Bank (SNB) is reportedly rolling out a new “wholesale” central bank digital currency (CBDC) pilot program. While speaking at a financial conference in Zurich on Monday, SNB Chairman Thomas Jordan said the bank plans to kick off the pilot on Switzerland’s SIX digital exchange soon, according to a report from Reuters. “This […]
The post Swiss National Bank Launches Wholesale CBDC Pilot Program: Report appeared first on The Daily Hodl.
The underpinning technology for the U.K.’s CBDC could use an alternative to blockchain technology.
The Bank of England (BoE) has made significant developments in its central bank digital currency (CBDC) program. Tom Mutton, director of fintech at the BoE, recently shared insights on the privacy aspect of the CBDC and why the central bank might look for other options beyond blockchain as the underpinning technology.
In the interview, Mutton said that during a recent meeting of technologists hosted by the BoE to discuss digital pound design, there was a clear disagreement on which ledger should be used for the CBDC. Thus, the bank aims to trial multiple ledger technologies, including blockchain.
Dubbed Britcoin, the development plans for a digital pound were first proposed when the United Kingdom’s Treasury Department and the BoE established a joint task force to research a U.K. CBDC in April 2021. Later, in February 2023, the bank issued a consultancy paper outlining the design of the digital pound.
Related: Digital pound could co-exist with private stablecoins
Currently, the BoE and His Majesty’s Treasury are seeking feedback from the stakeholders and technology experts on the proposed design of the CBDC. The feedback is open until June 30.
Mutton stated:
“We want to be compatible with distributed-ledger business models in the private sector, but we were not convinced that distributed ledgers offered more efficiency over conventional ledgers.”
Cointelegraph reached out to BoE to enquire about what other ledger technologies it was considering. However, the BoE did not respond by publication.
Apart from the discussions about ledger technology, Mutton also talked about the privacy aspect of the CBDC, claiming it would be focused on offering privacy to users and won’t collect personal data. He said the bank would focus on providing the infrastructure, while the private players would be responsible for the innovation.
“There will be no data shared with the Bank of England, we will know what transactions have happened but we will have no data on the individual who did it. While the wallet provider would have the user data but won’t have access to their transaction data.”
Mutton claimed the BoE or the government wouldn’t have access to any user data, and even the wallet providers with limited access to that data will need consent from the users regarding what data they can store. With a focus on retail, the BoE had stated previously that the digital pound could co-exist with private stablecoins.
Magazine: Best and worst countries for crypto taxes — plus crypto tax tips
Thomas Jordan, head of the Swiss National Bank, announced the project at a conference in Zurich; bank still feels “prudent” about a retail CBDC, though.
The head of the Swiss National Bank (SNB) has announced that the bank will launch a wholesale central bank digital currency (wCBDC) pilot project, according to a report. Reuters quoted bank chair Thomas Jordan as saying the project would begin “soon.”
The wCBDC will be issued on the Swiss SIX digital exchange and run for a limited time, Jordan was quoted as saying at the Point Zero Forum in Zurich on June 26. The SIX Group also runs Switzerland’s largest stock exchange. Jordan said, according to the report:
"This is not just an experiment, it will be real money equivalent to bank reserves and the objective is to test real transactions with market participants."
SNB governing board member Thomas Moser told Cointelegraph last year that CBDCs could work well with decentralized finance. The SNB integrated a wCBDC into the back-office systems of five banks early last year as part of its Project Helvetia, which had previously completed a proof of concept for wCBDC.
That was a pivot from the position expressed a year prior by SNB chief economist Carlos Lenz, who said blockchain was not a suitable platform for CBDC, and the country had not intention of issuing one.
Related: BIS joins France and Switzerland's central banks on cross-border CBDC project
Thomas said of retail CBDC that “we are a little bit prudent at the moment,” but he did not rule out its introduction.
Swiss National Bank (SNB) to launch digital currency (CBDC) pilot - SNB's chairman https://t.co/Kc7DKIYuSA via @Reuters pic.twitter.com/HG4ZSFGkW9
— Dan Popescu (@PopescuCo) June 26, 2023
SNB governing board member Andréa Maechler, speaking at a different event from Jordan at the Point Zero Forum this year, said that the central bank does not foresee the replacement of cash in the country. Maechler said last year that SNB officials “believe the risks outweigh the benefits” in regard to a retail CBDC.
Magazine: Best and worst countries for crypto taxes — plus crypto tax tips
Cointelegraph analyst and writer Marcel Pechman explains how China’s economic weakness and Turkey’s interest rate hikes could impact the cryptocurrency market.
On the latest episode of Cointelegraph’s Macro Markets, analyst Marcel Pechman explores how Turkey’s recent interest rate increase might attract hundreds of millions of new cryptocurrency investors, and how China’s looming economic crisis could affect Bitcoin (BTC) and crypto globally.
Turkey’s central bank has increased the interest rate by 6.5% to 15% in a dramatic attempt to fight inflation. The move comes as the local currency, the lira, dropped by 80% against the United States dollar in five years.
According to Pechman, whether the U.S. dollar holds its dominant position as a global reserve currency doesn’t matter. Turkey and Argentina’s 70% inflation in 2022 are perfect examples of how decentralized cryptocurrencies might be the sole lifeguard for hundreds of millions — if not billions — of people who cannot save and transact in foreign currencies.
The next part of the show discusses whether China’s economic weakness impacts Bitcoin and how its central bank digital currency could increase demand for cryptocurrencies. Goldman Sachs economists reduced their estimates for Chinese gross domestic product growth to 5.4%, citing “challenges from the property market, pervasive pessimism among consumers and private entrepreneurs, and only moderate policy easing.“
Pechman shows how the iShares MSCI China exchange-traded fund has been a better proxy for Bitcoin’s price and explains the importance of the Chinese economy to global growth. Ultimately, for Pechman, if the Chinese stock market goes down, the odds are cryptocurrency prices will be pressured as well.
Lastly, Pechman presents a bullish case for cryptocurrency adoption during a recession — or lower growth, in China’s case — including stimulus checks being used to buy cryptocurrencies.
Macro Markets runs exclusively on the new Cointelegraph Markets & Research YouTube channel, so make sure to like and subscribe today!
The global central bank umbrella organization known as the Bank for International Settlements (BIS) has released a blueprint for the future of central bank digital currencies (CBDCs). In its new annual economic report, the BIS deploys the language of the blockchain and smart contract industry, saying the tokenization of fiat currency “has great potential” but […]
The post Bank for International Settlements Unveils ‘Game-Changing’ CBDC Blueprint Using Privatized and Controlled Crypto Technology appeared first on The Daily Hodl.
An executive at the European Central Bank (ECB) is sounding off against digital assets, saying that the nascent asset class is dangerous and offers no benefit to society. Speaking at a panel about the future of crypto assets during the 22nd Bank for International Settlements Annual Conference, Fabio Panetta, a member of the ECB’s executive […]
The post European Central Bank Executive Calls Crypto ‘Deleterious,’ Says Asset Class Has No Societal Benefits appeared first on The Daily Hodl.
Economists with the International Monetary Fund (IMF) are calling for more proactive measures to manage the risks of crypto as several nations crack down on the industry. In a new report, IMF’s Western Hemisphere Department division chief Mauricio Villafuerte and economists Rina Bhattacharya and Dmitry Vasilyev warn that outrightly banning crypto may have adverse consequences. “While […]
The post IMF Economists Say Complete Crypto Bans ‘May Not Be Effective’ Long-Term Policy Choices appeared first on The Daily Hodl.
François Villeroy de Galhau tried to soft sell the proposed euro CBDC to commercial bankers, emphasizing collaboration and the CBDC’s advantages.
The digital euro holds something in store for every stakeholder, Governor of the Banque de France François Villeroy de Galhau told commercial bankers on June 22. Disintermediation is not in the works, he said at the Global Official Institutions Conference hosted by French multinational bank BNP Paribas.
Before addressing the euro central bank digital currency (CBDC), Villeroy de Galhau began with an explanation of why the banking crisis earlier this year did not affect the eurozone. He credited European regulation and supervision for keeping its banking system safe. He noted, however, that the acquisition of Credit Suisse by UBS “raised new questions” about reliable crisis resolution. “The framework for the ECB to provide ‘Eurosystem resolution liquidity’ has yet to be built,” he said.
Related: France on the verge of passing stringent crypto firm licensing laws
Villeroy de Galhau’s tone became more cajoling as he pivoted to the “less consensual ground” of the digital euro. He asked rhetorically, “As everything is becoming digital, why should central bank money be the only thing to remain in paper?”
️ François Villeroy de Galhau : "Notre engagement est de ramener l’#inflation à 2% d’ici fin 2025, qui est la bonne température de l’#économie, comme 37° est la bonne température du corps". pic.twitter.com/SEdiuedj8u
— Banque de France (@banquedefrance) June 15, 2023
“The e-euro will be a digital banknote, or ‘Cash+,’” he continued. Its use will be optional, but it will have the advantage of allowing the use of central bank money in e-commerce. Without it, a crisis of trust would arise “sooner or later.” But the digital euro will not lead to disintermediation, according to Villeroy de Galhau, as:
“We central banks have absolutely no intention to open private accounts.”
Wholesale CBDC is also a joint undertaking, Villeroy de Galhau said. Commercial and central banks share the goals of “fostering tokenised finance and tokenised securities; facilitating cross-border interoperability.” Not only would the digital euro not be a competitor to commercial bank money, it will help resist “giving ground to so called ‘stablecoins’ probably issued by non-European players.” In fact:
“It’s very probably our duty to issue a CBDC, but it’s our will to issue it with you, commercial banks, and not against you.”
The digital euro would be rolled out gradually beginning in 2027 or 2028, if approved by the European Central Bank Governing Council, Villeroy de Galhau said.
Magazine: Bitcoin in Senegal: Why is this African country using BTC?
The Monetary Authority of Singapore (MAS) has published a whitepaper that proposes conditions for the use of central bank digital currencies (CBDCs), tokenized bank deposits and stablecoins. The whitepaper was produced in collaboration with the International Monetary Fund (IMF), Banca d’Italia, and the Bank of Korea, and is currently paired with a pilot program that […]
The post Amazon Collaborating in Pilot Program for New CBDC Proposed by IMF and Central Banks appeared first on The Daily Hodl.
