Rep. Tom Emmer reintroduces anti-CBDC bill to Congress

September 13, 2023 Coin Telegraph

CBDC

The bill would limit the Fed from issuing a CBDC which Tom Emmer called a surveillance tool that would "undermine the American way of life."

Legislation aimed at preventing “unelected bureaucrats in Washington” from issuing a central bank digital currency (CBDC) has been reintroduced by Representative Tom Emmer.

On Sep. 12, Emmer and 49 original co-sponsors revived the “CBDC Anti-Surveillance State Act” in the United States House of Representatives in a bid, they claim, to protect Americans’ right to financial privacy.

“The administration has made it clear: President Biden is willing to compromise the American people’s right to financial privacy for a surveillance-style CBDC,” Emmer, a Republican, said in a statement, adding:

“That’s why I’m reintroducing my landmark legislation to put a check on unelected bureaucrats and ensure the United States’ digital currency policy upholds our values of privacy, individual sovereignty, and free-market competitiveness,”

Emmer first proposed the bill to address CBDCs in January 2022. It was formally introduced to Congress in February 2023 with the aim of limiting the Federal Reserve from minting a programmable digital dollar which Emmer claims is a “surveillance tool that would be used to undermine the American way of life.”

Today, with 49 of my Republican colleagues, I reintroduced the CBDC Anti-Surveillance State Acthttps://t.co/mbke95IHBn
— Tom Emmer (@GOPMajorityWhip) September 12, 2023

The bill specifically prohibits the Fed from issuing a CBDC to individuals which Emmer says would stop it mobilizing into a retail bank able to collect personal financial data.

The bill also prohibits the central bank from using any CBDC to implement monetary policy.

In March, Tom Emmer warned against the weaponization of money as the federal government seeks to maintain and expand financial control.

U.S. presidential candidate Robert F. Kennedy Jr. echoed the sentiment in May stating, “That is why I oppose CBDCs, which will vastly magnify the government’s power to suffocate dissent by cutting off access to funds with a keystroke,”

Other supporters of the CBDC Anti-Surveillance State Act include Senators French Hill, Warren Davidson, and Mike Flood.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Israel, Hong Kong complete retail CBDC test emphasizing privacy, inclusivity

September 12, 2023 Coin Telegraph

BIS

The Hong Kong Monetary Authority, Bank of Israel and Bank for International Settlements teamed up to address the complex issues of rCBDCs.

The Bank for International Settlements and the central banks of Hong Kong and Israel released the results of Project Sela on Sept. 12. The project was a public-private partnership that used private intermediaries to create a retail central bank digital currency (rCBDC) combining the desirable characteristics of cash and the advantages of digitalization.

The project leveraged the central banks’ diverse experience to incorporate a number of predefined policy, security, technology and legal features. The private participants were fintechs FIS and M10 Networks, which provided core products, Clifford Chance for legal analysis and Check Point Software Technologies for cyber security. The project was a proof-of-concept.

Project Sela proposes a new financial infrastructure, the Access Enabler, which facilitates customer-facing activities without ever holding users’ rCBDC. It removes complexity, costs + risks compared w current payment providers #BISInnovationHub @hkmagovhk https://t.co/znVp81gQol pic.twitter.com/hItQamQc0K
— Bank for International Settlements (@BIS_org) September 12, 2023

In the Sela ecosystem, the central bank that issues an rCBDC maintains the ledger for it with pseudo-anonymous end-user accounts and provides instantaneous settlement with a real-time gross settlement (RTGS) system. Funding institutions manage users’ accounts and convert the rCBDC into and out of bank deposits and cash. An intermediary called an access enabler handles all customer-facing services, including Know Your Customer compliance, endorsements and routing, while end users maintain control over their electronic wallets with cryptographic keys.

One advantage of the ecosystem is its accessibility for the private financial institutions that carry out the unbundled financial services, which will purportedly increase competition and lead to increased user access. Access enablers do not create accounts, manage records or control money, reducing the regulatory requirements placed on them:

“Lower entry barriers can enable wider participation in the provision of rCBDC services, compared with the existing payments market, to include, for example, SMEs [small- and medium-sized enterprises], civil society and charitable organisations, e-commerce providers, community centres and technology companies, among others.”

Financial institutions are understood in the traditional sense of banks, credit unions and similar organizations. Thus, it does not lead to disintermediation. Project Sela rCBDC users would not have to be account holders to use the services of those institutions to convert an rCBDC to or from cash. Payments are settled by the central banks, and users control their money the whole time. The central bank participants are assumed to be the operators of the distributed ledger system.

A system weak point noted in the report is RTGS systems, since they are usually not available around the clock and are not designed for frequent small transactions. Potential technical solutions are discussed.

Magazine: Ripple, Visa join HK CBDC pilot, Huobi accusations, GameFi token up 300%: Asia Express

$73,000,000,000,000 Wealth Transfer Incoming – Here’s Who Will Gain the Most, According to Billionaire Ray Dalio

September 9, 2023 The Daily Hodl

CBDCs will gradually displace private banks, says Russian lawmaker

September 6, 2023 Coin Telegraph

Banks

Some Russian banks have been increasingly concerned about the potential implications of the digital ruble after the first pilots started in August.

Central bank digital currencies (CBDC) and blockchain technology are likely to displace traditional banks, according to a lawmaker in Russia.

Anatoly Aksakov, head of Russia’s parliamentary financial committee and a major skeptic of Bitcoin (BTC), has predicted that the traditional banking system will "fade away" with the adoption of the digital ruble, the local news agency RIA reported.

“As for the role of banks, I think that their role will decrease in the future with the development of blockchain,” Aksakov said at a meeting of the media forum AIF Media.

Private banks will have to find a new use and they would be able to participate in the infrastructure of digital financial assets and the digital ruble, Aksakov said, adding:

“The traditional role that they served will gradually fade away.”

Aksakov also noted that the Bank of Russia has limited the daily use of digital rubles at 200,000 rubles, or roughly $2,000. “One of the reasons is the separation of the banking system from money, because people from banks will have to move to the central bank’s system,” he added.

As Russia has been progressing with its CBDC rollout — launching first trials in August 2023 — local banks have been growing increasingly concerned about the potential implications of the digital ruble.

Last month, the Association of Russian Banks reportedly sent a letter to the Bank of Russia, asking the regulators to clarify whether it would compensate creditors for providing access to the digital ruble platform. The banks also asked the central bank to officially prohibit forcing the citizens to open a digital ruble account.

On Aug. 1, Bank of Russia’s first deputy governor Olga Skorobogatova suggested that digital ruble adoption would force banks to offer “more interesting loyalty programs.”

“In this competition, in any case, the consumer will win, who will be able to use the entire set of non-cash payment tools,” Skorobogatova stated.

Russian banks aren’t the only ones that are concerned about their future amid the increasing adoption of CBDC and blockchain technology. In mid-August, the central bank of Colombia recommended putting limits on CBDC holdings and spending to help commercial banks stay relevant in terms of keeping their role as service providers for storing value.

Magazine: Asia Express: China expands CBDC’s tentacles, Malaysia is HK’s new crypto rival

Jamaican taxi drivers bullish on accepting Jam-Dex CBDC

August 30, 2023 Coin Telegraph

CBDC

Jam-Dex would be significantly transformative for the public transportation sector and needs to be embraced, believes Aldo Antonio.

Bus and taxi operators in Jamaica are eager to use the country’s in-house central bank digital currency (CBDC) — Jam-Dex — as locals seek operational efficiencies and reduced costs and security risks.

The Central Bank of Jamacia launched Jam-Dex, short for Jamaican Digital Exchange, in 2022, which was supported by an airdrop event to expedite its widespread adoption. More recently, Aldo Antonio, co-founder and acting executive chairman of the National Transporters Alliance Group (NTAG), revealed his efforts to spread Jam-Dex adoption among the transport community.

According to a local report from the Jamaica Observer, Antonio sees a lower curiosity in CBDCs among bus and taxi drivers — primarily due to a sluggish adoption rate among vendors and consumers. Regardless, Antonio remains optimistic:

“I see Jam-Dex as something that would be significantly transformative for the public transportation sector and needs to be embraced.”

In order to make Jam-Dex feasible, Antonio believes Jamaica needs more customers willing to use the CBDC. Failure to attract customers will discourage merchants and eventually result in the total abandonment of digital currency.

According to Antonio, food and transportation are the two main verticals that can increase the day-to-day Jam-Dex usage. He added:

“If we can get them [Jamaicans] moving and paying for transportation using Jam-Dex on a daily basis, it increases the rate at which we can get the digital currency into people’s hands.”

Moreover, CBDC’s widespread adoption eradicates the drivers’ concerns related to carrying cash or giving back the exact change. Jamaica is currently working toward enabling the CBDC services on mobile phones of the general public. “With that happening and training happening, then the sector could be in a position by January, if not before, to be able to accept Jam-Dex-type payments,” Antonio concluded.

An estimated 25,000–30,000 transport owners reside in Jamaica, who can help expand Jam-Dex’s reach beyond the existing 10,000 vendors with 200,000 people who use the CBDC through the digital wallet Lynk.

While Jamaica aims to bank on taxi drivers to expedite its CBDC adoption, Japanese auto-maker Nissan ramped up its Web3 efforts.

#NISSAN has filed 4 trademark applications for
▶️ INFINITI
▶️ NISMO
▶️ NISSAN

The filings signal plans for
Virtual Clothes + Cars
Stores for Virtual Goods + NFTs
NFT Marketplaces + Trading + Minting
Metaverse Advertising Services#NFT #NFTCommunity #Metaverse #Web3 #Car pic.twitter.com/iG3ZVgyD5t
— Mike Kondoudis (@KondoudisLaw) March 13, 2023

In Q1 2023, Nissan filed four new Web3-related trademarks in the United States. In addition, its Japan unit is experimenting with auto sales in the metaverse. The filings to the United States Patent and Trademark Office reveal Nissan’s plans to create virtual clothes, cars, headgear, trading cards, toys, tickets and a nonfungible token (NFT) marketplace for trading and minting NFTs.

Magazine: Recursive inscriptions: Bitcoin ‘supercomputer’ and BTC DeFi coming soon

Crypto amplified financial risks in emerging markets: BIS papers

August 22, 2023 Coin Telegraph

BIS

Central banks of the United States, Canada, Mexico and Brazil have pointed out the risks of crypto, but warned against excessively prohibitive laws.

Cryptocurrencies like Bitcoin (BTC) have failed to reduce but rather have “amplified financial risks” in less developed economies, according to a new study published by the The Bank for International Settlements (BIS).

On Aug. 22, the Consultative Group of Directors of Financial Stability (CGDFS) released a new report on cryptocurrencies, titled “Financial stability risks from crypto assets in emerging market economies.”

The study was conducted by BIS member central banks within CGDFS including those in Argentina, Brazil, Canada, Chile, Colombia, Mexico, Peru and the United States. The document emphasized that the views expressed are those of the authors and “not necessarily the views of the BIS.”

According to the authors of the study, cryptocurrencies like Bitcoin hold out the “illusory appeal” of being a quick solution for financial challenges in emerging markets.

“They have been promoted as low-cost payment solutions, as alternatives for accessing the financial system and as substitutes for national currencies in countries with high inflation or high exchange rate volatility,” the study reads. As cryptocurrencies allegedly extended the financial stability risks of emerging markets, authorities have many policy options to address those risks, ranging from outright bans to containment to regulation, the report notes.

At the same time, there are also risks if central banks and regulators react in an “excessively prohibitive manner,” the paper reads, adding that such policies may drive crypto activities into the shadows. The authors added:

“While crypto-related activities have not fulfilled their stated goals to date, the technology could still be applied in various constructive ways. Creating a regulatory framework to channel innovation into such socially useful directions will remain a key challenge in future.”

The central banks mentioned Bitcoin exchange-traded funds (ETFs) as one of major potential market risks in emerging markets as such products are able to lower the barriers to entry for “less sophisticated investors” and increase their exposure.

Among the risks, the study authors mentioned a situation where Bitcoin ETF investors “own no crypto assets but still face large losses when the price of Bitcoin drops.” Additionally, crypto futures-based ETFs “may increase price volatility and amplify risks if they hold a significant portion of the futures market,” the document notes.

It also appears somewhat unclear what emerging markets exactly are implied in the study, as many jurisdictions in this category, including China and Pakistan, have been quite restrictive in terms of crypto regulations. Equally, it's not clear whether the situation is different for more developed countries.

The BIS did not immediately respond to Cointelegraph’s request for comment.

Though not necessarily expressing views of the BIS, the study is another sign that the authority is cautious about the adoption of cryptocurrencies like Bitcoin. In another report in July, the international financial institution reiterated its high skepticism over crypto, pointing to commonly-cited issues like the instability of stablecoins and the purported irreversibility of smart contracts.

On the other hand, the central bank spoke highly of central bank digital currencies. “By underpinning the future monetary system, CBDCs would be the foundation upon which further innovations are built,” the authority wrote.

Big Questions: Did the NSA create Bitcoin?

Colombia central bank recommends limiting CBDC holdings and spending

August 17, 2023 Coin Telegraph

Banks

Setting limits on CBDC transactions could be beneficial to issues related to user privacy and security, according to the central bank of Colombia.

The central bank of Colombia has not yet decided whether or not to issue a central bank digital currency (CBDC), but believes that setting limits on CBDC transactions could bring about a number of benefits.

In its latest CBDC study, titled “Expected Macroeconomic Effects of Issuing a Retail CBDC,” Colombia’s Banco de la República concluded the potential introduction of a retail CBDC doesn’t pose any significant macroeconomic risks.

In order to mitigate any potential threats associated with CBDC, Colombia’s central bank recommended setting holding and spending limits for the digital currency. According to the regulator, such a CBDC design would increase the security of funds as CBDC holdings limits could safeguard users from cyberattacks targeting their balances or transactions.

Setting limits on retail CBDC holdings could also allow regulators to deal with the tradeoff between privacy and transparency by offering diverse tiers of limits.

For example, the Colombian central bank could offer digital wallets with small holding limits and a high level of privacy for people that place a high valuation to their transaction data. On the other hand, those who are comfortable with disclosing more data could prefer high holding limits and lower levels of privacy.

Additionally, CBDC limits could be beneficial for commercial banks as they would reduce the demand for a retail CBDC as a store of value in competition with bank accounts, the central bank noted.

“The introduction of the CBDC could be an attractive alternative for some risk-averse holders of other cash-like instruments,” the study reads, adding that this could impact the demand for government bonds, commercial papers and term deposit certificates. The study authors stated:

“By imposing CBDC holding limits to end users, this, and other types of situations — the tradeoff between privacy and security — could be easily controlled.”

While closely monitoring and studying the global development of CBDC, the Colombian central bank is still uncertain about whether its nation needs such a digital currency.

“The decision of issuing a retail CBDC must consider the fact that it would also need to have enough desirable features to generate a core group of users sufficient to generate the network externalities needed to make it viable,” the study authors stated.

A number of other global jurisdictions and organizations have considered setting limits on CBDC holding and spending as well.

In July, major United Kingdom’s finance trade bodies like UK Finance argued that the government should limit users’ digital pound holdings between 3,000 British pounds ($3,800) and 5,000 pounds ($6,400). According to UK Finance, a higher limit on Britcoin holdings — such as 20,000 pounds ($25,600) per individual — could destabilize the traditional banking system by facilitating bank runs or deposit competition with banks.

In 2020, European Central Bank’s director general of market infrastructure and payments, Ulrich Bindseil, proposed the adoption of a digital euro holding limit of 3,000 euros ($3,271) per person.

Asia Express: China’s risky Bitcoin court decision, is Huobi in trouble or not?

Canadians have ‘weak incentives’ to use a CBDC: Bank of Canada

August 11, 2023 Coin Telegraph

Bank of Canada

A central bank discussion paper found that the majority of Canadians have little trouble accessing financial services, which gives them little reason to use a CBDC.

The typical Canadian has little reason to adopt a central bank-issued digital currency, which could cause problems with its broad acceptance, according to a new paper from the Bank of Canada.

In the staff discussion paper released on Aug. 10, the central bank looked at a hypothetical scenario where cash was virtually eliminated in order to see what role a potential CBDC could play in helping the underbanked.

It found that most consumers would have “weak incentives” to use one, as Canadians don't face meaningful barriers to financial services like bank accounts or debit and credit cards.

*Screenshot of the staff discussion paper. Source: Bank of Canada*

98% of Canadian adults have a bank account, 87% also have a credit card and 90% of rural and urban households combined can access high-quality internet, the paper said.

It however found that replacing cash with digital loonies would also mean tech-averse Canadians would have fewer payment options while cash-dependent Canadians would find themselves unable to make the most common payments.

The potentially low uptake of a CBDC would also lead to merchants unlikely to want to accept one which would further diminish its usefulness.

Our latest survey results show that 92% of merchants have no plans to go cashless.

Read more results from our survey: https://t.co/DX0lUJ90u7 #cdnecon #PaymentMethods #Survey pic.twitter.com/017UYxiIC4
— Bank of Canada (@bankofcanada) August 8, 2023

Instead, the paper floated non-CBDC-related ways that could better help the underbanked — including improving internet access, expanding low-cost bank account availability, increasing merchant collaboration with remote communities and continuing to supply cash.

The paper stressed it was not predicting how Canadians would react to a CBDC and said more could be interested in using it due to a variety of reasons.

Even if there was greater interested than it suggested, the paper added the barriers for both users and merchants to broadly adopt a CBDC “appear to be significant.”

Cash is still king

The paper also gave a strong nod to the necessity of cash, noting that without cash there would be no offline payment methods in emergency situations such as extreme weather or widespread power outages.

“This suggests the potential system-wide benefits of encouraging digital payment innovations that can function offline as well as the importance of sustaining cash,” it explained.

The paper claimed such a scenario highlighted the importance of the Bank of Canada continuing to issue cash and providing cash accessibility.

The paper noted the central bank previously stated it was committed to supplying cash as long as it was in demand and a CBDC would only be issued with the advent of a cashless society or the widespread use of foreign CBDCs or cryptocurrencies such as Bitcoin (BTC).

Asia Express: China expands CBDC’s tentacles, Malaysia is HK’s new crypto rival

Nigeria to issue verifiable blockchain certificates for NYSC

August 10, 2023 Coin Telegraph

Central Bank

This initiative aims to house all NYSC certificates on the blockchain, providing individuals with the means to easily verify and authenticate them.

Kashifu Inuwa Abdullahi, who holds the position of Director-General at the National Information Technology Development Agency (NITDA), has disclosed that blockchain technology will be employed for the generation and validation of National Youth Service Corps (NYSC) certificates within Nigeria.

The National Youth Service Corps is a program in Nigeria that requires university graduates under 30 years old to undergo a one-year period of national service involving community development projects and cross-cultural integration.

This declaration took place at the Stakeholders’ Policy Dialogue centered around the execution of the National Blockchain Policy. The gathering was organized by NITDA in collaboration with the stakeholders from the Blockchain Association of Nigeria (SiBAN).

*Image of Kashifu Inuwa Abdullahi, the Director-General at NITDA at the event. Source: Youtube*

The Director-General of NITDA highlighted that the NYSC certificate has been susceptible to considerable counterfeiting within Nigeria. Consequently, the Director-General approached NITDA for assistance, and a mutual agreement was reached to aid in the creation of a blockchain-based certificate authentication system. This initiative aims to house all NYSC certificates on the blockchain, providing individuals with the means to easily verify and authenticate them.

Additionally, Kashifu Inuwa Abdullahi articulated the plan to furnish individuals who have successfully completed training programs under NITDA with certificates backed by blockchain technology. He also highlighted the willingness of the Central Bank of Nigeria to collaborate with the broader ecosystem.

As per the head of NITDA, blockchain presents a significant economic potential and a tangible avenue to delve into the extensive prospects of blockchain technology is its application in the issuance of certificates. Abdullahi said,

“I believe blockchain, with the ability to add $1.7 trillion to the global GDP, will be a good technology for Nigeria to leverage. And if we position ourselves well based on the BWC report, Nigeria can add about $40 billion to its GDP by 2030.”

A prominent voice at the gathering was Obinna Iwuno, serving as the President of SiBAN, who conveyed a positive outlook on the sector's forthcoming prospects. He highlighted that the government has embraced a grander vision for our industry and its future potential.

Consequently, they have begun to adopt a more comprehensive and expansive viewpoint, expressing their readiness to forge even stronger collaborations with the SiBAN, with the aim of ensuring the robust expansion of the industry.

Magazine: Blockchain games aren’t really decentralized… but that’s about to change

Blockchain.com scores payment license from Singapore central bank

August 7, 2023 Coin Telegraph

Central Bank

Cash is still king

Share this video