As part of DC Fintech Week, a digital conference on the governmental side of the financial technology sector, several international leaders gathered for an Oct. 19 panel called: Central Banks, CBDCs and Cryptoeconomics. "I don't see technological barriers in this area, but I do see technological challenges," Cecilia Skingsley, First Deputy Governor of Riksbank, the central bank of Sweden, said on the panel. "The challenge is not so much technology in itself, but it's more about — we have to choose what sort of policy objectives do we want to focus on, what is the problem we want to solve," …

The Bank for International Settlements (BIS), in collaboration with a group of seven central banks, published its first joint report into central bank digital currencies on Oct. 9, focusing on the foundational principles and core features of CBDCs. Alongside the report, the Bank of Japan, one of the members of the group, released a document outlining its own specific approach to CBDCs from a Japan-centric perspective. According to the BoJ report, it will begin the first of several testing phases for its own CBDC sometime in 2021. This will include the development of a test environment for the currency and …

A new report from the Bank for International Settlements (BIS) shows that 2020 is the year that momentum behind central bank digital currencies (CBDCs) has truly taken off. Published on Aug. 24, BIS’ new working paper analyzes the global state of CBDC research and development work, technical approaches and policy stances. The comprehensive research draws on over 16,000 central bank speeches from recent years and assesses existing CBDC designs and motivations behind various countries’ embrace of the new model. “Attitudes about whether central banks should issue them [CBDCs] have changed noticeably over the past year,” the paper’s authors write. Their …

Central bank digital currencies are a digital representation of a country’s fiat currency. They are effectively a government-issued cryptocurrency designed to replace the traditional, physical form of fiat currencies. The term CBDC is broad because its implementation involves several critical decisions on the part of an issuing central bank. The primary decision is whether a CBDC should be a general-purpose in that it’s available to be used by the general population. If not, then the issuing authority may decide to make it available for “wholesale” transactions, which means the CBDC is only used for settlements between banks. Finally, a CBDC …

Famed currency speculator George Soros, who in 1992 broke the Bank of England to emerge a billionaire overnight by forcing the pound out of the European Exchange Rate Mechanism, believes: “We will not go back to where we were when the pandemic started. That is pretty certain. But that is the only thing that is certain. Everything else is up for grabs.” Giles Coghlan, the chief currency analyst at HYCM, had the following to say: “The volatile market conditions that have come about as a result of COVID-19 has investors looking for safe haven assets to protect their capital. The …

In the past year, three major financial oversight bodies have voiced concerns about threats to financial stability purported to be posed by stablecoins. While acknowledging the potential for enhanced payments efficiency, reports from the Bank for International Settlements, the United States Federal Reserve and, most recently, from the Financial Stability Board all emphasize numerous risks under the banner of “financial stability.” The concern is with global stablecoins, which the FSB defines as having “potential reach and adoption across multiple jurisdictions and the potential to achieve substantial volume.” The FSB report included a glossary of definitions for key terms, although none …

In advance of its coming annual report, on June 24 the Bank for International Settlements released a special chapter from that report on digital payments — especially central bank digital currencies, a topic that’s attracted tremendous interest in recent months. The report encourages central banks to treat CBDCs as their future, saying: “One option at the frontier of policy opportunities is the issuance of CBDCs, which could amount to a sea change.” A recent shift in favor of CBDCs The BIS found that there had been a major bullish shift in sentiment for CBDCs since the beginning of this year …

Major financial institutions love certainty, and that will help the crypto community immensely. Let’s get down to basics: A stablecoin is a type of digital asset designed to solve the problem of the hypervolatility of cryptocurrencies. This year is an exciting time for stablecoins as interest among financial institutions picks up speed. For example, Wisdomtree, a regulated money manager, has made plans to launch a stablecoin as an extension of its business in exchange-traded funds. IBM, State Street, JPMorgan Chase and Wells Fargo have all been exploring the opportunities provided by stablecoins. None of these institutions are prone to wild …

Benoît Cœuré, the head of the Bank for International Settlements Innovation Hub, recently asserted that central bank digital currencies, or CBDCs, have been brought “into sharper focus” amid the coronavirus pandemic. Speaking during a webinar hosted by Accenture, the ReReinventing Bretton Woods Committee, and the Chamber of Digital Commerce on April 17, Cœuré asserted that “the crisis has exposed the value of technologies which enable the economy to operate at arm’s length.” He also revealed that the Bank of International Settlements, or BIS, is exploring tokenization as a possible solution for restarting segments of the economy during the lock-down. Coronavirus …

Researchers from the Bank for International Settlements are finding that cryptocurrency markets actually react positively to news of clear regulations. Findings? Crypto is not such a wild west after all Per a working paper released by the Dallas Federal Reserve Bank’s Globalization Institute on April 18, crypto prices are more responsive to regulation than their reputation suggests. While news reports of government bans on cryptocurrencies resulted in price dips, markets jumped when the regulation was clear. The paper suggests, “at the current juncture, authorities around the globe do have some scope to make regulation effective.” Categorizing different news and their …

The Bank of International Settlements (BIS) has issued a report arguing in favor of central bank digital currencies (CBDCs) and digital payments amid the COVID-19 pandemic. The bulletin published by the BIS, a 600-member international financial institution representing the central banks of 60 countries, urges central banks to consider developing CBDCs in light of concerns regarding the spread of coronavirus through existing payment methods. BIS warns of COVID-19 transmission via credit card terminals The report notes a significant negative change in consumer attitudes regarding the use of cash in response to the World Health Organization’s (WHO) warning regarding the spread …

The Riksbank, Sweden’s central bank that started testing its own central bank digital currency (CBDC) in February, wants to host the digital currency innovation hub by the Bank for International Settlements (BIS). Officially announcing the news on March 6, the Riksbank noted that in order for the hub to be located in Sweden, the bank would need to undertake a number of measures to co-finance the activity. As such, the Riksbank proposed an amendment to the Sveriges Riksbank Act, asking the Swedish parliament, the Riksdag, for approval to finance the activities of international organizations. The Riksbank requested the parliament for …