Major global economists credit Facebook’s Libra with pushing the world to start reconsidering the United States dollar as anchor currency. At a Jan. 23 panel at the annual World Economic Forum (WEF) in Davos, officials and financial experts discussed one of the most important mechanisms in the global financing system — the U.S. dollar, which has become the world’s reserve currency. Libra evoked a future digital currency Called “Challenging the Dominance of the Dollar,” the panel focused on factors that make the U.S. dollar the world’s dominant payment system and reserve currency, as well as the fact that countries over …

At the World Economic Forum panel discussing digital currencies, the conversation topics included Central Bank Digital Currencies (CBDCs). Calibra’s David Marcus highlighted that regardless of the nature of digital currency, these discussions are key to innovate cross-border payments and solve the issue of the unbanked. Retail CBDCs for consumer access Benoît Coeuré, head of the Bank of International Settlements’ Innovation Hub, revealed that as many as 80 percent of worldwide central banks are interested in CBDCs, primarily of the retail variety. Marcus explained the difference between “retail” and “wholesale” CBDCs: “Central banks could distribute the CBDCs in two possible ways. …

The World Economic Forum (WEF) — together with some of the world's major central banks — has created a central bank digital currency (CBDC) policymaker toolkit. According to an announcement on Jan. 22, the toolkit is the WEF's attempt to help policy-makers understand whether deploying a CBDC would be advantageous and guide them through its design. The WEF collaborated with regulators, central bank researchers, international organizations and experts from over 40 institutions to develop the framework. The head of blockchain and distributed ledger technology (DLT) at the World Economic Forum Sheila Warren explained: “Given the critical roles central banks play …

The former chairman of the United States Commodity Futures Trading Commission (CFTC) has some new remarks regarding his Digital Dollar initiative, speaking in Davos. On Jan. 22, Ex-CFTC chairman J. Christopher Giancarlo confirmed that the Digital Dollar project will consider the advantages of a United States’ central bank digital currency (CBDC), according to written remarks for a Davos event hosted by industry media outlet The Block. At the event, Giancarlo is scheduled to deliver his first public speech devoted to the blockchain-based Digital Dollar project, first announced last week. Digital Dollar project will develop a framework practical steps to establish …

Hong Kong and Thailand’s central banks have stepped closer to implementing a joint central bank digital currency (CBDC) for cross-border payments. On Jan. 22, the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) officially announced the outcomes of a joint CBDC research project called Project Inthanon-LionRock. Alongside publishing a joint press release, the banks have issued a detailed 90-page report providing an exhaustive analysis of the potential risks and benefits of CBDCs for real-time money transfers, liquidity management, regulatory compliance, and other aspects of finance. Inthanon-LionRock project was initiated in May 2019 After the HKMA and the …

The central banks of Canada, the United Kingdom, Japan, European Union, Sweden and Switzerland created a group with the Bank for International Settlements (BIS) to jointly research central bank digital currencies (CBDC). According to a press release published by the Bank of England on Jan. 21, the aforementioned institutions will share their experience with other group members as they study potential use cases for CBDCs in their respective jurisdictions. The announcement states: “The group will assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies. It will closely coordinate …

J. Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission (CFTC), plans to promote the blockchain-based United States dollar with a new think tank. Giancarlo, who earned the “Crypto Dad” moniker for advocating a “do no harm” approach to blockchain regulation, is now setting up a think tank called the Digital Dollar Foundation to promote the idea of digitizing the U.S. dollar. Giancarlo’s digital dollar is based on technology behind Bitcoin According to a Jan. 16 report by The Wall Street Journal, the ex-CFTC chairman is establishing the non-profit foundation to study prospects for converting the dollar into a …

A 200-page manual titled “Digital Currency: A Reader for Cadres” entered its second printing in January. The high demand signals interest from China’s government amid confusing regulations on cryptocurrencies. The handbook was first released in November, and includes a comprehensive set of 23 articles, starting from the basics of digital currencies to their impact on global finance. Yinan Zhao, a Bloomberg reporter covering the Chinese economy, explained to Cointelegraph: “It is actually a collection of published articles by officials and researchers on digital currencies. The views expressed in the book are not new. I think it meant to be a …

Digital currencies have gained prominence over the last few years, although such options will not budge the U.S. dollar from its seat of prominence, according to chief economist International Monetary Fund (IMF) Gita Gopinath. “Improvements in payment technology may have lowered the cost of switching from cash to digital payments, but there is little evidence they have done much to reduce the expense of moving among currencies,” Gopinath said in an opinion piece for the Financial Times on Jan. 6, adding: “Widely-held perceptions of the dollar’s safety and stability have kept it dominant in the international monetary system for decades.” …

The European Central Bank (ECB) remains open to the idea of a digital euro equivalent but would want to stop citizens holding too much of it. That was the conclusion of a fresh working paper on so-called central bank digital currencies (CBDCs) by Ulrich Bindseil, the bank’s Director General of Market Infrastructure and Payments, on Jan. 3. ECB would need to “control volume” of CBDC The paper deals with the prospect of issuing a CBDC for the European Union, and also touches on the differences between such a currency and cryptocurrency stablecoins. Its issuance comes as China edges closer to …

China has formally implemented a law governing cryptographic password management as part of its pre-release plans for its central bank digital currency (CBDC). As English-language news media outlet China Money Network reported on Jan. 1, the latest regulations have become legally binding following their unveiling in October last year. Crypto security paves way for CBDC As Cointelegraph reported, the Standing Committee of the 13th National People's Congress in China passed the crypto law on Oct. 26. It divides passwords at large into three distinct categories — passwords, common passwords, and commercial passwords — and aims to facilitate China’s transition to …

The Bank of Russia, the country’s central bank, has reportedly started testing stablecoins pegged to real assets in a regulatory sandbox. Elvira Nabiullina, Russia’s central bank head, said that the bank doesn’t assume that those stablecoins will function as a means of payment or become a substitute for money, Russian news service Interfax reported on Dec. 25. Nabiullina noted that the Bank of Russia is exploring the potential uses of stablecoins — cryptocurrencies that are pegged to another asset to prevent the volatility associated with crypto markets. She said: “We are testing stablecoins in our regulatory ‘sandbox’. We see companies …