News

The Bank of Japan’s executive director announced that the eagerly-awaited digital yen won’t be used to attain negative interest rates.

Papers in this volume were prepared for a meeting of emerging market Deputy Governors organised by the Bank for International Settlements on 9–10 February 2022.

Russia should deploy cryptocurrencies and CBDCs for settlement and payments with Africa, the president of the Chamber of Commerce and Industry believes.

Japanese people will ultimately decide whether they want a digital currency, executive director says

The prototype aims to examine the ability of US clearing and settlement infrastructure to support the US central bank digital currency using a DLT platform.

The sovereign national digital currency will be based on the national fiat and would have a fixed supply quite similar to Bitcoin.

Central banks are considering how retail central bank digital currencies (CBDCs) may help support financial inclusion. While they are not a magic bullet, central banks see CBDC as a further tool to promote financial inclusion if this goal features prominently in the design from the get-go. In particular, central banks are considering design options around promoting innovation in the two-tiered financial system (eg allowing for novel non-bank payment service providers), offering a robust and low-cost public sector technological basis (with novel interfaces and offline payments), facilitating enrolment and education (via simplified due diligence and electronic know your customer) and fostering interoperability (both domestically and across borders). Together, these features can address a range of existing barriers to financial inclusion.

The researchers from BIS and the World Bank identify common factors across nine central banks that face a variety of different challenges.

Privacy, security, and offline access present difficult problems

The South African Reserve Bank stated further work would be undertaken to study the findings from the project and used to inform policy and regulatory responses to DLT and CBDCs.

Fabio Panetta outlined recent findings and remaining challenges while emphasizing the necessity of a well-designed European CBDC.

Pilot CBDC can integrate into payments systems, but met potential AML and performance problems

Banks rarely become weak overnight, and flaws in business models and strategies are often the root causes of banks' vulnerabilities and failures. While sudden shocks may be the immediate cause of banks' demise, the root causes are generally more structural. If not identified in time and allowed to fester, these vulnerabilities will make a bank's activities increasingly unsustainable, to the point where it becomes non-viable.

The Riksbank, Sweden's central bank, said it completed the second phase of the e-krona test, known as the e-krona, ready to be integrated into the banking network and facilitate transactions.

The Swedish CBDC is now technically ready for integration with banks and payment service providers, according to a report from Riksbank.