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<ul class="summary-list"><li>There is no universal approach when designing CBDCs, the <keyword id="12030574" type="UNKNOWN" weightage="60" keywordseo="imf" source="Orion">IMF</keyword> said Wednesday.</li><li>But countries must focus on financial stability and privacy when designing these digital assets.</li><li>"No one size fits all," IMF Managing Director <a href="https://www.imf.org/en/About/senior-officials/Bios/kristalina-georgieva">Kristalina Georgieva</a> said. "Each economy is different."</li></ul>There is no universal approach when designing central bank digital currencies, but countries must focus on financial stability and privacy, the <keyword id="12472836" type="UNKNOWN" weightage="60" keywordseo="international-monetary-fund" source="Orion">International Monetary Fund</keyword> said on Wednesday."No one size fits all," IMF Managing Director <a href="https://www.imf.org/en/About/senior-officials/Bios/kristalina-georgieva">Kristalina Georgieva</a> said in a <a href="https://www.imf.org/en/News/Articles/2022/02/09/sp020922-the-future-of-money-gearing-up-for-central-bank-digital-currency">statement</a> published Wednesday. "There is no universal case for CBDCs because each economy is different."Georgieva said CBDCs have diverse use cases and should be tailored to a nation's situation.For instance, a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> can be an "important path to financial inclusion," especially for countries whose geographic makeup prevents easy transactions through central banks, while it could also be an "essential backup in the event that other payment instruments fail," she said.The managing director gave the Eastern Caribbean Central Bank as an example when it extended its CBDC pilot to areas struck by a <a href="https://www.reuters.com/business/environment/explosive-volcanic-eruption-rocks-caribbean-island-st-vincent-2021-04-09/">volcanic eruption</a> on the island of St. Vincent last year.Georgieva also noted that financial stability and privacy considerations are "paramount" when designing CBDCs."In many countries, privacy concerns are a potential deal breaker when it comes to CBDC legislation and adoption. So, it's vital that policymakers get the mix right," she said.The former World Bank CEO highlighted the delicate balance of both technical design and policy. While the technology underpinning this new form of money requires time and resources, developing new legal frameworks and regulations are just as crucial, she said. "On both fronts, a CBDC also requires prudent planning to satisfy policy targets like financial inclusion, and avoid undesirable spillovers such as sudden capital outflows that could undermine financial stability," she said. The comments come in conjunction with a <a href="https://www.imf.org/en/Publications/fintech-notes/Issues/2022/02/07/Behind-the-Scenes-of-Central-Bank-Digital-Currency-512174">35-page report</a> the IMF released on Wednesday that studied six advanced CBDC projects in the Bahamas, China, the Organisation of Eastern Caribbean States, Uruguay, Sweden, and Canada.The biggest takeaway is the importance of considering a country's unique context and policy goals when making digital currencies. "CBDC exploration is still in an early stage, and not all country experiences can be easily ported abroad," the report said. "There are still open questions, and CBDC remains an uncharted territory, raising challenges as well as opportunities."A CBDC is a type of central bank liability — similar to the US dollar — issued in digital form, which could be used by the general public. It has the full backing of a central bank although it could be managed by designated private financial institutions.As it stands, 87 countries are exploring CBDCs, and 14, including major economies like China and South Korea, are already in the pilot stage, according to a tracker by the <a href="https://www.atlanticcouncil.org/cbdctracker/" target="_blank" rel="noopener">Atlantic Council</a>. Nine have already fully launched a digital currency.Of the countries with the four largest central banks — the Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England —the US is the furthest behind, according to the tracker.

There is no universal approach for central bank digital currencies and countries must focus on privacy, IMF says

<ul class="summary-list"><li><keyword id="11912689" type="UNKNOWN" weightage="60" keywordseo="visa" source="Orion">Visa</keyword> is testing a platform in partnership with <keyword id="12948494" type="UNKNOWN" weightage="60" keywordseo="consensys" source="Orion">ConsenSys</keyword> that aims to support <keyword id="10038048" type="UNKNOWN" weightage="60" keywordseo="central-bank-digital-currencies" source="Orion">central bank digital currencies</keyword>.</li><li>The new technology is designed provide an "on-ramp for <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> to existing payment networks," Visa said.</li><li>Payment rival Mastercard already launched a similar CBDC testing platform with ConsenSys.</li></ul><a href="https://markets.businessinsider.com/searchresults?_search=v">Visa</a> is testing a platform in partnership with blockchain firm ConsenSys that aims to support central bank digital currencies.The new technology aims to provide an "on-ramp for CBDC to existing payment networks," Catherine Gu, Visa's head of CBDC, said in a <a href="https://usa.visa.com/visa-everywhere/blog/bdp/2022/01/13/envisioning-a-future-1642034573970.html">statement</a> Thursday.This means banks and companies can plug into their existing modules and seamlessly integrate their infrastructure to issue CBDC-linked payment cards or wallet credentials, among others, she explained."We envision a user experience that looks very familiar to how you pay today," Gu said. "If CBDC networks are seamlessly integrated into your existing banking app, you'd be able to use your CBDC-linked <keyword id="12554739" type="UNKNOWN" weightage="60" keywordseo="visa-card" source="Orion">Visa card</keyword> at the checkout."A CBDC is a type of central bank liability — similar to the US dollar — issued in digital form, which could be used by the general public. Visa, which is accepted by around 80 million merchant locations worldwide, could help bridge the gap between central banks and financial institutions if it's platform is successful.Rival <a href="https://markets.businessinsider.com/searchresults?_search=ma">Mastercard</a> already launched a similar CBDC testing platform in <a href="https://consensys.net/blog/press-release/consensys-launches-consensys-rollups-with-the-support-of-mastercard-fostering-innovation-and-scalability-on-the-ethereum-mainnet-for-private-and-permissioned-blockchains/">December 2020</a> also in partnership with ConsenSys, which is the leading ethereum software companies.For its part, ConsenSys has been working with several central banks to test CBDCs, including <a href="https://consensys.net/blog/press-release/consensys-selected-by-hong-kong-monetary-authority-for-phase-two-of-project-inthanon-lionrock/">Hong Kong's</a> and <a href="https://consensys.net/blog/press-release/reserve-bank-of-australia-partners-with-commonwealth-bank-national-australia-bank-consensys-perpetual-on-wholesale-cbdc-project/">Australia's</a>."CBDC could expand access to financial services and make government disbursements more efficient, targeted, and secure – that's an attractive proposition for policymakers," Visa's Gu added. "With CBDC, a central authority could send fast payments to a targeted set of users and program-specific spending parameters."Still, CBDCs do not come without controversy. Rep. Tom Emmer, R-Minn., on <a href="https://emmer.house.gov/2022/1/emmer-introduces-legislation-to-prevent-unilateral-fed-control-of-a-u-s-digital-currency" target="_blank" rel="noopener">Wednesday</a> <a href="https://markets.businessinsider.com/news/currencies/bill-cbdc-tom-emmer-fed-digital-currency-crypto-retail-investors-2022-1">introduced a bill</a> that would ban the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> from issuing a CBDC directly to retail investors.A centralized digital currency that would require Americans to register accounts with the Fed would put the central bank "on an insidious path akin to China's digital authoritarianism," he said.It is uncertain whether the Fed will issue a digital currency, but clarity may be ahead as the central bank prepares to release a much-anticipated CBDC report soon.Fed Chair Jerome Powell on <a href="https://markets.businessinsider.com/news/currencies/cryptos-fed-cbdc-digital-coin-central-bank-coexist-powell-toomey-2022-1?utm_medium=ingest&amp;utm_source=markets" target="_blank" rel="noopener">Tuesday</a> said cryptos — including stablecoins — would be able to coexist with a CBDC, walking back from his <a href="https://markets.businessinsider.com/news/currencies/jerome-powell-cryptocurrencies-cbdc-stablecoins-digital-currency-testimony-2021-7?utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_source=markets" target="_blank" rel="noopener">July statement</a> when he said there was no need for cryptos if the central bank were to issue its own CBDC.For now, 87 countries are exploring their own CBDCs, and 14, including major economies like China and South Korea, are already in the pilot stage, according to a tracker by the <a href="https://www.atlanticcouncil.org/cbdctracker/" target="_blank" rel="noopener">Atlantic Council</a>. Nine have already fully launched them.

Visa is testing a platform that will support central bank digital currencies in partnership with blockchain firm ConsenSys

<ul class="summary-list"><li>A new report from the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> opened the door to debate around a <keyword id="11939356" type="UNKNOWN" weightage="60" keywordseo="central-bank-digital-currency" source="Orion">central bank digital currency</keyword>.</li><li>The <keyword id="11894209" type="UNKNOWN" weightage="60" keywordseo="fed" source="Orion">Fed</keyword> avoided taking a side for or against the idea and instead raised a number of pros and cons.</li></ul>Cryptocurrencies' ascent to global stardom put governments on alert. Some, like China and Sweden, are already tinkering with digitizing their own currencies. Now the Federal Reserve is dipping its toes in the water.The Federal Reserve still hasn't sided for or against a <keyword id="11964297" type="UNKNOWN" weightage="60" keywordseo="central-bank" source="Orion">central bank</keyword> digital currency, but a new report lays out the potential benefits and risks of fully digitizing the US dollar.The Fed kickstarted the debate over a US central bank digital currency on Thursday, publishing a highly anticipated <a href="https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf">report</a> on the topic. A <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> would serve as a purely digital version of cash that's backed by the Fed and just as available to the public as physical cash. It wouldn't require the same deposit insurance that banks need for cash, and it wouldn't need to be backed by a physical asset.A Fed-backed <keyword id="12998637" type="UNKNOWN" weightage="60" keywordseo="digital-dollar" source="Orion">digital dollar</keyword> would then provide many of the benefits touted by cryptocurrencies without their wild price swings and usage fees. In theory, a CBDC would meld the best aspects of physical and digital currencies for the average American.A CBDC likely wouldn't feel all that different from a regular dollar. People already use digital cash when they shop with credit or debit cards, but in those situations, the currency is backed by private-sector banks. Should the Fed introduce a CBDC, Americans would be able to shop with a digital dollar backed by the country's central bank. If that sounds outlandish, it shouldn't; physical dollar bills are already backed by the Fed, not by commercial banks.The Fed stopped short of taking a position on a CBDC, saying it first aims to engage with the public, Congress, and other stakeholders on the topic. Still, the Thursday report detailed a handful of reasons why such a currency would benefit the country and serve as a better medium for spending than the commonly traded cryptocurrencies that have seen adoption explode over the past few years.<h2>A CBDC could bring safe, fast, and accessible payments</h2>Cryptocurrencies surged in popularity partly due to their use in real-time, peer-to-peer payments. A CBDC could offer the same. Transactions with a CBDC would be "final and completed in real time," and could be used for everything from buying groceries to receiving government stimulus, according to the report.The digital cash would also be free from credit risk, liquidity risk, and, perhaps most importantly, the volatility that makes spending with crypto so unreliable. Stablecoins, or cryptocurrencies that aim to fix their exchange rate with a more conventional currency like the dollar, address some of the volatility problem, but a recent <a href="https://home.treasury.gov/system/files/136/StableCoinReport_Nov1_508.pdf">report</a> from the President's Working Group on Financial <keyword id="11893875" type="UNKNOWN" weightage="60" keywordseo="markets" source="Orion">Markets</keyword> found gaps in the authority of regulators to address some stablecoin risks.A CBDC would also allow for more flexible transacting, the Fed said. Payments could be scheduled for certain times and used for small transfers that traditional systems might not allow for. And while services like PayPal and Venmo already have some of these capabilities, a CBDC would allow users to make such transfers without a private third party.<keyword id="12197645" type="UNKNOWN" weightage="60" keywordseo="cbdcs" source="Orion">CBDCs</keyword> could even improve cross-border payments, but such gains would take time to materialize. International CBDC transfers would require new infrastructure, government coordination, and enforcement to curb illicit finance. Still, a future network of CBDC could do away with transfer fees and long settlement times.<h2>A CBDC would come with 21st-century risks</h2>A fully digitized dollar would come with its fair share of pitfalls, the Fed warned. For one, allowing the Fed to back digital payments could "fundamentally change the structure of the US financial system," according to the report. Commercial banks rely on deposits to dole out loans, but a CBDC could replace cash held in commercial banks with digital wallets offered by the private sector. That could make it far more difficult for people to take out loans.The stability of a CBDC could also spark runs on commercial banks in times of economic uncertainty, the Fed said. Traditional measures used to prevent massive outflows from banks would be inefficient if people rushed to convert their bank holdings into CBDC.Implementation of a Fed-backed digital dollar could even erode the central bank's policy power. By changing the amount of reserves in the financial system, a CBDC could affect how the Fed sets interest rates and steers inflation. The Fed would likely need to boost its level of reserves just to accommodate fluctuations between outstanding cash, bank reserves, and CBDC holdings.Introduction of a CBDC, risks and all, would make for "a highly significant innovation in American money," the Fed said. The central bank is set to take comments on the matter until May 20, when it is expected to further mull the currency's pros and cons. While the future of a digitized dollar remains uncertain, the Fed's report unequivocally opens the door to such a project.

A fully digital US dollar would be a better online currency than crypto, new Fed report suggests

<ul class="summary-list"><li><keyword id="106488" type="CITY" weightage="60" keywordseo="Bank-of-England">Bank of England</keyword> deputy governor Jon Cunliffe said that it is "probable" the UK central bank will launch a <keyword id="1624829" type="PERSON" weightage="60" keywordseo="digital-currency">digital currency</keyword>. </li><li>Cunliffe listed several factors that served as a catalyst for a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword>, but specifically highlighted the pandemic.</li><li>He clarified that the UK will continue to make physical cash available.</li></ul>Bank of England deputy governor Jon Cunliffe said that it is "probable" the United Kingdom will launch a <keyword id="6472011" type="UNKNOWN" weightage="60" keywordseo="Central-Bank-Digital-Currency">central bank digital currency</keyword>, clarifying that no decision has been made on when to introduce it as of yet. "Introduction of a CBDC would be a very major public project which would have material implications for the financial sector, many parts of the economy and for society more broadly," Cunliffe said in a <a href="https://www.bankofengland.co.uk/speech/2021/may/jon-cunliffe-omfif-digital-monetary-institute-meeting" target="_blank" rel="noreferrer noopener">speech</a> to the Official Monetary and Financial Institutions Forum, a think tank, Thursday. "But it looks probable in the UK that if we want to retain public money capable of general use and available to citizens, the state will need to issue public <keyword id="1965229" type="PERSON" weightage="60" keywordseo="digital-money">digital money</keyword> that can meet the needs of modern day life," Cunliffe added. The statement is a development from an <a href="https://markets.businessinsider.com/currencies/news/crypto-uk-bank-of-england-backed-britcoin-cryptocurrencies-btc-2021-4-1030318483">April comment by British finance minister Rishi Sunak</a>, who, at the time, said the state is merely "exploring" a CBDC he nicknamed "<keyword id="11123980" type="UNKNOWN" weightage="60" keywordseo="britcoin">Britcoin</keyword>."CBDCs are <a href="https://markets.businessinsider.com/currencies/news/norway-central-bank-digital-currency-after-4-years-research-2021-4-1030334599?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">digital currencies backed by their respective countries</a> and secured on a blockchain ledger. Cunliffe clarified that the central bank will continue to make physical cash available as long as there is demand for it, especially for the 1.2 million unbanked people in the UK, who rely on cash and cannot access digital payments."I do not think that demand for cash will entirely disappear any time soon," he said. "But cash, and by extension public money, is becoming an ever-smaller fraction of the money we use in the UK and increasingly unusable in a digital world."A number of central banks have been exploring CBDCs spurred by strong momentum in the cryptocurrency space this year.China has been leading the race since developing its digital currency electronic payment CBDC in 2014 and testing a pilot in 2020. Norway, the <a href="https://www.norges-bank.no/en/news-events/news-publications/Speeches/2020/2020-11-05-bache/" target="_blank" rel="noopener">world's most cashless country,</a> also announced in April it will <a href="https://markets.businessinsider.com/currencies/news/norway-central-bank-digital-currency-after-4-years-research-2021-4-1030334599?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">start testing various solutions for a CBDC.</a>In the US, Boston Federal Reserve Bank President Eric Rosengren this week said that the Fed's <a href="https://markets.businessinsider.com/news/stocks/fed-boston-president-rosengren-cbdc-central-bank-digital-currency-launch-2021-5-1030422818">CBDC research is still ongoing</a> as it continues to weigh the implications of launching digital money in the US. Cunliffe touched on the possible threats of a CBDC as well, in particular, its security risks. He likened the current payment infrastructure to a "Blackberry" and is eager to develop it into an "iPhone."

Bank of England official says Britcoin CBDC launch is 'probable'

<ul class="summary-list"><li>The US <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> released its long-awaited report on <keyword id="10038048" type="UNKNOWN" weightage="60" keywordseo="central-bank-digital-currencies" source="Orion">central bank digital currencies</keyword>.</li><li>The report weighed the pros and cons of issuing a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> but didn't take a stance on whether to do so.</li><li>The Fed asked for public comment on a list of 22 questions about the matter.</li></ul>The Federal Reserve published its <a href="https://www.federalreserve.gov/publications/money-and-payments-discussion-paper.htm">long-awaited report</a> on a US digital currency on Thursday but avoided taking a stance on whether the country should establish one.In a 40-page report that was <a href="https://markets.businessinsider.com/news/currencies/central-bank-digital-currency-cbdc-federal-reserve-digital-dollar-cryptocurrency-2021-10?utm_medium=ingest&amp;utm_source=markets">previously due last summer</a>, the Fed outlined the pros and cons of a central bank digital currency, also known as a CBDC, and requested public comment. As for whether the Fed would issue a <a href="https://markets.businessinsider.com/news/currencies/central-bank-digital-currencies-cbdc-crypto-bofa-cryptocurrencies-economy-2021-7">digital currency</a>, the central bank said the report was designed to foster conversation, not to take a stance."The paper is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a U.S. CBDC," the report read.The Fed said it needed broad public and government support in order to pursue a CBDC and asked stakeholders to submit feedback on a list of 22 questions. It also said Congress must act before the Fed creates a CBDC, ideally via "a specific authorizing law.""The introduction of a CBDC would represent a highly significant innovation in American money," and with it, a range of risks and benefits, the Fed said.Some of the benefits of a CBDC that the report noted include a convenient and safe electronic form of central bank money as well as cheaper and faster payments, even overseas.As for the risks, the Fed noted a central digital currency could have an impact on the stability of the financial system and the effectiveness of monetary policy.Fed Chairman <keyword id="11918133" type="UNKNOWN" weightage="60" keywordseo="jerome-powell" source="Orion">Jerome Powell</keyword> hasn't necessarily taken a position on issuing CBDCs, outside of <a href="https://markets.businessinsider.com/news/currencies/cryptos-fed-cbdc-digital-coin-central-bank-coexist-powell-toomey-2022-1">comments</a> made about them generally.But Fed Governor <keyword id="12587226" type="UNKNOWN" weightage="60" keywordseo="lael-brainard" source="Orion">Lael Brainard</keyword>, who has been nominated for the No. 2 spot at the Fed, has advocated for them. She said they could <a href="https://markets.businessinsider.com/currencies/news/digital-dollar-cbdc-benefit-payments-transactions-fed-governor-leal-brainard-2021-5-1030459689">accelerate the payment of benefits</a> to Americans, like those issued during the onset of the COVID-19 pandemic when many sought financial assistance.For now, 87 countries are exploring their own CBDCs, and 14, including major economies like China and South Korea, are already in the pilot stage, according to a tracker by the <a href="https://www.atlanticcouncil.org/cbdctracker/" target="_blank" rel="noopener">Atlantic Council</a>. Nine have already fully launched them.

Fed punts on the creation of a digital dollar in long-awaited report on central bank cryptocurrencies

<ul class="summary-list"><li>The head of the ruling party's <keyword id="1624829" type="PERSON" weightage="60" keywordseo="digital-currency">digital currency</keyword> initiative told Reuters digital yen plans could take shape next year. </li><li>He said he expected this to provide clarity on its impact on the existing financial system. </li><li>The <keyword id="79248" type="CITY" weightage="60" keywordseo="Bank-of-Japan">Bank of Japan</keyword> started exploring a <keyword id="6472011" type="UNKNOWN" weightage="60" keywordseo="Central-Bank-Digital-Currency">central bank digital currency</keyword> earlier this year.</li></ul>Japan's plans for a digital yen could start to come together next year and the design of a potential central bank digital currency will be clearer then, the head of the ruling party's <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" id="docs-internal-guid-a75c27ea-7fff-65aa-ddcc-3f2d6739a86b">digital currency</a> initiative, Hideki Murai, told Reuters in an interview published on <a href="https://www.reuters.com/article/japan-economy-cbdc/japans-digital-yen-plan-to-become-clearer-late-2022-says-ruling-party-official-idUSL3N2OG0P4?rpc=401&amp;">Monday</a>. "By around the end of next year, we'll have a clearer view of what Japan's <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword> would look like," he said, adding this would not necessarily lead to a clear-cut decision on whether to roll out a central bank digital currency (CBDC). The Bank of Japan launched its exploration into a CBDC earlier this year and is currently researching and assessing the concept. Murai also said having a better picture of the <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" id="docs-internal-guid-c6605652-7fff-52aa-4ddd-bfbffa14c5a8">digital yen</a>'s design would provide insight into how it might impact the existing financial system and institutions in Japan, which is currently undergoing significant shifts. Private businesses have taken on responsibilities that previously fell to commercial banks, such as online settlement means, which have put the two industry groups at odds with one another. A digital yen could reverse the shift and commercial banks could benefit from this, Murai said. "CBDC has the potential to completely reshape changes occurring in Japan's financial industry." he commented. The Bank of Japan has previously said a CBDC would not significantly impact private businesses. Murai also said the Bank of Japan would have to ensure the digital yen is compatible with CBDCs from other countries, to ensure it stays competitive against the Chinese <keyword id="8641649" type="UNKNOWN" weightage="60" keywordseo="digital-yuan">digital yuan</keyword>. The Federal Reserve and the European Central Bank are currently among those banks researching the potential for a CBDC, while China is <a href="https://markets.businessinsider.com/news/stocks/china-cbdc-trial-digital-yuan-beijing-lottery-2021-6">trialling a digital form of its currency in various cities around the country</a>, before rolling it out nationwide. The country began to develop the digital yuan as early as 2014 and has said it <a href="https://markets.businessinsider.com/currencies/news/digital-yuan-china-central-bank-currency-visitors-2022-winter-olympics-2021-4-1030316791?utm_source=markets&amp;utm_medium=ingestgest">might make the CBDC available to international visitors</a> during the 2022 Winter Olympics in Beijing. If China fully rolls out its own CBDC, this could threaten demand for the yen, Murai said in the interview. "If a digital yuan becomes so convenient it's frequently used by tourists or becomes a main settlement means for trade, the relationship between the yen and yuan could change," he said. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/chinas-crypto-crackdown-is-not-with-bitcoin-mining-only-stablecoins-software-influencers-are-also-on-its-radar/articleshow/84229285.cms">China’s crypto crackdown is not likely to stop with Bitcoin mining — stablecoins, software, influencers are also on its radar</a> <a href="https://www.businessinsider.in/cryptocurrency/news/cryptocurrencies-exchanges-can-run-into-trouble-with-investors/articleshow/84205889.cms">Cryptocurrencies aren't all diamonds and roses — lawsuits from people who lost big are piling up with exchanges</a> <a href="https://www.businessinsider.in/cryptocurrency/news/crypto-sports-sponsorships-are-heating-up-again-as-ufc-bags-a-multi-million-dollar-deal-from-crypto-com/articleshow/84229910.cms">Crypto sports sponsorships are heating up again with multi-million dollar deals on the table</a> <a href="https://www.businessinsider.in/cryptocurrency/news/ceo-of-the-worlds-largest-cryptocurrency-said-that-financial-assets-like-cryptocurrencies-only-come-along-once-in-a-generation/articleshow/84164488.cms">The CEO of the world’s largest cryptocurrency asset manager reckons that crypto as an asset class is ‘here to stay’ — Here are 12 of his best quotes</a>

Japan's plans for a digital yen could start to take shape next year, according to a top lawmaker, report says

<ul class="summary-list"><li><keyword id="5601563" type="ORGANIZATION" weightage="60" keywordseo="Boston-Federal-Reserve">Boston Federal Reserve</keyword> president Eric Rosengren says that research on a <keyword id="6472011" type="UNKNOWN" weightage="60" keywordseo="Central-Bank-Digital-Currency">central bank digital currency</keyword> is still ongoing, <a href="https://www.reuters.com/article/us-usa-fed-rosengren/feds-rosengren-says-important-to-understand-trade-offs-of-digital-currencies-idUSKBN2CT1PU">Reuters reported</a>.</li><li>The Fed, he says, continues to weigh the implications of launching a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword> at a national level.</li><li>There are many potential benefits of a CBDC, but it could also threaten financial stability, Rosengren said.</li></ul>Boston Federal Reserve Bank President Eric Rosengren said that research on a central bank digital currency is still ongoing as the central bank continues to weigh the implications of digital bank notes for the US, <a href="https://www.reuters.com/article/us-usa-fed-rosengren/feds-rosengren-says-important-to-understand-trade-offs-of-digital-currencies-idUSKBN2CT1PU">Reuters reported</a> Wednesday."It is important to highlight that this is exploratory work, and any decision to move forward with such a currency would depend on a variety of factors beyond the technological feasibility and implementation," Rosengren during a virtual event organized by Harvard Law School, <a href="https://www.reuters.com/article/us-usa-fed-rosengren/feds-rosengren-says-important-to-understand-trade-offs-of-digital-currencies-idUSKBN2CT1PU">Reuters reported</a>.Rosengren added that while a CBDC could improve financial inclusion, reduce costs of cross-border transactions, and provide more flexibility for implementing monetary policy, there are drawbacks as well.One of which, he said, is potentially upending financial stability.The <a href="https://www.bostonfed.org/news-and-events/press-releases/2020/the-federal-reserve-bank-of-boston-announces-collaboration-with-mit-to-research-digital-currency.aspx">Boston Fed teamed up with the Massachusetts Institute of Technology</a> in August 2020 for a multi-year collaboration to explore digital currencies with the <a href="https://dci.mit.edu/" target="_blank" rel="noopener">Digital Currency Initiative.</a>The research project will explore the use of new and existing technologies to build and test a hypothetical digital currency platform. The research results will be published and the code would be licensed as open-source software so that anyone can experiment with it."It is important to understand what problems a central bank digital currency is being designed to solve, and whether other technologies could more cheaply or efficiently address those problems," Rosengren said.CBDCs are <a href="https://markets.businessinsider.com/currencies/news/norway-central-bank-digital-currency-after-4-years-research-2021-4-1030334599">digital currencies backed by their respective countries</a>. Typically, these are be powered by blockchain technology, a secure system of recording that is almost impossible to hack.A number of central banks have been exploring CBDCs spurred by strong momentum in the cryptocurrency space this year.China has been leading the race since developing its digital currency electronic payment CBDC in 2014 and testing a pilot in 2020.In April, Norway, the <a href="https://www.norges-bank.no/en/news-events/news-publications/Speeches/2020/2020-11-05-bache/" target="_blank" rel="noopener">world's most cashless country,</a> announced it will <a href="https://markets.businessinsider.com/currencies/news/norway-central-bank-digital-currency-after-4-years-research-2021-4-1030334599?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">start testing various solutions for a CBDC</a> while the UK said it is <a href="https://markets.businessinsider.com/currencies/news/crypto-uk-bank-of-england-backed-britcoin-cryptocurrencies-btc-2021-4-1030318483?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank" rel="noopener">coordinating exploratory work on a potential CBDC</a>, dubbed "britcoin."

Boston Fed president Eric Rosengren says more research is needed before the US launches a central bank digital currency

<ul class="summary-list"><li><keyword id="1334" type="COUNTRY" weightage="60" keywordseo="China">China</keyword> is giving away a total of 40 million <keyword id="8641649" type="UNKNOWN" weightage="60" keywordseo="digital-yuan">digital yuan</keyword>, worth $6.2 million, Reuters reported.</li><li>Beijing residents can win "red packets" of 200 digital yuan in a lottery to test China's <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword>.</li><li>China is the first major economy to advance its digital currency to the trial stage. </li></ul>China is handing out free "red packets" of its digital yuan, worth a total of $6.2 million, in a Beijing lottery designed to test the central bank digital currency, according to reports.Residents in China's capital city can apply to win one of the 200,000 packets, which each contain 200 digital yuan ($31.33), <a href="https://www.reuters.com/article/china-currency-digital/chinese-central-banks-digital-yuan-given-trial-by-lottery-idUSL2N2NK08R">Reuters</a> reported. The digital cash, delivered via apps, can be spent at selected local retailers. The e-wallet is inspired by the Chinese tradition of giving red envelopes of money at milestone events or celebrations.The lottery is part of the People's Bank of China's ongoing CBDC trials, in which the digital yuan is being tested and evaluated locally before being rolled out across the country. China is the first major economy to progress its CBDC initiative to the trial stage, with the US and the EU central banks still in the research stages of their respective digital currencies. China is currently pursuing a two-tier approach to distributing its digital currency, in which the central bank disseminates its CBDC to the population via commercial banks.To enter the Beijing lottery, people must apply through one of two banking apps required to participate in the trial. It will run until June 6, <a href="https://www.cnbc.com/2021/06/02/china-digital-currency-beijing-to-hand-out-6point2-million-in-trial.html">CNBC</a> reported, and winners will be notified soon after and be able to spend the digital cash until June 20.Other Chinese cities, Shenzhen and Chengdu, have held similar CBDC lotteries, and the central bank expects to carry out further local trials before rolling out the currency across the country. It is<a href="https://markets.businessinsider.com/currencies/news/digital-yuan-china-central-bank-currency-visitors-2022-winter-olympics-2021-4-1030316791"> planning to trial the digital yuan for international visitors</a> at the 2022 Beijing Winter Olympics. Earlier this week, Yao Qian, the former chief of China's CBDC efforts, said that<a href="https://markets.businessinsider.com/currencies/news/cbdc-blockchain-network-china-central-bank-ethereum-2021-6-1030482626"> digital currencies could eventually run on blockchain networks like ethereum</a>. Commercial banks would then no longer have to function as an intermediary and financial inclusion would be improved, as users would not need a bank account to use the digital yuan, Yao said.

China is giving away digital yuan worth $6.2 million in a Beijing lottery as it tests out its CBDC, reports say

<ul class="summary-list"><li><keyword id="11800379" type="UNKNOWN" weightage="60" keywordseo="federal-reserve-governor-christopher-waller">Federal Reserve Governor Christopher Waller</keyword> says he's "skeptical" that the US need a central bank digital currency. </li><li>"I am not convinced as of yet that a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword> would solve any existing problem," Waller said in prepared remarks Thursday. </li><li>He speech comes before the widely expected publication of the Fed's research paper on <keyword id="6335399" type="UNKNOWN" weightage="60" keywordseo="CBDCs">CBDCs</keyword>. </li></ul><keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> Governor Christopher Waller said Thursday he's skeptical that the US central bank needs to create its own digital currency, making his remarks weeks before the Fed is expected to release a highly anticipated research paper that should address whether it should issue its own digital dollar. Waller in a speech said private-sector innovations and other tools could perform a better job than a Fed-led digital currency in improving a range of issues in the country's payments system such as quickening the pace of payments. A central bank digital currency, or CBDC, would allow people to access central bank money digitally to hold and make payments. "[While] CBDCs continue to generate enormous interest in the United States and other countries, I remain skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system," said Waller in <a href="https://www.federalreserve.gov/newsevents/speech/waller20210805a.htm">prepared remarks for the American Enterprise Institute</a>, a right-leaning think tank focusing on issues related to government, economics, politics, and social welfare."What problem would a CBDC solve? Alternatively, what market failure or inefficiency demands this specific intervention? After careful consideration, I am not convinced as of yet that a CBDC would solve any existing problem that is not being addressed more promptly and efficiently by other initiatives," said Waller, who became a Fed governor in December and previously served as director of research at the Federal Reserve Bank of St. Louis. In terms of existing payments being too slow, Waller said a group of commercial banks recently developed an instant payment service known as RTP, and the Fed is creating its own instant payment service called FedNow. He said those services will move funds between account holders at US commercial banks immediately after a payment is initiated. "While cross-border payments are typically less efficient than domestic payments, efforts are underway to improve cross-border payments as well," he said. "These innovations are all moving forward in the absence of a CBDC. Consequently, facilitating speedier payments is not a compelling reason to create a CBDC." The Federal Reserve is working on a paper outlining its thinking on digital payments and is exploring a digital currency. Federal Reserve Chairman <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> has said he expects the paper to be released in September and that it's aimed to stimulate conversation on issues such as payments, data privacy and financial inclusion, among others. Waller said there are potential risks associated with a CBDC. "But at this early juncture in the Fed's discussions, I think the first order of business is to ask whether there is compelling need for the Fed to create a digital currency. I am highly skeptical," he said. In July, Powell told lawmakers <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword><a href="https://markets.businessinsider.com/currencies/news/fed-crypto-jerome-powell-senate-testimony-stablecoins-2021-07?utm_source=markets&amp;utm_medium=ingestgest"> have failed to become a viable payment method</a> and that an official US digital currency could undercut the need for cryptocurrencies or stablecoins. 86% of central banks are exploring the benefits and drawbacks of central bank <keyword id="3144636" type="PERSON" weightage="60" keywordseo="digital-currencies">digital currencies</keyword>, or CBDC, according to a 2020 survey by the <a href="https://www.bis.org/publ/bppdf/bispap114.pdf">Bank for International Settlements</a>.

Fed Governor Waller is 'highly skeptical' that the Fed needs to create a central bank digital currency

<ul class="summary-list"><li>Any US <keyword id="11964297" type="UNKNOWN" weightage="60" keywordseo="central-bank" source="Orion">central bank</keyword> digital currency must support the dominance of the dollar, <keyword id="11948119" type="UNKNOWN" weightage="60" keywordseo="treasury" source="Orion">Treasury</keyword> Secretary <keyword id="11898809" type="UNKNOWN" weightage="60" keywordseo="janet-yellen" source="Orion">Janet Yellen</keyword> said Thursday. </li><li>A <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> "could become a form of trusted money comparable to physical cash" and offer some of the benefits of digital assets, Yellen said.</li></ul>Treasury Secretary of the Janet Yellen explained Thursday that any implementation of a US central bank digital currency must support the prominent role the dollar plays in the global financial system.In <a href="https://home.treasury.gov/news/press-releases/jy0706">prepared remarks for her first speech on digital assets</a>, Yellen said Thursday that a CBDC "could become a form of trusted money comparable to physical cash" and offer some of the benefits of digital assets.She also pointed out that dollars account for nearly 90% of foreign transactions and that dollar-denominated assets account for roughly half of cross-border bank claims. She listed a series of questions that <a href="https://markets.businessinsider.com/news/currencies/biden-crypto-executive-order-digital-dollar-cbdc-bitcoin-congress-2022-3">President Biden's recent executive order</a> on <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> raised, including how a US CBDC would interact with national currencies, other countries' CBDCs, or private stablecoins."We need to consider these important questions in the context of the central role the dollar plays in the world economy," said Yellen.She also noted that Americans enjoy economic and national security benefits from the role that the dollar and US financial institutions play around the world, adding that the executive order "asks us to consider whether and how the issuance of a public CBDC would support this role."While she noted that she supports innovation in the sector, she cautioned that any developments must remain consistent with American values and laws. Issuing a US CBDC would also take years of development, not months, she added."I share the president's urgency in pulling forward research to understand the challenges and opportunities a CBDC could present to American interests," Yellen said.

Treasury Secretary Janet Yellen says a central bank digital currency must support the US dollar's global dominance

<ul class="summary-list"><li>Rep. <keyword id="12265150" type="UNKNOWN" weightage="60" keywordseo="tom-emmer" source="Orion">Tom Emmer</keyword> introduced a bill that would ban the Fed from issuing a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword> directly to retail investors. </li><li>"It is important to note that the Fed does not, and should not, have the authority to offer retail bank accounts," the Minnesota Republican said.</li><li>Instead, <keyword id="12197645" type="UNKNOWN" weightage="60" keywordseo="cbdcs" source="Orion">CBDCs</keyword>, should protect financial privacy, maintain the US dollar's dominance, and cultivate innovation, he said.</li></ul>As the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> continues to study issuing a digital currency, a congressman is seeking to block the central bank from doing so.Rep. Tom Emmer, R-Minn., on <a href="https://emmer.house.gov/2022/1/emmer-introduces-legislation-to-prevent-unilateral-fed-control-of-a-u-s-digital-currency">Wednesday</a> introduced a bill that would ban the Fed from issuing a <keyword id="11939356" type="UNKNOWN" weightage="60" keywordseo="central-bank-digital-currency" source="Orion">central bank digital currency</keyword> directly to retail investors. "Requiring users to open up an account at the Fed to access a US CBDC would put the Fed on an insidious path akin to China's digital authoritarianism," he said in a statement. "It is important to note that the Fed does not, and should not, have the authority to offer retail bank accounts."A CBDC like this, Emmer said, would require the centralization of information, which would leave Americans vulnerable to attacks and subject them to constant surveillance. Instead, he said the central bank should protect financial privacy, maintain the US dollar's dominance, and cultivate innovation."CBDCs that fail to adhere to these three basic principles could enable an entity like the Federal Reserve to mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely," he said.A CBDC is a type of central bank liability — similar to the US dollar — issued in digital form, which could be used by the general public. It has the full backing of the central bank but could be managed by designated private financial institutions.Emmer, a long-time <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> advocate, has <a href="https://www.businessinsider.com/lawmakers-investing-in-crypto-as-congress-weighs-regulations-2021-12">introduced</a> several crypto-related bills, including the <a href="https://www.congress.gov/bill/117th-congress/house-bill/4451?s=1&amp;r=46" target="_blank" rel="noopener">Securities Clarity Act</a>, which would allow regulators to categorize cryptocurrencies as either a commodity, a security, or a currency. He has also in the past <a href="https://markets.businessinsider.com/news/currencies/gary-gensler-crypto-tom-emmer-sec-republican-retail-investors-securities-2021-10">criticized</a> the US Securities and Exchange Commission for clamping down on cryptocurrencies. It is uncertain whether the Fed does have plans to issue CBDCs, but clarity may be ahead as the central bank prepares to release a much-anticipated CBDC report soon.Fed Chair <keyword id="11918133" type="UNKNOWN" weightage="60" keywordseo="jerome-powell" source="Orion">Jerome Powell</keyword> on <a href="https://markets.businessinsider.com/news/currencies/cryptos-fed-cbdc-digital-coin-central-bank-coexist-powell-toomey-2022-1">Tuesday</a> said cryptos — including stablecoins — would be able to coexist with a CBDC, walking back from his <a href="https://markets.businessinsider.com/news/currencies/jerome-powell-cryptocurrencies-cbdc-stablecoins-digital-currency-testimony-2021-7?utm_medium=ingest&amp;utm_source=markets">July statement</a> when he said there was no need for cryptos if the central bank were to issue its own CBDC.For now, 87 countries are exploring their own CBDCs, and 14, including major economies like China and South Korea, are already in the pilot stage, according to a tracker by the <a href="https://www.atlanticcouncil.org/cbdctracker/" target="_blank" rel="noopener">Atlantic Council</a>. Nine have already fully launched them.Of the countries with the four largest central banks — the Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England —the US is the furthest behind, according to the tracker.

You Searched For "countries with cbdc" and got 11 results

There is no universal approach for central bank digital currencies and countries must focus on privacy, IMF says

Isabelle Lee

Visa is testing a platform that will support central bank digital currencies in partnership with blockchain firm ConsenSys

Isabelle Lee

A fully digital US dollar would be a better online currency than crypto, new Fed report suggests

Ben Winck

Bank of England official says Britcoin CBDC launch is 'probable'

Isabelle Lee

Fed punts on the creation of a digital dollar in long-awaited report on central bank cryptocurrencies

Natasha Dailey

Japan's plans for a digital yen could start to take shape next year, according to a top lawmaker, report says

Sophie Kiderlin

Boston Fed president Eric Rosengren says more research is needed before the US launches a central bank digital currency

Isabelle Lee

China is giving away digital yuan worth $6.2 million in a Beijing lottery as it tests out its CBDC, reports say

Sophie Kiderlin

Fed Governor Waller is 'highly skeptical' that the Fed needs to create a central bank digital currency

Carla Mozée

Treasury Secretary Janet Yellen says a central bank digital currency must support the US dollar's global dominance

Phil Rosen

A US congressman has proposed a bill to limit the Fed's ability to issue its own digital currency

Isabelle Lee

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