In its “Monetary Policy for 2020” brief the Bank of Korea said it will continue to build on its research into distributed ledger technology, crypto-assets, and central bank digital currency. The Bank will organize a CBDC-dedicated task force and recruit additional experts.
The first of its kind, NZIA’s decentralized wireless payment system provides an alternate payment infrastructure for CBDC that augments existing payment networks.
China’s regulators have urged Beijing authorities to carry out relevant actions aimed at preventing the usage of cryptocurrencies by the public.
A recent ECB paper describe a hypothetical payments system in which citizens are provided with a monthly allotment of ‘anonymity vouchers’. The vouchers expire and cannot be traded. If users wish to make an anonymous payment, they must attach a voucher to each payment request. By doing so neither the issuing central bank nor the anti-money laundering authorities will be privy to the payor’s identity. Once the allotment is used up, payments can no longer anonymous. By rationing anonymity, the authors of the paper hope to allow for lower-value anonymous payments while filtering out larger ones.
“Cash could be crowded out of the payment landscape if current trends continue, but should central banks be responsible for ensuring its survival?”
The proposed two models would be modest contributions to introducing digital currencies for the sole use of cross-border interbank clearing and settlement. The concerns about verification of AML, CFT, KYC and tax evasion would be addressed as participating banks are properly supervised by their respective supervisory authorities. Transactions in ‘bricks’ would be authorized and executed by them. This would be a China designed and operated cross-border payments infrastructure, first for BRICS countries and later for partner countries of the Belt and Road Initiative. Like this, China and its partner countries could wean themselves off an outdated USD based system, which needs to face the digital age in a reform of its own before long.
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The Kiffmeister is a former Senior Financial Sector Expert at the International Monetary Fund.
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