The Central Bank of Madagascar is considering issuing retail central bank digital currency (CBDC). The e-Ariary project will be carried out in two phases; (i) analysis, design work and experimentation, and (ii) deployment and production, the launch of the second phase conditioned by the results of the experimental phase.
The National Bank of Cambodia officially launched its blockchain-based retail payment system, which it had been piloting since July. Bakong, which supports transactions in the dollar and riel, will allow Cambodians make payments and transfer money between individuals using their smartphones. The World Economic Forum has mischievously labeled it as being based on a “quasi-form” of central bank digital currency (CBDC) which it is definitely not.
The Wyoming Division of Banking has granted “no-action” relief to Two Ocean Trust, a Wyoming-chartered trust company that provides wealth management services to high-net worth individuals, family officers and advisers. This regulatory clearance enables the company to provide custody services for both digital and traditional assets under Wyoming law and serve as a “qualified custodian” under the Investment Advisers Act of 1940. This is a potential game changer because under the SEC Custody Rule, investment advisers are required to store customer assets with a “qualified custodian.”
Customers in the US can now join the waitlist for Coinbase Card, a Visa® debit card that allows crypto to be used for payments and purchases online and in-store as well as for ATM cash withdrawals. Coinbase Card also introduces new opportunities for customers to earn up to 4% back in crypto rewards.
Singapore’s DBS is launching a digital currency exchange allowing both institutional and retail customers to trade crypto-assets against multiple fiat currencies. The bank updated its website showing the upcoming crypto exchange services but later took the page down. The cached version of the now-deleted webpage is still available. Dubbed DBS Digital Exchange, the crypto trading platform is planning to list four top cryptocurrencies, Bitcoin, Ether, Ripple, and Bitcoin Cash, against multiple fiats, including the Singapore dollar, US dollar, Hong Kong dollar, and Japanese yen.
Australian ASX bourse operator has yet again pushed back the launch date of its blockchain-based clearing system until April 2023. ASX had flagged a delay to the project, which was scheduled for 2021, amid market turmoil in March. A proposed target of April 2022 has now been moved to 2023 after consulting market participants. “The industry … requested substantially more post-trade processing capacity than what had been contemplated pre-COVID-19,” the company said.
Visa’s $5.3 billion deal to buy Plaid is reportedly in jeopardy because of U.S. Department of Justice antitrust concerns. Plaid makes software that allows banks and fintechs to plug into consumers’ various financial accounts, enabling those companies, with users’ permission, to aggregate spending data, look up balances and verify other personal financial information. Its clients and partners include digital money-transfer service Venmo and stock-trading app Robinhood.
Banco Central dos Brasil and Brazil’s National Monetary Council approved the implementation of a regulatory sandbox. It will offer central bank-authorized entities the opportunity to test, for a specified period, innovative projects in the financial or payment areas, while subject to fewer rules and less monitoring in a limited environment.
Central bank digital currencies are in the limelight. Yet the motives for issuance and, relatedly, the policy approaches and designs differ. This column surveys the drivers, policy approaches and technical designs, based on a comprehensive and publicly available database. It finds that all Central bank digital currency projects aim to complement cash rather than replace it. Many projects would allow for an important role of the private sector in the payment system. (This is a summary of a previously-published working paper).
U.S. Senators Kirsten Gillibrand and Bernie Sanders introduced the Postal Banking Act to better reach the 8.4 million unbanked American households via the U.S. Postal Service (USPS). But why does the U.S. Postal Service (USPS) need to be involved at all in reaching the unbanked if a brick & mortar branch network isn’t important? It doesn’t. Any government agency could probably fill the role. In fact, the U.S. Treasury is already a major provider of a limited range of banking services via its Direct Express prepaid debit card. Rather than starting a new government debit card program from scratch, building off of and improving the Direct Express card would probably make more sense. On the other hand, USPS is a well-known brand. A prepaid card with the USPS logo on it would probably better stand out on a card rack than the Treasury’s brand.
The German finance ministry has unveiled a reform of financial regulation in the country in the wake of the Wirecard scandal. The Federal Financial Supervisory Authority (BaFin) will be given further powers, including the right to get information from third parties and conduct ad-hoc and suspicion-based inspections to be financed by the companies concerned. Companies would be obliged to replace their auditor every ten years, and accounting firms to establish a stricter separation between their auditing and consulting services and be subject to higher liability for breaches of duty.