Deputy Governor Tim Lane identified two scenarios that could trigger the Bank of Canada to issue central bank digital currency (CBDC. One of them was the disappearance of the acceptance of cash, and the second was the emergence of digital currencies that might turn out to be disruptive in some way or might undermine Canada’s monetary sovereignty. And he now says the last nine months have seen developments that look like they’re in the direction of some of those things coming to pass sooner than expected. In the end, part of the question is, if cash to is not modernized to keep up with changing technology, is there a gap in the system?
Russian state-owned Sberbank is working with JP Morgan on possibly issuing its own “Sbercoin” crypto-asset in 2021. The move follows the introduction of a new law, announced in July and coming into force on January 1, that makes permissible crypto-asset trading but forbids Russians from using crypto-assets as a means of payment. Olga Skorobogatova, Bank of Russia First Deputy Governor, said in a webinar that she opposed private companies that build digital rubles, but that the Russian central bank is still considering minting its own digital ruble.
The European Central Bank (ECB) reported that Euro area consumers are gradually shifting towards cards for in-person retail payments, although cash remained the most used instrument at the end of 2019. In 2019, euro area adult consumers used cash for 73% of their point-of-sale and person-to-person retail transactions (48% in value terms). In a previous ECB study conducted in 2016, the figure was 79% of these transactions (54% in value terms). The ECB carried out an ad hoc survey in July 2020 that found that 40% of respondents had used cash less often since the start of the pandemic.
The latest European Investment bank (EIB) Investment Survey found that although 45% of firms intend to invest less than initially planned in the current financial year due to the coronavirus, they expected to increase in the use of digital technologies (50%). The survey results also show that while 37% of EU firms had not adopted any digital technology, this figure is only 27% in the United States. The areas where the US has a particularly notable edge are the use of IOT applications and drones. In addition, large firms are significantly more likely to have implemented digital technology compared to small and medium-sized enterprises (75% vs. 52%).
SWIFT gpi Instant has gained its first live link in the UK, with customers of Lloyds Banking Group now able to remit instant cross-border payments through Lloyds via the UK Faster Payments system. The gpi Instant service works by connecting SWIFT gpi, the high-speed cross-border rails with real-time domestic infrastructure, in this case the UK’s Faster Payments. It enables banks to use existing infrastructure to provide better service 24/7, with faster speeds, clarity on fees and, crucially, predictability on when an end beneficiary’s account will be credited.
Visa is connecting its global payments network of 60 million merchants to the U.S. Dollar Coin (USDC) developed by Circle Internet Financial on the ethereum blockchain. The digital currency is now valued at $2.9 billion. While Visa itself won’t custody the digital currency, effective immediately, the partnership will see Circle working with Visa to help select Visa credit card issuers start integrating the USDC software into their platforms and send and receive USDC payments.