A bill to recognize decentralized autonomous organizations (DAOs) as companies has passed through the Senate Committee stage in Wyoming. The legislation would make it easier and cheaper to set up a DAO and give legitimacy to many crypto-asset projects. DAOs are entities that operate through smart contracts, with financial transactions and rules encoded on a blockchain, effectively removing the need for a central governing authority. The Wyoming DAO bill now goes to a vote in the Senate, and then the House. If all is well, it’s then signed into law.
JPMorgan has filed a request with the U.S. Securities and Exchange Commission to approve a debt instrument linked to 11 firms that have all invested in Bitcoin and other crypto-assets. The debt instrument will enable investors to have direct exposure to a basket of cryptocurrency-focused firms. 68% of the “Basket” will be made up of MicroStrategy, Square, Riot Blockchain, and NVIDIA. Other companies that are included in the debt instrument are PayPal, Advanced Micro Devices, Taiwan Semiconductor Company, Intercontinental Exchange, CME Group, Overstock.com and Silvergate Capital.
The People’s Bank of China main motivation for issuing a digital renminbi is to create a government-controlled alternative to two very large and loosely regulated digital payment platforms, Alipay and WeChat Pay. The ubiquity of Alipay and WeChat Pay raises the specter of the Chinese authorities losing control of payment flows through the economy. The American government has no analogous worries that justify the Fed issuing a digital dollar.
The Central Bank of Nigeria (CBN) is incentivizing citizens to use licensed international money transfer operators (IMTOs) to send and receive money with its “Naira 4 Dollar Scheme”. In effect, a typical recipient of diaspora remittances will, at the point of collection, receive not only the USD sent from abroad but also the additional 5 naira per USD received.
The Saudi Arabian Monetary Authority (SAMA) has launched a new instant payment system dubbed “sarie” that will allow customers of the banking sector to send and receive low-value local transfers, 24 hours a day, at low fees not exceeding one riyal, in addition to other services and features provided by the system to beneficiaries such as using the mobile number as an alternative identifier for the IBAN number for transfers between banks, and the possibility of verifying the details of the account of the party receiving the transfer before the actual transfer.
* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.