Kiffmeister’s #Fintech Daily Digest (06/07/2021)*

Responses to the Bank of England’s March 2020 Discussion Paper on CBDC

The Bank of England published the feedback it received on the “Central Bank Digital Currency: Opportunities, Challenges and Design” discussion paper that was published in March 2020. In short, the feedback is encouraging the Bank to continue examining the case for a CBDC. But at the same time, the it received clear feedback that the use case for a CBDC, which might justify its introduction, needed further research, refinement, and articulation, to inform a comprehensive assessment of the pros and cons of what would be a major decision. Additionally, some respondents expressed doubt that a CBDC was needed at all, given they considered that the intended benefits could be achieved through other forms of payments innovation.  

The Bank of England on new forms of digital money

The Bank of England also published a discussion paper that set out its emerging thoughts on new forms of digital money, which include both systemic stablecoins and a UK central bank digital currency (CBDC). It builds on the Bank’s previous Discussion Paper on CBDC published in March 2020 and the Financial Policy Committee’s expectations for stablecoins set out in the December 2019 Financial Stability Report. Broadly speaking, the paper proposes that stablecoins should meet equivalent standards to those imposed on commercial banks.

Shanghai to Hand Out $3 Million in Digital Yuan Lottery

The city of Shanghai is reportedly going to hand out 19.25 million yuan in digital currency. The money will be distributed among local consumers through a lottery system. Lottery winners will receive a total of 350,000 digital red envelopes. Each one of them will be loaded with 55 units of the Chinese central bank digital currency (CBDC). 

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