International Monetary Fund (IMF) spokesman Gerry Rice reportedly said Fund staff will meet later on Thursday (June 10) with El Salvador President Nayib Bukele to discuss the recently passed bitcoin law that gives bitcoin legal tender status in the country. Rice reportedly said “adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis.” El Salvador is also in discussions with the IMF seeking a near $1 billion program.
The Basel Committee on Banking Supervision issued a public consultation on preliminary proposals for the prudential treatment of banks’ crypto-asset exposures. It divides crypto-assets into two groups. Group 1 is comprised of those eligible for treatment under the existing Basel Framework with some modifications (e.g., certain tokenised traditional assets and stablecoins). Group 2 is comprised of “other” crypto-assets, such as bitcoin, that do not fulfil the classification conditions. Banks would have to hold risk-based capital at least equal in value to their Group 2 crypto-asset exposures (i.e., the maximum of their long and short positions) to absorb a full write-off of the crypto-asset exposures.
The Bank for International Settlements (BIS) Innovation Hub, Bank of France and Swiss National Bank launched Project Jura that, together with a private sector consortium led by Accenture, will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement on a distributed ledger technology (DLT) platform. The private sector consortium includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS. It will involve the exchange of financial instruments against a euro wCBDC through a delivery versus payment (DvP) settlement mechanism and the exchange of a euro wCBDC against a Swiss franc wCBDC through a payment versus payment (PvP) settlement mechanism. These transactions will be settled between banks domiciled in France and in Switzerland, respectively.
At first glance, the Marshall Island’s SOV scheme seems like a great way to raise government revenue. However, a closer look at it reveals that, like most things that sound too good to be true, it is.
Central bankers can sign up here: https://www.eventbrite.com/e/the-central-bank-digital-currency-workshop-tickets-152572742179
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