BOJ Closer To Rollout Of Digital Currency
The Bank of Jamaica is reportedly slated to commence national rollout of its central bank digital currency (CBDC) platform during the first quarter of 2022. National Commercial Bank is currently the sole deposit-taking institution participating in the CBDC proof of concept (PoC) slated to conclude in December. The PoC is being run with staff and their family members, and individuals and small merchants will be added before this year end. They will test person to person and person to business transactions, and automated banking machines cash-ins and cash-outs. [Read more]
Are US regulators about to get tough on crypto?
U.S. federal bank regulatory agencies issued a statement summarizing their interagency crypto-asset “policy sprints” and providing a roadmap of future work related to crypto-assets. It summarizes the agencies’ plan to provide greater clarity throughout 2022 on whether certain crypto-related activities conducted by banking organizations are legally permissible, and related expectations for safety and soundness, consumer protection, and compliance with existing law and regulations. The focus includes crypto-asset safekeeping and traditional custody services, ancillary custody services including staking, facilitating crypto-asset lending and distributed ledger technology governance services, facilitation of customer purchases and sales of crypto-assets, loans collateralized by crypto-assets, issuance and distribution of stablecoins, and activities involving the holding of crypto-assets on balance sheet. [Read more]
IMF warns El Salvador of bitcoin-related risks in Article IV mission concluding statement
El Salvador should not use bitcoin as legal tender, IMF staff wrote in their concluding statement of the 2021 Article IV mission. Given bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability, and gives rise to fiscal contingent liabilities. Also they recommended that the Chivo wallet should fully safeguard customers’ funds by segregating and ring-fencing reserve assets. However, staff did acknowledge that crypto-technologies and digital payment systems like Chivo have the potential to make payments more efficient, thereby enhancing financial inclusion and supporting growth. [Read more]
Stablecoin Advocates Make Their Case to U.S. Banking Regulators
Members of the USDF Consortium met with senior officials of the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. about how to issue a regulatory-compliant stablecoin. The USDF Consortium is an association formed by Figure Technologies, JAM FINTOP, and a group of FDIC-insured banks. Its USDForward (USDF) stablecoin would be issued, and backed, by dollar deposits at U.S. banks, which would be consistent with the recommendations of the President’s Working Group. USDF is currently being used on the Provenance Blockchain in a limited scope to facilitate the real-time, bilateral settlement of transactions. [Read more]
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