Kiffmeister’s #Fintech Daily Digest (20220327)

Bank of England and MIT joint CBDC collaboration

The Bank of England announced that in February 2022 it had agreed to a twelve-month collaboration with the Massachusetts Institute of Technology Media Lab’s Digital Currency Initiative on central bank digital currency (CBDC) research. They will explore potential technical challenges, trade-offs, opportunities and risks involved in designing a CBDC system. [Read more]

Responses to the Bank of England’s Discussion Paper on new forms of digital money

The Bank of England published a summary of the responses to the June 2021 Discussion Paper on potential monetary policy and financial stability implications of new forms of digital money, including CBDC and systemic stablecoins. Respondents generally agreed that access to cash should be preserved, and any regulation for systemic stablecoins should be clear, proportionate, and risk-based. [Read more]

Financial Stability in Focus: Crypto-Assets and Decentralised Finance

The Bank of England published its views on crypto-assets and decentralized finance (DeFi). It concluded that, despite their potential benefits, “where crypto technology is performing an equivalent economic function to one performed in the traditional financial sector, this should take place within existing regulatory arrangements and that the regulatory perimeter be adapted as necessary to ensure an equivalent regulatory outcome.” [Read more]

Honduras’ Central Bank Continues to Study CBDC Feasibility

The Central Bank of Honduras debunked chatter about bitcoin becoming legal tender in the country. However, it continues to study the conceptual, technical and legal aspects that would determine the feasibility of issuing CBDC that would be recognized as legal tender. [Read more]

DeFi Eliminates Gatekeeping But Also ‘Investor Protection’: IOSCO

The International Organization of Securities Commissions published a report on DeFi, highlighting a wide array of risks associated with it. “As DeFi continues to expand, both a granular and holistic understanding of the DeFi market will improve authorities’ ability to understand the regulatory implications of this emergent market with respect to their own jurisdictions.” [Read more]