The IMF on elements of effective policies for crypto-assets
The IMF published a board paper on “Elements of Effective Policies for Crypto Assets” that provides guidance to IMF member countries on key elements of an appropriate policy response to crypto-assets. It sets forth a framework of nine policy actions that can help members develop a comprehensive, consistent, and coordinated policy response. These include developing and enforcing prudential, conduct, and oversight requirements to all crypto market actors, and not granting crypto-assets official currency or legal tender status. [Read more at the IMF]
Canadian crypto trading platforms face ‘enhanced’ rules under new regulations
The Canadian Securities Administrators (CSA) published new guidance for the local crypto-asset industry, warning crypto-asset trading platforms (CTPs) that they would have to abide by “enhanced investor protection commitments. These include “enhanced expectations” regarding the custody and segregation of crypto-assets held on behalf of Canadian clients and a prohibition on offering margin, credit, or other forms of leverage to any Canadian client. They will also prohibit CTPs from permitting clients to purchase or deposit stablecoins and proprietary tokens without the prior written consent of the CSA. [Read more at the CSA]
Technology behind crypto can also improve payments, providing a public good
The IMF published a blog post that makes the case for leveraging the technology behind crypto-assets to upgrade payment infrastructures and ensure interoperability, safety, and efficiency in digital finance. It points particularly to tokenization, encryption, and programmability, plus central bank digital currencies (CBDCs) to clear and settle transactions. Payments could be made from one private money to another, through the CBDC ledger or platform. Money could be escrowed on the CBDC platform, then released when certain conditions are met, such as when a tokenized asset is received. And the CBDC platform could offer a basic programming language to ensure smart contracts are trusted and compatible with one another. More detail on these ideas were published in a recent IMF working paper (“A Multi-Currency Exchange and Contracting Platform“). [Read more at the IMF]
Digital euro should prioritize online, P2P payments, ECB says
A digital euro should prioritize online purchases and making person-to-person (P2P) payments, according to a slide deck on the European Central Bank (ECB) website. Other uses such as paying taxes, receiving welfare payments, and making payments in physical stores, should only follow in later tranches of a CBDC rollout. [Read more at the ECB]
Representative Emmer says no to U.S. CBDC
Tom Emmer, a member of the US House of Representatives, has introduced a new bill to prohibit the Federal Reserve from issuing a retail CBDC. “My bill, which prohibits the Fed from issuing a CBDC directly to individual Americans, is a statutory prohibition on a surveillance tool that could be used to kill private sector innovation and deflate the dollar’s dominance.” [Read more on Tom Emmer’s website]
Crypto bank Custodia’s bid for Fed supervision rejected again
The US Federal Reserve Board (FRB), in a unanimous decision, has again rejected Wyoming-chartered Custodia Bank’s bid to become a member of the Federal Reserve System, after previously denying the application in January 2023. The initial rejection said Custodia’s business model “presented significant safety and soundness risks,” and claimed Custodia did not have a sufficient risk management framework in place.” [Read more at the FRB]
Upcoming conferences, webinars and speaking engagements:
- I’ll be providing a (probably virtual) update on global central bank digital currency (CBDC) developments at the Digital Euro Association Digital Euro Conference on March 31 in Frankfurt. [Register here]
- I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]
Kiffmeister’s global central bank digital currency monthly monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.
The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).
Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]
WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]