European Central Bank FAQ on a digital euro
The ECB updated its digital euro FAQ with particular focus on the rationale for issuing a central bank digital currency (CBDC). “A digital euro would be an electronic form of cash for the digitalized world [that] would give consumers the option to use central bank money in a digital format… [and] providing… a digital means of payment universally accepted throughout the euro area… Moreover, a digital euro would strengthen Europe’s strategic autonomy and monetary sovereignty by boosting the efficiency of the European payments’ ecosystem as a whole.” [Read more at the ECB]
The crypto cycle, equity markets, and US monetary policy
The IMF published a paper that analyzes the relationships between crypto prices and global equity markets and US monetary policy. It identifies a single price component it labels the “crypto factor” that explains 80% of variation in crypto prices, and shows that its increasing correlation with equity markets coincided with the entry of institutional investors into crypto markets. As for equities, US Fed tightening reduces the crypto factor through the risk-taking channel—in contrast to claims that crypto assets provide a hedge against market risk. [Read more at the IMF]
*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.
Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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).
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