FSB urges stronger efforts to enhance cross border payments (FSB)
The Financial Stability Board (FSB) published (i) a consolidated progress report for 2024 reporting on a broad range of actions being progressed as part of the G20 Roadmap for Enhancing Cross-Border Payments; (ii) a progress report on the implementation of the Legal Entity Identifier (LEI); and (iii) an annual progress report on meeting the improved user experience targets for cross-border payments. While more than half of the planned actions set out by the G20 have been completed, the FSB’s key performance indicators which measure key aspects of the user experience in using payments services, suggest that further efforts are needed. The FSB emphasizes the importance of intensified effort and commitment from a range of stakeholders, including by domestic regulatory/oversight authorities and payments services providers. [Read more at the FSB]
Ban or tax “bitcoin” to support permanent government deficits (Minneapolis Fed)
The Federal Reserve Bank of Minneapolis published a paper that advocates for a legal prohibition or capital tax on “bitcoin” to support governments’ abilities to run permanent primary deficits. To be more accurate, the paper uses bitcoin as a metaphor for risk-free private-sector securities that are in fixed supply and that are not a claim to any real resources or “useless pieces of paper”. The analysis seems to be based on the idea that risk averse consumers are willing to hold government securities and bitcoin even when the real return on these securities is very low. The virtually impenetrable analysis suggests that the existence of “bitcoin” forces the government maintain a balanced budget, which some might view as a good thing. [Read more at the Minneapolis Fed]
The distributional consequences of bitcoin (SSRN)
The European Central Bank’s (ECB’s) Ulrich Bindseil and Jürgen Schaaf published a paper that argues that, if the price of bitcoin continues to rise, there will be a redistribution of wealth to early bitcoin adopters at the expense of consumption of the rest of society, assuming that bitcoin does not increase the productive potential of the economy. In a theoretical scenario of ever-rising Bitcoin prices, this wealth shift will be a lasting legacy, with early adopters’ luxury consumption financed by the diminished consumption of those who missed out. Moreover, the corresponding impoverishment of the rest of society, will endanger cohesion, stability and ultimately democracy. [Read More at SSRN]
Upcoming Speaking Engagements:
- Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]
And 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 john@kiffmeister.com.
