Morocco’s Central Bank Explores Digital Currency for Cross-Border Use (Yabiladi)

Bank Al-Maghrib, Morocco’s central bank, is advancing its central bank digital currency (CBDC) initiative, having completed its first peer-to-peer retail payment test and currently conducting a second trial focused on cross-border transfers in partnership with Egypt’s central bank and the World Bank. The work has been supported by comprehensive studies examining legal frameworks and macroeconomic implications conducted with World Bank and IMF assistance. [Read more at Bank Al-Maghrib]

Why Central Banks Shouldn’t Ignore Stablecoins (Risk.net)

In a timely move, Risk.net has dropped the paywall on an article by Manmohan Singh and Charles Kahn that argues that Federal Reserve risks repeating the monetary policy mistakes of the 1970s by ignoring the rapid growth of U.S. dollar stablecoins, drawing parallels to how the Federal Reserve initially overlooked the Eurodollar market’s expansion. Although the approximately $270 billion in stablecoins backed by high-quality liquid assets is dwarfed by traditional M1 money supply, stablecoins’ implied velocities of 60-80 times massively exceeded M1 velocities of about 1.26 when the article was written. Hence, these digital currencies punch above their weight and potentially impact monetary policy transmission mechanisms. The article suggests two potential policy responses; (i) backing stablecoins with central bank reserves, and (ii) interoperable tokenized bank deposits that can settle instantly. [Read more at Risk.net]

Upcoming Speaking Engagements:

The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]

I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.