On February 26, 2024, Republican Senator Ted Cruz, along with fellow Republican Senators Bill Hagerty, Rick Scott, Ted Budd and Mike Braun introduced the CBDC Anti-Surveillance State Act. The Federal Reserve acts as the U.S. central bank. The proposed legislation states that no Federal Reserve Bank may “issue a central bank digital currency or any digital asset that is substantially similar, under any other name or label, directly to an individual.’’ This same prohibition was…
The world’s central banks understand that the future of money is digital. As payments shift online, the use of cash declines and the fortunes of crypto assets rise and fall, central bankers realize that their ability to command the use of money in their economies could weaken. This could also contribute to cement the financial exclusion of un- and underbanked citizens. To try and forestall such developments, central banks in all the world’s major economies and most…
If 2020 was the year that crypto spurred investment action, then 2022 will be remembered for triggering the “equal but opposite” regulatory reaction. And for good reason. With several high-profile insolvencies and an across-the-board fall in cryptoasset prices, regulators have been reminded of the risks that can accompany financial innovation. The Financial Conduct Authority (FCA), alongside HM Treasury and various other government and enforcement actors, have been monitoring developments in crypto markets and considering the…
On January 20, 2022, the U.S. Federal Reserve issued its long-anticipated White Paper on the subject of central bank digital currency (CBDC). Not surprisingly, from the jump, the Fed made clear that this Paper was simply the starting point for opening a dialogue. The Fed said: The paper has been designed to foster a broad and transparent public dialogue about CBDCs in general, and about the potential benefits and risks of a U.S. CBDC. The…
The Bank of International Settlements is owned by 63 central banks and serves as bank for central banks. One June 23, 2021, the BIS released one chapter of its full annual report, which will be released on June 29. From the title of the chapter, “CBDCs: An Opportunity for the Monetary System,” it is apparent that the BIS is very much in favor of CBDCs (central bank digital currencies) — not very surprising considering the…
The Reserve Bank of Australia (RBA) has announced a partnership with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software to explore the use of a wholesale central bank digital currency (CBDC) using distributed ledger technology (DLT). The project is currently limited to the wholesale market, reflecting the RBA’s conclusion in a recent bulletin on the Design Considerations, Rationales and Implications of a Retail CBDC that there is currently no strong public policy case to…
Central bank digital currencies (“CBDC”) has been one of the hottest topics of 2020. We reported recently that the Bahamas planned to roll out its e-currency in October. China has probably been the most aggressive in developing plans for a future launch of a CBDC, the digital yuan. On October 9, 2020, the BIS and seven central banks released a report concerning the issuance of CBDCs. The report, Central bank digital currencies: foundational principles and core features, was…
Around the New Year, we posted about the pilot program launched in the Bahamas for its central bank digital currency (CBDC), known as the Sand Dollar. It has apparently been successful because Bloomberg is reporting that the country will roll out the e-currency nationwide in October. Sand Dollar transfers are made by mobile phone. Each Sand Dollar is pegged to the Bahamian dollar, which is, in turn, pegged to the U.S. dollar. There are, currently…
Effective as of December 27, 2019, the Bahamas went live with its central bank digital currency (“CBDC” ) platform, known as the Sand Dollar. It will undergo a pilot phase testing in Exuma, which will be extended in the first half of 2020 to Abaco. According to the outline published by the Central Bank of the Bahamas, the Sand Dollar is a digital fiat currency, not a cryptocurrency: A digital fiat currency would not be…