June 2021

• Swiss National Bank has no Plans for a Digital Currency (June 26, 2021)

  Carlos Lenz, the Swiss Bankers Association, SNB’s chief economist, announced there is no need for a digital franc because the current payment system works well without one. Switzerland has been researching central bank digital currencies since 2019 and concluded that the digital franc would be too risky in December of 2019. Despite the government’s views, Swiss CBDC research has continued. Go to Article.

• CBDCs Get Green Signal From Bank of International Settlements (June 25, 2021)

  In a directive from late June, the Bank of International Settlements (BIS) stated that if banks remained stoic on their stance on central bank digital currencies, it would be overtaken by the Big Tech such as Amazon, Facebook, and Alphabet. This announcement comes as many banks, including China, have CBDCs in the works. Go to Article.

• Nigerian Schools Will Accept Crypto Payments Despite Regulatory Uncertainty (June 25, 2021)

  A private secondary school in Kano, Nigeria will be accepting payments for school fees in cryptocurrency amid the country’s central bank banning financial institutions providing services to crypto exchanges. Although the school director did not state which tokes would be accepted payments, it is likely that Bitcoin will be accepted due to the strong public interest around Bitcoin in Nigeria. Similarly, come September, El Salvador will accept Bitcoin as legal tender across the country. Go to Article.

• Palestine’s Central Bank Reportedly Mulling a CBDC Launch (June 24, 2021)

  The Palestinian Monetary Authority is studying cryptocurrencies with the hope of eventually using digital currency for domestic and international payments. Currently, Palestinians do not have an independent currency and relay on the Israeli shekel for day-to-day transactions. Many regional economic analysts have expressed hesitation about the feasibility of a Palestinian digital currency, including Raja Khalidi, director of the Palestine Economic Research Institute, who commented that “the macroeconomic conditions don’t exist to allow a Palestinian currency – digital or otherwise – to exist as a means of exchange.” Go to Article.

• Citi Launches ‘Digital Assets Group’ Within Wealth Management Division (June 24, 2021)

  Citigroup’s wealth management division has formed a Digital Assets Group which will focus on blockchain enabled finance, such as cryptocurrencies, non-fungible tokens, stablecoins and central bank digital currencies. This unit was formed after Citigroup noticed a rapid uptick in client interest in bitcoin since last August. Go to Article.

• U.S. Risks Becoming ‘Backwater’ Without Central Bank Digital Currency (June 22, 2021)

  The Digital Dollar foundation will be launching five pilot programs this year in an attempt to help the United States regain the lead in a race against China towards a functioning CBDC. Chris Giancarlo, the former CFTC chairman and co-founder of the Digital Dollar Project, warns against the United States following China’s surveillance-centered CBDC model and instead opt for one more aligned with the country’s beliefs around individual privacy. However, the race to a CBDC isn’t merely about maintaining current US values, but also potentially about unlocking new forms of smart contract-based value for the wider population. Go to Article.

• Bank of Israel has Already Tested a Digital Shekel (June 21, 2021)

  The Bank of Israel has already carried out a pilot test on a central bank digital currency. However, Andrew Abir, the Bank of Israel’s Deputy Governor, is not optimistic about an Israeli CBDC being launched. Currently, the Bank is researching public opinion on an Israeli CBDC. Go to Article.

• Banque de France Extends Wholesale CBDC Experiment (June 21, 2021)

  Banque de France has extended its testing of the use of a central bank digital currency (CBDC) for the wholesale market. The latest experiment used a CBDC to simulate a securities trading settlement with TARGET2-Securities (TS2), the European Central Bank engine for instantaneous settlement. The experiment was conducted in collaboration with Swiss digital-asset bank SEBA and Luxembourg private bank Banque Internationale à Luxembourg. Go to Article.

• Digital Euro is Designing to “Protect Consumer Privacy” (June 21, 2021)

  The Digital Euro, a Central Bank Digital Currency (CBDC) being developed by the European Central Bank, has been tipped as a more secure option when compared to privately issued cryptocurrencies, particularly stablecoins. Unlike private companies, the European Central Bank has no commercial interest in storing, managing, or monetizing users’ data. In fact, the ECB has emphasized that privacy is the most important feature of the Digital Euro. The ECB has been making progress on its CBDC, including but not limited to public surveying and offline testing. Go to Article.

• Over 3,000 ATMS in Beijing Can Now Convert Digital Yuan into Cash (June 18, 2021)

  The Beijing branch of the Industrial and Commercial Bank of China has become the first bank to fully enable the digital yuan exchange in the Chinese capital city by setting up more than 3,000 digital currency-compatible ATMs. The Agricultural Bank of China (ABC), another major bank involved in China’s CBDC tests, has also deployed more than 10 ATMs in the Wangfujing area, a major shopping street in Beijing. The Chinese government has continued promoting their CBDC through a digital currency lottery. Go to Article.

• Digital Euro Could Drain 8% of Bank Deposits (June 16, 2021)

  Analysts at the American multinational investment bank Morgan Stanley have estimated that f the digital euro is widely adopted, then the CBDC could take up 8% of customer deposits from eurozone banks. Likewise, it is believed that the share may be higher in smaller countries such as Latvia, Lithuania, Estonia, and Greece. Morgan Stanley also said that digital euro adoption could slightly increase the average loan-to-deposit ratio (LDR) by eurozone banks, increasing the chance that banks may not have enough liquidity to cover unforeseen fund requirements. Go to Article.

• China’s Debuts Blockchain-Based Digital Yuan Salary Payments in Xiong’an (June 14, 2021)

  China has expanded its digital yuan pilot program in Xiong’an New Area by allowing salaries to be paid with the digital currency. Xiong’an authorities said that the pilot involved guidance and support from the Shijiazhuang-based PBoC branch, the Bank of China Hebei Xiong’an branch, as well as the National Development and Reform Commission. The new CBDC pilot used a blockchain-based payment platform to distribute salaries to workers on spring afforestation projects in Xiong’an. Xiong’an was one of the first four regions to pilot China’s CBDC in April 2020. Go to Article.

• Brazil’s Central Bank Pushes Back Target Date on CBDC by Two Years (June 11, 2021)

  The Banco Central do Brasil (BCB) has adjusted its CBDC timeline, saying that the digital currency will likely be released in 2023 or 2024. Previously, the currency was expected in 2022. This decision comes after the bank assessed progress on both their current projects and the international landscape regarding CBDCs. Fresh elements of Brazil’s financial system include a newly launched instant payment system known as PIX and the expected launch of its open banking model. The bank said it depended on the success of these elements to propel it toward a CBDC launch. The bank also said it was "actively" participating in international discussions relating to global standards for national CBDCs and that the next step was to assess their impact on Brazil's economy. Go to Article.

• China’s eCurrency can be Stored in Digital or Physical Wallets (June 11, 2021)

  The state-backed digital yuan can be stored in a variety of wallets — digital, physical, personal, or public. The wallets are designed to satisfy different demands, with users able to apply for them based on their credit limits, purposes of use, or preferences for a physical one or a digital one. Go to Article.

• Nigeria’s Central Bank may Launch a Digital Currency Pilot in 2021 (June 10, 2021)

  Before the end of the year, the Central Bank of Nigeria plans on releasing a central bank digital currency. This announcement comes after the bank has been researching central bank digital currencies for two years. Experts believe that a CBDC would be beneficial for Nigeria as it allows remittances to be easily transferred into the country. Similarly, Nigerian authorities have been debating how to regulate the use of private cryptocurrencies in the country. Earlier this year, the CBN ordered all local banks to seek and shut down accounts tied to crypto platforms, although the governor of the bank later clarified that crypto trading is not banned in the country. Go to Article.

• Bank of France, Swiss National Bank Begin Cross-Border CBDC Experiment (June 10, 2021)

  The Bank of France and the Swiss National Bank are working on a joint CBDC dubbed “Project Jura” which will focus on bank-to-bank wholesale lending as opposed to public transactions. The banks will work with the Bank for International Settlements Innovation Hub as well as a “private sector consortium” led by Accenture. Furthermore, Project Jura will experiment with cross-border settlements of two wholesale CBDCs and a French digital financial instrument on a distributed ledger technology platform. Go to Article.

• Elizabeth Warren, US Lawmakers Put Bitcoin on Trial in Senate CDBC Hearing (June 9, 2021)

  While a Senate Banking Committee hearing ostensibly focused on central bank digital currencies, bitcoin’s role in the ecosystem drew much of the attention. At the hearing, Senator Elizabeth Warren emphasized that cryptocurrencies such as bitcoin need more regulations in order for their advantages to be fully recognized. Warren also took aim at bitcoin and other proof-of-work cryptocurrencies’ environmental cost, saying it draws as much energy as The Netherlands, and could use as much energy as every other data center on Earth by the end of the year. Despite this, many members of the committee argued in favor of a digital dollar in the United States, citing low transaction fees as a huge advantage for the country. Go to Article.

• Hong Kong Includes Central Bank Digital Currency in Fintech Strategy (June 8, 2021)

  The Hong Kong Monetary Authority (HKMA) is to begin a study on the use cases of a central bank digital currency (CBDC) as part of its “Fintech 2025” strategy. This will be done in collaboration with the Bank of International Settlements. The HKMA will also continue to work with the Peoples Bank of China in testing digital yuan cross-border payments. The expanded CBDC research plan is one of five major focus points in Hong Kong’s fintech strategy. Other areas include ensuring the city’s banks embrace digital finance technology while creating a robust data infrastructure to support the planned fintech expansion. Go to Article.

• China’s CBDC Testing Advances Along 19.25M Yuan Distribute to Residents (June 7, 2021)

  In Shanghai, the People’s Bank of China will give out as much as 19.25 million yuan or 3 million U.S. dollars, in digital currency through a lottery system as part of their CBDC pilot program. A total of 350,000 digital red envelopes, each containing 55 digital yuan, will be given to lottery winners. Currently, Chinese residents can use the digital yuan for small-scaled retail payments in major cities, including Shenzhen. Although the country has not announced an official launch date for the Digital Yuan, the country plans to have the digital currency available by the 2022 Beijing Olympics. Go to Article.

• Ghana at ‘Advanced Stages’ with Digital Cedi, Central Bank Governor Says (June 4, 2021)

  The Central Bank of Ghana is in the advanced stages of introducing a digital currency. Likewise, Ghana is one of the first countries on the continent to be developing a central bank digital currency. Their next step will include a pilot program to test out the digital cedi on a mobile application. Since February, Ghana’s central bank has been partnered with Emtech, a digital transformation consortium, to launch a sandbox focused on areas like blockchain, CBDCs and financial inclusion. Go to Article.

• As Some Governments Falter with CBDC, Others Press On (June 3, 2021)

  Around the world, more than 60 central banks have been exploring developing a central bank digital currency. Many countries, such as China and Japan, are in the midst of piloting their relative CBDCs, with China planning to roll out the coin for mass use before the start of the 2022 Winter Olympics. Despite it’s popularity, many countries are struggling with getting their respective CBDCs off the ground due to the economic devastation caused by the coronavirus pandemic. Likewise, CBDCs will likely be built and implemented in different ways depending on the needs of the implementing country. Go to Article.

• China to Give Away $6.2 Million in Latest Digital Currency Trial (June 2, 2021)

  Beijing will hold a lottery for residents with a total prize pool of 40 million yuan. Every winner will receive 200 yuan (around $31) in the form of the digital yuan. There will be 200,000 lottery winners and they will be announced in mid-June. This is the third lottery of its kind in China. These trials put China far ahead of its competitors in the race to release a central bank digital currency. Currently, the People’s Bank of China does not publicly plan to use its digital currency to replace the U.S. dollar. Go to Article.

• ECB Report Highlights Risks of Not Launching CBDC (June 2, 2021)

  In a report entitled “The International Role of the Euro,” the European Central Bank highlighted that if countries do not launch a central bank digital currency, then domestic and cross-border payments could be dominated by non-domestic providers. Furthermore, the report warns that market dominance by a privately issued currency, such as Facebook’s Diem, could threaten the stability of financial systems and leave both consumers and businesses vulnerable. Moreso, the report emphasized that a CBDC could enhance the global status of a country’s currency if it is adopted in countries with unstable currencies. Go to Article.

• Thailand Central Bank Taps German Payments Giant to Design CBDC Prototype (June 1, 2021)

  The Bank of Thailand has hired Gieseche+Devrient, a German technology company, to develop a central bank digital currency prototype. The bank is on track or it’s target three- to five-year CBDC roll out plan. The bank has allocated 10 million baht (US$320,000) for the project, which includes taxes, transportation, registration fees and other expenses. Go to Article.

• Africa Could Become a World Leader in Central Bank Digital Currencies (June 1, 2021)

  Around the world, many leading economies are working towards the development of a central bank digital currency. Dr. Co-Pierre Georg, an expert on CBDCs and a associate professor at the University of Cape Town, believes that Africa should take the lead in producing the disruptive technology. A CBDC will create a system that doesn’t add artificial barriers to economic activity between the different countries. Likewise, introducing central bank digital currencies will generate growth for African fintech companies. Go to Article.

• Ex-Head of China’s Digital Yuan Effort Says CBDCs May Operate on Ethereum (May 31, 2021)

  Yao Qian, the ex-head of China’s Digital Yuan, believes that CBDCs shouldn’t attempt to be just a digital form of physical cash, but instead should incorporate smart contract functionality. Smart contracts are automatically executing pieces of blockchain code that carry out functions when certain conditions are met and can also be designed to complement or replace legal contracts. Currently, due to a rising number of security incidents arising from smart contract vulnerabilities, Qian warns that central banks should take a cautious approach in regards to the technology. Go to Article.