July 2021

• Ukraine Central Bank Now Officially Allowed to Issue Digital Currency (July 30, 2021)

  After several years of research, Ukrainian President Volodymyr Zelenskyy has signed a law titled On Payment Services, which permits the country’s central bank to issue a central bank digital currency. The On Payment Services aims to provide the implementation of open banking, the practice of sharing access and control to consumer financial information through third-party applications. Among other intentions, the newly signed law is also designed to adapt the Ukrainian legislation to the legal framework of the European Union, which would eventually allow integrating the country’s payment system with the one of the EU. Go to Article.

• We Have to Be in the Crypto Space, Mastercard CEO Says (July 30, 2021)

  Mastercard is working towards becoming the go-to for governments and private entities when they are testing and rolling out central bank digital currencies and stablecoins. Mastercard has been highly proactive in keeping up with the innovations in digital currency. The company has rolled out a virtual testing environment designed to help central banks simulate issuance, distribution, and transactions of CBDCs between multiple parties with both wholesale and retail CBDCs. Mastercard has also made considerable steps with cryptocurrencies, NFTs, and stablecoins. Go to Article.

• Ghana’s Vice President Declares Africa Should Embrace Digital Currencies (July 29, 2021)

  Ghana’s vice president Dr. Mahamudu Bawumia recently stated that African governments need to embrace digital currencies to facilitate trade throughout the continent. Currently, moving goods over African borders is costly and time-consuming. A digital payments system, Dr. Bawumia believes, would rectify these issues. The Bank of Ghana has been developing a CBDC since early 2021. Likewise, Nigeria is planning its own CBDC called GIANT, set to launch this October. Go to Article.

• CBDC Could Help Ensure US Dollar Keeps Prominence in International Markets (July 27, 2021)

  Currently, the US Dollar is the preeminent global reserve and transaction currency and accounts for 60 percent of transactions worldwide. In order to preserve this dominance, many experts have argued that the United States must establish a central bank digital currency. According to Robert M. Baldwin, head of policy for the Association of Digital Asset Markets, a CBDC system would provide both speed and cost benefits while also offering financial inclusion and improved cross-border transactions. Baldwin noted that another option is a regulated private sector-led stablecoin that’s endorsed by and coordinated with the federal government. Go to Article.

• Amazon is Looking for Head of Digital Currency and Blockchain Product Sector (July 24, 2021)

  In a recent job posting, Amazon revealed that it was looking for an experienced product leader to lead the blockchain, crypto, and the central bank digital currency [CBDC] sector of the e-commerce platform. The lead will be working towards developing the platform’s Digital Currency, which would include owning the vision and strategy of the product and designing the roadmap. While it wasn’t confirmed if the platform would be rolling out its own digital asset, its interest in the digital currency sector could significantly boost the industry. Go to Article.

• Nigeria to Kick Start its CBDC Pilot in October (July 23, 2021)

  On October 1st, Nigeria will start the pilot program for the country’s CBDC project, titled GIANT. The project has been in the works since 2017 and operated on an open-source blockchain called Hyperledger Fabric. With this pilot, Nigeria hopes to garner macro-management as well as growth. Furthermore, they hope to ease cross-border trading. Currently, nearly 80% of all central banks are developing a CBDC. Go to Article.

• China Takes its CBDC into the Insurance Industry (July 22, 2021)

  While most countries have just begun researching CBDCs, China’s digital yuan is being used by the public. Recently, the CBDC has ventured into the insurance industry. This program is being carried out by a local branch of the People’s Bank of China [PBoC], and the policies were issued in Shenzhen, South China’s Guangdong Province. Previously, the use of the CBDC was limited to e-commerce platforms and online payments. The country plans on having the digital yuan available for all visiting athletes during the 2022 Winter Olympics Go to Article.

• India’s Central Bank Considering Pilot Programs for CBDC (July 22, 2021)

  The Reserve Bank of India is considering running a series of pilot programs for the digital rupee. The pilots will act as a phased introduction of the digital rupee to allow time for legal changed to the country’s foreign-exchange rules. This announcement comes months after the Reserve Bank of India released a report highlighting the benefits and drawbacks of issuing a CBDC. Go to Article.

• China Unveils Cryptography Research Center to Support Digital Yuan (July 21, 2021)

  China has opened a national institute to research how to use cryptography to secure the digital yuan. The center will be in Jinan, a city in Shandong. Many notable leaders in China’s financial world spoke at the opening ceremony, including a deputy governor of the People’s Bank of China, Fan Yifei, as well as a representative from telecommunications equipment maker Huawei. Since 2017, China has been working towards improving it’s domestic cybersecurity practices. Go to Article.

• Canada CBDC ‘Probably Necessary’ for Competition (July 21, 2021)

  The Bank of Canada published a paper which described the benefits of issuing a digital currency within the country. First, the paper highlighted how the CBDC would provide unbanked Canadians with a risk-free option to store their money, thereby increasing competition in the market. Furthermore, a digital currency would allow users to bypass payment services providers such as credit cards, which antitrust watchdogs globally have said exhibit anticompetitive practices. Likewise, a CBDC that allows smart contracts could foster vibrant innovation and competition in digital services. However, smart contracts come with some risks, including software bugs, vulnerability to cyberattacks, scalability issues and difficult of bringing off-chain data into the blockchain. Despite these findings, the Bank of Canada will only release a central bank digital currency if the country largely moves away from using cash or if an alternative digital currency becomes so widely used that it threatens the country’s monetary sovereignty. Go to Article.

• Argentina’s Misiones Province Plans to Issue its Own Stablecoin (July 21, 2021)

  The Argentinian province of Misiones will be issueing its own stablecoin. Misiones is the first province in the country to do something of this nature. Currently, it is unclear whether Misiones will create its own blockchain or tap into an existing network. Similarly, the province will be using blockchain technology in a green bond that will keep track of the carbon footprint absorbed daily by Misiones’ forests. Go to Article.

• China Wants US Senators to ‘Stop Making Trouble’ out of Digital Yuan (July 21, 2021)

  Earlier this week, three US Senators wrote a letter to the U.S. Olympic and Paralympic Committee board chair Susanne Lyons. In the letter, the Senators requested that officials prevent U.S. athletes from using or accepting the Chinese digital currency due to privacy concerns. In response to this, Chinese Foreign Ministry spokesperson Zhao Lijian called the U.S. politicians ignorant and asked them to “figure out what a digital currency really is.” China still plans to make the digital yuan available for all international athletes and visitors during the 2022 winter Olympics. Go to Article.

• Insurer Pingan Issues Digital Yuan COVID-19 Policies for Medical Staff (July 21, 2021)

  In Shenzhen’s Nanshan district, the Chinese insurance giant Pingan is offering discounts for users who pay their premiums in e-CNY. The policy covers 300,000 yuan ($46,342) for death caused by the coronavirus, 50,000 ($7,723) yuan for a COVID-19 diagnosis and 50,000 yuan for accidental death. While this is not the first time the digital RMB has been tested in the insurance sector, it is likely the first time an e-CNY insurance trial has been open to the public. Go to Article.

• USA Senators: US Athletes Should Not use Digital Yuan in 2022 Olympics (July 20, 2021)

  The People’s Bank of China plans on opening their central bank digital currency to during the 2022 Olympics. Due to privacy concerns, three US Senators requested that American athletes should be refrained from accepting or even using the Chinese CBDC. They believe that the People’s Bank of China could use the digital yuan to keep an eye on athletes during their stay in the country and even after they revert to the USA. Go to Article.

• Bank of Korea Selects Kakao’s Blockchain Arm for Digital Won Tests (July 20, 2021)

  The Bank of Korea has chosen a blockchain subsidiary of Kakao, a local internet giant, as the principle technology provider for its blockchain-based digital won pilot. The blockchain subsidiary, Ground X, will work in cooperation with United States-based blockchain company ConsenSys as well as other Kakao affiliates like KakaoBank and Kakao Pay. The initiative aims to test the CBDC in a virtual simulation environment based on distributed ledger technology, exploring potential use cases related to CBDC issuance, redemption, electronic payments and settlement, as well as potential integrations related to purchases of digital artwork and copyrights. The first tests will likely begin in August. Go to Article.

• Fed and Yale Researchers Lay Out 2 Regulatory Frameworks for Stablecoins (July 18, 2021)

  The Federal Reserve’s ongoing research into central bank digital currencies, or CBDCs, has broadened to include stablecoins and whether they can be effectively regulated. Recently, Yale Professor Gary B. Gorton and Jeffery Zhang of the Board of Governors of the Federal Reserve System have co-authored a paper on the topic. In their paper, Gorton and Zhang highlighted that stablecoins and other privately produced monies are not effective mediums of exchange. The authors then proposed two solutions to address risks created by stablecoins: either make stablecoins equivalent to public money or introduce a CBDC, which entails taxing private stablecoins out of existence. Go to Article.

• China Evaluating Use of Digital Yuan for International Payments (July 16, 2021)

  The People’s Bank of China is evaluating use of the digital yuan for cross-border payments and is open to discussions about developing worldwide principles with the international monetary system. Furthermore, China plans to enhance the security and privacy measures of the Yuan as the pilot continues. Despite the evaluations, China has repeatedly noted that the digital yuan is mainly intended for domestic use. Go to Article.

• Jerome Powell: CBDC Report Coming in Early September (July 14, 2021)

  The United States Federal Reserve will be releasing a report on central bank digital currencies in early September. The report will outline the benefits and risks of CBDCs, as well as cryptocurrencies and stablecoins more broadly. The document will be written up by the Boston branch of the Federal Reserve, which has been conducting research on CBDCs and if one would be useful within the United States since last year. Go to Article.

• China Gives Out Total of $41.5M as Country Speeds Up Digital Yuan Tests (July 12, 2021)

  At this point in the pilot, the People’s Bank of China has handed out roughly $41.5 in digital yuan to citizens. The money has been distributed through a lottery system. These lotteries have been focused on cities, and more specifically in their financial sectors. Furthermore, the pilot has expanded to include government services such as medical care, education, and transportation. Go to Article.

• CBDCs can Cut Cross-Border Payments’ Friction Points (July 12, 2021)

  Recently, the Bank of International Settlements released a study which concluded that banks should be focusing on interoperability and coordination between banks as they explore and deploy CBDCs. To achieve interoperability, the BIS emphasized the importance of consistent standards and design coordination. The paper also highlighted risks of CBDCs, including but not limited to an increase risk for runs on both domestic banking sectors and currencies. Finally, the paper offered three models of how CBDCs might be harnessed to improve cross-border payments. All three highlighted the importance of shared technology and interfaces. Go to Article.

• Ghana’s Central Bank to Pilot CBDC in September (July 12, 2021)

  The Bank of Ghana plans to pilot its central bank digital currency this upcoming September. Although no definite timeline has been released, the bank’s deputy governor has stated that the success rate of the bank’s pilot will determine the pilot’s next stages. This project has been in the works since February when Ghana’s central bank began work with Emtech, a digital transformation consortium. Go to Article.

• South Korean Internet Giant Bid for CBDC Pilot (July 12, 2021)

  The Bank of Korea plans to select an operator to run a blockchain-based CBDC pilot next month that will test a digital won in various use cases. Currently, the top bidders are Naver and Kakao, two South Korean internet giants. The associated pilot will run until June 2022, with a research budget of 4.96 billion won ($4.3 million). The BoK intends to explore potential use cases related to CBDC issuance, redemption, electronic payments and settlement, and the purchasing of digital artworks and copyrights. Go to Article.

• Pandemic has Accelerated the Rollout of CBDCs by 5 Years (July 9, 2021)

  Guardtime, a European blockchain company, suggests that the pandemic may have accelerated the launch of a major central bank digital currency by up to five years. They believe that the growth of many technology companies, improved use of networking and telecommunications platforms, and digitalization of the world in general could mean the first central bank digital currency rom a major economy could be rolled out within three years. Currently, more than 60 central banks are exploring CBDCs. Go to Article.

• IMF, World Bank and BIS Champion Central Bank Digital Currencies in G20 (July 9, 2021)

  In a joint report, the International Monetary Fund (IMF), the World Bank and the Bank of International Settlements (BIS) have proposed that a cross-border network of central bank digital currencies (CBDC), underpinned by efficient technological integration and proactive international cooperation, could be of significant benefit to the world economy. The report emphasized the need for global coordination so that the full benefits of CBDCs could be achieved. The report highlighted how strong global coordination could combat both money laundering issues and the financing of terrorism. A worldwide push for CBDC issuance, the report notes, would therefore require tight integration of multiple CBDCs and uniformity of design choices, alongside specific measures designed to mitigate these macro risks. Go to Article.

• Digital Yuan Lottery Now Open to 10M Consumers in China (July 8, 2021)

  Currently, 10 million people have applied for and therefore are eligible to win digital yuan through the People’s Bank of China’s lottery system. Each of the 200,000 winners will receive 200 digital yuan, which can be used in several retailers across China. Likewise, some workers in China’s Xiong’an New Area can be paid with the digital yuan. Go to Article.

• France Tests CBDC Flows with Singapore using Automated Liquidity Pool (July 8, 2021)

  The Banque de France has tested a cross-border central bank digital currency (CBDC) transaction with Singapore, marking the first use of a smart contract–based, automated liquidity pool for the digital EUR/SGD currency pair. Cutting down on middlemen lessened the number of contractual arrangements and the Know Your Customer burden, thereby considerably speeding up the process. Currently, the Banque de France plans to scale up this project to support multiple central banks and commercial banks in different jurisdictions. Go to Article.

• Thailand’s Central Bank Warns Against Using Digital Currencies for Payments (July 8, 2021)

  In a recent statement, Thailand’s central bank said anyone who engaged in the trade of digital assets for goods and services, as the sender or recipient, could face risks including money laundering, theft, and price volatility. The Bank of Thailand followed this by highlighting their view that cryptocurrencies like Bitcoin and Ether are not legal tender in the country and warned of consequences from regulators. Despite this, the country is continuing its development of a CBDC and plans to begin testing in the second quarter of 2022. Go to Article.

• New Zealand’s Reserve Bank Consulting Public on a Potential CBDC (July 8, 2021)

  The Reserve Bank of New Zealand is plans to look at the potential for a CBDC to work together with cash as government backed money and believes that they may be a solution to the ongoing reduction in the use of cash within the country. Likewise, the Reserve Bank plans to assess both cryptocurrencies and stablecoins. Although they are open-minded about the future of a CBDC in New Zealand, the Reserve Bank has emphasized that they will take a measured and cautious approach in its development. Go to Article.

• Jamaica’s Central Bank to Start CBDC Pilot with Financial Institutions in August (July 7, 2021)

  In August, the Bank of Jamaica plans to test its delayed central bank digital currency across financial institutions. The bank plans to expand the trial between September and December and then gradually move toward a full-fledged launch. The pilot was originally planned to begin in May, but was delayed for unspecified reasons. Go to Article.