Looks like the experimentation with CBDCs is moving faster than we anticipated it would. Results from a recent survey by the BIS (Bank for International Settlements) are instructive. Survey respondents represented countries that in aggregate accounted for nearly 80% of the global population and 90% of economic output, and 70% of them are said to be experimenting with CBDCs in various capacities. This figure is roughly a 2% increase from the previous year, and a majority of central banks are looking at both Wholesale CBDCs (mostly for inter-bank settlements) and General purpose CBDCs.
While more than 50% of the CBDC experiments are still in the early stages, there has been a meaningful increase in the number of projects that have moved to the experiments/proof-of-concept stage as compared to the previous year. Interestingly, joint efforts between central banks to implement CBDCs in cross-border transfers and settlements are increasingly becoming more common. A few such collaborations include project Stella (ECB and BoJ), as well as the one between the triumvirate of Bank of Canada, MAS and Bank of England. Also notable is the recent announcement by Saudi Arabia to jointly develop a CBDC for inter-bank settlement.
Clearly central banks are stepping up efforts to assess the viability of CBDCs to improve payment processes and financial inclusion. However, it might be wise to temper expectations in the short run. Initial pilots on a nascent technology framework with unclear strategic objectives will have mixed results and it will be a while before a breakout success emerges from one of these projects.
“Blockchain Implementation Blueprint” India’s Institute for Development and Research in Banking Technology (IDRBT) has published a blueprint on blockchain implementation in the banking sector. The organization is reportedly working with the Indian government, banks and industry players to build an interoperable blockchain platform. Since there is no relevant regulation for the blockchain sphere in India, the blueprint purportedly presents a roadmap on the technology’s adoption in several areas and offers to establish protocols that would allow financial institutions to interact via decentralized platforms.
“Reverse-merger IPO in Crypto” One of the world’s largest cryptocurrency exchanges could soon be the first big one to be publicly traded. Singapore-based holding company BTHMB is looking to list in the U.S. by acquiring a publicly traded company here. On Tuesday, a holding company called Blockchain Industries, which trades publicly on U.S. over-the-counter markets under the ticker BCII, announced it had signed a binding letter of intent with BTHMB, which is being renamed Blockchain Exchange Alliance. Blockchain Exchange Alliance would wind up being the majority of the combined company.
“Dutch Regulator Calls for More Oversight” The Dutch central bank and financial services regulator say that the country must introduce a licensing regime for crypto exchanges and wallet providers in order to tackle money laundering and terrorist financing. In a joint statement, De Nederlandsche Bank (DNB) and the Authority for the Financial Markets (AFM) also call for the European regulatory framework for corporate funding to be amended to enable the use of cryptos that are comparable to shares or bonds.
“New GPUs to Mine Grin”Sapphire Technology is a creator of graphics cards, based in Hong Kong. In a press release from the official website, the company announced the launch of the SAPPHIRE RX 570 16GB HDMI Blockchain Graphics Card. This graphics card is just one of the first items from their new product line, making it possible to mine GRIN coins and other crypto tokens.By adding the new graphics card, miners are able to work with the Cuckatoo 31+ proof-of-work algorithm that anchors the entire network. Considering the limited availability for mining on this algorithm, Sapphire Technology says that “there will be fewer users on the network leading to higher rewards for early miners.”
The future of cryptocurrency regulation by Daniel Araya