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Fed Vice Chair Brainard defends CBDCs against Republican attacks in first hearing since confirmation

“America can’t be left behind,” said Maxine Waters (D-CA), chairwoman of the House Financial Services Committee, opening a May 26 hearing on a US central bank digital currency. The virtual hearing featured testimony from Lael Brainard, a longtime governor at the Federal Reserve who in April was confirmed as vice chair. Central to the hearing was a January Fed discussion paper on the outlook for an American CBDC. Brainard’s testimony, like the discussion paper itself, was diplomatic, but fundamentally sought …

IMF, Bank of France officials believe more CBCDs will emerge in next three to five years

The Governor of the Bank of France François Villeroy de Galhau said that the world might see a strong central bank digital currency emerge in the next three years. Galhau was asked during a panel at the World Economic Forum in Davos on Monday whether in five years’ time there would be “a central bank digital coin” being used on the daily basis (whether wholesale or retail) that would become “a superior system.” “We have several experiments which are not …

Chile’s central bank says it needs more time to study CBDCs

Chile is still considering whether to move forward with a central bank digital currency (CBDC), in spite of previously disclosed plans to have a proposal ready by early this year.  In a preliminary report issued on May 11, Chile’s central bank said it needs more time to make a decision about whether to issue a CBDC. Reuters reported last September that it had planned to reach such a determination around the beginning of this year.  “The bank considers that there …

Russia’s central bank to run real-world pilot of digital ruble in 2023: report

Russia is planning to run “pilot transactions” as early as next year using a digital ruble that could be used for international payments, according to a new report.  Elvira Nabiullina, governor of the Central Bank of Russia, said that the digital ruble was already being tested and that the bank was gearing up for real-world digital ruble transactions, according to Reuters. “We have fairly quickly created a prototype… now we are holding tests with banks and next year we will …

Consensus on CBDC design among central banks not a priority, Bank of Canada says

As central banks around the world explore central bank digital currencies (CBDCs), the Bank of Canada (BOC) is keen to stress that rollout efforts don’t require coordination between nations — and may not even need blockchain technology at all.  CBDCs are digital forms of fiat currencies that are controlled by a nation’s monetary authority, with rollout programs currently overseen by supranational working groups. In 2020, it was announced that officials from the Bank of International Settlements and the Bank of …

Clearing service DTCC pushes ahead with CBDC prototype ‘Project Lithium’

The Depository Trust & Clearing Corporation (DTCC) said on Tuesday that it is set to develop a prototype of how a central bank digital currency (CBDC) might work in the US in practice.  The corporation, which provides post-trade market infrastructure for the financial services industry, said in a press release that the model will use distributed ledger technology (DLT) and measure the benefits of a CBDC.  The assignment, dubbed ‘Project Lithium,’ comes as part of the digital dollar project (DDP) …

Central banker conference to examine ‘safe DeFi’ and CBDCs next week

A group of central bank officials is set to discuss decentralized finance and CBDCs during a virtual event on Monday.  The Bank for International Settlements (BIS) will livestream a conference from Zurich called “Does Safe DeFi Require CBDCs?” The event will examine how DeFi markets may evolve and what roles central banks and Central Bank Digital Currencies may play in creating a secure environment. The Basel, Switzerland-based BIS, which is owned by central banks, will host seminars explaining DeFi, recent …

BIS partners with four central banks to develop multi-CBDC platform prototypes

The Bank for International Settlements (BIS) Innovation Hub partnered with central banks in Australia, Malaysia, Singapore and South Africa to create two prototypes for an international settlement platform using multiple central bank digital currencies (CBDCs).  “This initial phase of the project successfully developed working prototypes and demonstrated practicable solutions, achieving its aim of proving that the concept of multi-CBDCs was technically viable,” the executive summary of the project report states. The collaboration, called Project Dunbar, focuses on how a shared …

David Woo on why an American CBDC could be big trouble for Bitcoin

David Woo, a former top Bank of America executive, is famous for his 2013 prediction that Bitcoin would prove to be a viable alternative to traditional money transfer providers. Nearly a decade later, Woo is still prognosticating about the future of Bitcoin and other cryptocurrencies, though given the current macro backdrop, his outlook is significantly bleaker.  In the latest episode of The Scoop podcast, Woo joins host Frank Chaparro to explain why Bitcoin may not be spared from the economic …

Canada’s central bank and MIT to collaborate on CBDC research

The Bank of Canada, the country’s central bank, and the Massachusetts Institute of Technology (MIT) have agreed to collaborate on Central Bank Digital Currency (CBDC) research. CBDCs are digital forms of a country’s fiat currency that are regulated by a nation’s centralized monetary authority.  The agreement, announced via a press release, will see the Bank of Canada work with MIT’s Digital Currency Initiative to build on its ongoing research into CBDCs on a twelve-month basis. After this period, The Bank …