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Accenture and Digital Dollar Foundation to trial United States CBDC this year

Fortune 500 company Accenture has teamed up with Digital Dollar Foundation to conduct Central Bank Digital Currency, or CBDC, trials in the United States.

Announced on Monday, May 3, the newly formed Digital Dollar Project will carry out five CBDC pilot programs over the next 12 months. The project’s objective is to generate data to inform U.S. policymakers on how to develop a domestic digital currency.

The Digital Dollar Project will launch three pilot programs in the next two months, generating data on the functional, sociological, and business benefits of a digital greenback.

Al Jazeera reports that former chair of the Commodity Futures Trading Commission and co-founder of the Digital Dollar Foundation, Christopher Giancarlo, emphasized the lack of U.S. data regarding CBDC:

“There are conferences and papers coming out every week around the world on CBDCs based on data from other countries. What there is not, is any real data and testing from the United States to inform that debate. We’re seeking to generate that real-world data.”

However, the Fed is taking a cautious approach as the guardian of the world’s reserve currency, the report added, with chairman Jerome Powell responding that it is far more important to get a digital dollar right than it is to be fast.

Giancarlo countered that Powell was correct to be cautious, but warned that the U.S. could fall further behind as China pushes ahead with its own CBDC testing and deployment.

While the U.S. Federal Reserve has been conducting research into the technology and applications for a CBDC, the United States lags behind the digital currency initiatives currently ongoing in numerous other jurisdictions.

China’s central bank and leading state banks have recently been preparing to test the digital yuan for a shopping festival on May 5.

Accenture has also worked on a number of CBDC projects in other countries, including Canada, Singapore, France, and Sweden — which has already completed the first phase of its pilot.

According to a study by the Bank for International Settlements, 80% of the world’s central banks are already researching central bank-issued digital currencies.

Accenture and Digital Dollar Foundation to trial United States CBDC this year

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ASIC calls for closer engagement, but crypto industry says rules are unclear

The Australia Securities and Investments Commission, or ASIC, is urging local blockchain and crypto firms to engage with regulators to help them foster innovation in the region. 

Speaking at the Australia Blockchain conference on Monday, April 19, senior advisor of strategic intelligence at ASIC, Jonathan Hatch, emphasized the regulator is trying to build trust and collaborate with the crypto economy.

Panelist Kevin Saunders, the CIO of Monochrome Asset Management, stated that while the blockchain sector could do more to understand the ASIC regulatory framework, the commission needs to provide greater clarity as to the industry’s compliance obligations.

Saunders took aim at the opacity of existing regulations, characterizing the industry’s oversight as “too ephemeral for large institutions to engage with it”.

Commenting on the challenges in the sector, National Blockchain Roadmap Lead, Chloe White, agreed that it is challenging for industry stakeholders to keep up with the current regulatory environment.

CEO of digital financial agreements firm Lygon 1B, Justin Amos, added that regulators need to collaborate to support new technologies, rather than seek to stifle emerging industries with heavy-handed regulation.

The Australian government has already been supportive of blockchain projects, having made two grants of up to $3 million available to blockchain teams targeting minerals certification and excise taxation solutions in late March.

In November 2020, the Reserve Bank of Australia (RBA) announced partnerships with the Commonwealth Bank, National Australia Bank, financial services company Perpetual, and Ethereum software firm ConsenSys to explore the potential use of a wholesale central bank digital currency.

In January 2021, Cointelegraph predicted that Australia would be one of the first five nations to launch a CBDC due to its favorable blockchain environment.

ASIC calls for closer engagement, but crypto industry says rules are unclear

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ECB’s Christine Lagarde Discusses Timeline for Digital Euro

European Central Bank’s (ECB) chief Christine Lagarde said that the possibility of a digital Euro, known more technically as central bank digital currencies (CBDCs), coming into circulation is growing given the change in digital priorities.

But it could still take the European Union sometime before it decides on moving forward with the idea.

CBDC Roll-out Process Is Complicated

In an interview with Bloomberg TV, Lagarde pointed to the intricate processes needed for a decision to be made towards launching a digital Euro. According to her, there is a possibility that a state-backed digital currency could come into existence in the next couple of years once the Governing Council gives the go-ahead.

The ECB would first release an analysis of eight thousand responses it received following its digital Euro consultation exercise. According to the French business guru, these responses would first be communicated to the European Parliament, a key player. Then the ECB’s decision-making Governing Council would decide whether to proceed with the fiat replica experimentation.

The consultation results would determine whether the ECB would commence experimentation on a digital fiat in the next six months or a year.

“It’s a technical endeavor as well as a fundamental change,” Lagarde said. “We need to make sure that we’re not going to break any system, but to enhance the system,” she added.

Lagarde’s enhancement speech echoes the Bank for International Settlements (BIS) report, which noted that over 20% of national banks globally actively considered rolling out a state-sanctioned digital currency. The report published in late 2020 recommended that any efforts in this direction should not usurp the fundamental role that fiat plays in the economy. According to the BIS, CBDCs should be integrated into the extant settlement framework.

Four Years At Most

But despite this supposed positive outlook for CBDCs, Lagarde has said it may take up to four years before anything meaningful comes out.

The CBDC race is led by China, which is currently fast-tracking the digital yuan pilot tests to meet up to the Winter Olympics in Beijing. But China is not the only country that has made efforts to revolutionize the way people spend cash. The Bahamas is the first recognized economy using a state-backed digital currency called Sands Dollar, and Lagarde says she is keenly interested in this project.

According to her, any decision on CBDCs would be targeted at providing Europeans with a fairly stable, safe, and secure digital currency, given the immense shift it would bring to the European financial scape.

Lagarde is a well-known critic of Bitcoin being perceived as a medium of exchange.

Noting the potential harm the digital asset may bring to the financial system, Lagarde said the pseudonymous nature of Bitcoin could serve criminal intents like money laundering and terrorist financing.

To many like her, the CBDC is a concept to regain the financial system disruptively usurped by decentralization.

ECB’s Christine Lagarde Discusses Timeline for Digital Euro

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Norway Central Bank Chief Calls Bitcoin Unstable and Resource Intensive

Norway’s Central Bank does not seem so keen on cryptocurrencies despite being known as a cashless society. This was deduced from the recent comments made by the Governor of Norges Bank, Oystein Olsen.

Norway’s Problem With Bitcoin

Olsen described Bitcoin as being too resource-intensive, far too costly, and unstable. These features are enough reason not to recommend Bitcoin as an alternative to fiat or a government-backed currency.

“The basic property and task for a central bank and central bank currency is to provide stability in the value of money and the system, and that is not done by Bitcoin,” Olsen told Bloomberg.

The apex bank chief said Bitcoin wouldn’t replace the money currently controlled by central banks. Olsen also doesn’t see cryptos like Bitcoin disrupting the operations of banks.

Although Olsen is not interested in Bitcoin or other cryptocurrencies, he’s not dismissing emerging technologies’ potential monetary applications. According to him, digital currencies are the new wine, and it gets better now that central banks are entering the scene.

The bank supports the cashless idea fully. We can see this in Norway’s mode of operations and payments. The Central Bank’s Deputy Governor, Ida Wolden Bache, revealed that only 4% of all payments are made with physical banknotes and coins.

While Norway’s apex banks won’t budge on crypto, Norwegian firms are embracing Bitcoin. Norwegian multinational Aker ASA launched a crypto-facing business unit, Settee AS, earlier this month.

Settee AS would invest in Bitcoin companies operating and hold its liquid assets in the BTC.

Norway’s CBDC Plans

While Norway welcomes the idea of developing Central Bank Digital Currencies (CBDCs), the country is not one of the first front-runners on the scene. Countries like China and Sweden are taking the lead.

Bache had disclosed in November that the central bank was exploring the need for a CBDC. But, they’re in no hurry to push out a prototype.

“The lack of urgency reflects our view so far that there is no acute need to introduce a CBDC. The introduction of a CBDC could have considerable consequences in a number of areas. Our decision must be well-informed.”

Just like the United States, Norway believes that CBDCs would not replace cash. Bache said that a CBDC would not change the private sector credit intermediation. 

Norway Central Bank Chief Calls Bitcoin Unstable and Resource Intensive

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Asian Banks Collaborate on Cross-Border CBDC Project

Global regulators continue to work on strategies in a bid to regulate their prospective crypto markets. One topic that continues to pop up even in regions that are averse to cryptos is CBDCs. In Asia, some major banks are planning to join hands to launch a pilot on the blockchain.

Apex Banks Look To Control Crypto Rise

Financial regulators from four Asian economies have announced that they intend to create cross-border central bank digital currencies (CBDCs) in the coming years.

The project rightly named the Multiple Central Bank Digital Currency (m-CBDC) is an ongoing partnership between four major Asian countries. The project aims to resolve challenges like the traditional cross-border payments system’s inefficiencies, high transaction cost, and complex regulatory guidelines. The body of regulators hopes to attract more apex banks to join in the study of blockchain technology.

The m-CBDC sees the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates, and the Digital Currency Initiative of the People’s Republic of China collaborate to develop a prototype leveraging blockchain technology.

The m-CBDC project builds upon the Inthanon-LionRock project set up in 2019 to facilitate cross-border payments. The new efforts will see the Asian nations further explore the potential of DLT by developing a proof-of-concept (PoC) prototype. The bridge project will also look to investigate “business use cases in a cross-border context using both domestic and foreign currencies.”

Pilot Tests Are Underway On CBDC

As Bitcoin prices rose up to $50K, global capital markets are seeing an outflow of funds into the crypto markets. Financial regulators are left in dire straits as digital assets continue to court attention and generate juicy returns for investors despite their associated risks.

In response, many countries have been on the march to create a digital version of their fiat currencies. Pilot programs launched in China and some parts of Europe have seen significant progress in this field. Although CBDCs do not address the inflationary question, world governments see it as a way to put a cap on cryptocurrencies’ rise.

While several developed countries are making progress, the world’s largest economy, the United States of America, has continued to drag its feet on the CBDC question. Although regulatory agencies like the Securities and Exchange Commission (SECC) and Commodity Futures Trading Commission (CFTC) have been doing their bit marshaling the crypto space, no official announcement has been made concerning a CBDC program.

Asian Banks Collaborate on Cross-Border CBDC Project

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