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China’s central bank lays regulatory foundation for CBDC

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China’s central bank, the People’s Bank of China (PBOC), published a draft law this Friday that aims to provide regulatory framework and legitimacy for a forthcoming central bank digital currency (CBDC), the digital yuan. 

The draft law states that the yuan is the official currency of the People’s Republic of China whether in physical or digital form.

The draft law also appears to take aim at third-party efforts at yuan-backed digital currencies, stating that individuals and institutions are prohibited from making and issuing a currency designed to “replace” digital yuan circulation. This move would presumably criminalize all non-state-sanctioned yuan-backed stablecoins. 

The punitive measures against violators of this proposed law are harsh: most notably confiscating all profits, destroying all tokens, and imposing a fine of not less than five times the illegal amount created, in addition to the possibility of criminal prosecution and imprisonment.

The People’s Bank of China clarified that the draft of the new law is on the table for public consultation until November 23, 2020.

Previous reports have indicated that China hopes to start officially issuing the digital yuan before the Winter Olympics in Beijing in February 2022. Additionally, earlier this month, China conducted a major test of Shenzhen’s digital yuan payment system, where nearly 47,500 residents claimed 200 yuan ($30) each in digital currency which they then spent across 3,389 stores throughout the city.

This regulatory move is also just the latest in a worldwide trend towards CBDCs. The Bank for International Settlements had told Cointelegraph that it had worked with seven central banks to define the foundational principles necessary for any publicly available CBDCs to help central banks meet their public policy objectives.

China\’s central bank lays regulatory foundation for CBDC

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LINE In Discussions With Central Banks Of Asia Regarding CBDC Projects

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LINE, the Japan-based messaging giant, had a spokesperson go to the press to announce that it is currently in discussions with central banks of Asia. These discussions pertain to potentially partnering up when it comes to digital currency projects.

Planning On Serving As The Bas

The spokesperson explained that the aim for LINE in these discussions is to allow for a blockchain platform that is primed and ready for the introduction of central bank digital currencies (CBDCs) based within the LINE Blockchain. LINE had already launched its blockchain platform for respective developers back in August of this year, as well.

As it stands now, it’s not quite clear which Asian central banks LINE is in discussions with. Even so, IT Chosun, a Korean news outlet, has speculated that it would work with central banks that already focus on developing digital currencies for the use of micropayments.

LINE Plans Global Expansion

IT Chosun explained that the spokesperson elaborated on the plan, in particular. According to the spokesperson, LINE is planning to support the development of customized CBDCs, doing so in such a format to reflect each central bank’s requirements for it in their respective countries.

All the while, the spokesperson stated that these banks would be capable of using LINE’s blockchain platform for its stability and scalability. The spokesperson stated that LINE is making plans for global expansion, with the first big push being in Asia.

One such example would be the Bank of Korea, which is planning to trial a CBDC in order to enact micropayments. The central bank also issued out a recent report, taking note that countries like the Bahamas, Uruguay, as well as Cambodia are all developing their respective forms of CBDCs dedicated to micropayments. This comes in a bid to reduce the costs of money management, overall.

The Crypto Arms Race

Even more global corporations are throwing their hat in the ring. Just a month prior, Mastercard, the global payments giant, had launched a “Virtual and Custom” testing platform. This platform is dedicated to allowing central banks to inspect and evaluate their respective digital currency systems, as well.

It seems that the entire world, even multinational corporations, are battling it out for supremacy within the new crypto tech race. Nothing remains clear, but only China and the Bahamas are in a position to issue out their CBDCs on a large scale, China being the global superpower in the lead at this point.

It should be noted, however, that the title of the first state-owned cryptocurrency falls on the Petro, the dubious stablecoin from Venezuela.

LINE In Discussions With Central Banks Of Asia Regarding CBDC Projects

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Bank of Canada Is Reportedly Planning to Hire Economist that Will Conduct Research related to Fintech and Central Bank Digital Currencies

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The Bank of Canada, the nation’s central bank, recently posted a new job requirement for an economist who may have experienced working with digital currencies and financial technologies or Fintech services.

The reserve bank has noted that it aims to serve as “a leading central bank—dynamic, engaged and trusted—committed to a better Canada.”

The job description states that there’s currently a new wave of innovation in the Fintech space that’s beginning to transform the “landscape of currency, payments systems and financial intermediation.” The Bank of Canada is focused on an extensive research program that aims to analyze the different risks and potential opportunities of these new Fintech developments, the job description noted.

It added:

“A key part of [the Bank of Canada’s] program is the monitoring framework for money and payments and the contingency planning for a central bank digital currency (CBDC). This is a program of major social significance and will require us to break new ground.”

The economist (who will be selected for the job by the BoC) will be responsible for taking part in extensive research projects. The economist will also be tasked with “analyzing complex economic and policy issues, providing insight, generating innovative solutions, and developing tools for the monitoring of the developments in money and payments.”

(Note: for more details on this job role, check here.)

The bank stated:

“We are willing to consider staffing this position on a temporary basis through the Financial Institutions Supervisory Committee (FISC) Interchange Program.”

The FISC Interchange Program aims to support talent management and employee development from several different local agencies, including the Department of Finance, Financial Consumer Agency of Canada, Canada Deposit Insurance Corporation, Office of the Superintendent of Financial Institutions and the Bank of Canada.

Canada has taken several measures to promote the adoption of innoative Fintech solutions or modern financial services. In August 2020, the Smith School of Business at Queen’s University introduced Canada‘s very first Fintech Masters course.

According to the Smith School of Business, the course has been designed mainly for financial or tech professionals who are already working in the industry. The first Master of Financial Innovation and Technology (MFIT) program will reportedly begin in November of this year.

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