US Treasury study finds CBDCs a plus for commercial bank stability
Access to CBDCs reduces banks’ need to insure against liquidity risks and gives policymakers greater information about trouble in the financial system, according to the study. The introduction of a central bank digital currency (CBDC) may increase the stability of a banking system, according to a paper released Tuesday by the United States Treasury Office of Financial Research. This finding counters concerns that a CBDC may encourage runs on weaker banks. According to the July 12 paper, researchers often claim that the public may in times of financial stress “pull funds out of banks and....
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The results of a new study from the Bank of Thailand point to three key considerations for making sure a retail central bank digital currency doesn't adversely impact financial stability. The Bank of Thailand has published the results of a new study into how to manage the implications of issuing a retail central bank digital currency (CDBC) for the country’s financial sector.As distinct from a wholesale CBDC, which is limited to use by financial institutions and intermediaries, a retail CBDC is widely available for use by the general public. The Bank of Thailand, like many other central....
Before trying to apply blockchain to anything, think why. Retail central bank digital currencies, or CBDCs, do not require the use of blockchain technology, according to executives at major European central banks.Thomas Moser, an alternate member of the governing board at Swiss National Bank, and Deutsche Bundesbank’s Martin Diehl discussed the state of CBDCs at the European Blockchain Convention Virtual 2020 conference on Monday.During the online panel discussion, both Diehl and Moser seemed to agree that global retail CBDC projects do not need blockchain, citing a number of reasons.Moser....
The Reserve Bank of India has described central bank digital currencies as a mixed bag in its report on currency and finance for 2020 to 2021. India’s central bank has recognized the potential benefits of central bank digital currencies, or CBDCs, but not without including a few pitfalls.The Reserve Bank of India offered its assessment of CBDCs as part of its report on currency and finance issued on Sunday.As a part of the report, the RBI noted that several countries are exploring the creation of their own sovereign national digital currency.According to the central bank’s report, CBDCs....
The International Monetary Fund (IMF), the World Bank, and the Bank of International Settlement (BIS) have conducted an extensive study of using central bank digital currencies (CBDCs) for cross-border payments. Their report to the G20 states that enhanced cross-border payments “can be achieved … as long as countries work together.” The Committee on Payments and Market Infrastructures, the BIS Innovation Hub, the International Monetary Fund, and the World Bank published a joint report to the G20 on July 9 titled “Central bank digital currencies for cross-border....
The latest study by the World Bank shows that it costs 4.98% on average to remit funds to South Asia which makes it the least expensive region while sub-Sahara Africa is the most expensive with an average cost of 8.47%. The quarterly study also finds that it is costlier to remit funds when using service providers such as banks that charge an average of 10.89%. Marginal decline Mobile operators are the cheapest as their sending costs averaged 3% and below during the period under review. Still, the study, which predictably excludes cryptocurrencies, shows a marginal decrease in the Global....