The Bank for International Settlements (BIS) and the central banks of Israel, Norway, and Sweden have completed Project Icebreaker, which examined the potential benefits and challenges of using retail central bank digital currencies (CBDC) in international payments. The project, a collaboration between the BIS Innovation Hub Nordic Centre, Bank of Israel, Norges Bank, and Sveriges Riksbank, tested the technical feasibility of conducting cross-border and cross-currency transactions between different experimental retail CBDC systems. The project explored a hub-and-spoke solution for interlinking domestic systems, allowing for competitive foreign exchange conversion rates and the use of bridge currencies. It also demonstrated that the hub-and-spoke model can reduce settlement and counterparty risk and enable near-instant cross-border transactions. The outcomes of Project Icebreaker provide valuable insights for central banks considering the implementation of retail CBDCs and promote scalability, interoperability, and simplicity.
ECB convenes inaugural meeting of Digital Euro Rulebook Development Group
The first meeting of the digital euro Rulebook Development Group (RDG) took place on 15 February 2023 at the European Central Bank (ECB). This Group was formed by the Eurosystem’s High-Level Task Force on Central Bank Digital Currency and aims to create a preliminary rulebook for a potential digital euro scheme. The RDG will investigate rules, practices, and standards that can support the distribution and operation of a digital euro. The ECB will publish the agenda and minutes of each RDG meeting, as well as provide regular updates on the progress made. Once a first draft of the Rulebook is ready, there will be extensive public consultation to gather feedback from interested parties. The drafting process will be flexible to accommodate adjustments based on the consultation results and the overall development of the digital euro project. Additionally, there will be Rulebook development workstreams focusing on specific sections that require specialized skills and expertise. Calls for expression of interest will be issued to identify potential candidates, who will be selected based on their experience by the digital euro team. To stay updated on the digital euro, it is advised to regularly monitor the ECB’s website.
Opportunity to Join Digital Euro Workstream – Submit Your Interest Now
The European Central Bank (ECB) is seeking experts in payments schemes to contribute to the scheme compatibility workstream for the digital euro scheme Rulebook. This workstream is part of the efforts to draft the Rulebook for the digital euro scheme. The main goal of the workstream is to propose a design for the Rulebook that will ensure the compatibility of the digital euro with existing scheme solutions. This proposal should include an impact analysis of existing scheme solutions and recommendations for specific sections of the Rulebook, such as the scope and interplay of the digital euro scheme and technical scheme requirements.
Exploring the Potential and Pitfalls of Cryptocurrencies and CBDCs in Latin America and the Caribbean
This paper provides an overview of crypto assets and central bank digital currencies (CBDCs), highlighting their advantages and disadvantages. It then focuses on the recent experience of these technologies in Latin America and the Caribbean (LAC). LAC has seen a significant interest in unbacked crypto assets and stablecoins, with different countries adopting varying policy responses. For example, El Salvador has introduced Bitcoin as legal tender, while other countries have prohibited these assets due to concerns about their impact on financial stability, currency substitution, tax evasion, corruption, and money laundering. The paper also discusses the results of a survey on CBDC introduction plans and crypto asset regulation. Finally, it provides general lessons and policy recommendations for the region, including the regulation of crypto assets, digital currencies, cross-border payments, and the potential introduction of CBDCs.
ECB selects members for the Rulebook Development Group to create a digital euro
The European Central Bank (ECB) has announced the formation of the Rulebook Development Group (RDG) as part of the digital euro project. Comprised of 22 senior professionals from the public and private sectors, the group will be responsible for drafting a rulebook for the digital euro scheme. The RDG’s work will be based on the design decisions made by the Governing Council and will be flexible enough to accommodate potential future adjustments. The group will hold monthly meetings, starting from February 2023. The Eurosystem’s digital euro project team will attend these meetings, while the European Commission will participate as an observer. It is important to note that the establishment of this group does not imply any decision to issue a digital euro in the future.
Debate on the European Parliament Plenary Session Regarding the ECB’s Annual Report
Christine Lagarde, President of the European Central Bank (ECB), delivered a speech at the plenary session of the European Parliament, emphasizing the importance of the ECB’s independence in fulfilling its mandate of ensuring price stability in the euro area. Lagarde acknowledged the impact of high inflation on the economy and people’s lives, particularly on low-income households. She highlighted that the Governing Council of the ECB has started a process of policy normalization, raising interest rates by 300 basis points since July 2022, with the aim of returning inflation to the 2% medium-term target. Lagarde stressed the responsibility of central bankers to be accountable for their decisions and to explain their policies to the public. She also expressed the ECB’s commitment to listen to the concerns of the public and evaluate how to respond within its mandate. Lagarde provided an assessment of the euro area economy, noting that growth slowed in the fourth quarter of 2022, but confidence is rising. Inflation remains high, although there was a decrease in January due to a drop in energy prices. Lagarde mentioned that wages are growing faster, supported by robust employment dynamics. She highlighted the risks to the growth and inflation outlook, including Russia’s war against Ukraine. Lagarde discussed the ECB’s monetary policy decisions, stating that interest rates will be raised further, and the Eurosystem’s balance sheet will be reduced under the asset purchase programs. She also touched upon the expansion of the euro area and the importance of completing the Economic and Monetary Union. Lagarde called for progress in strengthening euro area financial integration, reforming the EU economic governance framework, and laying down an appropriate regulatory framework for the digital euro. She concluded by emphasizing the ECB’s commitment to its mandate and the need for central bank independence balanced with accountability. Lagarde expressed the ECB’s readiness to formalize accountability practices with the European Parliament and welcomed the opportunity to listen to the views of the parliamentarians during the debate.
HM Treasury and Bank of England’s Contemplation of Plans for a Digital Pound
According to a consultation paper released by HM Treasury and the Bank of England, it is highly probable that a digital pound will be required in the future. The paper suggests that with the advancements in technology and the increasing popularity of digital currencies, the need for a digital pound becomes more apparent. This move would align the UK with other countries that have already started exploring the idea of a digital currency. The consultation paper aims to gather feedback and insights from various stakeholders to better understand the potential benefits and challenges associated with introducing a digital pound.
HM Treasury and Bank of England exploring options for a digital currency
The Great Barrier Reef is the largest coral reef system in the world, located off the coast of Queensland, Australia. It stretches over 2,300 kilometers and covers an area of approximately 344,400 square kilometers. The reef is made up of over 2,900 individual reefs and 900 islands. It is home to a diverse range of marine life, including over 1,500 species of fish, 400 species of coral, and 4,000 species of mollusks. The Great Barrier Reef is a UNESCO World Heritage site and is a popular tourist destination, attracting millions of visitors each year. However, it is also facing numerous threats, including climate change, pollution, and overfishing, which are causing coral bleaching and habitat destruction. Efforts are being made to protect and conserve the reef, but it remains a delicate and vulnerable ecosystem.
Is the digital pound the future of currency for households and businesses?
In recent years, there has been a significant increase in the use of renewable energy sources. This shift towards renewable energy is driven by a number of factors. Firstly, there is a growing concern about the environmental impact of traditional energy sources such as fossil fuels. Renewable energy sources, on the other hand, have a much lower carbon footprint and are considered to be more sustainable in the long run. Additionally, advancements in technology have made renewable energy sources more accessible and cost-effective. This has led to increased investment and development in renewable energy infrastructure. Overall, the shift towards renewable energy is a positive step towards a more sustainable and environmentally friendly future.
Speech by Jon Cunliffe on the Future of the Digital Pound
The technological advancements of the past decade have revolutionized the way we live and work. From smartphones to artificial intelligence, these innovations have had a profound impact on various industries. One industry that has particularly benefited from these advancements is the healthcare sector. The integration of technology in healthcare has led to improved patient care, increased efficiency, and better outcomes. For example, electronic health records have made it easier for healthcare providers to access and share patient information, leading to more coordinated and personalized care. Telemedicine has also emerged as a valuable tool, allowing patients to receive medical advice and treatment remotely. Overall, the use of technology in healthcare has transformed the industry, making it more accessible, efficient, and effective.