Mexico’s Central Bank to Launch its Digital Currency in Next 3 years to “Advance Financial Inclusion”

Mexico’s Central Bank to Launch its Digital Currency in Next 3 Years to “Advance Financial Inclusion,” says the Government

The central bank of Mexico will launch its own digital currency by 2024, announced the Mexican government on social media.

“Banxico reports that it will have its own digital currency in circulation by 2024,” the Mexican government wrote on its official Twitter account this week.

In its post, the central bank said it considers these new technologies and the latest payment infrastructure “very important” and “valuable options to advance financial inclusion in the country.”

Banxico, the monetary authority of Mexico, however, hasn’t confirmed the development itself. The central bank is legally independent of Mexico’s government. An anonymous senior bank official also told Reuters that the announcement was “not official.”

A couple of weeks back, Banxico said in a report that it is actually studying and working on the development of a platform for the implementation of a digital currency but gave no details on timing.

This CBDC project aims to improve financial inclusion by opening accounts for the registration of a digital currency for both banked and unbanked people, the report added.

This week, the central bank of India also said that they need to adopt a basic model for its CBDC.

“Given its dynamic impact on macroeconomic policymaking, it is necessary to adopt basic models initially and test comprehensively so that they have minimal impact on monetary policy and the banking system,” the Reserve Bank of India (RBI) said in a report. “India’s progress in payment systems will provide a useful backbone to make a state-of-the-art CBDC available to its citizens and financial institutions,” it added.

The apex bank further said in its report ‘Trend and Progress of Banking in India 2020-21’ that the CBDC can offer myriad benefits such as liquidity, scalability, acceptance, faster settlement, and ease of transactions with anonymity to its users.

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Author: AnTy

“We Have A Negative Attitude Towards Cryptocurrencies,” says Russia Central Bank Official

“We Have A Negative Attitude Towards Cryptocurrencies,” says Russian Central Bank Official

While Russian President Vladimir Putin supports crypto as a means of payment, the country’s central bank remains skeptical about them.

“We are advocating for Russia’s financial infrastructure not to be used for investments into cryptocurrencies, and this is possible to implement,” Governor Elvira Nabiullina told a briefing on Friday.

The Russian Central Bank sees risks to financial stability with the rising number of crypto transactions and as such advocated a “complete rejection” of them, reported Reuters, citing sources.

On Wednesday, US Federal Reserve Chairman Jerome Powell said that he does not see crypto as a financial-stability concern “at the moment” but did call them “really speculative assets.”

This week, Bank of England (BoE) Governor Andrew Bailey also warned about the rapid growth of crypto, saying that while “it probably isn’t a financial stability risk today,” crypto has “all the makings of something that could become one.”

Russia’s central bank is now ratcheting up its campaign against private crypto with Valeriy Lyakh, head of its department for countering market misconduct, saying investment in crypto was a “financial pyramid.”

“We have a negative attitude towards cryptocurrencies. We definitely do not support any circulation of it in our country,” Lyakh said in the video.

The Bank of Russia, meanwhile, is planning to issue its own digital rouble and join other central banks to modernize financial systems. The pilot for the CBDC program, which was initially planned to launch in December, was recently postponed to early 2022.

The central bank of India is also discussing crypto with Governor Shaktikanta Das, reiterating his views against allowing crypto, saying they are threats to the financial system.

The Reserve Bank of India said in a statement that the latest meeting of the Central Board of Directors of RBI was held under the Chairmanship of Das, where they “discussed various aspects relating to Central Bank Digital Currency and Private Crypto Currencies.”

The Indian government, meanwhile, has proposed to bring legislation on crypto. The Cryptocurrency and Regulation of Official Digital Currency Bill was listed for consideration in the ongoing Winter Session of Parliament but sources say that it may not be taken up during this session which is scheduled to end next week.

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Author: AnTy

Nigeria Central Bank Governor Reports ‘Overwhelming Interest’ for its Newly Launched CBDC eNaira

Nigeria Central Bank Governor Reports ‘Overwhelming Interest’ for its Newly Launched CBDC eNaira

Nigeria has launched its own digital currency, eNaira, to become the first African nation to do so. The central bank digital currency (CBDC) is expected to expand people’s access to banking, enable remittances, and help grow the economy by billions of dollars.

Central Bank Governor Godwin Emefiele said there had been “overwhelming interest and encouraging response” to the CBDC.

During the launch, Emefiele further said that already 33 banks, 120 merchants, and 2,000 customers had registered successfully with the platform, available via an app on Apple and Android.

He added that about 200 million fiat currency worth of eNaira has been issued to financial institutions, which will maintain parity with the traditional currency.

President Muhammadu Buhari, meanwhile, said that the use of digital currency could grow the economy by $29 billion over ten years. It will also enable direct government welfare payments and even increase the tax base, he added.

The country is ranked 7th in the 2021 Global Crypto Adoption Index, according to blockchain analytics firm Chainalysis.

Ikemesit Effiong, head of research with Lagos-based consultancy SBM Intelligence argues that the central bank had not yet made it clear if users can transfer eNaira back into fiat naira, whether there would be physical locations to use and transfer eNaira, and if crypto can be used to buy or sell the CBDC.

“It’s not clear looking at the CBN’s body of work that Nigerians would be comfortable using this,” he told Reuters, adding:

“There are more questions than answers, even though we are looking at the launch of this digital currency. The fact that this is the case so late in the game is concerning.”

Only three local television channels were allowed to attend the launch of eNaira, and officials took no questions.

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Author: AnTy

France Central Bank ‘Successfully’ Tests its CBDC in a Series of Government Bond Transactions

France Central Bank ‘Successfully’ Tests its CBDC in a Series of Government Bond Transactions

France’s central bank executed a series of bond transactions using its own digital currency and blockchain technology as part of the 10-month experiment in the country’s debt market.

A consortium of France’s biggest financial market participants, including BNP Paribas, Crédit Agricole CIB, HSBC, and Societe Generale, along with the French public debt office and Banque de France executed the transactions using a system developed by IBM, according to a report published by securities depository Euroclear, which led the trial.

“This project went well beyond previous blockchain initiatives because it successfully tested most central securities depository and central bank processes whilst eliminating current interim steps, such as reconciliation between market intermediaries,” said Soren Mortensen, global director of financial markets at IBM, in the report.

“We are rapidly moving towards fundamental change in the post-trade market infrastructure.”

Earlier this year, Banque de France published a request for proposals for central bank digital currency (CBDC) “experiment” applications to help it understand the risks and mechanisms of digital fiat.

The pilot was commissioned by the central bank of France in March last year to explore how digital fiat would exchange and settle with deals recorded on a digital ledger.

“We have together successfully been able to measure the inherent benefits of this technology, concluding that the central bank digital currencies can settle central bank money safely and securely,” said Isabelle Delorme, deputy chief executive of Euroclear France.

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Author: AnTy

Brazil’s Central Bank Governor Expects Crypto Investment in Country to Surpass $9 Billion

Brazil’s Central Bank Governor Expects Crypto Investment in Country to Surpass $9 Billion

Brazilians have already bought more than $4 billion in crypto this year up to August, as per the central bank report.

The total value of cryptocurrencies purchased by Brazilians this year has exceeded $4 billion, according to the data released by the Central Bank of Brazil in a report last week.

A total of nearly R$ 23.3 billion, $4.270 billion has been traded from January to August-end. In August, the purchase value was $496 million.

In August, Roberto Campos Neto, the president of Brazil’s central bank, also said that they need to pay attention to cryptocurrencies as they are here to stay. “We need to reshape the world of regulation,” he added.

The value of crypto assets bought by Brazilians reached its peak in May at $756 million. That month, the Brazilian market broke a record by trading R$ 826 million ($150 million) in Bitcoin in a single day.

But since then, they saw a drop in June and July at $695 million and $583 million, respectively. Still, these numbers have been much higher than the figures reported earlier this year in February at $386 million and $357 million in March.

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Last week, Deputy Governor for Monetary Policy at the central bank, Bruno Serra, said the Brazilians investment in crypto assets abroad is potentially three times greater than in American shares. He further said that there is a potential for this investment in crypto to reach R$ 50 billion (more than $9 billion in USD).

Serra also believes that people’s interest in cryptocurrencies is unlikely to fade anytime soon.

Earlier this month, as we reported, a bill advanced through Brazil’s House of Representatives, which has been in development since 2015, to regulate cryptocurrency in the country.

The bill calls for creating clearer definitions of crypto, will require virtual asset service providers to register, and further aims to crack down on crypto crimes by imposing higher fines and harsher prison sentences.

After being approved by a special committee of the Chamber of Deputies, the bill is currently in the hands of the Chamber’s Plenary, and once green-lit by them, it will advance to the Senate to be discussed before finally going to the president for a final nod.

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Author: AnTy

Crypto Market Dips and Over 165k Traders Get Liquidated for More Than $890 Million

But as long as central banks and governments continue to print money, which they will as Democrats are now pushing to expand the largest single spending bill in history $3.5 trillion package, investors will continue to turn to risk assets.

The cryptocurrency market has taken a drop today.

From its highs in the last 24 hours, Bitcoin has fallen more than 3.6% to as low as $50,590. The leading cryptocurrency had surged to $53,000 late on Sunday or early Monday.

As for Ether, it slid more than 6.5% to $3,675 from its 24-hour high of about $3,975.

Among the top 100 crypto assets, the biggest hit in the past 24-hours was recorded by SafeMoon of 15%, with other double-digit losses seen by Avalanche, IOTA, Horizen, Internet Computer, Filecoin, Sushi, Compound, Ethereum Classic, Polygon, Uniswap, VeChain, BAT, GRT, Cardano, Shiba Inu, Terra, Dogecoin, and Aave.

This has resulted in a 4% dip in the total market cap, which was at almost $2.47 trillion yesterday, nearing its $2.55 trillion peak, which slid down today and is currently at $2.36 trillion.

Despite the losses, Solana is up 25% and Fantom over 23%, while FTT is in the green by almost 5%.

The latest drop in the market resulted in liquidating 165,323 traders for more than $890 million, according to Bybt. But these numbers are not exhaustive as Binance does not report its full figures.

Bitcoin accounted for the most of it at $222.4 million, followed by $159.3 million in Ether and $80.8 million in Solana.

The funding rate on Bitcoin perpetual contracts has slid down some, with the highest currently at 0.0536% on Binance. The crypto asset prices have been recovering since July 21, and last week funding started trending up as prices made their way up, especially for Ether which went past $4k briefly on Friday, not far off of its $4,380 peak.

The highest funding rate on Ethereum perpetual is currently on Bybit at 0.0778% on USDT margin contracts, while the lowest is 0.01% on Binance for token margins contracts.

Meanwhile, open interest remains elevated at $19.41 billion on Bitcoin futures, gradually making its way to a $27.68 billion high. For Ethereum, OI has hit a new ATH on Monday, surpassing $11.6 billion from May 10. Today, it has seen a slight dip to $11.26 billion.

Despite the dip, the macro outlook remains bullish, with Democrats pushing to expand the largest single spending bill in history, $3.5 trillion tax and spending package.

So, as cryptocurrency exchange FTX noted in its blog titled “The everything bubble & TINA 2.0,” as long as money is being printed, the prices of everything from stocks, commodities, to venture capital, retail estate, and crypto should increase in value.

Since the COVID-19 pandemic began, already $32 trillion of fiscal and monetary stimulus — the largest stimulus as a percentage of global GDP — has been pumped into the markets while government bonds are negative-yielding.

“If global central banks and governments are going to continue to print money, investors are faced with a TINA 2.0 predicament, where cash is literally burning a hole in their pockets, pushing them not just into risk assets, but further out the risk curve, exacerbating wealth inequality along the way, leading to even further risk taking,” noted FTX.

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Author: AnTy

China’s Central Bank says Crypto Crackdown Completed and Now Back to Normal Supervision

China’s Central Bank says Crypto Crackdown Completed and Now Back to Normal Supervision

“The battle to prevent and resolve major financial risks has achieved important phased results,” reads the translated version of the China Financial Stability Report 2021 from the country’s central bank.

As part of its financial stability measures, the central bank cracked down on several activities, including crypto mining and derivatives trading, earlier this year.

This crackdown in China led to the shutdown of crypto mining operations in the country, leading to a crash in the hash rate of the Bitcoin network. After fleeing China, these miners are now coming back online overseas, as seen in the recovery in the hash rate, which is up 55% from early July, when it hit an almost two-year low.

This crackdown also led to a more than 50% drop in Bitcoin price, which went under $28k in June. Since July low, BTC/USD is now back above $50,500, up 73% YTD.

In its report, the People’s Bank of China (PBOC) noted that the crackdown on virtual currency transactions has been completed and has now been transferred to normalized supervision, shared Chinese publication Wu Blockchain.

“Bids filled, crackdown completed?” quipped Su Zhu, the CEO, and co-founder of Three Arrows Capital.

“FYI when BTC is in the 400-800k range, I think we will see a ton of govt crackdown psyops as they attempt to fill bids, similar to the jawboning we see in FX markets.”

Meanwhile, the report noted that the central bank’s measure to mitigate internet financial risks had achieved good results with all P2P online lending institutions in operation closed down, including internet asset management, equity crowdfunding, internet insurance, virtual currency trading, internet foreign exchange trading, and other fields.

The rectification work is “basically completed; it has been transferred to normalized supervision,” it added.

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Author: AnTy

Other Central American Countries Watching El Salvador’s “Out Of This World Experiment” to Adopt BTC Too

Other Central American Countries Watching El Salvador’s “Out Of This World Experiment” to Adopt Bitcoin Too, Says CABEI President

The executive president of the region’s development bank said, “everyone is watching” if Bitcoin adoption helps El Salvador reduce the cost of remittances so that they can also adopt the cryptocurrency.

Central American Bank for Economic Integration (CABEI), the development bank of El Salvador, said central American countries are eagerly waiting to see how their bitcoin adoption as a legal tender, alongside the US dollar, cuts the cost of remittances for them.

Remittance is an important source of income for millions of people in the region, and President Nayib Bukele touted Bitcoin adoption as a way to facilitate remittance payments from those living abroad.

“Everyone is watching if it goes well for El Salvador and if, for example, the cost of remittances drops substantially … other countries will probably seek that advantage and adopt it,” Dante Mossi, the executive president of the CABEI, told Reuters.

According to him, countries that receive the most remittances are most likely to turn to Bitcoin, adding besides El Salvador, Guatemala, and Honduras have the most to gain if Bitcoin helps lower the cost of sending remittances.

Recently, CABEI also attended a Central American Monetary Council meeting, part of the Central American Integration System (SICA), where participants asked about El Salvador’s bitcoin plans and showed interest, Mossi said.

Mossi called this an “out of this world experiment” that he says will increase financial inclusion in a region where many people lack access to bank accounts or credit cards.

Carlos Sanchez, CABEI’s head of investments, said the bank’s technical assistance, meant to help El Salvador “navigate waters that have yet to be explored,” is focused on helping them design a legal framework and to make sure that international money laundering protocols are adhered to.

Mossi meanwhile said CABEI had a “fiduciary obligation” to support El Salvador in its request for help.

CABEI is giving El Salvador technical assistance on implementing the cryptocurrency after the World Bank declined to help, citing environmental and transparency drawbacks.

“Regionalism v Globalism,” commented Su Zhu, CEO of Three Arrows Capital, to this.

As we reported this week, Bukele said the country is installing 200 ATMs and preparing over 50 bank branches to handle crypto in preparation to adopt BTC as legal currency.

The government is also giving $30 in bitcoin to those who download its cryptocurrency app called Chivo that is accessible to both citizens and tourists. Transactions in the app will be commission-free, helping save the country $400 million per year in fees, Bukele tweeted.

It was early in June this year when Bukele made the announcement that El Salvador is becoming the first sovereign nation to declare Bitcoin a legal tender. By the end of the month, Congress approved his plan to give the leading cryptocurrency the official currency status with a supermajority.

The law will take effect on September 7.

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Author: AnTy

Jamaica’s Central Bank Begins Minting Country’s Digital Currency (CBDC)

Jamaica’s Central Bank Begins Minting Country’s Digital Currency (CBDC)

Central Bank Digital Currencies (CBDCs) have become a hot topic in the last year, with Asian giant China leading the charge.

However, Caribbean nation Jamaica is now at the forefront following its roll-out of its first wholesale digital currency in a recently concluded ceremony.

BOJ To Issue $1.5 million CBDCs By December

The Bank Of Jamaica (BOJ) is planning to issue a total of 230 million Jamaican dollars (JMD), worth approximately $1.47 million in CBDCs, to deposit-taking institutions and authorized payment service providers. This, according to the announcement, is part of the digital currency pilot program ending this December.

The first batch of digital currency was minted to demonstrate the process of creating this digital version of fiat. This was done before the Minister of Finance and Public Service Nigel Clarke Jamaica, BOJ Governor Richard Byles, and the management team from blockchain firm eCurrency Mint.

Commenting on the ground-breaking achievement, Minister Clarke highlighted the pivotal role CBDCs play in the creation of a digital economy for the island country. The minister also promised that necessary legislative structures would be implemented to provide a legal basis for the Jamaican CBDC by the end of 2021.

Clarke has previously emphasized CBDC’s influence in helping Jamaica transition into a digital society. He said it could greatly improve financial inclusion by making financial services available to the unbanked population.

BOJ Governor Richard Byles also believes that Jamaica’s next CBDC adoption step would be to ensure widespread access and acceptance by bringing it closer to users.

Also speaking in the ceremony was eCurrency CEO, Jonathan Dharmapalan who commended the nation for its commitment towards creating a more inclusive financial landscape for its citizens. He also noted that Jamaica has the fastest-moving CBDC project in the world.

Jamaica’s Rapid Progress In CBDC Project

Jamaica has been working on developing a CBDC since early 2020. The bank had originally planned to begin its pilot program in May but was delayed due to unstipulated reasons.

Last year, BOJ disclosed that it was researching CBDCs internally and introduced its new Fintech Regulatory Sandbox. The following month, the apex bank formally invited interested CBDC providers to develop and test potential CBDC solutions in this controlled environment.

The Jamaican Central bank then announced a partnership with eCurrency Mint in March 2021. The technology provider was chosen to support BOJ in testing its CBDC solution. eCurrency Mint was also revealed as the major provider when its national CBDC eventually roll-out begins in early 2022.

Other countries have also been picking up the pace of their CBDC research as no apex bank wants to be left behind when it comes to cross-border payments.

Countries like India already have plans to pilot their CBDCs soon. Last month, Reuters reported that the Reserve Bank of India (RBI) was considering a phased introduction of its CBDC. The Central Bank of Venezuela is also planning to launch a CBDC in October.

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Author: Jimmy Aki

Bitcoin Hovers at $40k as USD Slides After Fed Says No End to Tapering Anytime Soon

The US central bank has made no decision regarding the timing of the tapering; as such, the market has now shifted its focus on the Jackson Hole conference of central bankers in late August.

After eight straight days of green candles, the longest winning streak in 2021, Bitcoin is comfortably trading around and above $40,000.

The price of BTC is up more than 24% in the past 7-days, 38% YTD, and 268.5% in the past year, the leading cryptocurrency is still green as ever.

The second-largest crypto Ether is also enjoying a $2,300 level, which is up 218% YTD and 632% in the last year. The total crypto market cap is back above $1.6 trillion, as per CoinGecko. ETH 3.66% Ethereum / USD ETHUSD $ 2,384.26
$87.263.66%
Volume 16.32 b Change $87.26 Open $2,384.26 Circulating 116.89 m Market Cap 278.7 b
8 h Altcoins, Not Bitcoin, Drives the Latest ‘Massive’ Surge in Crypto Adoption: Report 9 h Bitcoin Chills Around $40k as USD Slides After Fed Says It Has A Ways to Go Before Tapering Ends; GDP Rises Slightly, Better than Q1 10 h Paypal Reports “Strong Adoption & Trading Of Crypto” In Q2; Currently Working On Allowing Transfers To Third-party Wallets

Spot gold rose 0.8% today to $1,821 an ounce but is still down 4.5% YTD, while the dollar index has been going down since last week, now under the 92 level last seen late last month.

The yield on 10-year Treasuries advanced three basis points to 1.26%, while little was changed with Germany’s 10-year yield at -0.44% with Britain’s 10-year yield advancing one basis point to 0.59%.

This positive action in the risk-on assets has been on the optimism that the Federal Reserve won’t start taping stimulus anytime soon. In Wednesday’s policy meeting, the Fed kept the interest rates in a range near zero while meaning its asset purchase at $120 billion a month.

While the officials have started to discuss how to go about scaling back the bond-buying when the time comes, Fed Chair Jerome Powell has yet again given the market reassurance that there’s still some way to go. It is simply, as expected, boosting sentiment.

“We haven’t made any decisions about the timing,” said Powell, adding they made their first real “deep dive” into discussions about the timing, pace, and composition of future asset purchases during this meeting.

While some US central bank policymakers said they want to end their monthly $40 billion of MBS purchases faster than the $80 billion in Treasuries because of the hot US housing market, Powell doesn’t think so.

“There really is little support for the idea of tapering MBS earlier than Treasuries. I think we will taper them at the same time,” Powell said at a press conference following the central bank’s latest two-day policy meeting.

BlackRock CIO Rick Rieder sees the Fed beginning to outline tapering at Jackson Hole late next month but says more specificity will be given at its September policy-setting meeting.

Powell also said that he is in the process of writing a speech to be delivered at the annual Jackson Hole conference of central bankers on Aug. 26-28.

As for why yields are still falling, Powell attributed that to the technical factor that “you can’t quite explain,” inflation expectation moderating, and decline in real yields as investors get concerned about a slowdown in growth due to the spread of coronavirus’ delta variant.

“We’ve seen long-term yields come down significantly.”

“I don’t think that there’s a real consensus on what explains the moves between the last meeting and this meeting.”

On Thursday, meanwhile, the Commerce Department reported that the US economy rose at a disappointing rate in Q2, with GDP reporting an increase of 6.5% on an annualized basis during the April-to-June period, slightly better than the 6.3% gain in Q1 but well below economists’ forecasts of 8.4%.

Initial claims for unemployment insurance also missed the mark with 400k total above the 380k expectation.

Meanwhile, the US Senate has voted to move ahead with a broad infrastructure package of roughly $1 trillion. This bill includes new tax reporting obligations for crypto to fund a portion of their investment into transportation and power systems.

“Despite the popularity and the need for it, Washington hasn’t been able to get it done. This time, we’re going to get it done,” said Sen. Rob Portman (R., Ohio).

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Author: AnTy