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John Kiff

How To Keep The Digital Dollar Democratic: A 'Treasury Dollar Bill' / 'Treasury Direct'... - 0 views

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    In March 2020, US House Democrats drafted plans to legislate into existence a digital dollar, along with a system of digital wallets. The plan Robert Hockett has been pushing can be instituted by municipal, state, or national authorities, and at the national level can be administered either by Fed or by Treasury. It is the latter - the Treasury - version that he emphasizes here, because it already has half of the requisite digital architecture in place. Treasury has a universal account system - 'Treasury Direct' - available to all citizens and legal US residents. It would be easy for Treasury to issue a new Fed 'dollar bill' equivalent - what Hockett calls 'Treasury Dollar Bills' - receivable into these accounts, then either facilitate easy convertibility into Fed dollar bills or - better yet - declare them legal tender as well. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3599419
John Kiff

Bermuda to Pilot Digital Dollar for Rum Sales - 0 views

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    Canadian fintech firm Bidali has reportedly launched a pilot to test a digital Bermuda dollar with the support of the Bermuda government. Under the pilot program, popular local rum company Gosling's Limited will be accepting digital Bermuda dollars through the Stellar network. From there it hopes to expand to other businesses in Bermuda. Bermuda is a British island territory that does not have a central bank and the Bermuda dollar is pegged one-to-one to the U.S. dollar - it's effectively a non-digital government-issued stablecoin with one USD in reserve for every Bermuda Dollar that's issued. Also, since 2019, Bermudans have been able to pay taxes with USDC stablecoins.
John Kiff

El Salvador May Launch National Stablecoin: Reports - 0 views

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    El Salvador's government is reportedly planning to release a U.S. dollar stablecoin. The currency would be issued by the central bank, pegged to the value of the U.S. dollar and backed by reserves of real U.S. dollars. The cryptocurrency would be called the "Colón-Dollar," a reference to the country's former national currency that was replaced with the U.S. dollar in 2001. The president's brothers reportedly met with representatives from Cardano, WhizGrid and Algorand at different times.
John Kiff

Regulating Stablecoins for What They Are - 0 views

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    Whether a stablecoin needs dollar reserves depends on its actual or potential use in the conventional payments system. A stablecoin used only within the crypto ecosystem wouldn't need 100% dollar reserves. It would only need sufficient dollar liquidity to maintain its peg - and if exchanges are compliant and redemptions restricted, that might not be very much. However, stablecoins could replace conventional rails for international payments, potentially making them faster, cheaper and available 24/7. Stablecoins used for this purpose would need to be fully exchangeable for U.S. dollars or other fiat currencies on demand 24/7, and would therefore either need 100% dollar reserves or access to central bank liquidity. [Hence,] rather than wasting time and energy trying to regulate crypto-only stablecoins as if they are banks or money market funds, regulators should concentrate on ensuring that stablecoins that are, or show signs of becoming, payment media within the conventional financial system have 100% reserves and/or are licensed banks.
John Kiff

PayPal to Issue Dollar-Pegged Stablecoin Based on Ethereum - 0 views

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    PayPal is entering the crypto-asset market with its own "PayPal USD" (PYUSD) U.S. dollar-pegged stablecoin. The Ethereum-based token will be available to PayPal users in the U.S., who will be able to transfer PYUSD between PayPal and supported external wallets, fund goods and services purchases, or convert any of PayPal's supported crypto-assets to and from PYUSD. PYUSD is issued by New York-based Paxos Trust and fully backed by US dollar deposits, short-term Treasuries and similar cash equivalents, and will be redeemable on demand for dollars. https://newsroom.paypal-corp.com/2023-08-07-PayPal-Launches-U-S-Dollar-Stablecoin
John Kiff

Regulated Liability Network shakes up payments world - 0 views

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    The Regulated Liability Network (RLN) completed its proof-of-concept phase on 6 July, proving it can achieve legal instant dollar settlement anywhere in the world. Even as a dollar settlement network, it goes further than wholesale CBDC projects, which are essentially tokenized versions of 24/7 real-time gross settlement systems, because the RLN would include commercial bank money as well as central bank money. Enabling 24/7 cross-border dollar settlement anywhere in the world would drastically improve the payments landscape, reducing risks and improving transaction speed, freeing up liquidity to be better used elsewhere. This would help to cement the dollar's status as the preferred currency for international trade and foreign exchange reserves. Multi-currency CBDC platforms like mBridge are springing up, seeking to give members a means of transacting locally without using dollars. However, with a global 24/7 dollar settlement system in place, there might be less demand for such systems.
John Kiff

The Bahamas' 'Sand Dollar' Needs Improved Cybersecurity, IMF Says - 0 views

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    The International Monetary Fund (IMF) said that the Bahamas' Sand Dollar central bank digital currency (CBDC) needs better reach and more security to achieve its aims. The IMF noted the Sand Dollar represents only 0.1% of currency in circulation. The country's central bank "should continue strengthening internal capacity - including on cybersecurity and the resilience of systems associated with the Sand Dollar," adding that there are currently "limited avenues to use the Sand Dollar."
John Kiff

Update on The Bahamas Sand Dollar - 0 views

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    The Central Bank of the Bahamas (CBOB) published an update on the uptake of its Sand Dollar central bank digital currency (CBDC). At present, only about 100,000 Sand Dollar wallets have been downloaded usage remains low when compared to the overall size of the domestic payments system. In order to bump up usage, a new version of the wallet will be introduced that will allow digital payment providers to offer fee-based merchant services from within the core Sand Dollar platform. Financial institutions will be able to customize the appearance of the app to display their individual brand identities, including logos and branding color preferences. Also the CBOB will ramp up promotional activities at civic and cultural events, and it has has committed to a giveaway of $1 million in Sand Dollars to early adopters through 2024.
John Kiff

Dynamic Set Dollar faces "massive test" as stablecoin falls as low as $.27 - 0 views

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    Dynamic Set Dollar and its DSD token is an algorithmic stablecoin project designed to - eventually - track the United States Dollar on a 1-1 ratio with DSD. During expansionary cycles, such as one that led DSD as high as $3 per token last week, users are rewarded with freshly-printed "rebased" tokens for providing liquidity. So far, the market seems to think Dynamic Set Dollar clears the bar. After hitting a low of $.27 earlier today, DSD has been climbing steadily since.
John Kiff

The Bahamas Reveal Details, October Date of Landmark Central Bank Digital Currency Debut - 0 views

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    The "gradual national release of Central Bank of the Bahamas (CBOB) Sand Dollar central bank digital currency (CBDC) will begin on October 20, 2020. In the first phase, authorised financial institutions (AFIs) will ready their systems with know-your-customer (KYC) and other compliance checks across low-value, personal and enterprise wallets. The CBOB said it has subjected the Sand Dollar to a "rigorous cybersecurity assessment" to overcome public fears of paying with a digital currency. Regulations surrounding the Sand Dollar will be "crystalized" in the public space over the month of October. Sand Dollar's second phase, slated for early- through mid-2021, will focus on preparing essential infrastructure services in the government and private sectors, such as utility companies, for the CBDC. https://www.centralbankbahamas.com/news/public-notices/the-sand-dollar-is-on-schedule-for-gradual-national-release-to-the-bahamas-in-mid-october-2020
John Kiff

Nearly $5 billion in Tethers were issued since January. Why? - Decrypt - 0 views

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    Bitcoin's price is determined by the total dollars, both fiat and Tether, in the system. Nicholas Weaver, a researcher at the International Computer Science Institute in Berkeley, believes that actual dollars in the system are depleted as Bitcoin miners need cash to pay their electricity costs. If the amount of real dollars in the ecosystem hits zero, Bitcoin will collapse, he argues. (Exchanges, typically those that lack links to traditional banking, use Tether in lieu of real dollars as a way to bring liquidity to the crypto markets and hedge against volatility.)
John Kiff

Thinking Big on Fed Accounts, Digital Dollars and Financial Inclusion - 0 views

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    Chris Brummer gets the sense that most financial experts and economists support the release of a digital dollar, at least of some sort, that would comprise a liability of the Federal Reserve carrying the full faith and credit of the U.S. government. The disagreements appear to lie in what kind of technology should support it. For Chris Giancarlo and Dan Gorfine, a digital dollar would be tokenized, meaning that digital dollars would operate as bearer instruments that could be transferred instantaneously. Meanwhile Morgan Ricks supports an account-based path for digitization that would comprise just one component of a larger, explicit strategy of enabling financial inclusion through the buildout of digital individual accounts at the Fed.
John Kiff

Digital Bahamian Dollar Sand Dollar - 0 views

shared by John Kiff on 02 Sep 21 - Cached
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    "Sand Dollar is the digital version of the Bahamian dollar (B$). Like cash, Sand Dollar is issued by the Central Bank of The Bahamas through authorised financial institutions (AFIs)."
John Kiff

Binance will suspend U.S. dollar transfers - 0 views

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    Binance will temporarily suspend U.S. dollar deposits and withdrawals as of February 8th. However, only 0.01% of the exchange's monthly active users leverage US dollar bank transfers, and the move applies only to non-U.S. customers who transfer money to or from bank accounts in dollars. Binance US, a unit of the company that's regulated by the US Treasury Department's Financial Crimes Enforcement Network (FinCEN), is not impacted by the suspension. The suspension is likely due to issues with its bank partner Signature Bank, which said last month that it would stop processing crypto SWIFT transactions under $100,000.
John Kiff

Mapping Account-based Blockchain Data to Virtual UTXOs - 0 views

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    Some blockchains like Bitcoin use something called an unspent transaction output (UTXO) based model. UTXO-based chains are conceptually similar to physical wallets. A wallet with $100 could be composed of any combination of $1, $5, $10 and $20 bills. When purchasing an item, you must use some combination of these bills that is equal to or exceeds the required amount. For example, if you want to purchase an item for 15 dollars but only have two 10 dollar bills, you must use both and then receive 5 dollars in change. Similarly, when a Bitcoin wallet wants to make a transfer, it must choose which of the associated UTXOs (dollar bills) to include in the transaction. Observing this process allows anyone to trace the provenance of individual UTXOs over time. Other blockchains, such as Ethereum, use an account based model, which is conceptually similar to bank accounts. When completing a transaction, the network simply updates the total balance and does not select which incoming transfer to use.
John Kiff

Bank of Canada launches public consultations on a digital dollar - 0 views

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    The Bank of Canada (BoC) launched an online public consultation on the features that could be included in a digital Canadian dollar. The BoC is also seeking opinions about how people would likely use a digital dollar, what security features are important, and what concerns they have about accessibility and privacy. The BoC says that, at this time, a digital dollar is not needed, but Canada may need one in the future, so BoC wants to be ready.
John Kiff

Bank of Canada publishes report on digital dollar consultations - 0 views

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    The Bank of Canada published a report on the feedback it has received to date about a potential digital Canadian dollar. It confirmed that Canadians place a high value on central bank-backed cash and want to maintain access to bank notes. Also, Canadians value their right to privacy and many expressed concerns that a digital dollar could compromise that right. In addition, they don't want a digital dollar that will add to financial stability risks. The Bank reconfirmed that likelihood of a digital loonie being needed is still uncertain, and the ultimate decision whether to go ahead with one depends on the Parliament.
John Kiff

The Hong Kong Dollar Is the Best Stablecoin. Sorry, Terra and Luna - 0 views

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    "Pegged to the US dollar for nearly four decades, the currency in the Asian financial center is a stablecoin, albeit of the paper variety. Most days it relies - just like UST - on arbitrage to hold its value at 7.8 to the dollar. But there are two key differences. The Hong Kong Monetary Authority runs a pure currency board. All of HKMA's monetary base is backed 110% by US dollar assets. Second, while fixing the exchange rate, the authority deliberately lets interest rates float freely to absorb pressures on the peg. When the local currency gets sold off, there's a capital flight from Hong Kong. But that automatically raises interest rates enough to lure buyers back."
John Kiff

Binance and its stablecoins - 0 views

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    "The crypto ecosystem relies on stablecoins as a cheap and plentiful form of dollar liquidity. If all stablecoins were classed as securities, dollar liquidity for onshore crypto exchanges and platforms would dry up as stablecoin issuers either went offshore or out of business. It is very hard to see what would replace it, at least in the short term: U.S. dollars (and other fiat currencies) are not liquid on crypto exchanges, because to move them around requires banks, and non-USD stablecoins have gained little traction thus far. So trading crypto onshore would become much more expensive and considerably riskier. The dollar liquidity drought could also severely impact DeFi, because that relies on stablecoins (or derivatives of stablecoins) as collateral. So the SEC's action could bring down the onshore crypto ecosystem. "
John Kiff

Why Stablecoin Interest Rates Are So Damn High - 0 views

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    "Why are interest rates on dollar-pegged stablecoins so much higher than interest rates on actual dollars? You'd think that a stablecoin worth a dollar would command the same interest rate as a dollar, namely zero. But a quick search of lending rates on stablecoins reveals rates of anything from 9% to 13%, or even more."
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