currencies - Pwim.Net

US Senator Sherrod Brown: Facebook is delusional

“Mark Zuckerberg said that Facebook is more like a government than a company. That’s delusional.” US Senator Sherrod Brown said in a video tweet by NowThis News.

The video was released a few hours after Facebook’s hearing with the Senate Banking Committee. In the video, Brown added “We have to protect our democracy. We should be making it harder, not easier to concentrate so much power in big corporations like big banks and big tech companies like Google and Facebook.”

Brown raised a serious concern on Facebook having an ability to force users to use their own product to create new monopoly money. He asked, “what happens when Facebook forces businesses to quit accepting your credit card or your debit card? You could be forced to use Facebook’s new monopoly money. What about small business owners, forced to use it, or lose access to Facebook’s millions of users?”

During the hearing on Facebook Libra, Brown remarked: “We’d be crazy to give them a chance to let them experiment with people’s bank accounts.” Senator Martha McSally shared the same sentiment with Brown. She said, “instead of cleaning up your house you are launching into a new business model.”

David Marcus, Head of Calibra emphasized the separation between social and financial data during the hearing. He said, “the way we’ve built this is to separate social and financial data because we’ve heard loud and clear that they don’t want those two types of data streams connected, so this is the way the system is designed.”

Marcus also stressed that Facebook is not aiming to compete with sovereign currencies. He added, “Facebook will only have one vote and will not be in a position to control the association, nor will Facebook or the Libra Association position themselves to compete with sovereign currencies or interfere with monetary policy.”

Bank of Japan Now Considers its CBDC Project a Top Priority

The Bank of Japan is reportedly expediting the development of its Central Bank Digital Currency (CBDC).

A top official of the Asian giant’s apex bank Takeshi Kimura confirmed this while speaking to Japanese news outlet The Asahi Shimbun. Takeshi said that the bank will begin substantive testing of its CBDC as pressure mounts following the fear of Beijing launching its digital Yuan which he said could pose a national security threat.

“Consideration of a central bank digital currency (CBDC) will be handled as one of the top priority issues within the BOJ, We will move forward with discussions while pushing up the level of consideration beyond the preparatory stage.” Takeshi told the news outlet.

While Japan has long been developing its CBDC, it has not shared a tangible roadmap towards the issuance of one, a position that is likely to change moving forward.

Recent Development in Japan’s CBDC Development

Earlier this month, the Japanese government said that its officials will continue to consider and discuss a CBDC in their official Honebuto Plan for Economic and Fiscal Revitalization. This move came a week after the Bank of Japan said that it will launch a Proof of Concept (PoC) test the technical application and feasibility of its proposed CBDC.

The Proof of Concept testing as gleaned from the words of Takeshi will be to ensure that the digital Yen has universal access similar to regular currency and to guarantee the availability of the asset should there be a natural disaster. These two major considerations must record adequate functionality before the digital currency will be fit for public release.

As a way to further accelerate the development and testing of the digital Yen, the Bank of Japan inaugurated a new research team to pilot the developmental process of the project. With these plethoras of development, no timeline has yet been given for the probable release of the CBDC, a common reality the project has in common with China’s digital Yuan.

HSBC and Wells Fargo Utilize Blockchain Technology, Enhancing Foreign Exchange Transactions

HSBC and Wells Fargo have signed a strategic agreement to use a settlement ledger powered by blockchain technology when undertaking foreign exchange (FX) transactions. This move is deemed a stepping stone towards minimizing settlement risk.

In a statement, Mark Jones, co-head of Macro, Wells Fargo Corporate & Investment Bank, welcomed this move and said:

“We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation. We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead.”

Using blockchain technology, two banks will enjoy efficient Payment-vs-Payment (PVP) settlement netting. Furthermore, real-time transparency will be availed in the FX transactions.

The blockchain-based settlement ledger is also expected to reduce associated settlement costs in the $6.6 trillion-a-day foreign exchange market.

The agreement also means that the two leading financial companies will bypass the nearly two-decades-old Continuous Linked Settlement (CLS) system used for FX transitions.

The ledger will be used to process the US dollar, Canadian dollar, Euro, and British pound sterling transactions with plans to extend to other currencies soon.

Mark Williamson, the global head of FX partnerships & propositions at HSBC, noted that this was a step forward towards more financial innovations.

“As financial services continue to digitize the store of payment and value on blockchain, we are delighted to work with Wells Fargo in the adoption of this important cross-border digital backbone for the confirmation and settlement of Foreign Exchange trades.”

Meanwhile, the central banks of France and Switzerland, together with the Bank of International Settlements (BIS), successfully conducted a wholesale Central Bank Digital Currency (CBDC) trial involving the nations’ fiat notes.

Tanzania wary about CBDC adoption following studies

The Central Bank of Tanzania has stated that it is still contemplating the introduction of a central bank digital currency (CBDC), but that it will take a “phased, cautious, and risk-based approach” in order to do so. This is because the bank has recognized a number of obstacles that may prevent its successful implementation.

Since its statement in 2021 about the possibility of a CBDC deployment, the East African nation of Tanzania has reportedly organized a multidisciplinary technical team to investigate the risks and advantages of CBDCs, as stated in a public notice that was issued by The Bank of Tanzania on January 14.

The bank said that its team has been doing research into various forms of CBDCs, strategies for issuance and administration, and the question of whether its CBDC should be token-based or account-based.

The findings of the research conducted up to this point have shown that more than one hundred countries around the world are currently in various stages of the process of adopting CBDC. Of these countries, 88 are in the research stage, 20 are in the proof of concept stage, 13 are in the pilot stage, and 3 are in the launch stage.

The central bank made note of the fact that at least four nations, namely Denmark, Japan, Ecuador, and Finland, have publicly canceled plans to adopt CBDCs, and that a further six nations have moved away from digital currencies as a result of the structural and technological challenges that are present in the implementation phase.

According to the bank, some of these issues were high costs of implementation, the predominance of cash, inefficient payment methods, and the danger of upsetting the current ecosystem. The risks and restrictions that are linked with the issue, distribution, counterfeiting, and use of currencies are one of the most important areas that the team is looking at right now.

The analysis of these data indicates that the majority of central bankers throughout the globe have chosen a cautious approach in the CBDC implementation plan. This is likely done in order to prevent any possible risks that might disturb the financial stability of their economies.