Latest news with #CBDCs
Gulf Insider
21-07-2025
- Business
- Gulf Insider
Trump To Prevent US Bank Digital Currency
A central bank digital currency (CBDC) will not be allowed in the United States, President Donald Trump said at a White House event on July 18, promising to take legislative action to prevent such a situation. 'I also remain fully committed to my pledge, never to allow the creation of a central bank digital currency in America,' Trump said. 'My first week in office, I signed an executive order to ban the creation of a CBDC in the United States. And very soon, I look forward to signing legislation that will codify and make it a permanent law.' Trump's comments came amid the signing of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law. During a campaign event in January last year, Trump had said that once he became president, 'I will never allow the creation of a central bank digital currency. Such a currency would give the federal government absolute control of your money,' which would be 'a dangerous threat to freedom.' On Jan. 23 this year, the first week after becoming president, Trump signed the executive order banning CBDCs. 'Agencies are hereby prohibited from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad,' the order said. Globally, various nations are at different stages when it comes to their approach towards CBDCs and introducing such currencies into their economy. According to a July update from the Central Bank Digital Currency Tracker from the Atlantic Council, of the 137 countries or currency unions tracked by the group, three have already launched a CBDC—Nigeria, Jamaica, and the Bahamas. Moreover, 49 nations or currency unions are piloting CBDCs, 36 are researching such a currency, and 20 are engaged in the development of such a currency. In addition, 21 are in an inactive status, while two have canceled launching a central bank digital currency, according to the analysis. Stablecoins are a type of crypto asset that tracks a reference asset, such as currency or commodities, on a 1:1 basis. For instance, if a stablecoin references the U.S. dollar, the issuer of stablecoins will offer one stablecoin for every dollar. The GENIUS Act establishes a regulatory framework for stablecoins. The Act requires stablecoins to have '100 percent reserve backing with liquid assets like U.S. dollars or short-term Treasuries,' according to a July 18 White House Fact Sheet. It also requires issuers of stablecoins to 'make monthly, public disclosures of the composition of reserves.' 'Stablecoin issuers must comply with strict marketing rules to protect consumers from deceptive practices. Crucially, they are forbidden from making misleading claims that their stablecoins are backed by the U.S. government, federally insured, or legal tender.' In case a stablecoin issuer becomes insolvent, the GENIUS Act will prioritize the claims of stablecoin holders over all other creditors, ensuring very strong consumer protection, the Fact Sheet said. Since stablecoin issuers have to back their assets with U.S. Treasuries and dollars, the GENIUS Act is expected to generate higher demand for U.S. debt and 'cement the dollar's status as the global reserve currency,' according to the White House. During the White House event, Trump said the Act unleashes the 'immense power' of U.S. dollar-backed stablecoins. 'This could be perhaps the greatest revolution in financial technology since the birth of the internet,' the president said. In addition to boosting demand for U.S. Treasuries, stablecoins can also bring down interest rates, according to Trump. 'This revolution has the potential to supercharge American economic growth and empower billions of people to save and transfer U.S. dollars.' Crypto czar David Sacks called the passage of the GENIUS Act a 'historical legislative achievement,' with stablecoins estimated to create trillions of dollars in demand for U.S. Treasury securities. Trump's promotion of stablecoins while opposing CBDCs, despite both being crypto assets, comes from concerns over threats to freedom. Also read: Trump Again Threatens To Destroy New Iran Nuclear Assets As Tehran Teases Pullout From NPT
The Hill
20-07-2025
- Business
- The Hill
What a GOP bill banning central digital currency means for consumer banking
A proposed GOP ban on a central bank digital currency (CBDC) could pump the brakes on grand visions to reshape electronic payment access around the Federal Reserve. Republican lawmakers pushed the ban through the House on Thursday over concerns the government could use a CBDC to surveil Americans' financial transactions. The banking industry has also lobbied against the currency, arguing the public already has sufficient access to easily usable and safe digital money. 'Nobody yet knows whether a CBDC is a good idea or not,' Rep. Jim Himes (D-Conn.), who has pushed for the government to explore a CBDC, said following the House's vote. 'There is potential for abuse and corruption, but also for extraordinary modernization that could serve unbanked communities, support the primacy of the U.S. dollar, and much more,' he added. Fed floated idea in 2022 white paper In 2022, the Federal Reserve issued a study of CBDCs that outlined their risks and benefits. 'All options for private digital money, including stablecoins and other cryptocurrencies, require mechanisms to reduce liquidity risk and credit risk. But all these mechanisms are imperfect,' the report notes. A traditional bank account is backed by the Federal Deposit Insurance Corporation, which guarantees individual deposits up to $250,000 in the event a bank fails. But there are also riskier forms of digital financial services. In 2024, a financial technology company called Synapse collapsed and left customers unable to access some $265 million in deposits. A CBDC, backed with the full faith and credit of the U.S. government, would be the safest possible digital asset. The Fed paper said that a CBDC could make cross-border payments easier and potentially improve access to banking for low-income households. A 2022 study by Himes, the Connecticut Democrat, proposed that CBDCs could be used for depositing paychecks or even be integrated into federal programs like Social Security. A more ambitious version of a CBDC could allow Americans to hold digital dollars at a bank account with the Fed, enabling them to make digital payments without an account at a traditional bank. That could, as the Fed paper noted, 'fundamentally change the structure of the U.S. financial system, altering the roles and responsibilities of the private sector and the central bank.' A government-backed digital dollar — especially one that could bear interest — could also drive consumers away from traditional commercial bank accounts. A CBDC still would require significant study, from the impacts on the banking system to the technology that it would run on. A hypothetical CBDC could use existing technology, or it could be distributed on a blockchain, similar to how Bitcoin and other cryptocurrencies are issued. In 2022, former Federal Reserve Vice Chair Lael Brainard estimated that it would take ' a long time ' — at least five years, she said — to launch a digital currency if Congress decided to do so. Fed Chair Jerome Powell said in February that the bank would not develop a CBDC under his tenure. His term expires in May 2026. The bill, which now heads to the Senate, would bar the Fed from directly or indirectly issuing a CBDC or studying the issue. Other federal agencies are already barred from studying a CBDC due to a January executive order from President Trump. Republicans cite privacy concerns Privacy is the biggest concern about CBDCs aired by Republican lawmakers. House Majority Whip Tom Emmer (R-Minn.), who led the CBDC ban through the House, said on the floor that a digital dollar would be tantamount to government surveillance. 'It is government-controlled programmable money that, if designed without the privacy protections of cash, this could give the federal government the ability to surveil and restrict Americans' transactions and monitor every aspect of our daily lives,' he said. In contrast to cash, which is essentially untraceable, a CBDC would likely leave a digital record of some form. If the government pursued a CBDC, it would have to balance concerns about privacy with safeguards to curb its use in money laundering or other illegal activities. Many lawmakers have cited China's digital yuan as a worrying example. Tech and China experts, as reported by WIRED, have raised concerns that the Chinese government could use its digital currency to track individual transactions or otherwise scoop up tranches of consumer data. Other Republicans have issued starker warnings about CBDCs. 'CBDC is an existential threat to Western civilization,' Rep. Warren Davidson (R-Ohio) wrote on the social platform X. Banking, crypto lobbies strongly oppose Banking and cryptocurrency lobbying groups are staunchly against a centrally issued digital currency. In a letter to Emmer in April, the American Banking Association argued that Americans already had sufficient access to digital payments. Alongside other digital transfer systems pioneered in the private sector, the Fed launched FedNow, an instant payment system that can operate 24/7, in 2023. Banks have to opt in to using the service, whose major clients include JPMorganChase and Wells Fargo. More broadly, the bank lobby argued that a CBDC would undercut the role banks play in the country's economic system. 'For example, a CBDC would be an advantaged competitor to retail bank deposits that would move money away from banks and into accounts at the Federal Reserve, severely limiting the ability of commercial banks to make loans that power economic growth in communities across the country,' the group wrote. A CBDC could also dampen hopes that cryptocurrencies like Bitcoin or privately developed stablecoins — cryptocurrencies whose value is pegged to a reference asset like the U.S. dollar — could become the primary form of digital money. 'You wouldn't need stablecoins; you wouldn't need cryptocurrencies, if you had a digital U.S. currency,' Powell said at a congressional hearing in 2021. 'I think that's one of the stronger arguments in its favor.'
Yahoo
17-07-2025
- Business
- Yahoo
'Genius' House vote has the markets rallying
'Genius' House vote has the markets rallying originally appeared on TheStreet. The House of Representatives passed the key procedural vote on July 16 to go ahead with key crypto legislation, which sent the crypto market rallying. Bitcoin surpassed the $120,000 mark a few hours after the vote opened in expectation of it getting passed. The record-long procedural vote that passed 217-212 was open for over nine hours as a group of Republican holdouts were insistent on a ban on central bank digital currencies (CBDCs). House Majority Leader Steve Scalise told reporters that the text related to a ban on CBDCs will now be added to the National Defense Authorization Act (NDAA). No Democrats voted in favor of the procedural vote. Notably, the House had voted 196-223 to not move forward the previous day, which seemed to put these crypto-related bills on the back burner. The Donald Trump administration has dubbed the Week of 14th the "Crypto Week," with three pieces of legislation being backed by President Trump GENIUS Act, which deals with stablecoin regulation, has already been passed by the Senate. However, though the House of Representatives will now be able to review the three bills, Trump has been unable to rally all Republicans to support the legislation. The Clarity Act, which aims to classify cryptocurrencies as securities and commodities, and the Anti-CBDC Surveillance State Act, which debars the Fed from issuing a CBDC, are also expected to be debated. Notably, a super PAC group funded by crypto industry giants is reportedly going to raise more than $140 million for the upcoming midterm elections, POLITICO reported on July 15. Fairshake, the said PAC, has received donations from the crypto exchanges Coinbase (Nasdaq: COIN) and Uniswap Labs, and the crypto payments firm Ripple Labs, among others, the report added. The total crypto market cap stood at $3.81 trillion at the time of writing, up 1.94% in the last 24 hours. BTC was trading at $118,748.58 at press time, up 0.59% in 24 hours, as per Kraken's price feed. 'Genius' House vote has the markets rallying first appeared on TheStreet on Jul 16, 2025 This story was originally reported by TheStreet on Jul 16, 2025, where it first appeared.
Time Business News
11-07-2025
- Business
- Time Business News
How Cutting-Edge Technology Is Revolutionizing the Financial Industry
Thanks in great part to fast technology improvements, the financial sector has changed dramatically recently. Innovative technologies are now entirely reevaluating conventional banking and investing methods that were mostly unaltered for decades. While this development presents new issues for institutions, authorities, and consumers, it is also generating historically unheard-of possibilities for efficiency, access, and security in financial services. Machine learning and artificial intelligence are radically altering the way financial firms run and make decisions. By analyzing enormous amounts of data at speeds unattainable for human analysts, these advanced algorithms can find trends and insights that are usually missed. AI-powered algorithms currently run most transactions on big exchanges in trading settings, basing their choices on market circumstances on split second basis. From technical indicators to sentiment analysis of news sources, these computers can simultaneously examine hundreds of factors, hence guiding more educated investing choices. Machine learning algorithms that evaluate risk more fully than conventional approaches have also transformed credit decisions. These methods can typically make more accurate lending decisions by evaluating hundreds of data points outside credit scores—including spending patterns, work history, and even social media activity—while maybe increasing access to underprivileged communities. Another area where artificial intelligence has shown very great value is fraud detection. Real-time monitoring of transaction patterns by advanced technologies allows them to detect questionable activity deviating from known consumer behavior. One of the most important developments in the financial industry, blockchain technology provides a transparent, safe, distributed method of managing assets and transaction records. Though sometimes connected mostly with cryptocurrencies, blockchain's possibilities go well beyond digital currency. Self-executing agreements with conditions straight inscribed into code, smart contracts are removing intermediaries in many financial transactions. From insurance claims to sophisticated derivatives trading, these automated contracts can manage everything, therefore lowering costs and improving efficiency while eliminating any conflict. Usually needing many intermediaries and taking days to execute, cross-border payments have been sluggish, costly, and opaque. Particularly valuable in remittance markets for unbanked communities worldwide, blockchain-based solutions can process these transactions very instantly at a fraction of the cost. This shorter settlement period not only increases efficiency but also greatly lowers counterparty risk in financial markets. Monetary authorities all around are aggressively investigating central bank digital currencies (CBDCs; some nations currently have government-backed digital currencies under trial). Potentially changing the way monetary policy is carried out, CBDCs offer to mix the stability and confidence of conventional fiat currencies with the efficiency of digital transactions. These systems, which are still developing, show how, depending on quantum finance ideas and other breakthroughs, financial services may operate in completely distributed surroundings. Advanced data analytics tools have changed the way banks see their consumers, markets, and dangers. For companies that make good use of these technologies, the capacity to analyze and draw insights from enormous datasets is generating competitive advantages. From static models to dynamic, real-time assessment systems that constantly analyze exposure across several facets, risk management has changed. These complex systems can immediately replicate thousands of scenarios, enabling organizations to get ready for changes in regulations and market shocks before they materialize. Thanks to modern analytics, customer segmentation and targeting now show hitherto unheard-of degrees of accuracy. Today, financial services firms may pinpoint micro-segments within their clientele, customizing goods and messaging to very particular wants and preferences instead of more general demographic groups. Specialized analytics systems that can track transactions for suspicious trends, guarantee adherence to difficult rules and automatically provide needed reports have made regulatory compliance more doable. These methods not only cut compliance expenses but also lower the possibility of expensive infractions. Predictive analytics lets financial firms spot life events that can cause fresh financial needs and foresee consumer wants before they develop. The financial and technological revolution keeps transforming the sector at unheard-of speed. Expect further profound changes in financial service delivery and consumption as these technologies develop and merge. Notwithstanding issues with control, privacy, and digital inclusion, the clear trend is technology is building an efficient, easily available, customer-centric financial environment unlike anything from ten years ago. Through better access, reduced costs, and customized services, these developments give individuals and companies more financial empowerment. TIME BUSINESS NEWS
Business Times
10-07-2025
- Business
- Business Times
Australia takes another step toward a central bank digital currency
[SYDNEY] Australia's central bank said on Thursday it was taking another major step toward a wholesale central bank digital currency (CBDC) with a range of industry partners pursuing projects using real money and assets for the first time. The Reserve Bank of Australia said its 'Project Acacia' initiative would test 19 pilot cases involving money and assets, along with five proof-of-concept use cases involving simulated transactions. The trials involve a range of asset classes, including fixed income, private markets, trade receivables and carbon credits. Proposed settlement assets include CBDCs, stablecoins and bank deposit tokens, as well as new ways of using commercial banks' existing deposits at the RBA. The platforms include Hedera, Redbelly, R3 Corda, Canvas Connect and other compatible networks. Testing will occur over the next six months, with a report due in the first half of next year, the RBA said. 'The use cases selected in this project will help us to better understand how innovations in central bank and private digital money, alongside payments infrastructure, might help to uplift the functioning of wholesale financial markets in Australia,' said Brad Jones, an RBA assistant governor overseeing the financial system. The RBA is concentrating on wholesale uses for a digital currency, having decided there was no economic benefit in an official retail cryptocurrency. According to the central bank, the benefits of a wholesale CBDC include reducing counterparty and operational risks, freeing up collateral, increasing transparency and auditability and reducing costs for institutions and customers. REUTERS
