Latest news with #CentralBankDigitalCurrency
Yahoo
2 days ago
- Business
- Yahoo
House Republicans' proposed tax on remittances spooks financial sector
Financial institutions are looking to stir up resistance to a Republican proposal to tax cash that migrants send to family members in their home countries ahead of a House vote expected this week. The provision's inclusion in the GOP's massive tax and spending bill caught many in the sector off-guard. Text of the bill released last week would require banks, credit unions and other companies that process so-called remittances to collect information on the sender that confirms they are a US citizen or US national so they can receive a tax credit for 5% of their transaction. Vice President JD Vance sponsored similar legislation as a senator, and Trump signaled in a Truth Social post last month that he sought to 'shut down' the payments altogether. But 'this came totally out of nowhere,' said one cryptocurrency executive, who was granted anonymity to discuss the legislation candidly. Now, 'everyone's just trying to figure it the f*ck out,' a lobbyist said. House Financial Services Chair French Hill, R-Ark., has directed Republicans on his committee to onpass concerns to House Ways and Means Chair Jason Smith, R-Mo., whose tax-writing panel drafted the language, four people familiar with the talks told Semafor Monday. Smith's office declined to comment. Lobbyists argue the proposal would be incredibly complicated for financial institutions to stand up. They also say that it could spur more customers to use cryptocurrency — plus set a dangerous precedent when it comes to government collection of customer data. 'This is the government surveillance they all say leads them to oppose a Central Bank Digital Currency,' a second lobbyist said. Many conservatives have resisted a CBDC because they say it would enable the party in power to track Americans' hawks are pushing hard for their conference to bring down the bill's price tag, so slashing a provision that raises money is a tough sell. The Joint Committee on Taxation estimates that the remittance tax could raise more than $22 billion between 2025 and 2034 — though there's a chance that number shrinks if customers pivot to using cryptocurrency, since some of those transactions could be excluded. The same conservatives who back this tax are also supportive of efforts to deter undocumented migrants from coming to the US — and striking that citizenship language from the bill could make it harder to win their support. House leaders will need almost every Republican's support to advance the bill this week ahead of their self-imposed deadline of Memorial Day. It's not just the financial sector that's pushing back. Mexico's ambassador to the US sent a letter to House tax writers last week urging them to 'reconsider' the idea, which the official said would 'disproportionately affect those with the least.' He also warned that it could encourage migrants to seek 'informal or unregulated means' — like crypto — to evade the tax. 'It's hard to see this as anything other than a way to harass legal immigrants and increase government surveillance,' Norbert Michel, vice president and director of the Cato Institute's Center for Monetary and Financial Alternatives, said. 'For relatively little tax revenue, it will make it harder for families to keep their income, discourage hard working people from improving their lives and becoming Americans, and add yet another layer of regulation on financial services companies and law-abiding taxpayers,' Michel while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Time of India
29-05-2025
- Business
- Time of India
RBI to review digital banking regulations, expand lending interface and CBDC pilots
The Reserve Bank of India (RBI) is set to overhaul internet and mobile banking regulations and broaden the Unified Lending Interface (ULI) with new features. The central bank is also developing a framework for digital channel resilience and expanding Central Bank Digital Currency (CBDC) pilots. Furthermore, the RBI will establish AI ethics guidelines and bolster cybersecurity measures across regulated entities. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Reserve Bank of India RBI ) has announced plans to review the regulatory framework governing internet and mobile banking as part of its agenda for the new year, outlined in its latest annual central bank will also broaden the scope of the Unified Lending Interface (ULI) by including additional loan products and lenders. A new business-to-customer (B2C) functionality will be introduced on the ULI platform, which currently hosts 44 lenders—including banks and non-banking financial companies (NBFCs)—offering over 60 data services across 12 loan categories, such as Kisan Credit Card (KCC) loans, digital cattle loans, and MSME loans.'Building on stakeholder feedback and positive outcomes, we are expanding the platform's reach to incorporate more products, data providers, and lenders,' the RBI addition, the RBI is developing a framework focused on operational resilience for digital channels used by banks and non-banks. It also aims to extend the scope of Central Bank Digital Currency ( CBDC ) pilots in both retail and wholesale segments by introducing new use cases and technological RBI is actively exploring cross-border CBDC pilots, both bilateral and multilateral, to address challenges related to transaction turnaround times, efficiency, and the regulator plans to establish guidelines for the ethical adoption of artificial intelligence (AI) in the financial sector and expand the MuleHunter initiative—an AI/ML-based solution designed to identify suspicious mule the growing importance of digital security, the RBI is working on guidelines for digital forensic readiness and will conduct comprehensive thematic reviews on cyber risks across all regulated entities. The central bank also plans to enhance cyber risk mapping and organize phased, cross-sectoral cyber crisis simulation exercises
The Hindu
29-05-2025
- Business
- The Hindu
e-Rupee in circulation grows to ₹1,016 crore; RBI explores cross-border CBDC pilots
'The value of Central Bank Digital Currency (CBDC) or e-rupee in circulation jumped to ₹1,016 crore at the end of March 2025 from ₹234 crore in the year-ago period,' the Reserve Bank of India (RBI) said on Thursday (May 29, 2025). 'The RBI is exploring the commencement of CBDC pilots on cross-border payments,' it said in the annual report without giving a timeline. The CBDC was first introduced in November 2022 initially with a wholesale pilot, which was followed up with a retail one as well. Simplifying cross-border payments was one of the stated advantages of the CBDC, which had to be introduced in face of the challenge to the currency system from non-fiat virtual currencies such as Bitcoins. "...the Reserve Bank is exploring commencement of CBDC pilots on cross-border payments both on bilateral and multilateral basis to overcome key challenges related to turnaround time, efficiency and transparency," it said. 'Bilateral cross-border CBDC pilots with select countries are being 'actively explored', and progress has been made in finalisation of roadmap, technical aspects and use cases,' the report said. The Reserve Bank's participation in multilateral CBDC initiatives, particularly under the Bank for International Settlements (BIS) Innovation Hub, is also being considered, as per the report. 'The Central bank also aims to further expand the scope and coverage of ongoing pilots in e-Rupee-Retail and e-Rupee-Wholesale by introducing new use cases and features and also improve the technological aspects of the account aggregator framework to enhance transparency, customer convenience and efficiency,' it said. 'A bulk of ₹857 crore of the e-Rupee in circulation is in ₹500 denomination,' the annual report said, adding ₹200 (₹91 crore in circulation) and ₹100 (₹38 crore in circulation) denominations also have sizeable presence. 'Starting with the initial use cases of person-to-person (P2P) and person-to-merchant (P2M), the Reserve Bank expanded the Central Bank Digital Currency (CBDC)-Retail (e-Rupee-R) pilot to include offline and programmability features in FY25,' the annual report said. As at the end of March 2025, the e-Rupee retail pilot was expanded to 17 banks and 60 lakh users. 'To further enhance adoption and improve distribution, certain non-banks have been allowed to offer CBDC wallets. Moreover, the scope of e-Rupee-Wholesale was further expanded and diversified with the addition of four standalone primary dealers (SPDs),' it said. Programmability use cases include direct benefit transfers to farmers against generation of carbon credits and loans to tenant farmers under kisan credit card (KCC) in select locations, it noted, adding that employee allowances for fuel/meal purposes are also being implemented by banks. 'Odisha has made e-Rupee payments to 88,000 beneficiaries under the Subhadra Yojana,' the annual report said, adding that discussions are under way with multiple Central Government Ministries and State Governments for leveraging programmability feature of CBDC to transfer funds to beneficiaries with a defined end use.
Telegraph
03-03-2025
- Business
- Telegraph
Britain's digital pound has all the signs of being another national white elephant
In April 2021, the Bank of England and HM Treasury announced an initiative to investigate the creation of a 'digital pound'. It said, 'A CBDC (Central Bank Digital Currency) would be a new form of money that would exist alongside cash and bank deposits, rather than replacing them'. Two years later, the Bank of England issued a consultation paper on the venture. Today the project continues. In the past decade there has been a tremendous revolution in the way in which the UK public spends money. Use of notes and coins has collapsed in the face of contactless cards and mobile payment; in 2013 51pc of all payments were made using cash; in 2023, it was 12pc. This change has been driven by technological and financial innovation, accelerated by the 2020-22 lockdown rules. There have been countless criticisms of the explosive rise in contactless payments – security worries; loss of anonymity; concern about older people managing, and so on, but I have never heard anyone complaining that there isn't a Central Bank Digital Currency. So I suspect, therefore, that the initiative is producer, not customer, driven. Why would the Bank feel the need to create a digital currency? There are lots of fine words in the 2023 consultation, but none of the reasons quoted seems to me to be compelling enough to set up a major financial project. My instinct is that the Bank feels threatened by the secular fall in cash use, as the interest foregone by holders of notes and coins is the Bank of England's principal source of income. If cash use continues to fall, then it is likely in due course that cash holdings will also fall. A world where cash becomes rarely used, and not widely held, would fundamentally damage the Bank of England's economic model, and hence its existence in its current (independent) form. While this seems a cynical take, I am struggling to find another credible motive for this project. Which moves us on to the next question: what is a digital pound? Again, it isn't clear to me from the Bank's communication. It appears to be designed to be something that the general public would use, as secure as holding a bank note (that is, a direct liability on the Bank of England), and it would pay no interest. It would exist as a digital entry on a Bank of England-run platform, and so would be designed to be easy to use, probably like modern contactless or online payment systems. But the vast majority of consumers would say that they already have this facility from UK banks or the newer online payment platforms. It is true that online payment platforms do not offer a Government guarantee, but for holdings under £85,000, UK banks do. So a Central Bank offering that looks to the customer very like a current bank current account would struggle to be appealing. UK current accounts can, and often do today, offer interest on balances. Some banks also offer auto-sweep operations, which move larger current account balances to high-interest investment accounts automatically. So unless a customer holds very large balances (more than £85,000) with one bank, and is particularly concerned with the risk of that bank going under, then it is very unlikely that the digital pound would appeal. There are other reasons why customers might not choose to use the digital pound. Most people regard the Bank of England as part of the Government. They might be suspicious that the Bank would not be able to protect their privacy, and hence that Government would in theory be able to discover their intimate financial affairs. People value their privacy, and however much the Bank of England might protest, they would regard this as under threat. The Bank says that its digital pound would not use blockchain technology (from its Technology Working Paper, 2023), so this new digital pound would not mimic the cryptocurrencies which have found so much favour with customers. Cryptocurrencies are anonymous payment methods that circumvent all direct regulatory controls and supervision. Central banks and financial regulators find cryptocurrencies a very serious threat to their power to monitor and control the financial dealings of their citizens, hence their very success. Cryptocurrencies are appealing both to honest citizens of oppressive regimes, and also to criminal and tax-avoiding citizens of open democracies. Today, we appear to be no nearer to a digital pound being launched, but the Bank of England has spent £24m so far on this project. This is a great deal of money for a project for which there is apparently no customer demand, and no output yet apparent. The Bank of England has had a good decade, with the enormous losses associated with its QE holdings, and the apparently unanticipated spike in inflation in 2022-23. Let's hope it decides to abandon this ill-fated venture and returns to its core remit of inflation control and sensible financial regulation.
