Digital currencies

Euro-area finance ministers agreed on a key step in their efforts to roll out a digital currency, adding impetus to a project that's becoming an important counterweight to US stablecoins.

Superintendent Harris led the takeover of Signature Bank after it failed this spring. She joins Editor-in-Chief Chana Schoenberger to reflect on the lessons of this year's banking crisis, and how she is modernizing supervision.

Widespread adoption of a central bank digital currency would utterly transform the financial services sector by reducing access to loans and raising prices for consumers.

"Florida will not side with economic central planners; we will not adopt policies that threaten personal economic freedom and security," said Gov. Ron DeSantis.

The crypto lender Celsius Network’s shock announcement that it’s freezing withdrawals sparked a rush by companies in the digital-assets sector to reassure markets about the health of their operations.

The creation of a U.S. dollar central bank digital currency is an existential threat to the banking industry and needs to be treated as such.

Wall Street lenders are calling on the U.S. government to hold off on launching a digital dollar, arguing that a virtual currency backed by the Federal Reserve risks draining hundreds of billions of dollars out of the banking system.

Treasury Secretary Janet Yellen pointed to a recent implosion of the experimental TerraUSD stablecoin — which uses an algorithm rather than fiat currency pegging to maintain its value — as the latest evidence for urgently needed regulation in the sector.

Federal Reserve Chair Jerome Powell outlined four qualities a hypothetical digital currency in the U.S. must have while adding that no final decision has been made on whether to proceed with creating one.

Several central banks and the Bank for International Settlements have developed prototypes for a common digital currencies platform that has the potential to make cross-border payments more efficient.

Jamaica plans to give $16 of free money to the first 100,000 citizens who use its soon-to-be-launched Jam-Dex digital currency.

Roughly two dozen countries have issued central bank digital currencies or have pilots underway. But until financial services firms strengthen the security of their mobile apps, these payment tools are unlikely to gain widespread acceptance.

The country that gets it right first will see rapid business and job creation, attract the world’s best and brightest minds and set the standard other nations will follow.

There’s no universal case for central-bank digital currencies, according to International Monetary Fund Managing Director Kristalina Georgieva, who urged policymakers to carefully weigh trade-offs as financial innovation enters a new phase.

A bipartisan group of House Financial Services Committee members says nonbanks as well as insured depository institutions should be allowed to issue cryptocurrencies pegged to U.S. dollars. That stance is a notable departure from financial regulators' recommendations.

By the end of the year, if it can clear regulatory and technical hurdles, the bank plans to launch tokenized dollars people could use to buy anything on the internet.

The work of creating a possible digital dollar inched ahead Thursday with research by the Federal Reserve Bank of Boston into the code that could eventually support such a currency.

A group of community banks and two major trade associations have formed a partnership with and invested in the fintech NYDIG to offer the service on the banks’ mobile apps by midyear. The banks say it will help them generate revenue and retain customers interested in cryptocurrency.

New York Community Bank and Synovus Bank are among the founding members of the group, which will use the US Dollar Forward stablecoin on the Provenance blockchain.