Digital currencies

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.

A U.S. central bank digital currency is coming, and what form it takes could spell opportunity — or trouble — for the banking industry.