Digital currencies

An initiative among EU nations called Project Jura focuses on financial institutions as the users of central bank digital currencies, removing variables that could slow testing and deployment.

Fed Vice Chairman for Supervision Randal Quarles says the benefits of a central bank digital currency are “unclear,” and that a digital dollar could actually “pose significant and concrete risks.”

About 100 small banks have signed up for technology provided by the core software vendor Fiserv and the cryptocurrency custodian NYDIG that allows customers to buy, sell and hold bitcoin through their bank accounts.

The Basel Committee on Banking Supervision issued a proposal this month laying out how banks should treat cryptocurrencies held on their balance sheets. It could give stablecoins, which are tied to traditional assets, an edge over more volatile digital assets like Bitcoin.

By 2023, the Federal Reserve expects to launch a service that would allow businesses and consumers to complete payments in real time. But a digital currency it's now studying could have similar benefits — while potentially removing the need for bank intermediaries.

The Basel Committee on Banking Supervision has proposed that a 1,250% risk weight be applied to a bank’s exposure to Bitcoin and certain other cryptocurrencies.

The Federal Reserve has signaled the need for congressional authorization if the central bank moves ahead with creating a digital currency. But senators raised questions at a hearing about whether it would help consumers, how it would complement private-sector banking and other issues.

The U.K.'s central bank says stablecoins should follow the same rules as traditional bank deposits.

From China to the Bahamas, central banks are rushing to create digital currencies that could be used for everything from attending the Olympics to helping the unbanked. Here are some notable initiatives.

Development and regulatory costs would be so high that the largest firms would need significantly more scale to justify the investment, according to new research from the Federal Reserve Bank of Richmond.