Digital currencies

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.

While cryptocurrencies could have benefits, they have “not served as a convenient way to make payments, given, among other factors, their swings in value,” said the head of the Federal Reserve. He also detailed imminent Fed research on a central bank digital currency.

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Silvergate Bank CEO Alan Lane, former HSBC executive Stuart Levey and experts at Anchorage Bank are helping Facebook make its digital currency more palatable to regulators and potential bank partners.

Chairman Jelena McWilliams said the agency will issue a request for information "to learn more about what banks are doing, what banks are considering doing and what, if anything, the FDIC should be doing in this space.”

The risk is growing that criminals or hostile nations could use quantum computing to hack into the ledger systems that control bitcoin and other digital currencies.

First Foundation and Suncrest are among the community banks developing platforms that let clients buy, sell and hold increasingly popular digital assets. The goal is to avoid losing business to cryptocurrency exchanges.

The visibility of automated transactions provides a clear view of the flow of transactions, says Hummingbird's Joe Robinson.

The risk is growing that criminals or hostile nations could use quantum computing to hack into the ledger systems that control bitcoin and other digital currencies.

Federal Reserve Chair Jerome Powell is dismissing claims that loose monetary policy has led to rising home values and shrinking inventory and insists that the market is buoyed by creditworthy borrowers and investors.

The move is in response to institutional investors' increasing demand for cryptocurrency services. The company also has invested in a firm that tokenizes assets, it and says it's been selected to administer a bitcoin exchange-traded fund.

The Federal Reserve and other central banks deciding whether to compete with private cryptocurrencies should heed the financial stability risks, such as expanding the economic power of governments and altering longstanding payments models.

Mainstream attention to crypto and active projects mean it's time to have a strategy for CBDCs, says R3's Todd McDonald.

The Federal Reserve and other central banks deciding whether to compete with private cryptocurrencies should heed the financial stability risks, such as expanding the economic power of governments and altering longstanding payments models.

Sen. Cynthia Lummis, a Republican, leads a new congressional caucus aimed at educating members about fintech issues. She says her state could serve as a model for regulating digital assets.

The special-purpose bank, licensed by the state of Wyoming, has drawn the support of investors and some policymakers. But banking groups say the digital assets that underlie its business model are highly volatile.

Federal Reserve Chair Jerome Powell said the central bank is involved in a large-scale research and development project on the digital dollar, and that questions of whether adopting such a currency would provide a public benefit have yet to be resolved.

Bradley Riss is chief commercial officer at Checkout.com, a firm that acts as a payment gateway, acquirer and processor through a single channel, covering cards, passthrough wallets, stored value wallets and alternative payment options such as point of sale credit. It charges a fee based on processing and card payment costs rather than the percentage+ model that most payment API companies charge. The model is designed to make the service customized to different merchants and serve as a base to offer other merchant products.

China’s central bank said its planned digital currency will coexist with technology platforms like Ant Group’s Alipay, Tencent and WeChat Pay, which currently dominate the online payments market.