The International Hierarchy of Money in Cross-Border Payment Systems: Developing Countries’ Regulation for Central Bank Digital Currencies and Facebook’s Stablecoin

2021 ◽  
Vol 50 (3) ◽  
pp. 226-243
Author(s):  
Andrés Arauz
Keyword(s):  
Developing Countries ◽  
Central Bank ◽  
Payment Systems ◽  
Cross Border

scholarly journals Modern models of systems of central bank digital currency

2021 ◽  
Vol 37 (2) ◽  
pp. 205-240
Author(s):  
Dmitry Kochergin ◽  
Keyword(s):  
Central Bank ◽  
Central Banks ◽  
Payment Systems ◽  
Bank Of China ◽  
Digital Currency ◽  
Cross Border ◽  
Economic Interpretation ◽  
Key Characteristics ◽  
National Implementation ◽  
Retail Payments

The article examines modern models of digital currency systems of central banks (CBDC) for retail payments and wholesale settlements. The study gives economic interpretation and defines the key characteristics of central bank digital currencies, identifies the features of the main models of digital currencies systems and analyzes the most advanced national implementation projects of CBDC. The study concludes that the digital currencies of central banks are a new (digital) form of fiat money. The implementation of digital currencies of central banks is due to the need to improve the efficiency of the monetary and payment systems and is aimed at preserving of the central banks as a monetary issuer. The main advantages of digital currencies for retail payments are the offer of a highly liquid, low-risk and universally accessible means of payment. The key benefits of wholesale digital currencies are to provide faster, safer, and cheaper cross-border payments. Among the models of digital currencies systems for retail payments (R-CBDC) the model of hybrid system is characterized by the best reliability and speed when processing a large number of payment transactions. Therefore, these systems are the most promising for implementation. Between the models of systems for wholesale payments (W-CBDC) systems with a universal digital currency are the most suitable for eliminating the main problems of cross-border payments. However, the implementation of such systems may require a large number of technological, managerial and financial changes in the payment systems of central banks. Currently, the most advanced project for issuing R-CBDC is the DCEP system of the People’s Bank of China, which is implemented on the basis of a hybrid model. W-CBDC projects are implemented jointly by the central banks of the leading countries, as they require financial and technological unification of settlements. Most projects of W-CBDC involve the use of systems with a convertible or universal digital currency.

scholarly journals Central Banks Digital Currencies: World Experience

2021 ◽  
Vol 65 (5) ◽  
pp. 68-77
Author(s):  
D. Kochergin
Keyword(s):  
Central Bank ◽  
Payment Systems ◽  
Bank Of Canada ◽  
Bank Of China ◽  
Digital Currency ◽  
Cross Border ◽  
Central Bank Money ◽  
National Currencies ◽  
Bank Money ◽  
Retail Payments

Received 28.07.2020. The article examines issues related to the introduction of central bank digital currencies (CBDC) for retail payments and wholesale settlements. The study defines and classifies central bank digital currencies, researches the main models of CBDC systems. The article also analyzes the features of various national projects for issuing Central bank digital currencies. The paper uses methods of economic-statistical and functional-structural analysis. The study concludes that CBDC are a new form of central bank money. Digital currencies can be issued in various issuing systems for the purpose of retail payments or wholesale settlements. Among the models of CBDC systems for retail payments (R-CBDC) the direct system model is the most attractive for its simplicity. This model eliminates the dependence of the Central bank on any financial and payment intermediaries. Models of synthetic and hybrid R-CBDC systems are characterized by reliability and speed in processing multiple transactions which makes them the most promising for implementation. Among the models of CBDC systems for wholesale payments (W-CBDC) the model of the system with a universal digital currency (U-W-CBDC) may be the most suitable for eliminating the main disadvantages of modern cross-border payment systems. However, a large number of technological and financial changes as well as the high operating costs of the U-W-CBDC can make such systems difficult to implement for non-developed financial market infrastructure countries. National financial regulators have different motivations for issuing digital currencies. The main advantages of digital currencies for retail payments may consist in providing users with highly liquid, low-risk, universally available means of payment. The main advantages of wholesale digital currencies are that they offer faster, safer, cheaper cross-border payments. The most advanced projects for issuing R-CBDC can be considered DCEP (People’s Bank of China) E-krona (Central Bank of Sweden). The most successful pilot projects for issuing W-CBDC are the projects Jasper (Central Bank of Canada) and Ubin (Monetary Authority of Singapore), which were able to achieve interoperability in conducting cross-border payments. Currently most CBDC are retail based on the use of distributed ledger technology and implemented in the form of DLT-tokens. Countries that develop digital currency systems can be divided into three groups. The first group is countries where the introduction of CBDC can be designed to support the national demand for central bank money (Sweden, Norway, Singapore, etc.). The second group – countries for which the adoption of digital currencies can afford to keep the place of national currencies in international settlements (USA and EU) or expanding the use of national currencies at the international level (China). The third group represents countries for which the introduction of digital currencies may be associated with the control of national monetary circulation and de-dollarization of the financial system (Uruguay, South Africa, Cambodia, etc.).

Payment Systems in EU

2011 ◽  
pp. 130-167
Keyword(s):  
Central Bank ◽  
European Commission ◽  
European Central Bank ◽  
Payment System ◽  
Payment Systems ◽  
European Central ◽  
Cross Border ◽  
The Cross ◽  
The Eu

The reforms of retail payment systems were also sought in response to the introduction of the euro. However, the retail payment systems in the EU are still fragmented, which means that each country has its own retail payment system. In order to overcome such a situation, the European Central Bank (ECB) and European Commission have promoted the project of “Single Euro Payments Area” (SEPA). The aim and situation of the SEPA project is described in detail. The cross-border retail payment systems, i.e. the “STEP1” and “STEP2,” are also discussed in this chapter.

scholarly journals Stablecoins and Central Bank Digital Currencies: Policy and Regulatory Challenges

2022 ◽  
pp. 1-18
Author(s):  
Barry Eichengreen ◽  
Ganesh Viswanath-Natraj
Keyword(s):  
Central Bank ◽  
Futures Market ◽  
Use Case ◽  
Time Varying ◽  
Bottom Line ◽  
Digital Currency ◽  
Cross Border ◽  
Using Data ◽  
Regulatory Challenges

Abstract Stablecoins and central bank digital currencies are on the horizon in Asia, and in some cases have already arrived. This paper provides new analysis and a critique of the use case for both forms of digital currency. It provides time-varying estimates of devaluation risk for the leading stablecoin, Tether, using data from the futures market. It describes the formidable obstacles to widespread use of central bank digital currencies in cross-border transactions, the context in which their utility is arguably greatest. The bottom line is that significant uncertainties continue to dog the region's digital currency initiatives.

Central bank transparency, inflation targeting and monetary policy: a panel data approach

2018 ◽  
Vol 45 (6) ◽  
pp. 1159-1174 ◽  
Author(s):  
Gabriel Caldas Montes ◽  
Cristiane Gea
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Panel Data ◽  
Interest Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Content Type ◽  
Central Bank Transparency ◽  
Policy Interest

Purpose The evidence concerning the effects of the inflation targeting (IT) regime as well as greater central bank transparency on monetary policy interest rates is not conclusive, and the following questions remain open. What is the effect of adopting IT on both the level and volatility of monetary policy interest rate? Does central bank transparency affect the level of the monetary policy interest rate and its volatility? Are these effects greater in developing countries? The purpose of this paper is to contribute to the literature by answering these questions. Hence, the paper analyzes the effects of IT and central bank transparency on monetary policy. Design/methodology/approach The analysis uses a sample of 48 countries (31 developing) comprising the period between 1998 and 2014. Based on panel data methodology, estimates are made for the full sample, and then for the sample of developing countries. Findings Countries that adopt the IT regime tend to have lower levels of monetary policy interest rates, as well as lower interest rate volatility. The effect of adopting IT on both the level and volatility of the basic interest rate is smaller in developing countries. Besides, countries with more transparent central banks have lower levels of monetary policy interest rates, as well as lower interest rate volatility. In turn, the effect of central bank transparency on both the level and volatility of the basic interest rate is greater in developing countries. Practical implications The study brings important practical implications regarding the influence of both the IT regime and central bank transparency on monetary policy. Originality/value Studies have sought to analyze whether IT and central bank transparency are effective to control inflation. However, few studies analyze the influence of IT and central bank transparency on interest rates. This study differs from the few existing studies since: the analysis is done not only for the effect of transparency on the level of the monetary policy interest rate, but also on its volatility; the central bank transparency index that is used has never been utilized in this sort of analysis; and the study uses panel data methodology, and compares the results between different samples.

Study of Increasing Adoption Trends of Digital Banking and FinTech Products in Indian Payment Systems and Improvement in Customer Services

2021 ◽  
pp. 229-255
Author(s):  
Narinder Kumar Bhasin ◽  
Anupama Rajesh
Keyword(s):  
Customer Satisfaction ◽  
Central Bank ◽  
Banking System ◽  
Government Agencies ◽  
Payment Systems ◽  
Online Payment ◽  
Customer Services ◽  
The Government ◽  
Digital Payments ◽  
The Impact

The objective of massive adaptation of digital payments by the banks with the support of the central bank of any country along with their government agencies is to improve customer services and satisfaction in the online payment systems in place of cashless and paperless payment systems. There are very few researches that have focused to measure the higher customer satisfaction based on factors like trust, risk-free, secure, transparent, accountability of banks, fintech, regulator, and payment system operators. This chapter analyzes the impact of digital banking and fintech in the Indian banking system, initiatives taken by RBI, NPCI, and the government to build the strong trust of customers in online payment systems to ensure improvement in customer services with higher customer satisfaction.

scholarly journals Why is inflation targeting adopted?

2020 ◽  
Vol 12 (1) ◽  
pp. 56
Author(s):  
Yutaka Kurihara
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Central Bank ◽  
Inflation Targeting ◽  
Developed Countries ◽  
The Other ◽  
Other Hand ◽  
Central Bank Credibility

Since the early 1990s, inflation targeting (IT) has been conducted in many countries and the number of the countries has been increasing rapidly. The outcomes of adopting IT has been discussed, however, the incentives of adopting IT is not fully examined. This study focuses on this issue empirically. The results are clearly divided into two types of countries. In developed countries, budget/GDP ratio, central bank credibility, exchange rate stability, and openness of the economy are deterministic elements of adopting IT, however interestingly, inflation itself does not play any roles of adopting IT. On the other hand, only inflation is the deterministic element of adopting IT in developing countries. Other elements, that are deterministic elements in developed countries, do not any effects on introducing IT. Moreover, countries would not like to limit the scope of policies when the economy’s openness is high.

Regulating Cross-Border Data Flows in a Data-Driven World: How WTO Law Can Contribute

2019 ◽  
Vol 22 (3) ◽  
pp. 389-416
Author(s):  
Andrew D Mitchell ◽  
Neha Mishra
Keyword(s):  
Developing Countries ◽  
World Trade Organization ◽  
World Trade ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Data Driven ◽  
Digital Inclusion ◽  
Cross Border ◽  
Data Flows ◽  
The World

Abstract While the free cross-border movement of data is essential to many aspects of international trade, several countries have imposed restrictions on these data flows. The pre-internet rules of the World Trade Organization (`WTO') discipline some of these restrictions, but they are insufficient. Unfortunately, so are the electronic commerce chapters in modern preferential trade agreements. This article argues that reformed WTO rules, which take account of the policy challenges of the data-driven economy, are required. These reforms would facilitate internet openness while ensuring consumer and business trust, promoting digital inclusion of developing countries, and incorporating clear exceptions for legitimate domestic policies.

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