Weekly Watch: Banks and CBDCs April 13, 2024 | By Observers.com | Coins | April 2024

It starts Down Under this week. A surprising survey by the Reserve Bank of Australia has found that consumers are not very interested in using central bank digital currencies. Research shows that Australians are satisfied with the regulations already in place for financial institutions and are willing to pay a premium to keep their transactions private.

The RBA concluded that in a case of “if it ain’t broke, don’t fix it”, to justify the launch of a CBDC, a digitized Australian dollar would need to offer additional use cases and benefits that consumers cannot. Currently receiving it.

The Federal Reserve Bank of Kansas City had a similar opinion, examining the launch of three retail CBDCs in the Caribbean: the Bahamas Sand Dollar, the Eastern Countries' DCash and Jamaica's JAM-DEX. We concluded that adoption rates were disappointingly low and made three observations:

• The technology used to create a CBDC will have little impact on adoption.
• Consumers are not educated. why These digital assets are worth using (reflecting the Reserve Bank of Australia's argument)
• Retail CBDCs should be integrated into the broader payments ecosystem rather than run in isolation.

The Kansas City Federal Reserve warned that embracing a “build it and they will come” mentality will not solve the problem with the circulation of these three CBDCs simply accounting for 0.15% of the currency used.

Eddie Yue, CEO of the Hong Kong Monetary Authority, also struck a cautious tone at an international conference on CBDCs. Despite the ever-increasing demand for digital payments and the declining use of cash, he warned:

“Retail CBDCs could represent a more advanced version of cash, but it remains to be seen whether the benefits of issuing them outweigh the risks. “More research will be needed into how the introduction of retail CBDCs will impact the wider financial system.”

The European Central Bank (ECB) has no doubts about retail CBDCs and has shared its planned activities for the second half of 2024.

Regular readers will know that the Atlantic Council has been tracking CBDC work for a long time. The monetary union, representing 134 countries and 98% of GDP, is currently exploring one of the following:

On Wednesday, a US think tank released a report warning that CBDCs risk turning into “walled gardens” unless economies work together to develop a “common framework of standards and cooperation”. The Atlantic Council said interoperability is critical, explaining that unification is needed “to foster harmony, quality, and reliability globally.”

Finally, the International Organization of Securities Commissions revealed its priorities for the coming year, including a greater focus on tokenization of financial assets. The goal is to gauge current levels of adoption and use cases to analyze “whether additional policy direction or guidance is needed.”