Argentina to Settle Chinese Imports in Yuan to Safeguard Dwindling Dollar Reserves

The economy minister of Argentina, Sergio Massa, announced that starting this month, payments for imports coming from China will be settled using the Chinese yuan. The agreement, which will allow the country to safeguard its dwindling dollar reserves, involves the disbursement of more than $1 billion in April. Argentina to Settle Bilateral Transactions With China

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Report: UAE Central Bank Implements Digital Currency Strategy

The central bank in the United Arab Emirates said it has started implementing its digital currency strategy with partners G42 Cloud and R3. According to the central bank, the digital currency initiative is expected to “further position and solidify the UAE as a leading global financial hub.” CBDC Strategy to Focus on Three Pillars The [...]

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State Duma Chairman of Financial Markets Committee: Russia to Exert ‘Serious’ Control Over Crypto After Legalization

Anatoly Aksakov, chairman of the Financial Markets Committee of the State Duma, the lower chamber of the Federal Assembly in Russia, has remarked that the government intends to hold “serious” control over crypto after it is legalized. According to local reports, Aksakov also stated that crypto users were looking forward to this legalization to use

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EAEU Official Urges BRICS and SCO for Joint Use of Digital Currencies, New Payment Card

Three integration unions with Russian participation, BRICS, SCO, and the EAEU, should adopt joint policies on the use of digital currencies, according to a top representative of one of them. He also believes the international organizations should develop a new payment system with its own bank cards. BRICS, SCO, and EAEU May Launch Common Payment

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Trade Bloc of Former Soviet States Ditches Dollar in 90% of Settlements

Trading within a Russia-led regional organization has effectively moved away from the U.S. dollar, according to the deputy head of the Russian government. The use of national currencies in the bloc’s transactions has reached around 90%, the official pointed out. EAEU Replaces Dollar in Trade With National Currencies, Russian Official Says Trade between member states [...]

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Putin Signs Digital Ruble Law Allowing CBDC Payments in Russia

President Vladimir Putin has signed into law a bill on the introduction of the digital ruble in the Russian Federation. The new legislation, which legalizes and regulates the use of Bank of Russia’s digital currency for payments and other transactions, will enter into force on Aug. 1. President Putin Greenlights Law Introducing Digital Ruble as [...]

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Venezuela to Integrate Russian Mir Payments System in De-Dollarization Push

The government of Venezuela has announced that it is currently working to integrate Mir, a Russian electronic card and transfer payments system. President Nicolas Maduro backed this integration, stating that this move is part of a de-dollarization push. More than 40,000 payment terminals are being adapted to accept Mir-compliant cards. Venezuela Integrates Russia’s Mir Payments [...]

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Russia and China Carry Out Most Settlements in Yuan and Ruble, Russian PM Mikhail Mishustin Says

The larger portion of payments between Russia and China are now processed using the currencies of the two countries, Prime Minister Mikhail Mishustin revealed. Moscow and Beijing intend to increase mutual trade beyond the $200-billion target this year, added the head of the Russian government. Mishustin: 70% of Settlements Between Russia and China Conducted in [...]

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Russia to Increase Reliance on National Currencies in Energy Trade, Vows to Move Away From the US Dollar

Russia will increase its reliance on national currencies to settle payments for its energy resources, moving away from the US dollar, according to Russian Deputy Prime Minister Alexander Novak. Novak noted there is a great interest in acquiring Russian energy resources, leading Russia to accept more currencies for these settlements. Russia Aims to Settle Energy [...]

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Putin Wants Limit on Currency Purchases for Russians Dealing With Foreigners

Russian citizens and firms doing business abroad may soon be restricted in the amount of foreign currency they are allowed to acquire, on order from Vladimir Putin. Russia’s head of state now wants his government to cap such purchases on the domestic forex market. President Putin Orders Russian Authorities to Limit Foreign Currency Purchases Russian [...]

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Russia to Work With Digital Currencies of Other Nations

The platform developed for the digital ruble will be able to operate with different state-issued digital currencies, the Bank of Russia said. Mechanisms for interaction with digital coins minted by the central banks of other countries are already under development, the monetary authority unveiled. Digital Ruble Platform to Support Integration With Other CBDCs, Bank of [...]

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Bank of England Tests DLT Settlement System

The Bank of England and the BIS Innovation Hub London Center successfully tested a distributed ledger technology-powered settlements system through Project Meridian, which could be extended to other asset classes to reduce time, costs, and risks of transactions. (Read More)

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USDC Stablecoin Nears Parity With USD After Fed’s Bailout Announcement

The stablecoin USDC has nearly regained parity with the U.S. dollar after rising just above $0.99 on March 12, 2023, at 7:20 p.m. Eastern Time. The stablecoin jumped back to the $0.99 range after the U.S. Federal Reserve revealed it would bail out depositors of California’s Silicon Valley Bank (SVB) and New York’s Signature Bank. [...]

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Int'l Experiment Proposes Cross-Border Retail CBDC Run as Two Domestic Payments

<p>The Bank for International Settlement (BIS) and its partners, the central banks of Israel, Norway and Sweden have completed a joint experiment on cross-border retail central bank digital currency (CBDC). The experiment was tagged ‘Project Icebreaker.’ Retail CBDCs are government-backed digital currencies used for payment purposes by consumers and businesses.</p><p>The experiment, which studied the potential advantages and challenges of using retail CBDCs in international payment, found that <a href="https://www.financemagnates.com/forex/" target="_blank" rel="follow">foreign exchange (FX) providers</a> can be used to facilitate cross-border <a href="https://www.financemagnates.com/tag/cbdc/" target="_blank" rel="follow">retail CBDCs</a> by breaking down a cross-border transaction into two domestic payments. </p><p>‘The Hub-and-Spoke Model’</p><p>In a statement released on Thursday, BIS explained that it has developed a “hub-and-spoke solution” through which cross-border retail CBDCs never have to exit their systems. This system works by requiring many forex providers to submit quotes to a retail CBDC system’s hub which then selects the cheapest alternatives for end users to settle their transactions.</p><p>This model differs from most of the existing cross-border payment systems under which users or payers have no choice about the exchange rate or who provides the forex conversion, the international financial institution noted. BIS added that its new solution uses bridge currencies to fight the problems of insufficient liquidity for currency pairs, thereby preventing the attendant issues of higher fees and delay in cross-border payments. </p><p>“The project also demonstrated that the hub-and-spoke model can reduce <a href="https://www.financemagnates.com/terms/s/settlement/" class="terms__main-term" id="2dc6d2c7-1626-4ecf-811e-4c1aabbdb280" target="_blank">settlement</a> and counterparty risk by using coordinated <a href="https://www.financemagnates.com/terms/p/payments/" class="terms__secondary-term" id="f1d2a713-da14-4a6b-8fcd-e8f360d07f45" target="_blank">payments</a> in central bank money; and complete cross-border transactions within seconds,” BIS explained.</p><p>Furthermore, BIS said the new model means that countries considering the development of their domestic CBDCs can introduce these features and other innovative services into their cross-border transactions. It added that the project provides a “deeper understanding of the technologies that can be used and the technical and policy choices available.”</p><p>“Project Icebreaker is unique in its proposition. It first allows central banks to have almost full autonomy in designing a domestic retail CBDC. Then it provides a model for that same CBDC to be used for international payments,” explained Cecilia Skingsley, the Head of the BIS Innovation Hub.</p><p>US, Australia Make New Moves on CBDC</p><p>Meanwhile, the United States and Australia both recently provided <a href="https://www.financemagnates.com/cryptocurrency/us-australia-make-new-moves-on-cbdc/" target="_blank" rel="follow">new updates on their efforts</a> towards assessing the feasibility of a CBDC. While the United States says it is planning to establish a new Treasury Department-led working group to deliberate on the possible launch of a digital dollar, the Reserve Bank of Australia unveiled 14 firms that proposed various CBDC uses cases to be tested in its limited-scale CBDC pilot that “will take place over the coming months.”</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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G20 Announces Standards for Global Crypto Regulation

G20 countries have announced that the Financial Stability Board, the International Monetary Fund, and the Bank for International Settlements will release recommendations on global crypto regulation by July. (Read More)

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Russia to begin work on CBDC settlement system as sanctions endure

The country’s central bank will begin studying two possible cross-border CBDC settlement models this quarter.

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Central Banks to Enforce Standard on Banks’ Exposure to Crypto in 2025

<p class="MsoNormal">The Group of Central Bank Governors and Head of Supervision (GHOS) of the Bank for International Settlements (BIS) has endorsed a global prudential standard for banks’ exposure to crypto assets. The Group has also decided on January 1, 2025, as the implementation date for the standard.</p><p class="MsoNormal">The standard was developed by the Basel Committee on Banking Supervision, the BIS’ primary global standard setter for the prudential regulation of banks, the BIS said in <a href="https://www.bis.org/press/p221216.htm" target="_blank" rel="nofollow">a statement</a> released on Friday.</p><p class="MsoNormal">“Unbacked cryptoassets and <a href="https://www.financemagnates.com/tag/stablecoin/" target="_blank" rel="follow">stablecoins</a> with ineffective stabilization mechanisms will be subject to conservative prudential treatment. The standard will provide a robust and prudent global regulatory framework for internationally active banks' exposures to cryptoassets that promotes responsible innovation while preserving financial stability,'' <a href="https://www.financemagnates.com/tag/bis/" target="_blank" rel="follow">BIS</a> explained in the statement.</p><p class="MsoNormal text-align-justify">Low Banking System Exposure to Crypto</p><p class="MsoNormal">According to the BIS, the direct exposure of <a href="n" target="_blank" rel="nofollow">the global banking system</a> to crypto assets “remains relatively low.” However, the international financial institution noted believes that recent events have necessitated having “a strong global minimum prudential framework for internationally active banks to mitigate risks from cryptoassets.”</p><p class="MsoNormal">BIS noted that the GHOS has, therefore, tasked the Basel Committee with continuously assessing bank-related developments in cryptoasset markets, including the role of banks as stablecoin issuers, custodians of cryptoassets and as broader potential channels of interconnections.</p><p class="MsoNormal">“Today's endorsement by the GHOS marks an important milestone in developing a global regulatory baseline for mitigating risks to banks from cryptoassets. It is important to continue to monitor bank-related developments in cryptoasset markets. We remain ready to act further if necessary,” Tiff Macklem, Chair of the GHOS and Governor of the Bank of Canada, noted.</p><p class="MsoNormal text-align-justify">The New Standard</p><p class="MsoNormal">According to the BIS, <a href="https://www.bis.org/bcbs/publ/d545.htm">the standard</a> will be incorporated as a new chapter of the consolidated Basel Framework (SCO60: Cryptoasset exposures). The standard accommodates feedback from BIS' second consultation on the prudential treatment of banks’ exposures to cryptoassets carried out by the Basel Committee in June 2022.</p><p class="MsoNormal">Under the new standard, banks will be required to classify cryptoassets into Group 1 and Group 2, with Group 1 cryptoassets including digital assets such as tokenized traditional assets and stablecoins. On the other hand, Group 2 cryptoassets “pose additional and higher risks” compared to those in Group 1 and include assets such as unbacked cryptoassets.</p><p class="MsoNormal">“A bank’s total exposure to Group 2 cryptoassets must not exceed 2% of the bank’s Tier 1 capital and should generally be lower than 1%,” the standard says.</p><p class="MsoNormal">Furthermore, the standard prescribes a redemption risk test and supervision and regulation requirements for cryptoassets.</p><p class="MsoNormal">“This test and requirement must be met for stablecoins to be eligible for inclusion in Group 1. They seek to ensure that only stablecoins issued by supervised and regulated entities that have robust redemption rights and governance are eligible for inclusion,” the standard notes.</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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Putin Calls for International Settlements Based on Blockchain and Digital Currencies

Russian President Vladimir Putin believes a new system for international money transfers is needed to reduce dependence on big banks and third parties. He is convinced that cross-border payments relying on digital currency and distributed ledger technology will be “much more convenient.” Russia’s Head of State Urges for Blockchain-Powered International Payments President of Russia Vladimir

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HSBC and Wells Fargo Expand DLT Solution for FX Transactions

<p> HSBC Bank plc and <a href="https://www.financemagnates.com/tag/wells-fargo/" target="_blank">Wells Fargo & Company</a>, two giants in the banking industry, announced on Thursday the expansion of a <a href="https://www.financemagnates.com/terms/d/distributed-ledger-technology-dlt/" target="_blank" id="5f586236-27b9-47a7-8088-da7635d6aab2_1" class="terms__secondary-term">distributed ledger technology (DLT</a>) solution they are using for foreign exchange (FX) settlements. It now includes CNH (offshore yuan). </p><p class="MsoNormal">According to the press release, two institutions launched the bilateral blockchain solution in <a href="https://www.financemagnates.com/institutional-forex/hsbc-and-wells-fargo-to-use-a-blockchain-solution-for-fx-transactions/">December 2021</a>, which currently covers five main currencies, the US dollar, the British pound sterling, the Canadian dollar, the euro and the offshore yuan. In the last 11 months, Wells Fargo and HSBC settled over $200 billion in FX transactions and current plans anticipate further expansion to include more currencies.</p><p class="MsoNormal">Companies share a private ledger created by a joint team with Wells Fargo and HSBC employees. All FX settlements and transaction records are visible and transparent to each party. The companies use a DLT technology provided by Baton System called CORE. The platform allows for the efficient clearing of bilateral cross-border obligations in multiple currencies.</p><p class="MsoNormal">"We are pleased to expand the capabilities of the platform to include CNH, allowing us to reduce risk in the payment settlement process. The collaboration shows that we can pursue innovative technologies and apply them in a way that enhances our existing infrastructure and ultimately benefits our clients," Vince Hindman, the Global Head of Rates and FX Solutions at Wells Fargo Corporate & Investment Bank, said.</p><p class="MsoNormal">Metaverse Fund From HSBC</p><p class="MsoNormal"><a href="https://www.financemagnates.com/tag/hsbc/" target="_blank">HSBC </a>is increasingly involved in cryptocurrency and blockchain-related technologies. In April, the company <a href="https://www.financemagnates.com/fintech/hsbc-is-launching-a-metaverse-fund-for-high-net-worth-asian-clients/">announced</a> the launch of a special metaverse fund for high-net-worth clients from Asia.</p><p class="MsoNormal">To this end, the institution has purchased a virtual land in <a href="https://www.financemagnates.com/terms/s/sandbox/" target="_blank" id="044130ee-16bf-4d90-b373-b634d8335cfb_1" class="terms__main-term">Sandbox</a>, one of the more popular web3 games. The fund focuses on experience and discovery, infrastructure, virtualization, interface and computing.</p><p class="MsoNormal">"We see many exciting opportunities in this space as companies of different backgrounds and sizes are flocking into the ecosystem," Lina Lim, the Regional Head of Discretionary and Funds for Investments and Wealth Solutions, Asia Pacific at HSBC, said in April.</p><p class="MsoNormal">According to the rival investment bank, Citi, the metaverse industry is expected to be worth $13 billion by 2030.</p> This article was written by Damian Chmiel at www.financemagnates.com.

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BIS: 95% of World Central Banks Into CBDC

BIS initiates a survey of central banks.  Approximately 95% of central banks are into CBDC. The next two years will

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