The march towards government adoption and regulation of cryptocurrency continues. As several central banks experiment with digital currencies for the public – a collaborative report by the Bank for International Settlements (BIS), International Monetary Fund (IMF), and World Bank calls for global coordination and “interoperability” among Central Bank Digital Currencies (CBDCs). CBDCs provide an opportunity to revamp the globe’s payment infrastructure by creating common standards and allowing for cheaper and faster cross-border payments.
Christine Lagarde president of the European Central Bank announced the development of a digital euro which will eventually be used among the 19 members of the eurozone. The digital euro is expected to take around four years for development and implementation. One concern about a CBDC is the ability for a central bank to issue the currency directly to the public and bypass commercial banks. Christine Lagarde reported that the digital euro will “complement” the current system as opposed to eliminating physical cash and the business of commercial banks.
Members of the Paraguayan Congress proposed a bill to regulate digital assets in the nation of Paraguay. The bill provides a legal framework on topics including cryptocurrency mining, trading through an exchange, and establishment of “monitoring and control mechanisms for transactions” to prevent money laundering. This regulation comes on the heels of El Salvador becoming the first country to adopt bitcoin as legal tender alongside the US Dollar. Only 30% of citizens in El Salvador can access financial services. Cryptocurrency paves the way for financial inclusion by allowing anyone with a mobile phone and internet connection access to financial services. Which country will adopt cryptocurrency as legal tender next?
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