Bank of Korea reports slow transaction processing times in DLT digital currency pilot

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The Bank of Korea (BOK) is to review additional central bank digital currency (CBDC) design options after its 10-month experiment to test a retail CBDC based on distributed ledger technology (DLT) revealed “limitations of scalability” such as slow processing times during periods of high transaction volume when compared with a more conventional centralised ledger database, the bank says... More



What's New in Payments

IMF reports on digital currencies

IMF managing director Kristalina Georgieva

Around 100 countries are now exploring the potential development and issuance of a central bank digital currency (CBDC), and the challenges and opportunities identified by these research projects reveal a need for “increased international information-sharing of insights learned”, according to an International Monetary Fund (IMF) report... More


What's New in Payments

IMF reports on the impact of digital money on banking business models

IMF warns banks to evolve or be ‘left behind’ amid competition from big tech firms — CNBC — “IMF authors Tobias Adrian and Tommaso Mancini-Griffoli said the two most common forms of money today, cash and bank deposits, will ‘face tough competition and could even be surpassed’. But banks are ‘unlikely to disappear’ as they face growing threats from big tech companies and fintech start-ups, the paper said. ‘Some will be left behind no doubt,’ the authors wrote. ‘Others will evolve, but must do so quickly’.”


IMF sees negative interest rates in cashless future

Cashing In: How to make negative interest rates work — International Monetary Fund — “In a cashless world, there would be no lower bound on interest rates. A central bank could reduce the policy rate from, say, 2% percent to -4% to counter a severe recession… Without cash, depositors would have to pay the negative interest rate to keep their money with the bank, making consumption and investment more attractive. This would jolt lending, boost demand, and stimulate the economy.”


What's New in Payments

IMF report finds digital currencies are gaining ground with central bankers

At least 15 central banks are serious about getting into digital currency — MIT Technology Review — “There are two main reasons for the trend, according to the report. First, new forms of digital money are ‘shrinking the role of cash’. Besides that, some central banks are interested in using the technology to reach the hundreds of millions of people who do not have a bank account or access to modern financial services. Finally, most central banks see the potential to reduce costs by replacing physical banknotes with digital ones.”