10.12.2023

Bank for International Settlements Exec Shows New Fondness for CBDCs

General manager at the Bank for International Settlements (BIS) Agustin Carstens seems to have changed his negative stance towards central bank digital currencies (CBDCs), now stating that such currencies could open up new possibilities.

In his speech entitled “The future of money and the payment system: what role for central banks?” published on Dec. 5, Carstens dug into central banks’ approach to emerging technologies in regards to building more efficient and inclusive financial systems.

Carstens said that the introduction of retail CBDCs – which are available to the general public, including businesses and consumers – could bring serious changes to the financial sector by opening up new possibilities when it comes to the 24/7 availability of payments, different degrees of anonymity, and peer-to-peer transfers.

Wholesale and retail CBDCs

He continued noting that wholesale CBDCs – where the network participants are financial institutions – could be made compatible with the provision of central bank settlement liquidity. Wholesale CBDCs would not raise difficult financial footprint issues as they would be largely restricted to institutions that already use central bank deposits, according to Carstens.

Unlike wholesale CBDCs, retail versions would raise a range of concerns such as the designation of entities  responsible for the enforcement of know-your-customer and anti-money laundering regulations, Carstens outlined.

CBDCs’ negative impact on the financial system

In late March, Carstens was not so positive about CBDCs, when he advised against the issuance of such currencies. Carstens argued then that a CBDC could facilitate a bank run, enabling people to move their funds from commercial banks to central bank accounts faster, thus destabilizing the system.

At the time, he also noted that there are enormous operational consequences for the central bank in the implementation of monetary policy and the traditional market’s stability.Carstens stated: “Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions.”

Meanwhile, a number of countries are exploring the issue of the development of a digitized national currency, including China, France and Ghana, among others.

$1M Bond to Keep Alleged North Korea Sanctions Violater Griffith in Alabama for Now

After having been denied bail on Dec. 26, Ethereum foundation researcher Virgil Griffith has now been released on a $1 million bond on the condition that he stay out of California.

On Dec. 30, the Inner City Press reported that the 36-year-old Griffith has been released after a bail appeal hearing earlier today. The hearing took place in front of United States District Court for the Southern District of New York Judge Vernon S. Broderick, who granted a $1 million bail and ordered Griffith released, on the condition that he stay with his parents in Alabama for «moral suasion.»

Despite the fact that Griffith attempted to procure a St. Kitts passport, the bail conditions allow for Griffith to use his passport card to travel to countries such as Canada, Mexico and certain regions of the Carribean including St. Kitts and Nevis. He will also be able to use email to stay in touch with his lawyers. The $1 million bond is reportedly secured by relatives’ homes.

Arrested for educating North Korea on crypto and blockchain

Griffith was first arrested on Nov. 28 for reportedly traveling to the Democratic People’s Republic of Korea (DPRK) to deliver a presentation on how to dodge sanctions via cryptocurrencies and blockchain technology.

Griffith was charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA), which carries a maximum term of 20 years in prison. U.S. Attorney Geoffrey S. Berman said at the time:

“As alleged, Virgil Griffith provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions. In allegedly doing so, Griffith jeopardized the sanctions that both Congress and the president have enacted to place maximum pressure on North Korea’s dangerous regime.”

Denied bail at first

On Dec. 27, a public information officer for the SDNY told Cointelegraph that Griffith was denied bail and ordered detained.

Griffith also allegedly disowned his status as an American national via text messages to family members, according to texts quoted by the U.S. Attorney’s office. Griffith’s texts also allegedly included intent to facilitate money laundering activities in North Korea.

Leave a Reply

Your email address will not be published. Required fields are marked *