China launches a digital currency race … and major central banks...

China launches a digital currency race … and major central banks...
China launches a digital currency race … and major central banks...

China launches a digital currency race … and major central banks are chasing it

Big jump in debt in frontier markets … and investors are hedging for a “blue wave”


Saturday – 23 Safar 1442 AH – 10 October 2020 AD Issue No. [
15292]

Seven major central banks are looking into the possible shape of a digital currency to help catch up with China’s leading role (Reuters)

aawsatLogo.jpg?w=696&ssl=1

London: “Asharq Al-Awsat”

The Chinese central bank is issuing digital coins worth 10 million yuan ($ 1.5 million) to 500 users, who will be chosen at random, in a move that some consider the country’s first public test of the yuan’s digital payment system.
The People’s Bank of China (central bank) campaign comes as central banks around the world race to issue their digital currencies to modernize payment systems as well as ward off potential competition from private cryptocurrencies.
From Friday, anyone in Shenzhen, southern China, can apply to join the program through the country’s four largest banks. However, only some will win 200 yuan through a lottery, according to the local government and banks.
Winners can use the digital currency at 3,389 retail outlets, including Sinopec gas stations, Walmart stores, CR Vanguard malls and Shangri-La hotels.
Kenji Okamura, Japan’s top diplomat on financial affairs, said Thursday that China is seeking to win the lead in its efforts to develop a digital currency.
On Friday, a group of seven major central banks, including the US Federal Reserve, set out to define what digital currencies might look like, in an effort to catch up with China’s pioneering role and outpace private ventures such as the stablecoin of ’s Libra.
Central banks and the Bank for International Settlements said the key features should include durability and availability at low or no cost, appropriate standards, clear legislative framework and an appropriate role for the private sector.
The growth in non-cash payments since the imposition of lockdown measures to combat the Corona pandemic is accelerating how technology can transform forms of money, said John Cunliffe, deputy governor of the Bank of England and head of the Payments Committee at the Bank for International Settlements.
Central banks began closely scrutinizing digital currencies after Facebook last year announced its yet-to-be-launched currency, Libra, which will be backed by a mix of major currencies and government debt.
Since then, the entity behind Libra has modified its plans and is now hoping to launch several “stable currencies” backed by single currencies. Cunliffe said central banks need to keep pace to avoid the private sector closing payment gaps in inappropriate ways.
Besides the Federal Reserve (US Central Bank) and the Bank of England, the seven banks that have allied with the Bank for International Settlements include the European Central Bank, the Swiss National Bank and the Bank of Japan, but not the People’s Bank of China.
China is already testing a digital yuan, while the People’s Bank of China says it will further spread the yuan in a currency world dominated by the dollar.
“China is seeking to gain the lead in building its own digital currency,” Kenji Okamura, the top Japanese diplomat involved in financial affairs, said Thursday, warning that “this is something we should be afraid of.” “I don’t think this is a race between central banks,” Cunliffe said, adding that no solution with a digital currency for a central bank would dominate the entire world.
On the other hand, debt of the front-end markets rose to a new record high at 121 percent of GDP in the second quarter of the year, as governments rushed to borrow to support their recovery from the Coronavirus pandemic.
The Institute of International Finance said the figure, an average weighted to GDP, rose by six percentage points in the first half of the year, which came on the back of a massive increase in government debt to $ 1.4 trillion in the second quarter. The frontier markets are developing economies that are smaller and more risky than emerging market economies.
The institute said in a note that it had conducted a survey of 29 countries that increased debt rates in 26 of them over the past year, led by Bahrain, Oman, Peru and El Salvador. In contrast, the institute said that the Republic of the Congo, the Dominican Republic and Kazakhstan have reduced debt ratios.
Khadija Mahmoud, an economist at the institute, wrote in the report: “As the global economy continues to be affected by the impact of the Covid-19 pandemic and the migration of portfolios to emerging markets, the existing weaknesses at the macroeconomic and social levels are exacerbating. Lower commodity prices and weak trade and tourism revenues also had an impact. These negative conditions push global debt rates to new record levels. ”
Separately, Bank of America said Friday that bond funds witnessed the second largest entry of weekly flows ever, at $ 25.9 billion, as markets continue to take into account a sweeping victory for the Democrats in the US presidential election next month, which may mean more financial stimulus. .
“The election resulted in a blue wave (the Democrats’ victory) that curiously turned from a consensus that it was a catalyst for the descent to a rally in recent months,” the US investment bank said. Bank of America said equity funds attracted $ 4.4 billion, mainly driven by US stocks. Government bond funds and the US Treasury attracted $ 3.8 billion in the largest inflows in 14 weeks, in the week ending Oct.7.

China

China’s economy

Bitcoin

These were the details of the news China launches a digital currency race … and major central banks... for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV The best European luxury sedans in 2020 … luxury on the...
NEXT US oil production increased by 286 thousand barrels per day during...