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Study suggests Canadian CBDC could promote digital innovation within the country

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A study released by Canada’s central bank, Banque du Canada, has noted a number of favorable reasons that the country could benefit from its own Central Bank Digital Currency, or CBDC.

The document laid out two scenarios that might result in the bank issuing a CBDC at some future date. One would be if citizens were no longer widely using cash within the country for reasons that were left unspecified. The other could be if a digital currency, public or private, were to become so widely adopted as to threaten the sovereignty of Canada’s existing central currency.

Participants did not see either scenario as a likely outcome in the near future, but noted that an interest in stablecoin regulation and adoption had increased within the country in recent months. Even so, the study found that cryptocurrencies and stablecoins used as a means of payment in Canada are currently a “novelty for a small number of enthusiasts.”

Related Bank of Canada sees no strong case for a digital dollar — For now

The document acknowledged a number of potential benefits inherent to the adoption of a CBDC. Namely that the technology could have the same level of safety as cash while allowing for use in payment systems for online transactions and peer-to-peer transfers. When compared to payment options like credit or debit cards, a CBDC would also not necessarily have the same type of transaction fees for retailers:

“A CBDC could be a simpler competition policy tool because it would provide an alternative low-cost payment instrument for customers and merchants. This would help bring down the interchange fees charged by the established networks.”

That a CBDC could potentially support smart contracts was also a point of interest, as they could increase the speed and accuracy of execution by automating actions that are typically done manually. Participants felt that smart contracts would create some risk for users however, given that smart contract developers would likely be independent from the bank’s CBDC platform. This could be problematic if the execution of the contract did not follow the terms agreed upon, whether purposely or otherwise. They advised that smart contracts, as well as the programmability of a Canadian CBDC, would need to be studied further before implementation is decided.

There could be many benefits to creating a CBDC for Canada. The study explained:

“In general, we argue that a CBDC might be beneficial and probably necessary to ensure a competitive and vibrant digital economy.”

Canada is not the only country looking into possibly implementing a CBDC. Last week while speaking to the House of Representatives, Chairman of the Federal Reserve Jerome Powell said there would be no need for stablecoins or cryptocurrency if there was a digital U.S. dollar. A paper focusing on the benefits and risks of a digital dollar is expected to be released sometime in September.

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Amazon seeks new exec to oversee digital currency strategy

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Tech giant Amazon is looking to dive into digital currency and blockchain development with a new major hire within its payments-focused team.

Amazon’s payments acceptance and experience team is seeking a digital currency and blockchain product lead to develop the company’s strategy of digital currency and blockchain as well as a product roadmap. The team is responsible for Amazon’s customers’ payments on Amazon’s sites and through its global services.

Posted on Thursday, the new role seeks an experienced product leader with expertise in blockchain, central bank digital currencies and cryptocurrencies to “develop the case for the capabilities which should be developed” and drive overall product vision.

The new Amazon digital currency lead will work closely with teams across Amazon to design the roadmap, including the customer experience, technical strategy and capabilities, the posting notes.

The application requires a set of industry-related qualifications, including a “deep understanding” of the digital currency and cryptocurrency ecosystems and related technologies.

Related: Amazon ‘will have to’ create its own crypto in future, Binance CEO says

It appears unclear whether Amazon is considering launching its own digital currency as part of its payment acceptance process with the new position. The firm did not immediately respond to Cointelegraph’s request for comment.

The latest job posting reaffirms Amazon’s growing attention to digital currency, as the company has been apparently developing a new service to allow its customers to shop using digital currency. Earlier this year, Amazon posted a job application to launch a new digital payment product known as “Digital and Emerging Payments,” initially planning to roll out the initiative in Mexico.

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KFC Korea and TriumphX marketplace sign deal to develop NFT content

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Entertainment and nonfungible token marketplace TriumphX has signed a memorandum of understanding (MOU) with fast-food giant KFC in South Korea.

The agreement will focus on joint blockchain research with the aim of integrating NFT technologies and enhancing the branding of the fried chicken outlet.

According to reports in local media, KFC Korea plans to introduce blockchain and NFT technology to its branding content. The fast-food franchise intends to issue NFTs to its customers comprising different digital formats including video, art and graphics, and metaverse collectibles.

TriumphX’s NFT issuance know-how will be leveraged to create and sell KFC-themed NFTs to a customer base that is already familiar with the Kentucky Fried Chicken brand.

Fried chicken and KFC is popular in South Korea with more than 210 outlets nationwide. According to a 2019 SCMP report, there were more fried chicken restaurants in the country than there were McDonald’s and Subway restaurants worldwide.

The cross-chain TriumphX has partnered with a number of local artists and entertainment companies recently including decentralized entertainment marketplace XPOP, photographer Kim Jung Man, and cartoonist Rosa Fantasy.

Related: KFC Launches Blockchain Pilot for Digital Advertising and Media Buying

NFTs have exploded in popularity in 2021 resulting in $2.5 billion in nonfungible token sales in the first six months of this year. This is a huge increase over the $13.7 million in sales for the same period in 2020.

Korea has not missed out on the NFT craze this year. According to a Korea Times report on July 23, copies of a priceless manuscript detailing the origins and workings of the Korean writing system will be sold as limited edition NFTs. The burgeoning K-pop industry is also looking to tap into nonfungibles to promote artists to adoring fans.

Despite the demand for NFTs and crypto in Korea, there has been an increase in regulation of the digital asset industry this year as financial watchdogs come down hard on unregulated exchanges and marketplaces.

As reported by Cointelegraph yesterday, the government stated that crypto exchanges will face punishment if they have not voluntarily registered with the country’s authorities by September 24.

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Reserve Bank of India mulls first steps toward an eventual CBDC

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The Reserve Bank of India, or RBI, continues to investigate the issuance of a central bank digital currency, or CBDC.

T Rabi Sankar, the deputy governor of RBI, said in a speech organized by the Vidhi Center for Legal Policy that private digital currencies could be part of what makes CBDCs ultimately necessary. He felt that the RBI’s development of it’s own CBDC could provide the public with many of the same uses as digital currencies such as Bitcoin, while limiting the average user’s exposure to volatility. He stated:

“Indeed, this could be the key factor nudging central banks from considering CBDCs as a secure and stable form of digital money…. The case for CBDC for emerging economies is thus clear – CBDCs are desirable not just for the benefits they create in payments systems, but also might be necessary to protect the general public in an environment of volatile private VCs.”

Sankar continued that the RBI is currently looking at a phased implementation strategy, and examining cases where a CBDC could be put into practice with little to no disruption of the bank’s status quo. The official detailed a number of issues that would need to be examined before CBDC implementation could truly be considered. He noted the need for careful consideration with regard to how retail payments, or payments occurring between consumers and businesses, would be orchestrated. Security issues, including the degree of allowable user anonymity, were also up for debate.

Related: India’s ICICI Bank warns remittance users to steer away from Bitcoin

Of the problems mentioned, Sankar seemed most concerned with the toppling of central bank oversight and authority. He stressed that traditional financial institutions might lose their role as trusted third-parties, should individual users be given the ability to trustlessly transact for themselves. An arguably valid fear, given that Bitcoin creator Satoshi Nakamoto openly devised blockchain technology as a way to end the stranglehold he felt banks needlessly enjoyed with regard to disintermediation.

People transacting without a middleman could also reduce the bank’s ability to issue credit to patrons, according to Sankar. In his statement however, the official failed to acknowledge the numerous options for decentralized credit issuance which the DeFi community has devised — a number of which have already been successfully implemented.

Sankar said that while there is more research to be done, it may not be long before pilot projects in both the retail and wholesale markets are put into motion:

“Setting this up will require careful calibration and a nuanced approach in implementation. Drawing board considerations and stakeholder consultations are important. Technological challenges have their importance as well. As is said, every idea will have to wait for its time. Perhaps the time for CBDCs is nigh.”

CBDCs have gained a lot of traction over the past year. South Korea recently chose a blockchain subsidiary of a local internet company as the technology provider for the pilot tests of its digital won. Members of the staff of the Bank of Canada also released a study detailing the possible benefits of a CBDC. They noted a number of plusses, including the elimination of transaction fees on debit and credit cards, and the possibilities inherent to programmable currency. In the U.S., the Chairman of the Federal Reserve said a CBDC could cut down on the number of cryptocurrencies being launched.

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