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Business and Economics > Finance: General

You are looking at 1 - 10 of 29 items for :

  • Type: Journal Issue x
  • Bahamas, The x
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Cover Policy Papers
Central Bank Digital Currency: Progress And Further Considerations
International Monetary Fund. Monetary and Capital Markets Department
The paper briefs the Executive Board on the further considerations on CBDC. These cover the positioning of CBDC in the payments landscape, cyber resilience of the CBDC ecosystem, CBDC adoption, CBDC data use and privacy protection, implications for monetary policy operations, and cross-border payments with retail CBDC.
Keywords:
Capacity development; CBDC; Central bank digital currencies; Adoption; Collaboration; Cross-border payments; Cyber resilience; Data use and privacy protection; Monetary operations; Payment systems; Positioning CBDC; CBDC data; CBDC system; CBDC adoption; CBDC design; data use; position CBDC vis-à-vis; Digital financial services; Monetary base; Global
Cover IMF Working Papers
Central Bank Digital Currencies and Financial Stability: Balance Sheet Analysis and Policy Choices
Romain Bouis
,
Gaston Gelos
,
Fumitaka Nakamura
,
Paavo A Miettinen
,
Erlend Nier
, and
Gabriel Soderberg
This paper offers a comprehensive analysis of the implications for financial stability of a central bank issuing a digital currency to the public at large. We start with a systematic analysis of balance sheet changes that arise from the new liability for the central bank and the banking system, and examine how they depend on preconditions, central bank choices, and banking system responses. Based on this, we discuss the range of implications for financial stability that may arise in steady state, in the context of adoption, and in crisis times. Threats to financial intermediation in steady state arise mainly in situations where the central bank balance sheet expands, and triggers adjustment mechanisms that lead to more costly or less stable funding of the banking system, while in crisis times run risk may increase. Our analysis of policy choices to control these effects considers macroprudential policy, and an expansion of central bank lending to commercial banks, but finds that a main contribution needs to come from a design of the CBDC that encourages its use as a means of payment rather than a store of value.
Keywords:
Central Bank Digital Currency; Financial Stability; Balance Sheets; Disintermediation; Bank Runs; central bank lending; CBDC issuance scenario; market operation; central bank choice; lending to commercial banks; Central Bank digital currencies; Commercial banks; Financial sector stability; Bank credit; Bank deposits; Global; Eastern Europe; Caribbean
Cover FinTech Notes
Central Bank Digital Currency Adoption: Inclusive Strategies for Intermediaries and Users
Tayo Tunyathon Koonprasert
,
Shiho Kanada
,
Natsuki Tsuda
, and
Edona Reshidi
Among the countries that have launched central bank digital currency (CBDC) or are conducting large-scale pilots, adoption remains slow and limited due to various challenges such as lack of public awareness and trust, preference for existing payment methods, and inadequate incentives for intermediaries. Central banks cannot take it for granted that CBDC, once launched, will be adopted and scaled up easily. Forming part of the CBDC Virtual Handbook, this paper aims to encourage policymakers to consider CBDC adoption early on, by arguing that successful CBDC adoption hinges not only on technical readiness and operational robustness, but also on strategic policy and design choices that target end-user and intermediary involvement from the outset. The paper introduces The REDI Framework which outlines various regulatory strategies, education/communication initiatives, design/deployment choices, and incentive mechanisms to prepare for CBDC adoption.
Keywords:
Central bank digital currency; CBDC; Adoption; Intermediaries; Incentives; central bank digital currency adoption; CBDC adoption; IMF Fintech Note 2024/005; eAUD payment; central bank of Peru; Central Bank digital currencies; Currencies; Payment systems; Digital financial services; Financial inclusion; Global; Africa
Cover Technical Assistance Reports
The Bahamas: Technical Assistance Report-Domestic Local Currency Bond Market Development
International Monetary Fund. Monetary and Capital Markets Department
The Bahamas has a strong foundation for developing the local currency bond market (LCBM), benefitting from macroeconomic stability, and favorable fiscal and borrowing plans. The government views domestic capital market development as crucial for rebuilding economic buffers and fostering financial market development. An IMF/CARTAC a technical assistance mission visited The Bahamas in March 2023 to support the LCBM development. The mission assessed the current stage of the sovereign debt market and formulated policy recommendations for each of the six building blocks outlined in the Guidance Note for Developing Local Currency Bond Markets. Key findings highlighted significant potential to shift funding from non-concessional external borrowing to the domestic bond market, which would facilitate a more robust yield curve and deeper benchmark issuances. The mission’s key recommendations were: • Transition to a competitive auction system, allowing market prices to clear a fixed volume on offer; • Enhance communication with market participants, including through a formal investor relations strategy, and with relevant stakeholders to improve credibility, transparency, and investor appetite; and • Implement reforms sequentially, initially focusing on eliminating the most critical bottlenecks to market development.
Keywords:
investor base; government securities registry; market outcome; market development; Bahamas government securities depository; money market issuance; Government securities; Government debt management; Securities markets; Securities; Treasury bills and bonds; Global
Cover Policy Papers
Central Bank Digital Currency—Initial Considerations
International Monetary Fund. Monetary and Capital Markets Department
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Research Dept.
The paper briefs the Executive Board on the initial considerations on CBDC. These cover a framework to guide countries’ CBDC exploration, as well as implications for monetary policy transmission, capital flow management measures, and financial inclusion.
Keywords:
Central bank digital currency; initial considerations; Handbook; capacity development; collaboration; CBDC handbook; CBDC Fintech Notes; IMF Fintech Notes; transparency policy; CBDC design; handbook chapter; Central Bank digital currencies; Financial inclusion; Payment systems; Monetary base; Central bank mandate; Global
Cover FinTech Notes
Central Bank Digital Currency's Role in Promoting Financial Inclusion
Ashley Lannquist
and
Brandon Tan
Financial inclusion is a key policy objective that central banks, especially those in emerging and low-income countries, are considering for retail central bank digital currency (CBDC). If properly designed to address the barriers to financial inclusion, CBDCs have the opportunity to gain acceptance by the financially excluded for digital payments. CBDC can then serve as an entry point to the broader formal financial system. CBDC has special aspects that may benefit financial inclusion, such as being a risk-free and widely acceptable form of digital money, availability for offline payments, and potentially lower costs and greater accessibility. However, CBDC is not a panacea to financial inclusion, and additional experience is needed to fully understand its potential impact.
Keywords:
Central bank digital currency; financial inclusion; digital inclusion; digital payments; central bank digital currency's role; IMF Fintech Note 2023/011; IMF Library; publication order; publications service; Central Bank digital currencies; Digital financial services; Payment systems; Global; Sub-Saharan Africa
Cover FinTech Notes
How Should Central Banks Explore Central Bank Digital Currency?
Gabriel Soderberg
,
Mr. John Kiff
,
Hervé Tourpe
,
Ms. Marianne Bechara
,
Stephanie Forte
,
Kathleen Kao
,
Ashley Lannquist
,
Tao Sun
, and
Akihiro Yoshinaga
Digitalization of the economy provides both challenges and opportunities. Central banks should ensure that they have the capacity to continue to meet their policy objectives in the digital age. It is in this context that central bank digital currency (CBDC) should be evaluated. If designed appropriately, CBDCs could allow central banks to modernize payment systems and future-proof central bank money as the pace and shape of digitalization continues to evolve. However, the decision to proceed with CBDC exploration and an eventual launch would need to be jurisdiction specific, depending on the degree of digitalization of the economy, the legal and regulatory frameworks, and the central bank’s internal capacity. This paper proposes a dynamic decision-making framework under which the central bank can make decisions under uncertainty. A phased and iterative approach could allow central banks to adjust the pace, scale, and scope of their CBDC projects as the domestic and international environment changes.
Keywords:
Central bank digital currency; project management; digitalization; payments; IMF Fintech Note 2023/008; IMF Library; Fintech note; decision-making framework; publication order; CBDC project; Central Bank digital currencies; Payment systems; Commercial banks; Currencies; Sub-Saharan Africa; Global
Cover IMF Staff Country Reports
The Bahamas: Technical Assistance Report-Operationalizing the New Bank Resolution Framework and Amended Deposit Insurance Legislation—First Mission
International Monetary Fund. Monetary and Capital Markets Department
This technical assistance report on The Bahamas analyses operationalizing the new bank resolution framework and amended deposit insurance legislation. The Bahamas has made considerable progress in developing the infrastructure needed for an effective bank recovery and resolution regime. The Central Bank of the Bahamas (CBOB) should strengthen the design of recovery planning requirements. The institutional arrangements for bank resolution should be strengthened. The CBOB is responsible for bank supervision, the resolution of nonviable banks, and depositor protection. The operationalization of the resolution regime should be facilitated by the development of a resolution “toolkit.” Domestic inter-agency cooperation and coordination are essential for an effective response to financial institution distress and failure. Cross-border cooperation arrangements for recovery and resolution, as well as for crisis management, should be enhanced. Operational capacity to manage financial crises should be enhanced. The authorities should undertake regular testing of crisis management and resolution arrangements, including through inter-agency crisis-simulation exercises.
Keywords:
Department mission; DIC management; recovery plan; target fund level; resolution plan; Bank resolution framework; Credit bureaus; Crisis management; Crisis resolution; Bridge bank; Global
Cover IMF Staff Country Reports
The Bahamas: Technical Assistance Report-Operationalizing the New Bank Resolution Framework and Amended Deposit Insurance Legislation—Second Mission
International Monetary Fund. Monetary and Capital Markets Department
This technical assistance report on The Bahamas analyses operationalizing the new bank resolution framework and amended deposit insurance legislation-second mission. The Central Bank of the Bahamas (CBOB) has made good progress in implementing recovery plans for the domestic systemically important banks (DSIBs). Building on this progress, the mission recommends that the CBOB provide the DSIBs with structured feedback on their initial recovery plans and, based on lessons learned from the pilot, provide to all banks and credit unions updated industry-wide guidance that sets out high-level expectations on the content for recovery plans. The CBOB is advised to develop a comprehensive strategy for resolving failed financial institutions. The bank resolution law was strengthened in 2020 and provides the CBOB with the key resolution tools needed for an effective resolution regime. However, some aspects of the law would benefit from review to better align with international principles and good practice.
Keywords:
recovery plan; bank resolution law; credit union law; Bahamas co-operative credit unions; resolution framework; Credit bureaus; Bank resolution framework; Bank resolution; Bridge bank; Contingency planning; Global
Cover FinTech Notes
Digital Currencies and Energy Consumption
Mr. Itai Agur
,
Jose Deodoro
,
Xavier Lavayssière
,
Soledad Martinez Peria
,
Mr. Damiano Sandri
,
Hervé Tourpe
, and
Mr. German Villegas Bauer
Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies. It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems and derives implications for the design of environmentally friendly CBDCs. For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm. While crypto assets like Bitcoin are wasteful in terms of resources, other designs could be more energy efficient than existing payment systems.
Keywords:
Payments; Energy efficiency; Environmental impact; Crypto assets; Bitcoin; Central Bank Digital Currency; CBDC; Distributed Ledger technology; DLT; CBDC user payment; energy consumption; FINTECH note; title page; user payment; Virtual currencies; Blockchain and DLT; Digital currencies; Central Bank digital currencies; Payment systems; Global