Follow Us Subscribe Now

OPINION NEWS REGIONS WORLD BUSINESS SPORTS ENTERTAINMENT LIFESTYLE THE SUNDAY TIMES MORE

Opinion Columns

Central banks of China, EU, US

moves on crypto, post-pandemic
Read Next

Mr. M feels alive to be Kapuso

50%
By New Worlds July 18, 2021 410

___ Listen to this article now

07:17 Powered by Trinity Audio

I-like 95

Latest Stories

US airstrike targets Islamic State member in Afghanistan

WATCH: Kabul airport blasts: Grieving relatives collect bodies from hospital

NCR, other areas remain under MECQ until Sept 7--Palace

Sotto: Govt agencies must be more prudent in asking for funds

Teachers' group sets up back to school hotline

The past few years before the Covid-19 pandemic saw the
rise of contactless payment systems getting popular in China
and other countries. The announced figure showed that
Alipay had 1.2 billion users and WeChat Pay had 900
HENRY CHAN million at the end of 2020. For Alipay, overseas users
counted 300 million.

The rise of cryptocurrency such as Bitcoin, based on blockchain, in the second

half of the 2010s threatened the seigniorage power of governments around the
world. Its private promoters dangle privacy to convince people to use the
cryptocurrency in transactions and usurping the role of traditional fiat money
issued by governments. At the cryptocurrency frenzy peak in April 2021,
there were more than 6000 cryptocurrencies and stable coins in the market
with a value of over $2 trillion.

The ascendancy of the handphone-based contactless payment system and

cryptocurrency alerted central banks worldwide on the danger of the The Manila Times Newsletter
government losing control over monetary policy and seigniorage. At the end Get the latest news from your inbox for free

of 2020, a Bank of International Settlement (BIS) survey showed more than 60 Enter Your Email
central banks worldwide were actively studying the central bank digital
currency (CBDC) issuance to reassert control on payment and money Yes, I want to keep up with The Times

issuance.
RECOMMENDED FOR YOU
Top central banks race
Digong for VP - a
political game changer
The pandemic highlights the importance of digital transformation to improve a
country's economic resiliency and accelerated the development of the CBDCs
2 dead in Marikina
worldwide. The People's Bank of China (PBoC) started a field test of its hostage taking

digital money, e-CNY, last October and has since successfully conducted nine
rounds of the test. The PBoC is expected to launch the e-CNY in next Sara Duterte: 'I do not
hold grudge vs Go'
February's Winter Olympics officially.

Afghanistan; Manny's
! READ: Bitcoin prices soar crossroads
ADVERTISING

Domagoso, out;
Malapitan, in

The impending launch of e-CNY prompted the BIS to issue a joint report with
the International Monetary Fund and the World Bank on July 9 on the
implication of digital money to the global financial system. The report urged
all developing countries to carefully study their CBDC project and look at the
possibility that their home currency might face replacement threats from
major countries' CBDCs once digital euro, digital dollar and e-CNY become
the dominant form of international payment. The efficiency of digital money
in cutting down transaction costs, particularly in small denomination cross-
border usage, will make it an attractive alternative to existing national
currencies.

TODAY'S FRONT PAGE

The European Central Bank (ECB) has launched the investigation phase of a
digital euro project that will run for 24 months. The study focuses on four
areas - digital ledger, privacy and anti-money laundering, limits on digital
euro in circulation, end-user access while not connected to the internet and
facilitating inclusiveness with the appropriate device. The recommendation
will be the basis of any digital euro design and launching, which the ECB
thinks will take another two years. The ECB, however, said no technical
obstacles were identified during the earlier nine-month preliminary
experimentation study.

The endorsement of China and the ECB on the digital currency means all
countries in the world will likely follow soon. There are only three economic
blocs that have an annual GDP of over $10 trillion in 2020, and they are the
United States ($20.8 trillion), China ($14.9 trillion) and the Eurozone ($12.7
trillion). The endorsement of any of the two virtually means the third one will
Advertisement

follow or face its currency being displaced by the other two. Moreover, China
and the European Union's combined international trade is more than twice that
of the US.|

Central Bankers Yi Gang of China, Jerome Powell of the United States, Christine Lagarde of the
European Central Bank and Benjamin Diokno of the Philippines. COLLAGE BY IDSI

The Chinese e-CNY enjoys the first-mover advantage, and its design will
likely set the trend of other CBDCs. As a result, any CBDC will likely be:

! READ: China's CB keeps monetary policy stable

(1) Retail-based and designed for use in daily transactions.

(2) Liability of the central bank, and it is the first time in the history of money
that a series of computer codes will represent money and not something with
physical form.

(3) Run on a two-tier system in the form of a master e-wallet of banks with the
central bank forming the first tier and subsidiary e-wallet between the
consumers and issuing banks forming the second tier.

(4) Most of the new banking innovation will be done via an application
programming interface (API) in the second tier.

! READ: Shaking the future of banking

(5) The consumer experience will be like the current payment system and not
noticeable from the consumer end.

(6) Financial innovation and inclusiveness will significantly improve with the
efficiency of the new digital money.

Issuing CBDCs is a major endeavor for any country; building the supporting
communication network and technical backbone is a daunting task. But the
danger of losing a country's currency franchise will force everyone to adapt.
The appearance of new money carries social impact and moving to digital
money will define the post-Covid-19 digital transformation; its arrival will
mark the success of a society's digital transformation.

Evolution of money

The search for the appropriate form of money has been the obsession of any
human community since civilization started. The need for money to set prices,
facilitate exchange and store wealth makes the question of what money is a
central issue in any society and affects everyone's life.

First, people used shells in the earlier Stone Age, then moved to copper and
then precious metals of gold and silver in the agricultural society. Next, the
more sophisticated social and government organizations in the 18th century
industrial age brought fiat money such as banknotes to wide circulation in the
19th century. Finally, by the 20th century, the advent of the modern banking
system and improved information communication technology brought money
like payment intermediaries such as checks credit cards and internet online
payment systems such as PayPal into the picture.

The 20th-century innovation represents a proxy to money used in transactions,

and the underlying money remained the legal tender authorized by a country's
law. The three functions of money, namely, medium of exchange, store of
value and unit of account, had never changed throughout the ages.

When one looks at the history of money, two outstanding features stand out:
the first is that they are all in physical form in coins or banknotes, the second
is that they are the product of technological evolution. Thus, the substitution
of banknotes over coins happens because the new notes have counter-fake
features, and it is more efficient in serving the three functions of money. The
appearance of proxies to money such as checks, and credit cards was based on
the same logic. Now, a new form of money will undoubtedly supplement or
replace the old form of money when new technology promises to make money
transactions cheaper.

Dr. Henry Chan is an internationally recognized development economist based

in Singapore. He is also a senior visiting research fellow at the Cambodia
Institute for Cooperation and Peace and adjunct research fellow at the
Integrated Development Studies Institute (IDSI). His primary research interest
includes global economic development, Asean-China relations and the Fourth
Industrial Revolution.

New Worlds by IDSI (Integrated Development Studies Institute) aims to

present frameworks based on a balance of economic theory and historical
realities, ground success in real business and communities, and attempt for
common good, culture and spirituality. We welcome logical feedback and
possibly working together with compatible frameworks
(idsicenter@gmail.com).

50%

READ NEXT

PayPal allows Britons to BSP reminds banks to The curious case of the
hold, sell cryptocurrency accept mutilated $600-M crypto heist
currencies from public

Article Topics
China Bank of International Settlement United States European Central Bank

European Union Integrated Development Studies Institute Cambodia Institute

Bankers Yi Gang Jerome Powell Benjamin Diokno Henry Chan

What is your reaction? 4 votes

50% 0% 0% 0% 0% 50%

Happy Unmoved Amused Excited Angry Sad

The Manila Times

Keep Up With The Times | Oct. 5, 2020

Keep Up With The Times | Oct. 5, 2020

KEEP UP WITH THE TIMES

…
Today will mark the opening of classes for students from over 50,000 public
schools in the Philippines, but instead of the usual classroom setup, students will
have to study from home (and online) and shift to blended learning because of the
quarantine measures, as a result of the coronavirus pandemic.

Speaking of the opening of classes for the new school year 2020-2021, senators
have called for more financial support for teachers, in order for them to cope with
the challenges of blended learning.

Meanwhile, in the United States, President Donald Trump went through a “very
concerning” period on Friday (Saturday in Manila) and faces a “critical” next two
days in his fight against the coronavirus disease 2019 (Covid-19) at a military
hospital, his chief of staff said.

Back in the country, more than 200 cadets and personnel of the Philippine
National Police Academy (PNPA) who tested positive for Covid-19 have since
recovered, based on swab tests conducted on September 8, according to the
academy’s chief.

Veteran broadcast journalist Henry Omaga-Diaz was announced to be the newest

anchor of ABS-CBN’s flagship newscast, “TV Patrol”, in a statement made by the
network on Sunday. Omaga-Diaz replaced Ted Failon, who left last August.

The Manila Times Newsletter

Omaga-Diaz formerly anchored “TV Patrol” from 2001 to 2003 and its weekend
edition from 2004 to 2006.

Physical Christmas parties are a no-no among employees in the cities of Navotas
Get the latest news from your inbox for free
and Valenzuela, as their mayors, Toby Tiangco and Rex Gatchalian, said it would
be unreasonable to hold such parties, while other Filipinos experience hardships
amid the Covid-19 pandemic.
Enter Your Email Yes, I want to keep up with The Times
In business, the country’s headline inflation likely remained unchanged in
September, as food and oil prices remained steady, according to analysts polled
by the Times. Projections for the month ranged by 2.3 to 2.5% average, which
matches August’s inflation figures, but higher than 0.9% posted last year.

Meanwhile, in Sports, the Los Angeles Lakers need just two more wins to capture
their 17th NBA championship and give LeBron James, his fourth. The Lakers won
game 2 with a score of 124-114. Game 3 is set for Sunday night, or Monday
morning in Manila.

Rigoberto Tiglao and Fr. Ranhilio Aquino are the Times’ featured columnist on the
front page of the Monday issue. For Tiglao, he thinks natural gas is the “crux” of
the country’s disputes in the South China Sea, while Fr. Aquino talks about a
decision on the Philippine Law School Admission Test.

The Times, in its Editorial, takes on how the Duterte administration is being
resolute in reopening and rebuilding the country’s economy, amid a forecast of
economic recessions this year and the prospect of more difficulties in 2021.

For more news and information, get a copy of Advertisement

The Manila Times, subscribe to its
digital edition or log on to www.manilatimes.net. Follow us on Facebook, Twitter
and Instagram and Keep Up With The Times.

Comments (0)

Be the first to comment

PEOPLE REACTED TO THESE (JOIN THE CONVERSATION)

Follow the Swedish model? Pacquiao to meet with

Are you nuts? Robredo soon
22 Comments 16 Comments

Duque to resign once CoA 1,500 Americans await

issues cleared evacuation in Afghanistan
15 Comments 11 Comments

Show more articles

Add Vuukle Privacy

Advertisement

OPINION ON PAGE ONE

OTHER STORIES

New health warning A must-audit of Midweek Comments

against ivermectin… pandemic funds
A must-audit of pandemic
merits attention
funds

By Marlen Ronquillo
Do we honor God with The loss of life in a 20-
our lips, not our hearts? year war

Will Pax Americana end Faith Healer

Waterpower
with Covid-19 and…
Afghanistan? Do we honor God with our
lips, not our hearts?

By Ricardo Saludo

Advertisement Reflections

TOP STORIES The loss of life in a 20-

year war

By Fr. Shay Cullen

EDITORIAL

New health warning

against ivermectin
PNP warns against hoarding oxygen tanks merits attention
By Dempsey Reyes Read more

'Poor need more aid'

CoA bares 'lapses' in DepEd funds use

Lawmakers, officials tackle Bayanihan 3

LATEST STORIES

US airstrike targets WATCH: Kabul airport

Islamic State member in blasts: Grieving relatives
Metro Manila 3-day forecast
Afghanistan collect bodies from…
hospital Friday August 27, 2021 SAT SUN MON

NCR, other areas remain Sotto: Govt agencies 30 °C

under MECQ until Sept must be more prudent in 24 °C
24°C 24°C 25°C
7--Palace asking for funds
31°C 31°C 32°C

Navotas City Hall, 2

Teachers' group sets up
other buildings locked
back to school hotline
down over new 24…
Covid-19 cases TRY OUR DIGITAL EDITION
FREE FOR 30 DAYS
Ida aims to hit New
Manila completes ECQ
Orleans on Hurricane SUBSCRIBE NOW
cash aid distribution
Katrina anniversary

ALREADY A SUBSCRIBER?
PH logs second highest Pia Wurtzbach,
LOGIN HERE
number of Covid-19 indigenous fabrics
cases at 17,447 featured on Vogue Italia
DOWNLOAD THE APP

by Taboola Sponsored Links by Taboola

From The Manila Times From the Web

The hunt must end 1 in 2 Mac Users
- protect the forest Don’t Know This
rangers of Mac Trick
Masungi MacKeeper

Robredo had The government

something else in of Canada needs
mind – Sotto more workers…
Become A Canadian

Mayors support
It's Not A Joke!
Lacson, Ferrer
Unsold Cars Are
Almost Given…
Car Deals | Search Ads
Former DILG
Secretary is Kris Are you from
Aquino's new man Santo Rosario and
single?
Dating.com

Advertisement

TRY OUR DIGITAL EDITION News Opinion Special Sections The Manila Times
FREE FOR 30 DAYS

SUBSCRIBE NOW Nation Editorial The Sunday Times Home Delivery Subscription

Regions Editorial Cartoon Special Features Subscribe to our Digital

ALREADY A SUBSCRIBER? Edition
Business OP-ED Columns Public Square
LOGIN HERE The Manila Times College
World From our Readers Videos
The Manila Times TV
DOWNLOAD THE APP
Sports Podcasts
The Manila Times Rewards
Entertainment Market Overview
The Manila Times Forum
Lifestyle Weather
The Manila Times Coffee
Break

The Manila Times Channel

on the L!ve App

Twitter Youtube Facebook Instagram DailyMotion Spotify Subscribe Now

Copyright © The Manila Times – All Rights Reserved. Advertise Contact Us About Us Privacy Policy
: