Central banks explore digital currency

Central banks ponder the introduction of digital currencyThe successful transition of crypto-currency bitcoin from experimental concept to globally accepted currency with a market value of more than $10 billion, is causing central banks to start exploring the potential of digital currencies for themselves. Research is at an early stage, but central banks – including those in Russia, Canada, the UK, Australia and China are assessing the risks and benefits of adopting a digital currency of their own. Further analysis needs to be done into how digital could affect a country’s economy and financial stability, and how systems could be put in place to defeat hackers, at the same time serving the needs of tens of millions of people. Read more…

Sterling at risk of losing reserve currency status

Post-Brexit shocks to sterling have rocked the currency’s reserve currency statusPost-Brexit shocks to sterling have rocked the currency’s reserve currency status

After Britons voted narrowly to exit the European Union earlier this year, they may not have anticipated the effect on the country’s currency and financial reputation. But with sterling reaching its lowest value in 40 years and the country stripped of its Triple-A credit rating, there are also fears that its prized reserve currency status could be under threat, should it fail to secure continued access to the European single market, according to US ratings agency Standard & Poor. Read more…

Are we heading towards a cashless economy?

Cashless could be on the cards as banks weigh up the pros and consCould cash become obsolete?

We’ve all become more wedded to plastic as advancements in technology allow us to pay for everything from a breakfast muffin to a wide-screen TV with a credit card. But the idea of a cashless economy seems unthinkable. Central banks are evaluating the situation, though, to enable them to exert more control over economic recovery measures. It’s no good establishing QE and negative interest rates to stimulate the economy if people hoard cash instead. Read more…

What’s a Brexit and what would it mean for the US?

How does speculation over Britain’s potential exit from the EU affect the US?British exit from EU could affect US markets

Brexit is a term that may well be unfamiliar to many Americans, although there could be repercussions down the line, should the UK vote to leave the EU in the June referendum. Britain’s prime minister David Cameron has been trying to renegotiate key agreements with the EU to improve its position within the union. But with US interests closely connected to those of the UK and the outcome of the vote far from certain, it’s worth paying attention to proceedings. Read more…

Negative interest rates deployed by Bank of Japan

Negative interest ratesBank of Japan introduces negative interest rates to boost economy

In a bid to shake the economy out of its stalemate, the Bank of Japan has introduced negative interest rates. In theory, the 0.1% rate should encourage lending and begin to turn the tide of deflation. In practice, because banks and other lenders will, in effect, be charged for hoarding deposits, they ought to be more inclined to lend to businesses and consumers and, in turn, promote spending and business investment. It’s the latest in a raft of initiatives designed to boost commercial confidence and support Japan’s plans to move inflation towards its 2% target. Read more…

Bitcoin creator remains a mystery

Australian tech entrepreneur in bitcoin allegationAustralian tech entrepreneur in bitcoin allegation

The identity of the famously coy bitcoin developer is still unknown, despite a raid by police on the home of an Australian tech entrepreneur ‘outed’ by US publications Gizmodo and Wired as the cryptocurrency creator in leaked interview transcripts. Officers arrived at the house of Craig Wright in a Sydney suburb for a raid that was said to be unrelated to the bitcoin claims, according to the Australian Federal Police. Those who claim to know Wright doubt the likelihood of his involvement, with some saying they believe Gizmodo and Wired have been the victims of an elaborate hoax. Read more…