Bank

Donald Trump

Freedom

<div>
 Louisiana’s amended Blockchain Basics Act bans the use of CBDCs and sets very strict regulations for digital asset miners and node operators. The legislation is expected to be&nbsp;effective by August 2024. Meanwhile, the European Central Bank (ECB) is improving its CBDC framework with a focus on privacy, while Ethiopia is preparing the legal groundwork for its own CBDC.
 <h2 id="louisiana-bans-cbdcs">Louisiana Bans CBDCs</h2>
 Louisiana has <a href="https://x.com/Swan/status/1805230394046120145" target="_self" rel="noopener noreferrer nofollow">updated</a> its legislation to ban the use of central bank digital currencies (CBDCs) and establish rules for miners and node operators. The changes are set to take effect in August 2024.
 The amended law, which is named the <a href="https://legiscan.com/LA/text/HB488/id/3006883" target="_self" rel="noopener noreferrer nofollow">Blockchain Basics Act</a>, bans Louisiana from participating in any CBDC tests or accepting payments in CBDCs, although it does not ban other digital currencies. The act explicitly states that governing authorities in Louisiana are completely barred from participating in any CBDC tests conducted by the Board of Governors.
 In addition to this, Louisiana also imposed strict regulations on foreign-owned digital asset mining companies that prohibits foreign parties from buying or maintaining stakes in such operations in the state. Businesses that are currently engaged in digital asset mining that are foreign-controlled have to fully divest their interests by Aug. 1, 2024. If these businesses do not comply with this regulation, it can result in severe penalties, including fines up to $1 million or 25% of the foreign party’s stake in the mining operation.
 The revised legislation also provides a clear definition of node operators and their roles in a blockchain network. It acknowledges that while nodes are essential for maintaining blockchain consensus and integrity by creating and validating transaction blocks, they do not have the authority to alter or decide the outcome of transactions initiated by users.
 The future of a digital dollar in the United States is still very uncertain as several states, including Florida and North Carolina, have also moved to restrict or ban CBDCs.&nbsp;
 This issue has also become an important talking point among presidential candidates.&nbsp; Donald Trump is still <a href="https://www.youtube.com/watch?v=SRLBZZ6sVck" target="_self" rel="noopener noreferrer nofollow">opposed</a> to CBDCs due to concerns about government overreach and potential increased surveillance. Trump even vowed to prevent the creation of a central bank digital currency as he believes it would give the government excessive control over citizens&amp;#39; money.&nbsp;
 On the other hand,&nbsp;the Biden administration seems a bit more open to exploring the potential of CBDCs, despite facing legislative <a href="https://www.hagerty.senate.gov/wp-content/uploads/2024/02/cbdc_anti-surveil-_lance_state_act.pdf" target="_self" rel="noopener noreferrer nofollow">resistance</a> from several senators who oppose the introduction of a digital dollar.
 It is <a href="https://cbdctracker.org/" target="_self" rel="noopener noreferrer nofollow">estimated</a> that at least 110 countries are actively exploring or developing CBDCs, and about 39 countries have reached more advanced stages like piloting or launching initiatives.
 <h2 id="privacy-central-to-ecb-39-s-cbdc-framework">Privacy Central to ECB&amp;#39;s CBDC Framework</h2>
 The European Central Bank (ECB) also recently released its first <a href="https://www.bancaditalia.it/media/bce-comunicati/documenti/2024/cs_ECB-publishes-first-progress-report-of-digital-euro-preparation-phase.pdf" target="_self" rel="noopener noreferrer nofollow">progress report</a> on developing a CBDC. The ECB has committed to implementing pseudonymization, hashing functions, and encryption to prevent tracking people by transaction. Additionally, under the ECB’s CBDC framework, payment service providers cannot use consumer financial data for commercial purposes without getting explicit consent from the person.
 The report also outlined methods for conducting offline transactions, allowing payments to be settled directly on users&amp;#39; devices, like smartphones and potentially battery-powered &amp;quot;smart cards,&amp;quot; without needing a third-party intermediary. These offline transactions would later synchronize with the CBDC blockchain.
 The ECB announced that its &amp;quot;Rulebook Development Group&amp;quot; will finalize the first draft of its technical and regulatory CBDC framework by the end of 2024. This draft will be prepared in consultation with service providers, infrastructure builders, and the public.
 Privacy concerns and issues of fundamental human liberty are still some of the major challenges standing in the way of CBDC adoption. At the recent <a href="https://oslofreedomforum.com/" target="_self" rel="noopener noreferrer nofollow">Oslo Freedom Forum</a>, speakers pointed out some instances where state actors seized people&amp;#39;s assets to suppress dissent. This is a very good example of the potential for government overreach that Trump and so many others are afraid of when it comes to CBDCs.&nbsp;&nbsp;
 A 2023 Trezor <a href="https://financialit.net/news/personal-finance/73-brits-concerned-about-uk-authorities-controlling-access-money-britcoin" target="_self" rel="noopener noreferrer nofollow">report</a> indicated that 73% of respondents were uneasy about the possible&nbsp;privacy issues that could be introduced by a CBDC and the control it would give governments over consumer behavior. Others also argue that these risks outweigh the benefits of a CBDC, especially when stablecoins are considered.
 <h2 id="ethiopia-prepares-legal-framework-for-cbdc">Ethiopia Prepares Legal Framework for CBDC</h2>
 Meanwhile, the National Bank of Ethiopia (NBE) prepared two proclamations as part of an economic reform plan, including the establishment of a legal framework for a CBDC. These policy changes include increasing the NBE’s capital and creating a legal basis for consumer protection.&nbsp;
 The accompanying Banking Business Proclamation addresses the liberalization of foreign investment in banking, corrective measures for troubled banks, and the creation of a regulatory sandbox for innovative financial solutions. The Council of Ministers <a href="https://eastleighvoice.co.ke/africa/51161/ethiopias-council-of-ministers-approves-key-banking-reforms" target="_self" rel="noopener noreferrer nofollow">approved</a> these proclamations, and they will soon be introduced to the House of Representatives.
 These reforms are part of Ethiopia’s Homegrown Economic Reform Agenda. The government’s interest in a CBDC was brought to light in April by <a href="https://www.thereporterethiopia.com/39549/" target="_self" rel="noopener noreferrer nofollow">The Reporter</a>, which is a privately owned Ethiopian newspaper. It mentioned that a study on the matter would begin in June.&nbsp;
 Ethiopia has taken steps toward economic liberalization, like ending the state monopoly on mobile money services and using blockchain-based digital infrastructure for large government payments. Despite the mixed success of crypto adoption in Africa, like the Central African Republic&amp;#39;s unsuccessful attempt to launch Bitcoin as a currency, Ethiopia has licensed numerous data mining firms to take advantage of its cheap electricity for crypto mining.&nbsp;
 Digital currencies are still illegal in Ethiopia, but the country still plans to introduce the Web3 Fuse payment system.
 At least 18 African countries are currently <a href="https://cbdctracker.org/" target="_self" rel="noopener noreferrer nofollow">researching</a> CBDCs. <a href="https://x.com/CoinW_Africa/status/1541304798711975936" target="_self" rel="noopener noreferrer nofollow">Nigeria</a> has experienced mixed results with its eNaira that was launched in 2022. <a href="https://www.bloomberg.com/news/articles/2024-04-29/zimbabwe-central-bank-holds-key-rate-at-20-in-first-meeting-since-zig-debut" target="_self" rel="noopener noreferrer nofollow">Zimbabwe</a> has introduced a government-issued gold-based token as a foundation for its latest currency.
 <h2 id="imf-survey-questions-necessity-of-cbdcs">IMF Survey Questions Necessity of CBDCs</h2>
 A <a href="https://www.imf.org/en/Blogs/Articles/2024/06/18/central-bank-digital-currencies-can-boost-middle-easts-financial-inclusion-payment-efficiency?utm_medium=email&amp;amp;utm_source=govdelivery" target="_self" rel="noopener noreferrer nofollow">survey</a> that was conducted by the International Monetary Fund (IMF) involving 19 central banks from the Middle East and Central Asia (ME&amp;amp;CA) suggests that CBDCs may not be essential to achieve intended policy goals.&nbsp;
 The survey indicated that while CBDCs can boost financial inclusion and reduce the cost of financial services, adopting a CBDC requires careful consideration. It also revealed that addressing underlying constraints and improving existing digital payment systems might be a more practical approach than implementing CBDCs.
 The IMF has been studying the evolution of CBDCs and advising member nations on their integration into monetary systems. A senior IMF official <a href="https://www.coindesk.com/policy/2023/06/19/imf-official-presents-blueprint-for-cross-border-cbdcs/" target="_self" rel="noopener noreferrer nofollow">mentioned</a> that a global CBDC platform could potentially reduce payment costs through capital controls. A number of nations in the ME&amp;amp;CA region, including Saudi Arabia, have explored CBDC usage, with Saudi Arabia’s central bank recently participating in a cross-border CBDC experiment with the Bank for International Settlements (BIS). IMF Managing Director Kristalina Georgieva&nbsp; previously suggested that CBDCs could replace cash in island economies.
 The IMF survey concluded that introducing digital currencies is a complex process that requires a lot of cautious planning by central banks. Policymakers have to assess if a CBDC actually aligns with their country’s objectives and if the anticipated benefits outweigh potential costs and risks to the financial system and central bank operations.&nbsp;
 The survey also warned that since about 83% of bank funding in the region comes from deposits, CBDCs could compete with bank deposits and potentially impact bank profits, lending, and financial stability.
 The 19 central banks that were surveyed are exploring CBDC issuance, and are focusing on how these digital currencies can improve financial inclusion and payment system efficiency. In oil-exporting countries of the Middle East and North Africa, as well as Gulf Cooperation Council countries with relatively developed financial markets, the priority is to enhance the efficiency of domestic and cross-border payments. In contrast, for oil-importing nations in the Middle East and North Africa, the emphasis is more on expanding financial inclusion.
 The survey findings also pointed out that the benefits of CBDCs might be very marginal unless other barriers like low digital and financial literacy, lack of identification, distrust of financial institutions, and low wealth are addressed.
</div>

New Crypto Law Bans Central Bank Digital Currencies in Louisiana

Table of Contents

Coinpaper.com

دیگر آرٹیکلز 25 جون، 2024 پر پبلش کیے گئے ہیں

Report: Coinbase loses second place in global top ranking

MoonBag Meme Coin Aims For The Moon With $2.9 Million Mark, While Bitcoin Cash and Slothana See M...

David Sacks Net Worth 2024: How He Got Rich?

Bitcoin, Ethereum, Dogecoin Bounce Back As Whale Transactions Spike: 'Bitcoin Retrace Was All Abo...

Crypto Market Crash: How Low Can ADA Drop for Discounted Accumulation and Gains?

WIF Loses Its Position Among Top 50 Cryptos With FTM

Join our free newsletter for daily crypto updates!