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The Federal Reserve is open to creating a digital dollar

The Federal Reserve finally released a much-delayed paper yesterday opining on the pros and cons of developing its own central bank digital currency (CBDC), but without coming to any firm conclusions.

Why it matters: Around the world, there are now 23 CBDCs either in pilot or formally launched. They have morphed from a theoretical concept into real-world digital cash, changing the way governments and millions of people use money — but not in the U.S.


Between the lines: Although the Fed’s paper doesn’t advocate one way or another on whether the U.S. should begin development, the language used in the paper indicates that it’s very open to the idea, Josh Lipsky, director at the Atlantic Council’s GeoEconomics Center, tells Axios.

  • “Part of the reason that they’re [open to it] is they see countries around the world exploring CBDCs,” says Jonathan McCollum, chair of federal government relations for Davidoff Hutcher & Citron. “I think they understand that the U.S. has an important role to play in creating some sort of [international] standards.”

The big picture: A digital dollar would be legal tender pegged to the value of the physical dollar and backed by the Fed.

  • Central banks are considering CBDCs in order to retain control over monetary policy in the face of growing cryptocurrency adoption, and because they could enable more efficient government payments and financial inclusion.
  • It’s also a matter of international influence: Fed vice chair nominee Lael Brainard, for one, said last year that she couldn’t “wrap [her] head around” the U.S. not having one, given the dollar’s current dominance in international payments — and China’s head start on developing its own digital yuan.

China is the largest economy with a pilot, and as of November about 140 million people had opened digital wallets, China’s central bank said.

  • For the upcoming Beijing Winter Olympics, Chinese authorities are encouraging athletes and companies to use the digital yuan, in an effort to showcase it internationally, Bloomberg reported.

How it works: Globally, central banks are so far using existing financial networks — like banks, fintechs, and even telecom companies — to distribute CBDCs to citizens, Jonathan Dharmapalan, CEO of eCurrency, tells Axios.

  • That’s notable, because “if you go back a few years, there were these ideas out there that people were going to have Fed apps on their phone. But that’s not happening,” adds Lipsky.

Still, consumer adoption has been slow — in part since existing electronic payments systems are pretty convenient, according to reports on China’s efforts. Same in Nigeria, the largest economy to formally launch a CBDC.

  • In Nigeria, consumers go through a clunky process to set up the digital wallet app and connect it to their bank account, says Naomi Aladekoba, who’s based in Nigeria for the Atlantic Council. But once that’s done, using the wallet is simple and efficient, with instantaneous transfers — not unlike using Venmo stateside, she says.
  • Nigeria plans to roll out a program in which users won’t need smartphones — only a national identification number — to use the digital currency. With a large cash economy, this could help alleviate the crippling challenge that the frequent lack of correct change poses for vendors and consumers, Aladekoba says.

What’s next: In the U.S., there’s a 120-day comment period on the new paper, after which the Fed may issue a follow-up.

  • But the ball is effectively in Congress’ court: the Fed said unequivocally that it wouldn’t move forward on any CBDC development without legislative action granting it authority.

Source: https://www.axios.com/the-federal-reserve-is-open-to-creating-a-digital-dollar-5f332697-b3f5-4e59-b542-ab1f5ca79d3b.html
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The Article Was Written/Published By: Kate Marino

Dogecoin Surges 18% After Elon Musk Says the Crypto Will Be Accepted at Tesla

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Tesla will soon accept dogecoin as payment for merchandise, according to a tweet from Elon Musk early Tuesday. The announcement caused dogecoin’s price to surge over 18% at a time when most cryptocurrencies have been plunging.

Read more…

Source: https://gizmodo.com/dogecoin-surges-18-after-elon-musk-says-the-crypto-wil-1848211210
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The Article Was Written/Published By: Matt Novak

Energy efficient cryptocurrency still emits as much carbon as 2-3 coal plants

I own some cryptocurrency—a decision which began mostly out of necessity, until I saw how much it ballooned, and then I decided that I’ll keep this around and see what happens. But as cool as it’s been to see the value of my minuscule investment blossom and boom, I’ve also been well aware that Bitcoin transaction processing requires about 91 terawatts of energy each year. — Read the rest

Source: https://boingboing.net/2021/12/06/energy-efficient-cryptocurrency-still-emits-as-much-carbon-as-2-3-coal-plants.html?utm_source=rss&utm_medium=rss&utm_campaign=energy-efficient-cryptocurrency-still-emits-as-much-carbon-as-2-3-coal-plants
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The Article Was Written/Published By: Thom Dunn

5 Psychological Tricks in Free-To-Play Games (and How to Avoid Them)

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Free-To-Play (F2P) games, make billions of dollars annually, so they clearly aren’t as “free” as they sound. That’s partly because F2P games use psychological tricks to make it more likely that players will reach for their credit cards.

Read This Article on How-To Geek ›

Source: https://www.howtogeek.com/765113/5-psychological-tricks-in-free-to-play-games-and-how-to-avoid-them/
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The Article Was Written/Published By: Sydney Butler

What Is a Crypto Wallet?

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If you want to own cryptocurrency—either because you’re looking to invest or because you want to spend money online—you’re going to need a crypto wallet. Using one will let you keep your crypto safe, while also allowing you to make transactions.

Read This Article on How-To Geek ›

Source: https://www.howtogeek.com/771394/what-is-a-crypto-wallet/
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The Article Was Written/Published By: Fergus O’Sullivan

Elon Musk warns Starship engines could bankrupt SpaceX

SpaceX faces a “genuine risk of bankruptcy” if Starship can’t fly once every two weeks in 2022, Elon Musk has warned employees, blaming rocket engine production challenges and management crisis for the surprise ultimatum. Starship is set not only to take NASA’s Artemis mission to the Moon later this decade and, beyond that, missions to Mars, in addition to being … Continue reading

Source: https://www.slashgear.com/elon-musk-warns-starship-engines-could-bankrupt-spacex-30700809/
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The Article Was Written/Published By: Chris Davies

Robinhood Hack Compromises Millions of Customer Email Addresses and Names

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Someone recently hacked and attempted to extort Robinhood, the popular investment and trading platform, gaining access to millions of customers’ email addresses and full names in the process.

Read more…

Source: https://gizmodo.com/robinhood-hack-compromises-millions-of-customer-email-a-1848019174
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The Article Was Written/Published By: Lucas Ropek

In this simulation, spending Bill Gates’ 100 billion is exhausting

If you had $100 billion that you had to spend, how would you even do it? A simulation by Neal Agarwal lets you squander the wealth of Bill Gates on things like movies, monster trucks, and the Mona Lisa. Try it out here, or spend Elon Musk’s fortune here. — Read the rest

Source: https://boingboing.net/2021/10/18/in-this-simulation-spending-bill-gates-100-billion-is-exhausting.html?utm_source=rss&utm_medium=rss&utm_campaign=in-this-simulation-spending-bill-gates-100-billion-is-exhausting
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The Article Was Written/Published By: Annie Rauwerda

PayPal launches its ‘super app’ combining payments, savings, bill pay, crypto, shopping and more

PayPal has been talking about its “super app” plans for some time, having recently told investors its upcoming digital wallet and payments app had been given a go for launch. Today, the first version of that app is officially being introduced, offering a combination of financial tools including direct deposit, bill pay, a digital wallet, peer-to-peer payments, shopping tools, crypto capabilities and more. The company is also announcing its partnership with Synchrony Bank for its new high-yield savings account, PayPal Savings.

These changes shift PayPal from being largely a payments utility that’s tacked on other offerings here and there, to being a more fully fleshed out finance app. Though PayPal itself doesn’t aim to be a “bank,” the new app offers a range of competitive features for those considering shifting their finances to neobanks, like Chime or Varo, as it will now also include support for paycheck Direct Deposits through PayPal’s bank partners, bill pay and more.

By enabling direct deposit, PayPal users can get paid up to two days earlier, which is one of the bigger draws among those considering digital banking apps over traditional banks.

In addition to shifting their paychecks to Payal, customers’ PayPal funds can then be used for things that are a part of daily life, like paying their bills, saving or shopping, for example.

The enhanced bill pay feature lets customers track, view and pay bills from thousands of companies, including utilities, TV and internet, insurance, credit cards, phone and more, PayPal says. When bill pay first arrived earlier this year, it offered access to (single-digit) thousands of billers. Now, it will support around 17,000 billers. Customers can also discover billers through an improved, intelligent search feature, set reminders to be notified of upcoming bills and schedule automatic payments for bills they have to pay on a regular basis. The bills don’t have to only be paid from funds currently in the PayPal account, but can be paid through any eligible funding source that’s already linked to their PayPal account.

Via a Synchrony Bank partnership, PayPal Savings will offer a high-yield savings account with a 0.40% Annual Percentage Yield (APY), which is more than six times the national average of 0.06%, the company says. However, that’s lower than top rivals in the digital banking market offer, like Chime (0.50%), Varo (starts at 0.20%, but users can qualify to get 3.00% APY), Marcus (0.50%), Ally (0.50%), ONE (1.00% or 3.00% on Auto-Save transactions), and others. However, the rate may appeal to those who are switching from a traditional bank, where rates tend to be lower.

PayPal believes its high-yield offering will be able to compete not based on the APY alone, but on the strength of its combined offerings.

Image Credits: PayPal

“We know that about half of customers in the United States don’t even have a savings account, much less one with a very competitive rate,” notes PayPal SVP of Consumer, Julian King. “So all in all, we think that by bringing together the full set of solutions on the platform, it’s a really competitive offering for an individual.”

The app has also been reorganized to accommodate the new features and those yet to come.

It now features a personalized dashboard offering an overview of the customer’s account. The wallet tab lets users manage Direct Deposits and connect funding sources like bank accounts and debit and credit cards alongside the ability to enroll in PayPal’s own debit, credit and cash cards. And a finance tab provides access to the high-yield savings and the previously available crypto capabilities, which allows users to buy, hold and sell Bitcoin, Ethereum, Bitcoin Cash and Litecoin.

The payments tab, meanwhile, will hold much of PayPal’s traditional feature set, including peer-to-peer payments, international remittances, charitable and nonprofit giving, plus now bill pay and a two-way messaging feature that allows users to request payments or say thank you after receiving a payment — whether that’s between friends and family or between merchants and customers. This addition could bring PayPal more in line with PayPal-owned Venmo, which already offers the ability to add notes to payments and make comments.

Messaging also ties into PayPal’s new Shopping hub, which is where the company is finally putting to good use its 2019 $4 billion Honey acquisition. Honey’s core features are now becoming a part of the PayPal mobile experience, including personalized deals and exclusive rewards.

Image Credits: PayPal

PayPal users will be able to browse the discounts and offers inside the app, then shop and transact through the in-app browser. The deals can be saved to the wallet for future use, so they can be applied if shopping later in the app or online. Customers will also be able to join a loyalty program, where they can earn cashback and PayPal shopping credit on their purchases. The company says these personalized deals will improve over time.

“We’ll use AI and [machine learning] capabilities to understand what kind of shopping deals are most interesting to customers and continue to develop that over time. They’ll just get smarter and smarter as the product gets more usage,” notes King. This will include using the data about the deals a customer likes, then bringing similar deals to them in the future.

Also new in the updated mobile app is the addition of PayPal’s crowdsourced fundraising platform, the Generosity Network, first launched late last year. The network is PayPal’s answer to GoFundMe or Facebook Fundraisers, by offering tools that allow individuals to raise money for themselves, others in need, or organizations like small businesses or charities. The network is also now expanding to international markets with Germany and the U.K. to start, with more countries to come.

As PayPal has said, the new app is laying the groundwork for other new products in the quarters to come. The biggest initiative on its roadmap is a plan to enter the investment space, to rival other mobile investing apps, like Robinhood. When this arrives, it will support the ability to buy stocks, fractional stocks and ETFs, PayPal says.

It will also later add support for paying with QR codes, like Venmo, and tools for using PayPal to save while in stores.

The updated app is rolling out starting today in the U.S. as a staggered release that will complete in the weeks ahead. However, PayPal Savings won’t be available immediately — it will arrive in the U.S. in the “coming months,” as will some of the shopping and rewards tools.

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Source: https://techcrunch.com/2021/09/21/paypal-launches-its-super-app-combining-payments-savings-bill-pay-crypto-shopping-and-more/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29
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The Article Was Written/Published By: Sarah Perez

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