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| | [[cbdc:public:cbdc_omg:04_doc:15_common:start| Return to Common Elements]] | <WRAP> | | [[cbdc:public:cbdc_omg:04_doc:15_common:start| Return to Common Elements]] | <WRAP> | ||
| <html><b> | <html><b> | ||
| - | <a href="mailto:[email protected]?Subject=OMG CBDC Response: | + | <a href="mailto:[email protected]?Subject=OMG's CBDC WG Response: |
| 4.6 International Considerations | 4.6 International Considerations | ||
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| Bank for International Settlements (BIS), | Bank for International Settlements (BIS), | ||
| Report no 1, | Report no 1, | ||
| - | __Central Bank Digital Currencies - foundational principles and core feature__, | + | __Central Bank Digital Currencies - foundational principles and core features__, |
| ISBN: 978-92-9259-427-5 (online) | ISBN: 978-92-9259-427-5 (online) | ||
| 2020, | 2020, | ||
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| **Desirement** is a blended word combining the word **Desire** and **Requirement**. **Desirement** is something that is desired, but not absolutely required and is often used to caption the capabilities of a product or system before it has reached the formal requirements phase. | **Desirement** is a blended word combining the word **Desire** and **Requirement**. **Desirement** is something that is desired, but not absolutely required and is often used to caption the capabilities of a product or system before it has reached the formal requirements phase. | ||
| Source: [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:d:desirement | Desirement]] | Source: [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:d:desirement | Desirement]] | ||
| - | )) in a **White Paper** named [[https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf | Money, and Payments: The U.S. Dollar in the Age of Digital Transformation]]. These "Desirements" were captured and summarized in a [[cbdc:public:cbdc_omg:04_doc:12_summary:start| White Paper Analysis]] conducted by the [[https://www.omg.org/ | Object Management Group ]]. Ultimately, these "Desirements" need to be incorporated into a **CBDC Data Strategy** following the guidelines set by the U.S. government for government entities to develop a Federal Data Strategy. | + | )) in a **White Paper** named [[https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf | Money, and Payments: The U.S. Dollar in the Age of Digital Transformation]]. These "Desirements" were captured and summarized in a [[cbdc:public:cbdc_omg:04_doc:12_summary:start| White Paper Analysis]] conducted by the [[https://www.omg.org/ | Object Management Group's ]] CBDC WG. Ultimately, these "Desirements" need to be incorporated into a **CBDC Data Strategy** following the guidelines set by the U.S. government for government entities to develop a Federal Data Strategy. |
| - | The Federal Reserve has suggested a "Desirement" to have the CBDC used internationally and as a mechanism to transfer funds across borders. These "Desirements" need to be added to a Federal Reserve CBDC Data Strategy. For more information, the OMG DIDO-RA provides a discussion on [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.l_regulations:fds | Federal Data Strategy]]. The Federal Reserve and the implementation of the CBDC should formulate their own **Federal Data Strategy**. The Data Strategy should also address matters covered in Section [[cbdc:public:cbdc_omg:04_doc:15_common:45_privacy:start]]. | + | The Federal Reserve has suggested a "Desirement" have the CBDC used internationally and as a mechanism to transfer funds across borders. These "Desirements" need to be added to a Federal Reserve CBDC Data Strategy. For more information, the OMG DIDO-RA provides a discussion on [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.l_regulations:fds | Federal Data Strategy]]. The Federal Reserve and the implementation of the CBDC should formulate their own **Federal Data Strategy**. The Data Strategy should also address matters covered in Section [[cbdc:public:cbdc_omg:04_doc:15_common:45_privacy:start]]. |
| Since the Federal Reserve is striving for a CBDC with international appeal, it also needs to develop a Data Strategy, covering [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.l_regulations:data_residency | Data Governance, Compliance and Regulation]]. Table {{ref>dataLocation}} provides some insight into data governance the CBDC needs as part of a **Data Strategy**. | Since the Federal Reserve is striving for a CBDC with international appeal, it also needs to develop a Data Strategy, covering [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.l_regulations:data_residency | Data Governance, Compliance and Regulation]]. Table {{ref>dataLocation}} provides some insight into data governance the CBDC needs as part of a **Data Strategy**. | ||
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| ===== Governance Issues Associated with Data Storage ===== | ===== Governance Issues Associated with Data Storage ===== | ||
| - | <nspages :cbdc:private:cbdc_omg:04_doc:15_common:50_international -tree -r -exclude -subns -pagesInNs -h1 -textNs=""> | + | <nspages :cbdc:public:cbdc_omg:04_doc:15_common:50_international -tree -r -exclude -subns -pagesInNs -h1 -textNs=""> |
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| [[cbdc:public:cbdc_omg:04_doc:15_common:50_international:start| Return to Top]] | [[cbdc:public:cbdc_omg:04_doc:15_common:50_international:start| Return to Top]] | ||
| - | The following "Desirements" are from the [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:15_summary:start&do=edit | White Paper]] as identified by the [[https://www.omg.org/ | Object Management Group's ]] report called [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:15_summary:start | White Paper Analysis]]: | + | The following "Desirements" are from the [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:15_summary:start&do=edit | White Paper]] as identified by the [[https://www.omg.org/ | Object Management Group's ]] CBDC WG report called [[cbdc:public:cbdc_omg:04_doc:12_summary:start | White Paper Analysis]]: |
| <table> | <table> | ||
| - | <caption>Example of mapping a subset of requirements identified during the White Paper Analysis conducted by the OMG</caption> | + | <caption>Example of mapping a subset of requirements identified during the White Paper Analysis conducted by the OMG's CBDC WG</caption> |
| |< 100% 20% ->| | |< 100% 20% ->| | ||
| ^ Category ^ Desirements ^ | ^ Category ^ Desirements ^ | ||
| Line 102: | Line 102: | ||
| <figure TransactionSpeed> | <figure TransactionSpeed> | ||
| - | {{ :cbdc:private:cbdc_omg:04_doc:15_common:50_international:screen_shot_2022-05-15_at_6.32.42_pm.png?700 |}} | + | {{ :cbdc:public:cbdc_omg:04_doc:15_common:50_international:screen_shot_2022-05-15_at_6.32.42_pm.png?700 |}} |
| <caption>Cryptocurrencies Transactions Speeds compared to Visa and Paypal(( | <caption>Cryptocurrencies Transactions Speeds compared to Visa and Paypal(( | ||
| HowMuch.net, | HowMuch.net, | ||
| Line 141: | Line 141: | ||
| )) | )) | ||
| - | However, even though the U.S. Dollar is the //de facto// world currency, that it is partially because it is perceived as a neutral, unbiased, well-managed, and transparent commodity. If the CBDC were to change the rules to make it less well managed, neutral, unbiased, and transparent there will be serious challenges to the U.S. Dollar. Part of the explanation for Bitcoins' adoption was that transactions were perceived to be beyond the purview of the U.S. government, in specific, but other governments as well. | + | However, even though the U.S. Dollar is the //de facto// world currency, it is partially because it is perceived as a neutral, unbiased, well-managed, and transparent commodity. If the CBDC were to change the rules to make it less well-managed, neutral, unbiased, and transparent there will be serious challenges to the U.S. Dollar. Part of the explanation for Bitcoins' adoption was that transactions were perceived to be beyond the purview of the U.S. government, in specific, but other governments as well. |
| : // Despite trillions of dollars in foreign debt and continuous large deficit spending, the United States still holds global trust and confidence in its ability to pay its obligations. For this reason, the U.S. dollar remains the strongest world currency. It may continue to be the top global currency in the years to come.// | : // Despite trillions of dollars in foreign debt and continuous large deficit spending, the United States still holds global trust and confidence in its ability to pay its obligations. For this reason, the U.S. dollar remains the strongest world currency. It may continue to be the top global currency in the years to come.// | ||
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| </WRAP> | | </WRAP> | | ||
| ^ P0004 ^ Protect consumer privacy |<WRAP> | ^ P0004 ^ Protect consumer privacy |<WRAP> | ||
| - | Internationally, a major method of protecting consumer privacy is referred to as [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:50_international:20_local | Data Localization]]. This section includes examples from Russia, China, India, European Union, and Brazil. | + | Internationally, a major method of protecting consumer privacy is referred to as [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:04_doc:15_common:50_international:20_local | Data Localization]]. This section includes examples from Russia, China, India, European Union, and Brazil. |
| Data Localization policies classification (( | Data Localization policies classification (( | ||
| Line 235: | Line 235: | ||
| ** Human Trafficking:** [[https://www.intelligence.senate.gov/laws/intelligence-reform-and-terrorism-prevention-act-2004 | Intelligence Reform and Terrorism Prevention Act of 2004]] The **Intelligence Reform and Terrorism Prevention Act, section 7202** established the Human Smuggling and Trafficking Center to achieve greater integration and overall effectiveness in the U.S. government's enforcement and other response efforts, and to work with foreign governments to address the separate but related issues of alien smuggling, trafficking in persons, and criminal support of clandestine terrorist travel. | ** Human Trafficking:** [[https://www.intelligence.senate.gov/laws/intelligence-reform-and-terrorism-prevention-act-2004 | Intelligence Reform and Terrorism Prevention Act of 2004]] The **Intelligence Reform and Terrorism Prevention Act, section 7202** established the Human Smuggling and Trafficking Center to achieve greater integration and overall effectiveness in the U.S. government's enforcement and other response efforts, and to work with foreign governments to address the separate but related issues of alien smuggling, trafficking in persons, and criminal support of clandestine terrorist travel. | ||
| - | ** Drug Trafficking:** [[https://www.law.cornell.edu/uscode/text/18/1952 | 18 U.S. Code § 1952 - Interstate and foreign travel or transportation in aid of racketeering enterprises ]] Five year maximum for traveling or using the mail or instruments of interstate commerce (telephone/**internet**) with intent to facilitate drug trafficking. | + | ** Drug Trafficking:** [[https://www.law.cornell.edu/uscode/text/18/1952 | 18 U.S. Code § 1952 - Interstate and foreign travel or transportation in aid of racketeering enterprises ]] Five years maximum for traveling or using the mail or instruments of interstate commerce (telephone/**internet**) with intent to facilitate drug trafficking. |
| </WRAP> | </WRAP> | ||
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| : 1. Deposit of illicit funds into the financial system | : 1. Deposit of illicit funds into the financial system | ||
| : 2. Transactions designed to conceal the illicit origin of the funds, known as “layering” | : 2. Transactions designed to conceal the illicit origin of the funds, known as “layering” | ||
| - | : 3. Use of laundered funds to acquire real estate, financial instruments or commercial investments | + | : 3. Use of laundered funds to acquire real estate, financial instruments, or commercial investments |
| U.S. Federal law requires a person to report cash transactions of more than \$10,000 by filing IRS Form 8300 PDF, Report of Cash Payments Over \$10,000 received in a Trade or Business. (( | U.S. Federal law requires a person to report cash transactions of more than \$10,000 by filing IRS Form 8300 PDF, Report of Cash Payments Over \$10,000 received in a Trade or Business. (( | ||
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| </WRAP> | | </WRAP> | | ||
| ^ P0024 ^ CBDC would need to comply with the U.S. robust rules |<WRAP> | ^ P0024 ^ CBDC would need to comply with the U.S. robust rules |<WRAP> | ||
| - | Most of the international agrements have to do with detection and prevention of [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:start| National Security]] which is a broad, extensive topic that requires an understanding of the U.S. Laws and Regulations, as well as, international treaties and agreements. Within the context of the CBDC, criminal activity can be one or more of the following: | + | Most of the international agreements have to do with the detection and prevention of [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:start| National Security]] which is a broad, extensive topic that requires an understanding of the U.S. Laws and Regulations, as well as, international treaties and agreements. Within the context of the CBDC, criminal activity can be one or more of the following: |
| : 1. [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:10_human_traf| Human Trafficking]] | : 1. [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:10_human_traf| Human Trafficking]] | ||
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| : 4. Legal Frameworks:** There are already legal frameworks in place to handle: | : 4. Legal Frameworks:** There are already legal frameworks in place to handle: | ||
| - | : a. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:45_privacy:start | National Privacy Considerations]] | + | : a. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:04_doc:15_common:45_privacy:start | National Privacy Considerations]] |
| - | : b. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:start | National Security Considerations]] | + | : b. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:start | National Security Considerations]] |
| - | Although these frameworks were developed without a CBDC, they already //"comply with the United States are subject to robust rules"// and are continuously being reviewed, updated, and amended based on new information obtained from the field. As part of this process, these frameworks need to add to the existing frameworks rather than creating new frameworks. | + | Although these frameworks were developed without a CBDC, they already //"comply with the United States are subject to robust rules"// and are continuously being reviewed, updated, and amended based on new information obtained from the field. As part of this process, these frameworks need to add to the existing frameworks rather than create new frameworks. |
| : 5. Preventing Illicit Transactions:** There are two areas within the existing legal frameworks covering Illicit transactions: | : 5. Preventing Illicit Transactions:** There are two areas within the existing legal frameworks covering Illicit transactions: | ||
| - | : a. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:40_launder | Money Laundering]] | + | : a. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:40_launder | Money Laundering]] |
| - | : b. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:30_corrupt | Corruption ]] | + | : b. [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:30_corrupt | Corruption ]] |
| Although these frameworks were developed without a CBDC, they already //"comply with the United States are subject to robust rules"// and are continuously being reviewed, updated, and amended based on new information obtained from the field. As part of this process, these frameworks need to add to the existing frameworks rather than create new frameworks. | Although these frameworks were developed without a CBDC, they already //"comply with the United States are subject to robust rules"// and are continuously being reviewed, updated, and amended based on new information obtained from the field. As part of this process, these frameworks need to add to the existing frameworks rather than create new frameworks. | ||
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| </WRAP> | | </WRAP> | | ||
| ^ D0003 ^ **Design** should allow a limit on the amount of CBDC an end user could accumulate over short periods |<WRAP> | ^ D0003 ^ **Design** should allow a limit on the amount of CBDC an end user could accumulate over short periods |<WRAP> | ||
| - | See: [[cbdc:private:cbdc_omg:04_doc:20_comments:dsn:q16:start]] | + | See: [[cbdc:public:cbdc_omg:04_doc:20_comments:dsn:q16:start]] |
| The U.S. CBDC would need to work within the confines of the individual country's laws and regulations on: | The U.S. CBDC would need to work within the confines of the individual country's laws and regulations on: | ||
| : 1. [[cbdc:public:cbdc_omg:04_doc:15_common:50_international:10_residency| Data Residency ]] | : 1. [[cbdc:public:cbdc_omg:04_doc:15_common:50_international:10_residency| Data Residency ]] | ||
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| ^ D0009 ^ **Design** should allow for significant foreign demand for CBDC, furthering complicate monetary policy implementation |<WRAP> | ^ D0009 ^ **Design** should allow for significant foreign demand for CBDC, furthering complicate monetary policy implementation |<WRAP> | ||
| This depends on the [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:start| Currency Model]] used for the CBDC. For | This depends on the [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:start| Currency Model]] used for the CBDC. For | ||
| - | : 1. [[cbdc:private:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash Model, it would follow all the same rules as the current physical Dollar models work today.]] | + | : 1. [[cbdc:public:cbdc_omg:04_doc:15_common:08_currency_models:10_cash:start | Digital Cash Model, it would follow all the same rules as the current physical Dollar models work today.]] |
| </WRAP> | | </WRAP> | | ||
| ^ D0013 ^ **Design** should facilitate compliance with a robust set of rules already intended to combat <WRAP> | ^ D0013 ^ **Design** should facilitate compliance with a robust set of rules already intended to combat <WRAP> | ||
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| ^ D0017 ^ **Design** should include digital payments in areas suffering from large disruption, such as natural disasters | <WRAP> | ^ D0017 ^ **Design** should include digital payments in areas suffering from large disruption, such as natural disasters | <WRAP> | ||
| See: **''D0015''** | See: **''D0015''** | ||
| - | See: [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:private:cbdc_omg:04_doc:20_comments:dsn:q18]], List of Internet outages provided by Wikipedia. | + | See: [[https://www.omgwiki.org/CBDC/doku.php?id=cbdc:public:cbdc_omg:04_doc:20_comments:dsn:q18]], List of Internet outages provided by Wikipedia. |
| </WRAP>| | </WRAP>| | ||
| | **''B''** = [[cbdc:public:cbdc_omg:04_doc:12_summary:start#benefits| Benefit Considerations ]] ||| | | **''B''** = [[cbdc:public:cbdc_omg:04_doc:12_summary:start#benefits| Benefit Considerations ]] ||| | ||
cbdc/public/cbdc_omg/04_doc/15_common/50_international/start.1652743861.txt.gz · Last modified: 2022/05/16 19:31 by terrance
