Economics Advisory

Ousmène Jacques Mandeng

Financial innovations and international monetary affairs



Tokyo
ADBI RBWC Tokyo 2012
Washington
SAIS Washington 2014
Seoul
KDI Seoul 2015
Hamburg
HWWI Hamburg 2017
Madrid
Bank of Spain RBWC September 2019

Economics Advisory offers advisory, speaking, seminars and analysis on international monetary affairs and emerging markets capital markets with a focus on digital currencies and blockchain-based monetary and financial applications, the IMF, history of the international monetary system and emerging markets currencies and capital markets developments.


Recent commentary

CBDC—New money for new purpose

10 December 2023

Central bank money remains at the heart of national payment systems. Today, central banks offer two formats of money, banknotes to the general public and reserves or scriptural money to banks. The former serves the cash infrastructure and the latter the large value payment system. Central bank money is often the preferred payment instrument. As alternative financial market infrastructures are emerging, central banks will need to consider offering alternatives formats to ensure equitable access to central bank money for eligible entities and that the financial system can benefit from the best possible payment instruments. This is why consideration is given to central bank digital currencies (CBDC). [...]

CBDC—What for and the Maria Theresa Thaler

Reinventing Bretton Woods Committee Conference, Derisiking the transition to a new globalisation, Vienna, 6 December 2023

[...] Professor Feldkircher asked me to answer a number of questions around central bank digital currencies (CBDC) that I will try to address in my short prepared remarks. I have now for about five years been researching CBDC and working on different CBDC projects including among others Jura with the central banks of France and Switzerland, mBridge with the BIS Innovation Hub. Today, most central banks are working on CBDC compared with just a handful when I started. CBDC has triggered a new debate about money, what it does and what it takes to make it successful. That may already have been its biggest contribution. [...]

SVB and stablecoins--Time to tighten regulations

Bretton Woods Committee, blog post, 17 March 2023

The collapse of Silicon Valley Bank and subsequent jitters at USDC shall serve as a reminder that stablecoin regulation remains far too lax. Circle, the U.S. company and issuer of USDC, a stablecoin denominated in U.S. dollar, is mostly regulated in the U.S. as a money transmitter. This is grossly insufficient for a company with US$40 billion in stablecoins outstanding. Regulation and supervision need to impose sufficient obligations for stablecoin issuers to adopt best industry practices. [...]

CBDCs are set to transform how payments are made

Financial Times, 26 January 2023

In the late 19th century, there was controversy in England over what some saw as a usurper to the established monetary order — paper banknotes. At the time, the use of paper currency to complement gold and silver coins was seen by opponents as unduly disruptive and prone to causing instability. [...] A similar debate is under way on the development of central bank digital currencies, which is gathering pace around the world. CBDCs are set to transform how payments can be conducted.[...]

Stable coins' messy communications

11 January 2023

Binance’s announcement of 10 January that its stable coin is actually backed 1:1 is indicative of the difficulties stable coins continue to expose in articulating what they are actually doing. The commitment of a stable coin is similar to a fixed exchange rate, that is, Binance commits to exchange 1 BUSD for 1 USD on demand. Central banks hold foreign exchange reserves to signal that they can uphold convertibility [until they cannot]. They do not explain how they do it nor is there any indication that the commitment spans all national currency denominated liabilities. Stable coin issuers should look at and learn more from central banks.

Currency concentration and cross-border payments

Reinventing Bretton Woods Committee, Dialogue of Continents, 28-29 November 2022, Paris, prepared remarks

[...] Cross-border payments have for some time been criticised for being slow, opaque and unduly costly. This has been attributed to many factors including the role of correspondent banks, time differences, onerous compliance, long payment chains and limited access. One aspect that has rarely been analysed as a possible cause for persistent cross-border payments deficiencies is the high concentration of currencies used in cross-border payments.[...]

CBDC design—What is needed for success?

Arab Monetary Fund, Eigth Meeting of the Arab Regional Fintech Working Group, 23-24 November 2022 (on-line)

[...] In my brief remarks I shall focus on international payments and the possible role of central bank digital currencies (CBDC). The Arab Monetary Fund has of course been a pioneer in seeking new approaches to international payments in particular with the Buna platform. CBDC offers an alternative approach. It aims to introduce new functionalities to enable new settlement processes. The success of CBDC will rest in large part on its ability to produce a more efficient and diversified payment system by mediums, actors and geographic distribution of central bank money. It is therefore the design of CBDC that will determine its success. [...]

Next generation of CBDC projects—Liquidity in an instant and atomic financial market environment

Bank Indonesia and De Nederlandsche Bank conference Payment system in the digital era, 26-27 October 2022, G20 side event, Yogyakarta, prepared abbreviated remarks

[...] Yogyakarta has of course a special place in the monetary history of Indonesia. In was here, at the time the Indonesian capital, in October 1946, when Vice President of the Republic of Indonesia Mohammad Hatta announced on radio the issuance of the first Indonesian currency, the Oeang Republik Indonesia (ORI) that was also printed first in Yogyakarta to replace the colonial currency by De Javasche Bank as an important expression of Indonesian sovereignty. Central bank digital currencies (CBDC) may not quite have the same historical significance as the introduction of a new currency, but they could define the continued utility of a currency. In my remarks I shall focus on the next generation of CBDC projects with a view on how a CBDC could transform liquidity in financial transactions and hereby support the very foundations of market stability and our understanding of liquidity itself. [ ...]

Cryptocurrencies: What added value?

Euro50 Group Conference, 16 October, Washington, D.C., prepared remarks

[...] The subject of this session, Cryptocurrencies: What added value? seems to have an ever so tiny hint of cynicism which however, I'm glad to report, I shall completely ignore. Cryptocurrencies have changed the debate about money and probably represent the most important source of financial innovation of the past 10 years. They have inspired many financial applications and given rise to consideration by central banks to introduce central bank digital currencies (CBDC). I have been working on a number of leading CBDC projects with Accenture over the past few years including among other E-krona, Jura, Khokha 2, mBridge. Money or better said currencies have rarely been subject to more interesting and transformative developments.[ ...]

Cross-border payments: A global public good?

Reinventing Bretton Woods Committee Conference, 15 October 2022, Washington, D.C., prepared remarks

[...] Persistent deficiencies in international payments and rising geopolitical tensions that will test the ability of existing systems to adapt are expected to increase strains to conduct international payments. This could reduce prospects for an orderly economic recovery and undermine opportunities for international trade and investments. International payments need to become more agile, be more resilient and respond faster to changing economic relationships. They also of course need to become much more efficient. It is still faster to get on a plane from London to Singapore to deliver a suitcase of banknotes than making an international wire transfer between the two cities. [...]

Blockchain-based financial applications could help increase the competitiveness of the City

LSE Business Review, 4 October 2022

[...]The new chancellor wants the City of London to become the world’s leading financial centre. He also seems in need of some good ideas. While regulation and overhaul thereof will play a role, the Treasury and the Bank of England could also proactively support such ambition. Most significant recent financial advances emerged with the adoption of blockchain. Financial centres will likely struggle to keep up without being close to key financial innovations. The government announced for some time that building an environment conducive to blockchain-based financial applications is a goal. So far progress has been lacklustre. A major initiative would be to bring forward the project of issuing government debt and the pound on blockchain. It would signal forcefully the government’s intent to support the future and competitiveness of the City. [...]

CBDC in international large value payments

FDF Lounge Accenture, presentation and panel discussion, 21 September 2022, Kronberg (Taunus), prepared remarks

[...] I will try to go one step deeper and outline objectives and content of several CBDC projects with a focus on international wholesale payments. Accenture has been involved in a number of leading CBDC projects including projects e-krona with the central bank of Sweden, Khokha 2 with the central bank of South Africa, project Jura with the central banks of France and Switzerland and the BIS Innovation Hub. E-krona is a retail CBDC project. Khokha 2 is a domestic wholesale CBDC project and Jura is a wholesale CBDC covering international payments and financial instrument settlement. Earlier project Jasper-Ubin with the central banks of Canada and Singapore had a similar objective. I shall focus on the latter and also make reference to project mBridge, an international payments wholesale CBDC project by the BIS Innovation Hub with the central banks of China, Hong Kong, Thailand and the UAE.

New financial challenges and central bank digital currencies

UBS Central Bank Reserve Management Seminar, 20-24 June 2022, Wolfsberg

[...] In my presentation, I will provide an overview of central bank digital currency (CBDC) projects against recent financial market challenges to highlight possible drivers of CBDC adoption. To start, I will cover some high level elements on blockchain and argue that recent geopolitical tensions may make introduction of blockchain-based capabilities even more urgent.

Why do we need central bank digital currencies?

22 June 2022

The debate about central bank digital currencies (CBDC) remains difficult. In part this seems due to resistance from the banking system, politicians and central bankers themselves amid a lack of conviction about the case for CBDC. CBDC is often viewed as a substitute of existing payment arrangements. Yet, CBDC matters because it aims to expand functionality of central bank money to serve across a wider range of use cases, signal support for financial innovation and act as catalyst for a more diversified and resilient payments infrastructure. It is also not only about central bank money innovation but the strengthening of the financial system at large. [...]

Stable coins and the cost of high grade money

22 June 2022

Stable coins are being increasingly integrated into the financial mainstream. The U.K. Treasury recently launched an open consultation reaffirming that stable coins are basically similar to other contractual monetary arrangements. Stable coins if done right could become high-grade monies of choice in particular where central bank money is not readily available or too expensive. Different stable coin denominations could also offer new possibilities to conduct international payments. There are already some solutions, but they maintain too close a dependence on existing systems. As central bank money in the U.K. alone is estimated to cost about GBP12 billion to hold, one third of the U.K. largest high street banks' annual profits, the quest, made more urgent by rising rates, for finding alternative high-grade monies is on. [...]


More commentary


Services

Advisory

Strategic advisory work on monetary innovation, central bank digital currencies (CBDC), private digital currencies, and other blockchain-based financial and monetary applications with a focus on public policies and the financial public sector.

Seminars

Organisation of seminars on international monetary affairs and monetary history including on CBDC, crypto-currencies, the International Monetary Fund. Seminars can be arranged in various formats including general public, working dinners, classes, lectures, interviews.

Speaking

Event and keynote addresses and panel discussions on digital currencies and international monetary themes.





Publications

Two key publications by the Reinventing Bretton Woods Committeeon international monetary affairs are now available on Amazon:





About

Economics Advisory Ltd. is a London-based private limited company registered in England and Wales.



Ousmène Jacques Mandeng, Director, Economics Advisory Ltd, has worked more than 20 years in the financial sector and international organisations on international investment and economic policy analyses and now focuses on the linkages between financial innovation and monetary and payments innovations. He is a Senior Advisor with Accenture in its Blockchain and Multiparty Systems Practice working globally on digital currency solutions.

Ousmène was a Managing Director at Prudential Financial and UBS Investment Bank leading coverage of official financial institutions globally. He worked at the International Monetary Fund, last as Deputy Division Chief coordinating work on IMF lending policies and use of IMF resources and on Latin America including as a Resident Representative. He has commented periodically in the financial press and presented in leading international forums on the international monetary system and emerging markets capital markets developments.

He is a Visiting Fellow at the School of Public Policy at the London School of Economics and Political Science, a Fellow of the Reinvention Bretton Woods Committee and a Member of the Bretton Woods Committee and of Robert Triffin International. He is fluent in German, English, French and Spanish. He holds an MPhil in economics from the University of Cambridge and a PhD in economic history from the LSE.



All views expressed in this blog are those of Economics Advisory and not necessarily those of Accenture or other clients.



Contact

ousmene@economicsadvisory.com



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