📑 “The pipeline of wind and solar projects under development in the U.S. has ballooned as renewable energy developers race to qualify for expiring tax incentives, with the production tax credit for wind farms scheduled to expire at the end of 2019 and the investment tax credit for solar plants slated to begin phasing down in 2020.” ―S&P Global [12 pp.]
Latest of Lyman
📑 “Although hydropower is still the main source of renewable energy with the cheapest LCOE, rapidly falling costs have made solar PV the largest market for new investment. In fact, unsubsidized solar PV-generated electricity has now become cost competitive with fossil fuels in a number of locations around the world.” ―KPMG [16 pp.]
📑 “Our national imperative is clear: win the clean energy race. This would ensure that the United States captures a significant and growing share of the multi-trillion dollar global clean energy market and the jobs, energy security and other opportunities that will be created along the way.” ―Dr. David T. Danielson, Assistant Secretary [33 pp.]
Despite the entity-free and borderless nature of cryptocurrencies, regulatory actions as well as news regarding potential regulatory actions can have a strong impact on cryptocurrency markets, at least in terms of valuations and transaction volumes. (Raphael Auer and Stijn Claessens, BIS, September 2018)
The source of the success of public deposit banks was their role in instilling common knowledge in monetary transactions by establishing a platform for standardised settlement of transactions, both for goods and for financial instruments. Common knowledge refers to not only the fact that everyone knows, but also that this knowledge is transparent to all concerned. . . . The importance of common knowledge is especially relevant in monetary economics in the age of distributed ledger technology (DLT) and Bitcoin, as one interpretation of money is as a score-keeping device on the history of past transactions. The analysis of money as a score-keeping device was given emphasis by the paper by Kocherlakota (1998), whose title is “Money is memory.” (Isabel Schnabel and Hyun Song Shin, BIS, February 2018)
Circular by the Philippine Central Bank (Bangko Sentral ng Pilipinas), 5pp.
A presentation by the Philippine Central Bank (Bangko Sentral ng Pilipinas), 19pp.
Cryptocurrencies today do not do a good job at fulfilling the main functions of money. They may be favored by some for ideological, technological, or monetary policy reasons. The blockchain technology they use does have some important advantages in controlling for fraud and maintaining privacy. But they also open up avenues for tax evasion and criminal activity. (Jeffrey Banks, IMF, January 2019)
[T]he fundamental value of a bitcoin is equal to the miners’ equipment and electricity costs relative to their expected block reward and fees. While Bitcoin is a decentralized peer-to-peer network with no central authority, the mechanism for adjusting the level of difficulty encoded in its protocol amounts to inflexible system of supply management. Hence, demand shocks have an exaggerated effect on the price of the bitcoin and each adjustment in the level of difficulty of mining a bitcoin results in social welfare losses. (Andrea Podhorksy, ADB, March 2019)
Cryptocurrencies such as Bitcoin promise to deliver not only a convenient payment means based on digital technology, but also a novel model of trust. Yet delivering on this promise hinges on a set of assumptions: that honest miners control the vast majority of computing power, that users verify the history of all transactions and that the supply of the currency is predetermined by a protocol. Understanding these assumptions is important, for they give rise to two basic questions regarding the usefulness of cryptocurrencies. First, does this cumbersome way of trying to achieve trust come at the expense of efficiency? Second, can trust truly and always be achieved? (Hyun Song Shin, BIS, June 2018)
Achieving trust in money through the consensus of self-interested bookkeepers imposes too many constraints and cuts too many corners for it to replace the monetary system. The technology is only a small part of the issue of the viability of cryptocurrencies. The underlying incentives and the economics are key. Even leaving aside the many important issues to do with illicit activities and consumer protection, cryptocurrencies fall a long way short of being able to sustain a monetary system. . . . The decentralised technology of cryptocurrencies, however sophisticated, and useful for many other purposes, is a poor substitute for the solid institutional backing of money through independent and accountable central banks. (Hyun Song Shin, BIS, June 2018)
In the digital age too, good money is likely to remain a social construct rather than a purely technological one: the efficiency of decentralised exchange via proof-of-work exclusively is much lower than would appear at first sight, and alternative technologies still need to demonstrate that they can function without institutional backing. But claiming that technology alone cannot do the trick is not to say that it is useless. It simply means that the focus could shift away from the issue of whether the technology can replace traditional sovereign money and financial institutions. (Raphael Auer, BIS, January 2019)
Whether or not a central bank should provide a digital alternative to cash is most pressing in countries, such as Sweden, where cash usage is rapidly declining. But all central banks may eventually have to decide whether issuing retail or wholesale CBCCs makes sense in their own context. In making this decision, central banks will have to consider not only consumer preferences for privacy and possible efficiency gains – in terms of payments, clearing and settlement – but also the risks it may entail for the financial system and the wider economy, as well as any implications for monetary policy (Bordo and Levin, 2017). Some of the risks are currently hard to assess. (Morten Linnemann Bech and Rodney Garratt, BIS, September 2017)