Fiats of the Caribbean – POLITICO

With the help of Derek Robertson

The US may not see a “digital dollar” anytime soon – last week the new vice chairman of the Fed Lael Brainard testified to the House Financial Services Committee that if Congress did instruct the Fed to create a digital dollar, it could take five years to implement the security features required for its deployment.

But Americans eager to see the possible future of the currency need not look beyond their own backyard.

In the Caribbean, central banks are moving more quickly. How overwhelming majority Central banks around the world are considering or starting to implement central bank digital currencies that integrate technical upgrades such as blockchains into existing national currency systems – the region’s central banks are winning the race for early adoption.

Why the Caribbean? Small countries can sometimes move more nimbly than large ones, and digital currencies give developing countries a chance to “beat” the rich by skipping intermediate technologies and adopting advanced ones.

The region’s early forays into the future of fiat currency give the rest of the world an opportunity to watch and learn.

In October 2020, the Bahamas became the first country in the world to issue a CBDC, the sand dollar, nationwide. Under the scheme, the country’s central bank issues sand dollars in the form of digital tokens recorded on a blockchain, which citizens can spend through a mobile phone app or with a physical card.

So far, absorption has been minimal, according to new report from the International Monetary Fund. it found that the sand dollar accounted for less than one-tenth of one percent of the Bahamian dollars in circulation. The report recommends that the country step up its education efforts and strengthen its cybersecurity safeguards.

The experience of the Bahamas has been more successful than that of the eastern Caribbean, where several island nations, including Grenada and Dominica, participate in a regional monetary union. Last March, the Eastern Caribbean Central Bank rolled out its blockchain-based CBDC, DCash, for public use across several island nations that participate in its regional monetary union. But in January, a technical glitch related to an expired security certificate disabled DCash and it didn’t work for several weeks.

Next in the gate is Jamaica, which began rolling out its CBDC Jam-Dex (official slogan: “No money, no problem”) earlier this year with plans to make it publicly available. this summer. By far the biggest controversial points seem to be complaints about its potentially confusing name (in crypto parlance, “Dex” refers to a decentralized currency exchange) and its logo. It may seem trivial, but at a time when millions of people around the world are abandoning their national currencies in favor of cryptocurrencies and dollar-pegged stablecoins, branding can make or break CBDCs in some corners of the globe.

Projects in the region are of particular importance to the potential of digital currencies to reach the unbanked population, experts say. Carmel Cadetformer IBM executive who founded EmTech, a company that supports CBDC initiatives.

Much of EmTech’s focus has been on the Caribbean and West Africa, another region that is rapidly adopting the technology, with a high proportion of unbanked citizens. Nigeria – world leader in cryptocurrency adoption, according to a 2020 survey that showed a third of adults have used it — launched eNaira in October, and Ghana is piloting eCedi.

“So far, affordability has been an important factor for these markets,” said Cadet, who said West African officials are looking into Caribbean projects.

There is one big difference between these early pilot programs and what the emergence of digital currency in many major Western economies might look like. In the Caribbean and West Africa, the launch of digital currencies has targeted consumers who can use them to make payments through apps on their smartphones.

However, in Europe, according to Kadet, the development of CBDCs was more focused on mass use, that is, transactions between banks. (It’s not yet clear what form the digital dollar could take, but there are a few signs, including a section on financial inclusion in a recent Fed report about the future of the dollar, which is seriously considered the retail component)

If this all sounds like a lot to keep track of, CBDCTracker.org as well as Atlantic Council both offer global insights into the digital fiat currency race.

And if your job is related to central bank policy, maybe Now is the time to book a Caribbean cruise.

Nanny’s State, Meet the Proctor’s State: Using AI Software to Detect Cheating in Exams Again under public control, due to its unintended, hard to confirm, and sometimes disastrous results. I called Oren Etzioni, CEO of the Allen Institute for AI, and asked him about how facial recognition is used, misused and what can be done to improve it. Our conversation, slightly edited for clarity, is as follows:

What are the developers of AI-based fraud detection software doing to prevent its misuse?

It has been documented over and over again that they [developers] in the past did not take into account what happens when it is used on people of coloror what happens in what you might call corner casesor cases that are not expected.

I guess people at Amazon are saying, look, we’re building a building block, we’re going to make it as good as we can, and then users really need to figure out how to use it. If you’re building a hammer, it can be used in different ways, but when you’re building a gun, obviously the load is different, right? Weapons can be used by good people, bad people, all too often bad people. But facial recognition is not a weapon. Facial recognition is the basic building block of the technology.

If developers thought about these precautions, what could they do?

The practical things to do are more social mechanisms, which could include a comment period for a new technology, or transparency of the data set that is used to train it. Another is an open technology audit – there should be an API that can be used for external polling so that the ACLU, or POLITICO, or anyone else can submit requests to it and see when it works and when it works. t.

What role should regulators play in this process?

I absolutely believe that regulators have a role to play, but we see again and again that regulation can be very imperfect.

In effect, the GDPR has resulted in a sort of collective punishment for the billions of people who have to click yes to access the content they want without any real privacy value. He just created this extra click. Another example is the concept of “right to explain,” which sounds reasonable, but under the hood, explanations for inferences made by deep learning systems are usually either incomprehensible or oversimplified and imprecise.

After all, regulation is often a crude tool that is abused. – Derek Robertson

In his book Retromania, critic Simon Reynolds described our current pop culture in a state of “hyperstasis.” stuck in the endless repetition of old myths and icons instead of creating new ones.

Add to this pile one more … well, sort of: The DeLorean Motor Company. announced today a new all-electric model of the iconic gull-wing sedan, dubbed the Alpha 5. (This is not the company that built the car you might be thinking ofa San Antonio organization that started selling parts for an old DeLorean before acquiring the naming rights for its new car.)

DeLorean’s website promises that as part of its Alpha 5 “journey to own” it will “connect the physical universe to the metaverse.” (I sent an email to the company to see what this might entail, but have yet to receive a response.)

Whatever the reality of the product, the concept is the right mix for our time – a new version of an old project, backwards in style, but (theoretically) futuristic in its technology. – Derek Robertson

Stay in touch with the entire team: Ben Schrekinger ([email protected]); Derek Robertson[email protected]); Konstantin Kakaes (ur.[email protected]); and Heidi Vogt ([email protected]).

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Ben Schrekinger writes for POLITICO on technology, finance and politics; he is a cryptocurrency investor.