A New York Times investigation by John Carreyrou claims a British cryptographer named Adam Back is the strongest circumstantial candidate yet for being Satoshi Nakamoto. The report citing overlaps in writing style, ideology, technical background, and old posts that outlined key parts of Bitcoin years before its launch. Carreyrou is a renowned investigative journalist and author, best known for exposing the massive fraud at Theranos while at the Wall Street Journal. Here's an excerpt from the report: ... As anyone steeped in Bitcoin lore will tell you, Satoshi was a master at the art of maintaining anonymity on the internet, leaving few, if any, digital footprints behind. But Satoshi did leave behind a corpus of texts, including a nine-page white paper (PDF) outlining his invention and his many posts on the Bitcointalk forum, an online message board where users gathered to discuss the digital currency's software, economics and philosophy. And that corpus, it turned out, had expanded significantly during the impostor's civil trial when Martti Malmi, a Finnish programmer who collaborated with Satoshi in Bitcoin's early days, released a trove of hundreds of emails he had exchanged with him. Emails Satoshi sent to other early Bitcoin adopters had surfaced before, but none came close in volume to the Malmi dump. If Satoshi was ever going to be found, I was convinced the key lay somewhere in these texts.

Then again, others must have gone down this road before me. Journalists, academics and internet sleuths had been trying to identify Satoshi for 16 years. During that span, more than 100 names had been put forward, including those of an Irish cryptography student, an unemployed Japanese American engineer, a South African criminal mastermind and the mathematician portrayed in the movie "A Beautiful Mind." The most alluring theories had focused on coincidences that aligned with what little was known about Satoshi: a particular code-writing style, a mysterious work history, an expertise in Bitcoin's key technical concepts, an anti-government worldview. But they had run aground under the weight of an alibi or some other piece of inconsistent or contrary evidence. Each failure had been met with glee by many members of the Bitcoin community. As they liked to point out, only Satoshi could definitively prove his identity by moving some of his coins. Any evidence short of that would be circumstantial.

It seemed foolish to think that I could somehow crack a case that had confounded so many others. But I craved the thrill of a big, challenging story. So I decided to try once more to unmask Bitcoin's mysterious creator. Back, for his part, denies being Satoshi, writing in a post on X: "i'm not satoshi, but I was early in laser focus on the positive societal implications of cryptography, online privacy and electronic cash, hence my ~1992 onwards active interest in applied research on ecash, privacy tech on cypherpunks list which led to hashcash and other ideas."

Friday America's consumer watchdog agency "proposed a rule to give virtual video game currencies protections similar to those of real-world bank accounts..." reports the Washington Post, "so players can receive refunds or compensation for unauthorized transactions, similar to how banks are required to respond to claims of fraudulent activity." The Consumer Financial Protection Bureau is seeking public input on a rule interpretation to clarify which rights are protected and available to video game consumers under the Electronic Fund Transfer Act. It would hold video game companies subject to violations of federal consumer financial law if they fail to address financial issues reported by customers. The public comment period lasts from Friday through March 31. In particular, the independent federal agency wants to hear from gamers about the types of transactions they make, any issues with in-game currencies, and stories about how companies helped or denied help.

The effort is in response to complaints to the bureau and the Federal Trade Commission about unauthorized transactions, scams, hacking attempts and account theft, outlined in an April bureau report that covered banking in video games and virtual worlds. The complaints said consumers "received limited recourse from gaming companies." Companies may ban or lock accounts or shut down a service, according to the report, but they don't generally guarantee refunds to people who lost property... The April report says the bureau and FTC received numerous complaints from players who contacted their banks regarding unauthorized charges on Roblox. "These complaints note that while they received refunds through their financial institutions, Roblox then terminated or locked their account," the report says.

An anonymous reader quotes a report from NBC News: The former CEO of a small Kansas bank was sentenced to more than 24 years in prison for looting the bank of $47 million -- which he sent to cryptocurrency wallets controlled by scammers who had duped him in a "pig butchering" scheme that appealed to his greed, federal prosecutors said. The massive embezzlement by ex-CEO Shan Hanes in a series of wire transfers over just eight weeks last year led to the collapse and FDIC takeover of Heartland Tri-State Bank in Elkhart, one of only five U.S. banks that failed in 2023. Hanes, 53, also swindled funds from a local church and investment club -- and a daughter's college savings account -- to transfer money, purportedly to buy cryptocurrency as the scammers insisted they needed more funds to unlock the supposed returns on his investments, according to records from U.S. District Court in Wichita, Kansas. But Hanes never realized any profit and lost all of the money he stole as a result of the scam. Judge John Broomes on Monday sentenced Hanes to 293 months in prison -- 29 months more than what prosecutors requested after he pleaded guilty in May to a single count of embezzlement by a bank officer. [...]

[P]rosecutors and bank regulators said that Hanes, who has three daughters with his school teacher wife, began stealing after being targeted in a pig-butchering scheme in late 2022. That scheme was described in a court filing as "a scammer convincing a victim (a pig) to invest in supposedly legitimate virtual currency investment opportunities and then steals the victim's money -- butchering the pig." Hanes, who had served on the board of the American Bankers Association, and been chairman of the Kansas Bankers Association, in December 2022 began making transactions to buy cryptocurrency, which "appeared to be precipitated by communication with an unidentified co-conspirator on the electronic messaging app 'WhatsApp,'" prosecutors wrote in a court filing. "To date, the true identity of the co-conspirator, or conspirators, remain unknown," the filing notes. Hanes initially used personal funds to buy crypto, but in early 2023 he stole $40,000 from Elkhart Church of Christ and $10,000 from the Santa Fe Investment Club, according to prosecutors and a defense filing. He also used $60,000 taken from a daughter's college fund, and nearly $1 million in stock from the Elkhart Financial Corporation, his lawyer said in a filing.

In May 2023, he began to make wire transfers from Heartland Tri-State Bank to accounts controlled by scammers, at first with a $5,000 transfer. Two weeks later, on May 30, Hanes wired $1.5 million and a day after that, he sent another transfer of the same amount the following day, filings show. Three days later he directed two wire transfers totaling $6.7 million to be sent by the bank to the crypto wallet, and a whopping $10 million less than two weeks later, and another $3.3 million days afterward. Hanes told bank employees to execute the wire transfers, and "made many misrepresentations to various people" to get access to the funds so they could be transferred, prosecutors wrote. Heartland Tri-State employees circumvented the bank's own wire policy and daily limits to approve Hanes' wire transfers, according to a report by the Office of the Inspector General of the Board of Governors of the Federal Reserve System.

mrspoonsi shares a report from the BBC: A former takeaway worker found with Bitcoin worth more than $2.5 billion has been convicted at Southwark Crown Court of a crime linked to money laundering. Jian Wen, 42, from Hendon in north London, was involved in converting the currency into assets including multi-million-pound houses and jewelry. On Monday she was convicted of entering into or becoming concerned in a money laundering arrangement. The Met said the seizure is the largest of its kind in the UK.

Although Wen was living in a flat above a Chinese restaurant in Leeds when she became involved in the criminal activity, her new lifestyle saw her move into a six-bedroom house in north London in 2017 which was rented for more than $21,000 per month. She posed as an employee of an international jewelry business and moved her son to the UK to attend private school, the Crown Prosecution Service (CPS) said. That same year, Wen tried to buy a string of expensive houses in London, but struggled to pass money-laundering checks and her claims she had earned millions legitimately mining Bitcoin were not believed. She later travelled abroad, buying jewelry worth tens of thousands of pounds in Zurich, and purchasing properties in Dubai in 2019.

Another suspect is thought to be behind the fraud but they remain at large. The Met said it carried out a large scale investigation as part of the case - searching several addresses, reviewing 48 electronic devices, and examining thousands of digital files including many which were translated from Mandarin. The CPS has obtained a freezing order from the High Court, while it carries out a civil recovery investigation that could lead to the forfeiture of the Bitcoin. The value of the Bitcoin was worth around $2.5 billion at the time of initial estimates -- but due to the fluctuation in the currency's value, it has since increased to around $4.3 billion.

Public sector workers in an eastern Chinese city are set to be paid fully in digital yuan, as the country makes a significant push to popularize the currency. From a report: Changshu, located in the province of Jiangsu, will start the new payment process in May, according to an official document widely posted on government websites. This is the biggest rollout of the currency, also known as the e-CNY, in China so far, according to state media. Government employees as well as staff at state-owned companies and public institutions such as schools, hospitals, libraries, research institutes and media organizations in the city will be affected. Changshu, a city of 1.7 million residents, was already experimenting with the digital yuan, a form of money that exists only online and is managed and backed by China's central bank. Like cryptocurrency, the digital yuan incorporates some elements of blockchain technology: Every transaction is recorded and traceable in a digital ledger. Since last October, Changshu has been paying the transit subsidies for some government employees in digital yuan. China is already on the verge of becoming a cashless society, but the vast majority of electronic transactions happen on privately owned apps (Alipay and WeChat Pay), outside of the immediate purview of the state.

A SPAC merger brought a global "Uber for bus" startup to the Nasdaq just as tech investment was about to dry up. From a report: In July 2021 the world's tallest tower, the Burj Khalifa in Dubai, was briefly lit up in brilliant red, with animated electronic text scrolling up its height announcing "the Middle East's first $1.5 billion unicorn to list on Nasdaq." The splashy marketing was for Swvl, a company with lofty ambitions to become a hybrid of a ride-hailing app and bus service in cities across the globe. Twenty months later, the Dubai-based company's shares have dropped more than 99%. Its roughly $9 million market value is a shadow of the billion-dollar-plus valuation that once gave it so-called unicorn status.

A deal to buy Turkish transit company Volt Lines largely using Swvl shares fell apart in January. Once trumpeted by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum as a symbol of the Middle East's startup spirit, Swvl Holdings has become another example of tech-sector overreach -- and how quickly investor money dried up once superlow interest rates went away. It also shows the perils of trying to build a business that straddles emerging markets vulnerable to currency shocks as the dollar rises. Swvl was co-founded in Cairo in 2017 by former Rocket Internet SE executive Mostafa Kandil along with Ahmed Sabbah and Mahmoud Nouh. The trio started the company as a solution for commuters who didn't want to rely on public transit but couldn't pay a premium for ride-share services. Their idea: buses and vans running along routes that users could book a ride on with an app.

A billionaire cryptocurrency evangelist may have gotten a tougher reception than he expected when proposing widespread adoption of Bitcoin to a bankrupt country. From a report: Silicon Valley investor Tim Draper was in Sri Lanka to shoot an episode of his "Meet the Drapers" TV show with local entrepreneurs, and met President Ranil Wickremesinghe on Tuesday to proselytize the adoption of cryptocurrency. He journeyed to the central bank the next day with the same pitch -- but embattled Governor Nandalal Weerasinghe, who's still working to calm financial mayhem, was having none of it. "I come to the Central Bank with decentralized currency," proclaimed Draper, dressed in a Bitcoin tie for the meeting that took place in a teak-paneled room overlooking the sea. "We don't accept," Weerasinghe said, taking another sip of fizzy ginger beer.

During the meeting, Draper several times referred to what he described as Sri Lanka's reputation for corruption and argued cryptocurrency was one solution. Colombo could avert graft by keeping perfect records after adopting Bitcoin, he argued. "Have you seen Sri Lanka in the news? It's known as the corruption capital," Draper said. "A country known for corruption will be able to keep perfect records with the adoption of Bitcoin." Sri Lanka's topmost monetary official countered: "Adoption of 100% Bitcoin won't be a Sri Lanka reality ever." [...] He kept trying with Weerasinghe. "Does the administration have the guts to do it?" he asked. "What's the advantage of having your own currency?" Weerasinghe said other technologies could efficiently distribute financial services to foster inclusion and disburse electronic welfare payments, and noted that a country without its own currency couldn't have monetary-policy independence. "We don't want to make the crisis worse by introducing Bitcoin," he said.

During a 92-minute presentation Wednesday on the state of the free software movement, Richard Stallman spoke at length on a wide variety of topics, including the need for freedom-respecting package systems.

But Stallman also shared his deepest thoughts on a topic dear to the hearts of Slashdot readers: privacy and currency: I won't order from online stores, because I can't pay them . For one thing, the payment services require running non-free JavaScript... [And] to pay remotely you've got to do it by credit card, and that's tracking people, and I want to resist tracking too.... This is a really serious problem for society, that you can't order things remotely anonymously.

But GNU Taler is part of the path to fixing that. You'll be able to get a Taler token from your bank, or a whole bunch of Taler tokens, and then you'll be able to use those to pay anonymously.

Then if the store can send the thing you bought to a delivery box in your neighborhood, the store doesn't ever have to know who you are.
But there's another issue Stallman touched on earlier in his talk: There is a proposed U.S. law called KOSA which would require mandatory age-verification of users -- which means mandatory identification of users, which is likely to mean via face recognition. And it would be in every commercial software application or electronic service that connects to the internet.... [It's] supposedly for protecting children. That's one of the favorite excuses for surveillance and repression: to protect the children. Whether it would actually protect anyone is dubious, but they hope that won't actually be checked.... You can always propose a completely useless method that will repress everyone....
So instead, Stallman suggests that age verification could be handled by.... GNU Taler: Suppose there's some sort of service which charges money, or even a tiny amount of money, and is only for people over 16, or people over 18 or whatever it is. Well, you could get from your bank a Taler token that says the person using this token is over 16. This bank has verified that.... So then the site only needs to insist on a 16-or-over Taler token, and your age is verified, but the site has no idea who you are.

Unfortunately that won't help if user-identifying age-tracking systems are legislated now. The code of Taler works, but it's still being integrated with a bank so that people could actually start to use it with real businesses.
Read on for Slashdot's report on Stallman's remarks on cryptocurrencies and encryption, or jump ahead to...

• Can GNU Taler accounts be frozen?
• Why cryptocurrency shouldn't replace banking
• The problem with VPN apps - and how interoperable encryption could protect your freedom

A group of U.S. lawmakers says the U.S. Treasury Department may be the right government entity to create a digital dollar -- not the Federal Reserve. A new bill introduced Monday would authorize just that. CoinDesk reports: Reps. Stephen Lynch (D-Mass.), Jesus Chuy Garcia (D-Ill.), Ayanna Pressley (D-Mass.) and Rashida Tlaib (D-Mich.) introduced the "Electronic Currency And Secure Hardware Act" (ECASH Act) to direct the Treasury Secretary to develop and issue an electronic version of the U.S. dollar, with an eye to preserving privacy and anonymity in transactions. The electronic dollar, as defined in the bill, would be a bearer instrument that people could hold on their phone or a card. The system would be token-based, not account-based, meaning if someone were to lose their phone or card, they would lose the funds. In other words, it would be like losing a wallet with dollar bills in it. This electronic dollar would be deemed legal tender and be functionally identical to a physical greenback.

Rohan Grey, an assistant professor at Willamette University who consulted on the bill, told CoinDesk the bill is meant to create a true digital analogue to the U.S. dollar. "We're proposing to have a genuine cash-like bearer instrument, a token-based system that doesn't have either a centralized ledger or distributed ledger because it had no ledger whatsoever. It uses secured hardware software and it's issued by the Treasury," he said. This form of e-cash would support peer-to-peer transactions, and given the nature of its setup, it would support fully anonymous transactions. Thus, it would differ from other proposals for a digital dollar, which are based on stablecoins or other decentralized ledger tools. The full text of the E-CASH Bill can be read here.

The Beijing Winter Olympics is giving Visa a run for its money. From a report: For decades, America's largest card network has been the exclusive electronic-payments provider at the world's largest sporting event. At this year's Beijing Games, however, Visa finds itself having to share the spotlight with China's new digital currency, the e-CNY. China has been at the forefront of digitizing payments, thanks in large part to the popular mobile networks Alipay and WeChat Pay, operated by Chinese internet giants Ant Group and Tencent Holdings, respectively. The mass adoption of digital payments in the world's most populous nation has made the use of physical cash virtually obsolete -- a trend that has alarmed China's central bank, which has been conducting small-scale rollout trials for its digitized legal tender since late 2019. At previous Olympics, cash and Visa cards were the only two permitted forms of payment, though the former diminished in usage at the sporting venues after the 2004 Olympics in Athens, according to people familiar with the matter, with nearly all payments having moved to Visa. That has generally held true at the Beijing 2022 Olympics, with Alipay, WeChat Pay and other electronic-payment methods barred as part of the exclusivity guaranteed by Visa's sponsorship.

"The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology's Digital Currency Initiative have come up with an initial design for a central bank digital currency," reports Yahoo Finance.

Reuters cautions that the newly-released research does not suggest that the U.S. central bank will move toward launching a CBDC, a step it has said it would not take without clear support from the White House and Congress...." Instead the team "developed technology that can be adjusted as more policy questions regarding the structure and purpose of a CBDC are addressed."

The Washington Post describes it as "a system that can settle the vast majority of payments in less than two seconds, handles more than 1.7 million transactions per second and operates around-the-clock with no service outages in the case of a disruption in its network."

The Boston Globe adds that "The team noted there's a lot more work to do in the next phase, including researching various privacy features, and stressed the digital dollar remains hypothetical until the Fed decides whether to move forward with government-backed electronic cash."

Some context from the Washington Post: The ultimate product could help extend financial services to people who lack a bank account and make cross-border payments such as remittances safer and easier, said Neha Narula, director of the Digital Currency Initiative at MIT. Narula, in a conference call with reporters, noted that the Boston researchers "aren't the ones making policy decision on how such a system might operate," so they have aimed to "create a flexible system that can work with a variety of models."

Along with a paper describing the team's work to date, researchers on Thursday published open-source code for the platform that would support the digital currency. Jim Cunha, executive vice president of the Boston Fed, called that a first for the central bank, intended to encourage public input that improves the technology.

The Federal Reserve on Thursday released its long-awaited study of a digital dollar, exploring the pros and cons of the much-debated issue and soliciting public comment. CNBC reports: Billed as "the first step in a public discussion between the Federal Reserve and stakeholders about central bank digital currencies," the 40-page paper (PDF) shies away from any conclusions about a central bank digital currency, or CBDC. The report originally was expected in the summer of 2021 but had been delayed. Instead, it provides an exhaustive look at benefits such as speeding up the electronic payments system at a time when financial transactions around the world already are highly digitized. Some of the downside issues the report discusses are financial stability risks and privacy protection while guarding against fraud and other illegal issues.

"A CBDC could fundamentally change the structure of the U.S. financial system, altering the roles and responsibilities of the private sector and the central bank," the report says. One primary difference between the Fed's dollar and other digital transactions is that current digital money is a liability of commercial banks, whereas the CBDC would be a Fed liability. Among other things, that would mean the Fed wouldn't pay interest on money stored with it, though because it is riskless some depositors may prefer to keep their money with the central bank.

The paper lists a checklist of 22 different items for which it is soliciting public feedback. There will be a 120-day comment period. Fed officials say the report is the first step in an extensive process but there is no timetable on when it will be wrapped up. The paper released Thursday notes that the Fed's "initial analysis suggests that a potential U.S. CBDC, if one were created, would best serve the needs of the United States by being privacy-protected, intermediated, widely transferable, and identity-verified." However, the report also states that it "is not intended to advance a specific policy outcome and takes no position on the ultimate desirability of" the digital dollar. The report notes that the speed of the project is not a top priority. Instead, the authors of the report are focused on getting it right. "The introduction of a CBDC would represent a highly significant innovation in American money," the report says. "Accordingly, broad consultation with the general public and key stakeholders is essential. This paper is the first step in such a conversation."

The Fed also said that it will not proceed without a clear mandate from Congress, preferably in the form of "a specific authorizing law."

In what's being referred to as the largest-ever cryptocurrency theft involving one person, police in Canada say they recently arrested a teen who allegedly stole $36.5 million worth of cryptocurrency from a single individual in the U.S. Engadget reports: The owner of the currency was the victim of a SIM swap attack. Their cellphone number was hijacked and used to intercept two-factor authentication requests, thereby allowing access to their protected accounts. Some of the stolen money was used to purchase a "rare" online gaming username, which eventually allowed the Hamilton Police Service, as well as FBI and US Secret Service Electronic Crimes Task Force, to identify the account holder. Police seized approximately $7 million CAD ($5.5 million) in stolen cryptocurrency when they arrested the teen.

The New York Times argues that this week changed Bitcoin's reputation as "secure, decentralized and anonymous" (adding "Criminals, often operating in hidden reaches of the internet, flocked to Bitcoin to do illicit business without revealing their names or locations. The digital currency quickly became as popular with drug dealers and tax evaders as it was with contrarian libertarians.")

"But this week's revelation that federal officials had recovered most of the Bitcoin ransom paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think..." [F]or the growing community of cryptocurrency enthusiasts and investors, the fact that federal investigators had tracked the ransom as it moved through at least 23 different electronic accounts belonging to DarkSide, the hacking collective, before accessing one account showed that law enforcement was growing along with the industry... The Bitcoin ledger can be viewed by anyone who is plugged into the blockchain. "It is digital bread crumbs," said Kathryn Haun, a former federal prosecutor and investor at venture-capital firm Andreessen Horowitz. "There's a trail law enforcement can follow rather nicely." Haun added that the speed with which the Justice Department seized most of the ransom was "groundbreaking" precisely because of the hackers' use of cryptocurrency. In contrast, she said, getting records from banks often requires months or years of navigating paperwork and bureaucracy, especially when those banks are overseas...

Tracking down a user's transaction history was a matter of figuring out which public key they controlled, authorities said. Seizing the assets then required obtaining the private key, which is more difficult. It's unclear how federal agents were able to get DarkSide's private key. Justice Department spokesman Marc Raimondi declined to say more about how the F.B.I. seized DarkSide's private key. According to court documents, investigators accessed the password for one of the hackers' Bitcoin wallets, though they did not detail how. The F.B.I. did not appear to rely on any underlying vulnerability in blockchain technology, cryptocurrency experts said. The likelier culprit was good old-fashioned police work. Federal agents could have seized DarkSide's private keys by planting a human spy inside DarkSide's network, hacking the computers where their private keys and passwords were stored, or compelling the service that holds their private wallet to turn them over via search warrant or other means. "If they can get their hands on the keys, it's seizable," said Jesse Proudman, founder of Makara, a cryptocurrency investment site. "Just putting it on a blockchain doesn't absolve that fact...."

The F.B.I. has partnered with several companies that specialize in tracking cryptocurrencies across digital accounts, according to officials, court documents and the companies. Start-ups with names like TRM Labs, Elliptic and Chainalysis that trace cryptocurrency payments and flag possible criminal activity have blossomed as law enforcement agencies and banks try to get ahead of financial crime. Their technology traces blockchains looking for patterns that suggest illegal activity... "Cryptocurrency allows us to use these tools to trace funds and financial flows along the blockchain in ways that we could never do with cash," said Ari Redbord, the head of legal affairs at TRM Labs, a blockchain intelligence company that sells its analytic software to law enforcement and banks. He was previously a senior adviser on financial intelligence and terrorism at the Treasury Department.
The story includes three intriguing quotes:

• Justice Department spokesman Marc Raimondi said the Colonial Pipeline ransom seizure was only the latest of "many seizures, in the hundreds of millions of dollars, from unhosted cryptocurrency wallets" used for criminal activity.
• Hunter Horsley, chief executive of cryptocurrency investment company Bitwise Asset Management, said "The public is slowly being shown, in case after case, that Bitcoin is good for law enforcement and bad for crime — the opposite of what many historically believed."
• A spokesperson for Chainalysis, a start-up that traces cryptocurrency payments, tells the Times that in the end, "cryptocurrencies are actually more transparent than most other forms of value transfer. Certainly more transparent than cash."

A thousand years ago, when money meant coins, China invented paper currency. Now the Chinese government is minting cash digitally, in a re-imagination of money that could shake a pillar of American power. From a report: It might seem money is already virtual, as credit cards and payment apps such as Apple Pay in the U.S. and WeChat in China eliminate the need for bills or coins. But those are just ways to move money electronically. China is turning legal tender itself into computer code. Cryptocurrencies such as bitcoin have foreshadowed a potential digital future for money, though they exist outside the traditional global financial system and aren't legal tender like cash issued by governments.

China's version of a digital currency is controlled by its central bank, which will issue the new electronic money. It is expected to give China's government vast new tools to monitor both its economy and its people. By design, the digital yuan will negate one of bitcoin's major draws: anonymity for the user. Beijing is also positioning the digital yuan for international use and designing it to be untethered to the global financial system, where the U.S. dollar has been king since World War II. China is embracing digitization in many forms, including money, in a bid to gain more centralized control while getting a head start on technologies of the future that it regards as up for grabs. "In order to protect our currency sovereignty and legal currency status, we have to plan ahead," said Mu Changchun, who is shepherding the project at the People's Bank of China. Digitized money could reorder the fundamentals of finance the way Amazon.com disrupted retailing and Uber rattled taxi systems. That an authoritarian state and U.S. rival has taken the lead to introduce a national digital currency is propelling what was once a wonky topic for cryptocurrency theorists into a point of anxiety in Washington. Asked in recent weeks how digitized national currencies such as China's might affect the dollar, Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell have said the issue is being studied in earnest, including whether a digital dollar makes sense someday.

The electronic Chinese yuan is now being tested in cities such as Shenzhen, Shanghai and Beijing. No other major power is as far along with a homegrown digital currency. From a report: Annabelle Huang recently won a government lottery to try China's latest economics experiment: a national digital currency. After joining the lottery through the social media app WeChat, Ms. Huang, 28, a business strategist in Shenzhen, received a digital envelope with 200 electronic Chinese yuan, or eCNY, worth around $30. To spend it, she went to a convenience store near her office and picked out some nuts and yogurt. Then she pulled up a QR code for the digital currency from inside her bank app, which the store scanned for payment. "The journey of how you pay, it's very similar" to that of other Chinese payments apps, Ms. Huang said of the eCNY experience, though she added that it wasn't quite as smooth.

China has charged ahead with a bold effort to remake the way that government-backed money works, rolling out its own digital currency with different qualities than cash or digital deposits. The country's central bank, which began testing eCNY last year in four cities, recently expanded those trials to bigger cities such as Beijing and Shanghai, according to government presentations. The effort is one of several by central banks around the world to try new forms of digital money that can move faster and give even the most disadvantaged people access to online financial tools. Many countries have taken action as cryptocurrencies such as Bitcoin, which has recently soared in value, have become more popular. But while Bitcoin was designed to be decentralized so that no company or government could control it, digital currencies created by central banks give governments more of a financial grip.

China's central bank has introduced a homegrown digital currency across four cities as part of a pilot program, marking a milestone on the path toward the first electronic payment system by a major central bank. The Wall Street Journal reports: Internal tests of the digital currency are being conducted in four large cities around China -- Shenzhen, Suzhou, Chengdu and Xiong'an, a satellite city of Beijing -- to improve the currency's functionality, the digital currency research institute under the People's Bank of China confirmed Monday, in response to a request for comment. Chinese domestic and state-run media outlets reported on the trials over the weekend. The trials followed years of research by the central bank dating back to 2014.

The new currency, which doesn't have an official name but is known by its internal shorthand "DC/EP," or "digital currency/electronic payment," will share some features with cryptocurrencies including bitcoin and Facebook Inc.'s Libra, PBOC officials have said. While it won't boast the anonymity that bitcoin and other cryptocurrencies tout, China's central bankers have vowed to protect users' privacy. The intention, China's central bankers have said, is to replace some of China's monetary base, or cash in circulation. It won't replace other parts of the country's money supply, such as bank deposits and balances held by privately-run payment platforms, Yi Gang, the governor of China's central bank, said last year.

In Xiangcheng, a district in the eastern city of Suzhou, the government will start paying civil servants half of their transport subsidy in the digital currency next month as part of the city's test run, according to a government worker with direct knowledge of the matter. Government workers were told to begin installing an app on their smartphones this month into which the digital currency would be transferred, the worker said. Civil servants were told that the new currency could be transferred into their existing bank accounts, or used directly for transactions at some designated merchants, the person said.

Sweden's Riksbank said on Wednesday it had begun testing an e-krona, taking the country a step closer to the creation of the world's first central bank digital currency (CBDC). From a report: If the e-krona eventually comes into circulation it will be used to simulate everyday banking activities, such as payments, deposits and withdrawals from a digital wallet such as a mobile phone app, the Riksbank said. "The aim of the project is to show how an e-krona could be used by the general public," the Riksbank said in a statement. In January, the central banks of Britain, the euro zone, Japan, Sweden and Switzerland joined forces to assess the case for issuing CBDCs. CBDCs are traditional money, but in digital form, issued and governed by a country's central bank. By contrast, cryptocurrencies such as bitcoin are produced by solving complex maths puzzles, and governed by disparate online communities instead of a centralized body. The sharp decline in the use of cash and competition from alternative currencies, such as Facebook's Libra, has also prompted central banks around the world to consider issuing their own electronic currencies.

pnutjam writes: New York is proposing a statewide virtual currency aimed at helping unbanked citizens get access to day-to-day financial transactions without predatory fees. Since there are an estimated 14 million U.S. adults without bank accounts, lawmakers in New York are trying to fix this with a new bill that "would create a 'public Venmo' system designed to include more people in the formal economy and stimulate local economic growth," reports Motherboard. "In November, New York State Assemblymember Ron Kim, Senator Julia Salazar, and Cornell law professor Robert Hockett announced their Inclusive Value Ledger (IVL) proposal. If passed, it would create the country's first publicly owned electronic banking platform, as well as a digital currency that can be exchanged for goods and services within the state."

"The IVL plan calls for New York State to distribute the $55 billion per year in uncollected individual tax credits through a 'public Venmo,' a publicly-administered, non-extractive payment system that would allow recipients to spend freely within the state economy without transaction fees or delays," the report says. "Every business and individual residing in New York would be issued a virtual wallet, connected to a state government-controlled master wallet, that could act as a viable alternative to a bank account without the fees of a for-profit bank." The proposal does not include any specifics as to how the payment system will be secure, nor does it address the specific privacy needs for certain groups the lawmakers hope the system will serve, such as people who are undocumented.

Federal regulators have proposed loosening real-estate appraisal requirements to enable a majority of U.S. homes to be bought and sold without being evaluated by a licensed human appraiser [the link may be paywalled; alternative source]. That potentially opens the door for cheaper, faster, but largely untested property valuations based on computer algorithms. From a report: The proposal was made earlier this month by the Office of the Comptroller of the Currency, the Federal Deposit Insurance. and the Federal Reserve. It would increase to $400,000, from $250,000, the value of homes that can be bought and sold without a tape-measure-toting appraiser visiting a property.

More than two-thirds of U.S. homes sell for $400,000 or less, according to U.S. Census data and the National Association of Realtors. If the regulators' proposal had been in force last year, about 214,000 additional home sales, or some $68 billion worth, could have been made without an appraisal, regulators said in their 69-page proposal.

Some worry, though, that dropping appraisal requirements would introduce new risks into the $10.7 trillion market for home loans. "We still would prefer a human being doing the appraisal," said Lima Ekram, a mortgage-backed securities analyst at Moody's Investors Service. One issue: Automated valuations done by computers are largely unregulated. The 2010 Dodd-Frank financial overhaul required regulators to propose quality control standards for so-called automated valuation models, but they have yet to do so.