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Common Knowledge Theory of Stablecoins
Common Knowledge Theory of Stablecoins
"We propose a new theory of stablecoins based on common knowledge. We contrast this with the ‘better money’ theory of stablecoins, which emphasises marginal improvements over the standard origin of money theory as: medium of exchange, unit of account, store of value."
#Fintech#CryptoAssets#Stablecoins#Money#DFC
·papers.ssrn.com·
Common Knowledge Theory of Stablecoins
Bank of Thailand retail CBDC proof of concept update (English version)
Bank of Thailand retail CBDC proof of concept update (English version)
The Bank of Thailand (BOT) published an English version of its update on its retail central bank digital currency (CBDC) technical testing. The original version was published in late March 2024 in Thai and, because Google Translate was returning gibberish, I wasn’t able to ascertain whether the latest work was a pilot or proof of concept (POC). However, according to the new document, it is clearly a proof of concept because the 4,000 individual users that participated were employees of the BOT and the three intermediaries that took part. In any case, the POC successfully demonstrated the potential of the technology behind the retail CBDC system, but the BOT said it has no plans to launch one and will use the technology design to further develop a more efficient payment system.
#Fintech#CBDC#Thailand#DFC
·bot.or.th·
Bank of Thailand retail CBDC proof of concept update (English version)
Bundesbank and MIT Media Lab to conduct joint CBDC research
Bundesbank and MIT Media Lab to conduct joint CBDC research
The Deutsche Bundesbank will work with the Massachusetts Institute of Technology's Digital Currency Initiative (MIT DCI) to investigate pivotal CBDC design questions, such as the implementation of data protection and privacy. Deutsche Bundesbank President Dr. Joachim Nagel said that the Eurosystem would not have access to digital euro users' personal information, and that consumers should have more control over their personal data. https://www.bundesbank.de/en/press/speeches/digital-euro-vision-advances-and-challenges-929800
#Fintech#CBDC#Eurozone#Germany#Privacy#DFC
·bundesbank.de·
Bundesbank and MIT Media Lab to conduct joint CBDC research
Financial Stability Implications of CBDC
Financial Stability Implications of CBDC
The U.S. Federal Reserve published a paper that examines the financial stability risks in times of stress associated with central bank digital currency (CBDC) under different design options. The analysis is based on lessons derived from historical case studies of bank runs as well as on an analytical framework that allows for the characterization of the mechanisms through which a CBDC can affect financial stability. It then discusses an extensive array of policy tools that can be employed to mitigate these risks.
#Fintech#CBDC#UnitedStates#FinancialStability#DFC
·federalreserve.gov·
Financial Stability Implications of CBDC
New Zealand launches CBDC consultation
New Zealand launches CBDC consultation
The Reserve Bank of New Zealand (RBNZ) launched its second retail central bank digital currency (CBDC) consultation (the first one was in 2021). Based on feedback and preparation of a business case, a decision will be made on whether to proceed to a "preparation" phase. The consultation document advocates for "digital cash" accessible to everyone, including those that don't have a bank account, and should be usable when the power is out or the internet is down, and work via physical cards, and on devices like phones and or watches. https://consultations.rbnz.govt.nz/money-and-cash/digital-cash-in-new-zealand/
#Fintech#CBDC#NewZealand#DFC
·ledgerinsights.com·
New Zealand launches CBDC consultation
Modernizing Financial Markets with Wholesale CBDC
Modernizing Financial Markets with Wholesale CBDC
The World Economic Forum (WEF) published a report that explores the potential of wholesale central bank digital currency (CBDC) to unlock new economic models and integration points. Four areas of differentiated value are highlighted. First, they can realize a global settlement window by harmonizing foreign exchange (FX) and securities markets settlement times to overcome operational hour disparities among key trading corridors. Second, they can expand payment-versus-payment arrangements through cost-effective solutions that can support a diversity of currencies to enhance currency liquidity. Third, they can mutualize data across parties by securely transmitting settlement data across parties and jurisdictions to support automation, reduce settlement risk, and enhance trade and post-trade activities. Lastly, they tokenize credit risk-free settlement media for settling tokenized securities and supporting emerging tokenized payment instruments. https://www.ledgerinsights.com/wef-accenture-release-report-on-wholesale-cbdc/
#Fintech#CBDC#wCBDC#WEF#DFC
·weforum.org·
Modernizing Financial Markets with Wholesale CBDC
Bank of Israel considering remunerated CBDC
Bank of Israel considering remunerated CBDC
Andrew Abir, Deputy Governor of the Bank of Israel (BOI), floated the idea of a remunerated digital shekel, as a way to push banks to up their games. "We could consider that the digital shekel, which will be built to be able to pay interest directly on the public's holdings, would actually do that. Of course, we will need to think about this carefully – for example, by setting it at a lower level than the Bank of Israel policy interest rate, and/or by limiting the types of users who will be eligible for it and the maximum amount on which interest would be paid."
#Fintech#CBDC#Israel#DFC
·boi.org.il·
Bank of Israel considering remunerated CBDC
UK Finance announces new RLN experimentation phase
UK Finance announces new RLN experimentation phase
UK Finance announced work on a new UK Regulated Liability Network (RLN) experimentation phase with eleven of its members. The UK RLN is envisaged as a common "platform for innovation" across multiple forms of money, including existing commercial bank deposits and a shared ledger for tokenized commercial bank deposits. It will focus on three use cases; payment-upon-delivery for a physical product, the process of buying a home, and digital bond settlement. The experimentation phase will run until summer 2024 and will cover customer and business benefits, technical feasibility via proofs of concept in a technology sandbox, and the legal framework.
#Fintech#DepositTokens#Tokenization#UnitedKingdom#RegulatedLiabilityNetwork#DFC
·ukfinance.org.uk·
UK Finance announces new RLN experimentation phase
Finternet: the financial system for the future
Finternet: the financial system for the future
The Bank for International Settlements (BIS) published its vision for a "Finternet" of multiple financial ecosystems interconnected with each other, much like the internet. The envisioned system leverages tokenization and unified ledgers, underpinned by a robust economic and regulatory framework, to dramatically expand the range and quality of financial services. The paper provides a blueprint for how key technical characteristics like interoperability, verifiability, programmability, immutability, finality, evolvability, modularity, scalability, security and privacy can be incorporated, and how varied governance norms can be embedded.
#Fintech#DepositTokens#UnifiedLedger#BIS#DFC
·bis.org·
Finternet: the financial system for the future
Managing the transition to central bank digital currency
Managing the transition to central bank digital currency
"Most studies on central bank digital currencies focus on the effects after they become well established. This column analyses the macroeconomic effects in the transition to the new equilibrium. Using a two-country model with financial frictions, it shows that, under plausible assumptions for demand for central bank digital currency, the transition is characterised by volatility in the digital currency, cash, and deposits, leading to volatility in loan rates, investment, and consumption. Binding caps on holdings of the digital currency during the transition period are shown to be most effective in reducing disintermediation and output losses and in minimising international spillovers."
#Fintech#CBDC#Eurozone#DFC
·cepr.org·
Managing the transition to central bank digital currency
Hong Kong still cautious about introducing a retail CBDC
Hong Kong still cautious about introducing a retail CBDC
Hong Kong Monetary Authority (HKMA) CEO Eddie Yue remains skeptical about the benefits of a retail central bank digital currency (CBDC). H started by listing some of the potential benefits, including serving as a fundamental layer to facilitate interoperability and interlinking between various future digital economy participants. Also, it could act as a bridge between different types of privately-issued digital money, and ensure all private money to be exchangeable with a public money on demand and at par. He also envisioned that a retail CBDC could be a potential “backbone” and anchor, bridging a legal tender and digital assets, offering price stability and confidence needed to empower more innovations, and developing a vibrant sector and ecosystem for digital assets in Hong Kong. Nevertheless, Mr. Yue said that more research is needed on whether its benefits outweigh the risks, particularly "given the generally efficient and competitive retail payment ecosystem in Hong Kong" [and the HKMA] will continue to take a use-case driven approach in thinking about whether and when to introduce a retail CBDC." https://www.hkma.gov.hk/eng/news-and-media/speeches/2024/04/20240411-1/
#Fintech#CBDC#HongKong#DFC
·ledgerinsights.com·
Hong Kong still cautious about introducing a retail CBDC
Atlantic Council calls for global interoperability standards for CBDC
Atlantic Council calls for global interoperability standards for CBDC
The Atlantic Council published an updated version of their "Standards And Interoperability: The Future Of The Global Financial System" white paper calling for calling for global interoperability standards around central bank digital currency (CBDC). It sets some common definitions and understanding of the current state of international standards for those seeking to understand the current state of international standards and existing gaps and areas for improvement. It also notes that, standards ensuring consistency and seamless functionality are not static; they must be flexible enough to accommodate advancements in digital currency technology, shifts in economic priorities, and changing societal perspectives on digital assets. https://digitaldollarproject.org/standards-and-interoperability-the-future-of-the-global-financial-system/
#Fintech#CBDC#Interoperability#DFC
·ledgerinsights.com·
Atlantic Council calls for global interoperability standards for CBDC
Observations from the Retail CBDCs of the Caribbean
Observations from the Retail CBDCs of the Caribbean
The Kansas City Fed published an article by Franklin Noll that analyzes the underwhelming adoption of retail CBDC in the three Caribbean jurisdictions where they have been launched (Bahamas and Jamaica) or are being piloted (Eastern Caribbean Currency Union). It concludes that, to spur adoption it needs to add value relative to cash, be widely accepted, readily accessed, and easily used. Also, the new platform may need to be integrated into existing payments systems; into ways that consumers, merchants, and banks do business; and, ultimately, into people's lives.
#Fintech#CBDC#Caribbean#ECCB#Bahamas#Jamaica#DFC
·kansascityfed.org·
Observations from the Retail CBDCs of the Caribbean
Valuing Safety and Privacy in Retail Central Bank Digital Currency
Valuing Safety and Privacy in Retail Central Bank Digital Currency
The Reserve Bank of Australia (RBA) published a paper that explores the merits of introducing a retail central bank digital currency (CBDC) in Australia, focusing on the extent to which consumers would value having access to a digital form of money that is even safer and potentially more private than commercial bank deposits. The results suggest that the average consumer attaches no value to the added safety of a CBDC. This is consistent with bank deposits in Australia already being perceived as a safe form of money, and physical cash issued by the RBA continuing to be available as an alternative option. Privacy settings of a CBDC, which can take various forms, look more consequential for the CBDC value proposition. However, no clear relationship was found between safety or privacy valuations and the degree of consumers' cash use.
#Fintech#CBDC#Australia#DFC
·rba.gov.au·
Valuing Safety and Privacy in Retail Central Bank Digital Currency
Stablecoins: regulatory responses to their promise of stability
Stablecoins: regulatory responses to their promise of stability
The Bank for International Settlements (BIS) published a paper that assesses the evolving regulatory landscape for issuers of single fiat-pegged stablecoins. It compares regulatory frameworks issued by 11 authorities in seven jurisdictions to identify emerging trends and commonalities in their respective frameworks. It finds that many regulatory approaches have similar key requirements, but there are relevant differences in regulatory regimes. For example, in-scope stablecoin definitions vary significantly across regulations, and there are notable differences in the specifics of the regulatory treatment of reserves, and in relation to segregation and custody.
#Fintech#CryptoAssets#Stablecoins#Regulation#BIS#DFC
·bis.org·
Stablecoins: regulatory responses to their promise of stability
Bank of Russia expects CBDC to take 5-7 years to achieve mass use
Bank of Russia expects CBDC to take 5-7 years to achieve mass use
Bank of Russia Governor Elvira Nabiullina provided an update on its digital ruble pilot to the State Duma. A serious scaling will happen no earlier than 2025, depending on how the pilot is going, and after that, it will take five to seven years to become a mass product. The Governor said that “this will be a natural process, because the choice of the people themselves, the business, is fundamental, it should be convenient for them.
#Fintech#CBDC#Russia#DFC
·pnp.ru·
Bank of Russia expects CBDC to take 5-7 years to achieve mass use
SNB Chair reflects on wholesale CBDC pilots. Retail too risky
SNB Chair reflects on wholesale CBDC pilots. Retail too risky
Swiss National Bank (SNB) Chair Thomas Jordan provided an update on the central bank's central bank digital currency (CBDC) experiments and thinking. Firstly, the SNB's position remains that there is no need for a Swiss retail CBDC because digital payment requirements are already satisfied, and there are possibly far-reaching consequences for the financial system. However, the SNB continues to advance its wholesale CBDC work aimed at settling tokenized securities on the SIX Digital Exchange (SIX) platform. He also called attention to the unusual approach of issuing the CBDC on a third-party (i.e., SDX) platform. However, as pointed out by Ledger Insights, SIX also operates the Swiss real-time gross settlement (RTGS) system, so a trust relationship already exists. However, the SNB is also evaluating other options for tokenized securities settlement, such as the RTGS "trigger" solutions being tested by the European Central Bank in its wholesale CBDC experiments. https://www.snb.ch/en/publications/communication/speeches/2024/ref_20240408_tjn
#Fintech#CBDC#wCBDC#Tokenization#Settlement#Switzerland#DFC
·ledgerinsights.com·
SNB Chair reflects on wholesale CBDC pilots. Retail too risky
Macroeconomic Modelling of CBDC: A Critical Review
Macroeconomic Modelling of CBDC: A Critical Review
The ECB's Ulrich Bindseil con-authored a paper that argues that macroeconomic models of CBDC often start from an early CBDC narrative which is no longer in line with the one of central banks actually working on CBDC. These include not accounting for design features communicated by central banks, such as no-remuneration, quantity limits, access restrictions, and automated sweeping functionality linking CBDC wallets with commercial bank accounts. Also, they do not explain well enough the difference between CBDC and banknotes within their macro-economic models, apart from remuneration.
#Fintech#CBDC#ECB#DFC
·papers.ssrn.com·
Macroeconomic Modelling of CBDC: A Critical Review
CBDCs and financial integrity: finding the trade-off between privacy and traceability
CBDCs and financial integrity: finding the trade-off between privacy and traceability
"This paper aims to focus, in particular, on two complementary and co-related aspects involving CBCDs: (i) how can the full digitalisation and centralisation of the transaction ledger be combined with privacy and (ii) to what extent CBDCs affect the allocation of burden and the responsibility over supervision of retail transactions. Eminently, the use of cash ensures a form of default privacy that protects the individual against State and private intrusion. While this privacy has caused concern, due to its criminogenic potential, and has been consequently limited by anti-money laundering (AML) regulations, the remaining cone of shadow cash guarantees is a crucial limit to control. In the context of a shifting financial system, undergoing deep transformation due to increasing datafication and decentralisation of the market, a new governance of financial supervision and record-keeping—up to now based on a unique and centralised ledger—is crucial to redefine the trade-off between financial integrity and privacy. This article will examine the origins and characteristics of CBDCs, to then analyse how the trade-off between control and privacy is set to reshape this new architecture."
#Fintech#CBDC#Eurozone#Privacy#DFC
·link.springer.com·
CBDCs and financial integrity: finding the trade-off between privacy and traceability
Clearstream joins ECB DLT for wholesale CB money settlement trials
Clearstream joins ECB DLT for wholesale CB money settlement trials
Clearstream, Deutsche Börse Group’s post-trade business, joins the European Central Bank (ECB) trials and experiments, aimed at exploring the potential of distributed-ledger technology (DLT) for wholesale central bank money settlement. Clearstream aims to assess the feasibility of using DLT for wholesale transaction processing, using tokenized securities, including conducting euro-denominated issuance and delivery-versus-payment (DvP) transactions across different use-cases and payment models. Three solutions will be tested by the central banks of Germany (Trigger solution), France (wholesale central bank digital currency (CBDC)) and Italy (TIPS Hashlink).
#Fintech#CBDC#wCBDC#Settlement#Tokenization#Blockchain#DLT#ECB#DFC
·clearstream.com·
Clearstream joins ECB DLT for wholesale CB money settlement trials
Ethiopian central bank to undertake digital currency study
Ethiopian central bank to undertake digital currency study
The National Bank of Ethiopia (NBE) is reportedly embarking on a study on the use of a central bank digital currency (CBDC) as part of its Homegrown Economic Reform Agenda (HGER). The NBE is set to initiate the study in June 2024 under the macroeconomic team led by Girma Birru, according to the latest HGER detail matrix covering three years leading up to 2026.
#Fintech#CBDC#Ethiopia#DFC
·thereporterethiopia.com·
Ethiopian central bank to undertake digital currency study
Reserve Bank of Zimbabwe launches new ZiG “structured” currency
Reserve Bank of Zimbabwe launches new ZiG “structured” currency
The Reserve Bank of Zimbabwe (RBZ) launched a new “structured” currency called “Zimbabwe Gold” (ZiG) that will be anchored to a weighted value of the central bank’s precious metal (mainly gold) and foreign currency reserves. As of April 5, 2024, the RBZ had reserve assets of US$100 million in cash and 2,522 kgs of gold (US$185 million) to back the entire local currency component of reserve money which stood at ZW$2.6 trillion (US$90 million). ZiG notes and coins shall be issued in denominations made up of 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG, but no mention is made of what becomes of the ZiG (now GBDT) wallets, assuming such wallets ever existed.
#Fintech#CBDC#Zimbabwe#DFC
·rbz.co.zw·
Reserve Bank of Zimbabwe launches new ZiG “structured” currency
RBI to broaden e-rupee's retail access beyond banks
RBI to broaden e-rupee's retail access beyond banks
The Reserve Bank of India (RBI) plans to its make e-rupee central bank digital currency (CBDC) accessible to a broader segment of users by enabling non-bank payment system operators to offer CBDC wallets. Such non-bank payment system operators, include third-party payment app providers like PhonePe, Google Pay and Paytm. This expansion will facilitate testing of the resiliency of CBDC platform to handle multi-channel transactions, and hopefully help lift underwhelming transaction volumes. https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=57638
#Fintech#CBDC#India#DFC
·reuters.com·
RBI to broaden e-rupee's retail access beyond banks
First participants in ECB wholesale DLT announced
First participants in ECB wholesale DLT announced
The European Central Bank (ECB) published the list of the first institutions to participate in its trials of the settlement of wholesale transactions on distributed ledger technology (DLT) based platforms using central bank money. The list is comprised of five central banks, ten institutions, six market DLT operators and five central banks. The trials will involve real transactions as well as mock simulations, with most of the tests focusing on securities settlement. There also plans to consider use cases for payment versus payment (FX) and cross border payment. Three settlement solutions are part of the trials, provided by the central banks of Germany (RTGS-based "trigger" solution), France (wholesale central bank digital currency (CBDC) solution) and Italy (TIPS Hashlink solution). https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews240403.en.html
#Fintech#CBDC#wCBDC#Settlement#DLT#ECB#Eurozone#DFC
·ledgerinsights.com·
First participants in ECB wholesale DLT announced
Ripple to launch USD-backed stablecoin on Ethereum and XRP Ledger
Ripple to launch USD-backed stablecoin on Ethereum and XRP Ledger
Ripple plans to launch a stablecoin pegged to the U.S. dollar across the Ethereum and XRP Ledger blockchains. They will be fully backed by U.S. dollar deposits, short-term U.S. government treasuries, and “other cash equivalents. Ripple will provide monthly attestations of its holdings that back the stablecoin, which will be audited by a third-party accounting firm. It is expected to be available later this year, subject to applicable regulatory approval.
#Fintech#CryptoAssets#Stablecoins#Ripple#DFC
·ripple.com·
Ripple to launch USD-backed stablecoin on Ethereum and XRP Ledger
Project Agorá: Exploring tokenized commercial bank deposits
Project Agorá: Exploring tokenized commercial bank deposits
The Bank for International Settlements (BIS) together with seven central banks will explore how tokenization of wholesale central bank money and commercial bank deposits on programmable platforms can improve the monetary system. Project Agorá's primary area of exploration will be to increase the speed and integrity of international payments, while lowering costs by building on the BIS's proposed unified ledger concept. The BIS will issue a call for expressions of interest to private financial institutions, with the Institute of International Finance (IIF) acting as the intermediary and convener, to join the project.
#Fintech#wCBDC#DepositTokens#UnifiedLedger#BIS#CBDC#DFC
·bis.org·
Project Agorá: Exploring tokenized commercial bank deposits
CBDCs: Consumer Attitudes and Expectations in the United States
CBDCs: Consumer Attitudes and Expectations in the United States
The Federal Reserve Bank of Philadelphia conducted a survey in October 2022 in which it asked consumers about their interest in retail central bank digital currency (CBDC). 52.6% of respondents said they would possibly use a digital dollar, but widespread consumer adoption will require that the product does not require fees to access or use (63.5% of respondents who would possibly use a digital dollar), be accepted widely in the marketplace (57.3%), provides high levels of security and privacy for consumers (42.0%), and bear interest (39.2%). At the same time, not all consumers were confident they could render an opinion about a CBDC.
#Fintech#CBDC#UnitedStates#DFC
·philadelphiafed.org·
CBDCs: Consumer Attitudes and Expectations in the United States
Bank of China launches eCNY offline payments for Qingdao Rail Transit
Bank of China launches eCNY offline payments for Qingdao Rail Transit
The Qingdao branch of the Bank of China (BOC) has rolled out a new payment option for Qingdao Rail Transit through digital yuan hardware wallets for payments without network and electricity. This “deferred payment” system allows travelers to use the public transit service first and pay later with the hardware wallet featured enabled on users’ smartphones. This functionality requires the use of an Android-based smartphone running a "Super SIM" card that stores digital yuan account information for use when there's no network or electricity, introduced by China Mobile, China Telecom, and China Unicom in 2023. https://baijiahao.baidu.com/s?id=1794932657646082801&wfr=spider&for=pc
#Fintech#CBDC#Offline#China#DFC
·cryptonews.com·
Bank of China launches eCNY offline payments for Qingdao Rail Transit
Japan’s first deposit-type stablecoin “Tochika” has been launched
Japan’s first deposit-type stablecoin “Tochika” has been launched

Japan’s first deposit-backed stablecoin “Tochika” has been launched Hokkoku Bank together with the City of Suzu and Kono Shinkin Bank, has launched the “Suzu Tochika” deposit-backed blockchain-based stablecoin in Suzu City, Ishikawa Prefecture. In the summer of 2023, the consortium launched the “Suzu Tochituka” digital payment service for Suzu City-issued “Suzu Tochipo” points used for payments at participating stores. A Tochika account can be opened by registering a bank deposit account for charging the Tochituka app, with 1 tochika equating to 1 yen, and later redeemed at the same rate. Tochika is accepted at Tochituka member stores. Merchants pay a 0.5% settlement fee on Tochika transactions.

#Fintech#CryptoAssets#Stablecoins#DepositTokens#Tokenization#Japan#DFC
·medium.com·
Japan’s first deposit-type stablecoin “Tochika” has been launched