DFC

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PayPal’s new stablecoin on Solana will offer ‘confidential transfers’
PayPal’s new stablecoin on Solana will offer ‘confidential transfers’
PayPal’s PYUSD stablecoin, which previously had only been available on Ethereum, has been deployed on Solana which offers “confidential transfers” as an optional feature. When enabled, it would allow merchants to provide confidentiality for transaction amounts to their consumers while maintaining visibility for regulatory purposes. According to PayPal, it chose the Solana blockchain for its high speeds with extremely low costs. https://solana.com/news/pyusd-paypal-solana-developer https://newsroom.paypal-corp.com/2024-05-29-PayPal-USD-Stablecoin-Now-Available-on-Solana-Blockchain,-Providing-Faster,-Cheaper-Transactions-for-Consumers
#Fintech#CryptoAssets#Ethereum#Solana#PayPal#Stablecoins#PYUSD#Privacy#DFC
·cointelegraph.com·
PayPal’s new stablecoin on Solana will offer ‘confidential transfers’
Spain’s central bank launches second wholesale CBDC trial
Spain’s central bank launches second wholesale CBDC trial
Banco de España has launched a second wholesale central bank digital currency (CBDC) trial, this time to test the settlement of natively digital bond transactions, and make coupon and redemption payments. The first trial, announced in January, included developing a tokenized deposit solution for interbank payments, and settling tokenized securities (i.e., not natively digital) transactions. https://boe.gob.es/boe/dias/2024/05/06/pdfs/BOE-A-2024-9112.pdf
#Fintech#CBDC#wCBDC#Eurozone#Spain#Tokenization#Settlement#DFC
·europapress.es·
Spain’s central bank launches second wholesale CBDC trial
Bank of Israel launches the Digital Shekel Challenge
Bank of Israel launches the Digital Shekel Challenge
The Bank of Israel (BOI) is inviting anyone (from Israel or abroad) interested in studying or experimenting with the use of a digital shekel to submit a request to join the Digital Shekel Challenge. Preference will be given to uses with innovative characteristics in the payments market, whether they are improvements to existing applications, or completely new applications. Contestants will be asked to technologically develop various use cases for the digital shekel, by using the application programming interface (API) layer at the center of the proposed two-tier central bank digital currency (CBDC) model. The API layer provides functionalities that enable service providers to connect to the digital shekel system and offer end users among the public a wide and innovative range of services, while maintaining end users’ privacy and the security and reliability of the payment system.
#Fintech#CBDC#Israel#DFC
·boi.org.il·
Bank of Israel launches the Digital Shekel Challenge
Drex pilot postponed to improve privacy and will have a new phase in 2025
Drex pilot postponed to improve privacy and will have a new phase in 2025
Banco Central do Brasil (BCB) has has extended the Drex project timeline into 2025 because the technological solutions tested in the first phase "did not present the necessary maturity to guarantee compliance with all requirements legal issues related to the preservation of citizens’ privacy”. The BCB decided that it would be inappropriate to advance testing to a pilot phase (where real users are involved) until there is "certainty about the ability to meet privacy requirements". The next phase will seek to incorporate new functionalities, such as the implementation of smart contracts within the platform, so that the private institutions participating in the project will be able to create services and business models on the network, without being limited to those designed by the BCB itself. https://normativos.bcb.gov.br/Votos/BCB/202466/Voto_do_BC_66_2024.pdf
#Fintech#CBDC#Brazil#DFC
·valor.globo.com·
Drex pilot postponed to improve privacy and will have a new phase in 2025
Central Bank Digital Currency and Monetary Policy
Central Bank Digital Currency and Monetary Policy
The IMF's Dong He published an update on ongoing work being undertaken by the IMF's Monetary and Capital Markets Department on the implications of central bank digital currency (CBDC) for monetary policy. He argued that universally convertible and interoperable CBDC could bolster the role of central bank money as both the ultimate settlement asset and the unit of account, and preserve the central bank's capacity to implement monetary policy effectively in the digital age. An important challenge will be to figure out how the demand for reserves would be affected by the introduction of CBDC. The operational framework may need to be reconfigured to deal with increased volatility in the demand for reserves, and central bank capital buffers may also need to be revisited if balance sheet materially increases in size and in financial risks because of CBDC adoption. An interest-bearing CBDC could amplify the passthrough from policy interest rates to broader monetary conditions, albeit at the risk of disintermediating banks if the interest rate is set too high. But even a non-interest-bearing CBDC could enhance the channels of monetary policy transmission, although the magnitude of this effect is anticipated to be modest and heavily reliant on country characteristics, such as the capacity of CBDC to advance financial inclusion or diminish the appeal of currency substitution.
#Fintech#CBDC#IMF#DFC
·researchgate.net·
Central Bank Digital Currency and Monetary Policy
The flaws in the CBDC Anti-Surveillance Bill
The flaws in the CBDC Anti-Surveillance Bill
According to Ledger Insights, the wording of the CBDC Anti-Surveillance State Act (H.R. 5403) recently passed by the U.S. House of Representatives is too broad and will have unintended consequences. The bill will require the Federal Reserve to obtain congressional approval before issuing a central bank digital currency (CBDC). However, the wording is very sloppy, particularly by blurring the lines between retail and wholesale CBDC. For example, it could prohibit the current practice of using remuneration on commercial bank reserves held at the Fed as a policy tool, by not recognizing that those reserve balances are already wholesale CBDCs, albeit not on a distributed ledger. However, hopefully that can be sorted out as it moves through Congress.
#Fintech#CBDC#UnitedStates#DFC
·ledgerinsights.com·
The flaws in the CBDC Anti-Surveillance Bill
House passes bill barring Federal Reserve from issuing digital dollar
House passes bill barring Federal Reserve from issuing digital dollar
The U.S. House of Representatives passed the CBDC Anti-Surveillance State Act (H.R. 5403) that requires the Federal Reserve to obtain congressional approval before issuing a central bank digital currency (CBDC). The bill seeks to amend the Federal Reserve Act, barring the Fed from providing direct consumer services or leveraging CBDCs for monetary policy (i.e., remunerating a CBDC) without Congress’s explicit consent. As pointed out by Ledger Insights, the drafting is very sloppy, particularly by blurring the lines between retail and wholesale CBDC, and full enactment could have unintended consequences. For example, the sloppy drafting could prohibit the current practice of using remuneration on commercial bank reserves held at the Fed as a policy tool. https://www.govinfo.gov/content/pkg/BILLS-118hr5403rh/pdf/BILLS-118hr5403rh.pdf
#Fintech#CBDC#UnitedStates#DFC
·thehill.com·
House passes bill barring Federal Reserve from issuing digital dollar
Towards a CBDC for the euro area
Towards a CBDC for the euro area
"The aim of this study is a systematic presentation and brief analysis of (the majority of) the provisions of the proposal for a Regulation of the European Parliament and of the Council “on the establishment of the digital euro”, which was submitted by the Commission on 28 June 2023 as part of its “Single Currency Package” (taking in particular into account its Explanatory Memorandum and most of its recitals). The key concerns raised and proposals for amendment made by the European Central Bank (ECB) in its related Opinion of 31 October 2023 are also discussed."
#Fintech#CBDC#Eurozone#DFC
·papers.ssrn.com·
Towards a CBDC for the euro area
Retail CBDC Impact on Digital Payments and Bank Deposits: Evidence from India
Retail CBDC Impact on Digital Payments and Bank Deposits: Evidence from India
The NBER published an empirical analysis utilizing detailed transaction data from India's digital rupee pilot to explore the dynamics between central bank digital currency (CBDC) and existing digital payment methods, as well as the implications of increased CBDC usage on traditional bank deposits. It finds that policies that increase transaction costs for current digital payment methods catalyze a substitution effect, bolstering CBDC adoption. Furthermore, an uptick in CBDC usage is associated with a notable decline in bank, cash, and savings deposits, suggesting potential paths to bank disintermediation.
#Fintech#CBDC#India#FinancialStability#DFC
·nber.org·
Retail CBDC Impact on Digital Payments and Bank Deposits: Evidence from India
Bank of England point-of-sale proof of concept
Bank of England point-of-sale proof of concept
The Bank of England (BOE) has assessed the technical feasibility of using existing point-of-sale (POS) hardware, as currently used in the UK, to initiate digital pound payments. This involved a proof of concept (POC) that used EMV standards to send payment instructions from smart cards to POS devices, and then to an application programming interface (API). It demonstrated that, while existing POS terminals may not need to be modified to make online digital pound payments, they might need to be modified for offline payments.
#Fintech#CBDC#UnitedKingdom#Offline#DFC
·bankofengland.co.uk·
Bank of England point-of-sale proof of concept
Bank of Ghana completes first Project DESFT proof of concept
Bank of Ghana completes first Project DESFT proof of concept
The Bank of Ghana (BOG) has completed the second phase of Project Digital Economy Semi-Fungible Token (DESFT), a joint project with the Monetary Authority of Singapore (MAS) and the United Nations Development Programme (UNDP). The first phase saw the development of the blockchain-based Universal Trusted Credentials (UTC) system that enables micro, small and medium enterprises (MSMEs) to efficiently verify authenticity of key information, such as basic credentials, licenses, certificates, and trade records across borders. In the second phase, a cross-border payment was made using UTCs, the eCedi CBDC and a Singapore dollar stablecoin, using the Purpose-Bound Money (PBM) protocol. https://www.bog.gov.gh/wp-content/uploads/2024/06/PRESS-RELEASE-BANK-OF-GHANA-ANNOUNCES-SUCCESSFUL-COMPLETION-OF-CROSS-BORDER-TRADE-USING-DIGITAL-CREDENTIALS-120624.pdf
#Fintech#CBDC#CrossBorder#Singapore#Ghana#G+D#DFC
·ghanabusinessnews.com·
Bank of Ghana completes first Project DESFT proof of concept
Expanding the cross-boundary e-CNY pilot in Hong Kong
Expanding the cross-boundary e-CNY pilot in Hong Kong
The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) are expanding the scope of the e-CNY pilot in Hong Kong to facilitate the set up and the use of e-CNY wallets by Hong Kong residents, as well as the top-up of e-CNY wallets through the Faster Payment System (FPS). This marks the world's first linkage of a faster payment system with a central bank digital currency (CBDC) system. Users can now set up e-CNY personal wallets in Hong Kong, which requires only their Hong Kong mobile phone numbers. The e-CNY wallets can then be used for cross-boundary payments to merchants, but not person-to-person (P2P) transfers.
#Fintech#CBDC#CrossBorder#HongKong#China#Payments#DFC
·hkma.gov.hk·
Expanding the cross-boundary e-CNY pilot in Hong Kong
Cross-Border Payments with Retail CBDCs
Cross-Border Payments with Retail CBDCs
The IMF published a paper that draws lessons from ongoing experimentation and research to identify design and policy considerations when developing retail CBDC systems so they may be compatible for cross-border payments. The paper provides an analytical framework through the lens of five interrelated elements: access, communication, currency conversion, compliance, and settlement. For each element, the paper identifies key CBDC design choices, many of which can be tackled in the initial preparation phases.
#Fintech#CBDC#CrossBorder#IMF#DFC
·imf.org·
Cross-Border Payments with Retail CBDCs
Banks in Kazakhstan roll out CBDC card services
Banks in Kazakhstan roll out CBDC card services
Early adopters of Kazakhstan’s digital tenge central bank digital currency (CBDC) who are customers of Altyn Bank, Eurasian Bank and Halyk Bank can apply for virtual and plastic CBDC cards and use them for purchases across Mastercard and Visa global networks. Additionally, they can withdraw cash at ATMs, link their cards to Google Pay, Apple Pay and Samsung Pay, monitor their CBDC card balance and transaction history through mobile banking; and access other related services.
#Fintech#CBDC#Kazakhstan#DFC
·finextra.com·
Banks in Kazakhstan roll out CBDC card services
World Bank partners with SNB and SDX to issue digital bonds
World Bank partners with SNB and SDX to issue digital bonds
The World Bank will issue the first CHF digital bond by an international issuer to settle in Swiss Franc wholesale central bank digital currency (CBDC) provided by the Swiss National Bank (SNB). The coupon and redemption payments on the seven-year CHF 200 million bond will be made using tokenized CHF on the SIX Digital Exchange (SDX). The SDX connects to conventional settlement systems such as Euroclear and Clearstream, via SIX SIS, allowing investors to hold the digital bond through their traditional custodians.
#Fintech#CBDC#wCBDC#Settlement#Switzerland#WorldBank#DFC
·worldbank.org·
World Bank partners with SNB and SDX to issue digital bonds
The possible impact of the digital euro on Sweden
The possible impact of the digital euro on Sweden
Sveriges Riksbank published a paper that assesses the impact of a European Commission legislative proposal to open up the possibility for non-euro countries to allow their citizens and businesses to access digital euro services. It concludes that the impact will be minimal, but a digital euro could increase the need for an e-krona to safeguard the role of the Swedish krona and may have positive effects on the work on an e-krona. By taking advantage of the technology and regulatory framework being developed for a digital euro, the costs and complexity of the work on an e-krona can be reduced. Together with an e-krona, a digital euro could also improve and simplify cross-border payments.
#Fintech#CBDC#Sweden#Eurozone#DFC
·riksbank.se·
The possible impact of the digital euro on Sweden
Central Bank of Taiwan launches CBDC research project
Central Bank of Taiwan launches CBDC research project
[On June 18, 2020] the Central Bank of Taiwan announced a multi-phase approach to central bank digital currency (CBDC) research, starting with retail CBDC in the first half of 2020 and moving to distributed ledger technology (DLT) based wholesale CBDC in the third quarter of 2020.
#Fintech#CBDC#Taiwan#DFC
·cbc.gov.tw·
Central Bank of Taiwan launches CBDC research project
Central banks of France and Tunisia conduct WCBDC experiment
Central banks of France and Tunisia conduct WCBDC experiment
[On July 8th 2021] Banque de France successfully carried out a wholesale central bank digital currency (CBDC) experiment in cooperation with Banque Centrale de Tunisie. A wire transfer took place between two individuals, in commercial bank money through transfer of wholesale CBDC between the two central banks.
#Fintech#CBDC#France#Tunisia#DFC
·bct.gov.tn·
Central banks of France and Tunisia conduct WCBDC experiment
Few Chinese workers paid in digital yuan choose to use it
Few Chinese workers paid in digital yuan choose to use it
Some Chinese cities have begun to pay employees with eCNY but most convert to cash immediately. Ledger Insights points out that this may be because few retail outlets accept it because of the zero acceptance fees paid by merchants, versus the 0.6% paid on other retail digital payment instruments. Apparently, point-of-sale (POS) equipment manufacturers earn a cut of merchant fees, so zero eCNY fees disincentivize conversion of POS equipment.
#Fintech#CBDC#China#DFC
·ledgerinsights.com·
Few Chinese workers paid in digital yuan choose to use it
HKMA establishes the Project Ensemble Architecture Community
HKMA establishes the Project Ensemble Architecture Community
The Hong Kong Monetary Authority (HKMA) has established the Project Ensemble Architecture Community to work with the industry to shape standards and provide suggestions to support the development of Hong Kong's tokenization market. The Community aims to develop a set of industry standards to support interoperability among wholesale central bank digital currency (WCBDC), tokenized money and tokenised assets. The Community will also assist in the design and implementation of a sandbox to launch by around mid-2024.
#Fintech#Tokenization#CBDC#wCBDC#DepositTokens#Sandboxes#HongKong#DFC
·hkma.gov.hk·
HKMA establishes the Project Ensemble Architecture Community
Digital rupee to get boost from offline feature
Digital rupee to get boost from offline feature
Speaking at the Bank for International Settlements (BIS) Innovation Summit, Reserve Bank of India (RBI) Governor Shaktikanta Das said offline accessibility, which is in the works, will make the digital rupee an attractive choice for retail users. Governor Das said that the digital rupee should have the same benefits as cash - anonymity and finality of settlement. While there is currently a preference for the Universal Payments Interface (UPI) among retail users, Governor Das was hopeful that offline and programmable CBDC will change this going forward.
#Fintech#CBDC#Offline#India#DFC
·timesofindia.indiatimes.com·
Digital rupee to get boost from offline feature
CBDC and the operational framework of monetary policy
CBDC and the operational framework of monetary policy
The Bank of Spain published a paper that analyzes the impact of introducing a central bank-issued digital currency (CBDC) on the operational framework of monetary policy and the macroeconomy as a whole. It is based on a theoretical model that is calibrated to replicate the main monetary and financial aggregates in the euro area. It predicts that CBDC adoption implies a roughly equivalent reduction in banks' deposit funding, but this has a rather small effect on bank lending to the real economy. This result reflects the parallel impact of a CBDC on a central bank's operational framework. For relatively moderate CBDC adoption levels, the reduction in deposits is absorbed by an almost one-to-one fall in reserves at the central bank, implying a transition from a 'floor' system – with ample reserves – to a 'corridor' system. For larger CBDC adoption, the loss of bank deposits is compensated by increased recourse to central bank credit, as the corridor system gives way to a 'ceiling' system with scarce reserves.
#Fintech#CBDC#FinancialStability#Spain#DFC
·bde.es·
CBDC and the operational framework of monetary policy
Rwanda central bank launches CBDC public consultation
Rwanda central bank launches CBDC public consultation
The National Bank of Rwanda (NBR) launched a public consultation on the potential issuance of central bank digital currency (CBDC). A detailed feasibility study, launched in 2023, formed the basis of its approach, that identified four "sweet spots" for a Rwandan CBDC: (i) increase resilience against possible network outages, power failures and natural disasters, (ii) improve innovation and competition, (iii) contribute to achieving the cashless economy national initiative over time, and (iv)develop faster, cheaper, more transparent, and more inclusive crossborder remittances. The consultative paper recommends a cautious iterative approach with multiple proofs of concepts and pilots.
#Fintech#CBDC#Rwanda#DFC
·bnr.rw·
Rwanda central bank launches CBDC public consultation
More than 90% of stablecoin transactions aren’t from real users
More than 90% of stablecoin transactions aren’t from real users
More than 90% of stablecoin transactions aren’t coming from genuine users, according to VISA and Allium Labs. Their new metric strips out transactions initiated by bots and large-scale traders to isolate those made by real people. Out of about $2.2 trillion in total transactions in April 2024, just $149 billion originated from “organic” payments activity. https://visaonchainanalytics.com/
#Fintech#CryptoAssets#Stablecoins#DFC
·bloomberg.com·
More than 90% of stablecoin transactions aren’t from real users
Successful execution of RBI’s programmable CBDC pilot
Successful execution of RBI’s programmable CBDC pilot
IndusInd Bank successfully implemented the Reserve Bank of India’s (RBI’s) programmable central bank digital currency (CBDC) pilot. It was executed as an alternate form of CBDC wherein the bank can program the end use of funds being disbursed to farmers in lieu of generation of carbon credits. IndusInd Bank initiated the programmable CBDC disbursement to 50 farmers in Ratnagiri district of Maharashtra, which will expand to 1000 farmers. Phase 2 of the project will focus on Safai Karmacharis, aiming to increase their income by leveraging revenues generated from the collection, recycling, and repurposing of plastic waste.
#Fintech#CBDC#Programmability#India#DFC
·indusind.com·
Successful execution of RBI’s programmable CBDC pilot
BIS Innovation Hub Project Pyxtrial request for quotation
BIS Innovation Hub Project Pyxtrial request for quotation
In February 2023, the Bank for International Settlements (BIS) Innovation Hub published its 2023 workplan that included Project Pyxtrial, aimed at building a stablecoins monitoring platform to ensure that the backing assets at least match the stablecoin issuance. That was the last I heard of it, but I just came across a request for quotation (RFQ) that was published in August 2023 for “visionary partners with outstanding experience and technological capabilities to join [the London Centre] to design and build prototypes of the data reporting pipeline. The RFQ was supposed to have closed in September 2023 and the work started in October.
#Fintech#CryptoAssets#Stablecoins#Regulation#BIS#DFC
·bis.org·
BIS Innovation Hub Project Pyxtrial request for quotation
CBDCs in the Middle East and Central Asia
CBDCs in the Middle East and Central Asia
The IMF published a paper on central bank digital currency (CBDC) developments in the Middle East and Central Asia (ME&CA) region. A survey of IMF country teams representing 31 ME&CA countries found that 19 are considering issuing or exploring CBDC, most of which are at the research stage, although a few are at the proof-of-concept (POC) stage (Bahrain, Georgia, Saudi Arabia, United Arab Emirates). Kazakhstan is most advanced in its CBDC journey, having initiated two digital tenge pilots. The region's fragile and conflict-affected states and low-income countries (LICs) have expressed limited interest. The paper also includes three country case studies (Jordan, Kazakhstan, and Libya).
#Fintech#CBDC#IMF#MiddleEast#Asia#DFC
·imf.org·
CBDCs in the Middle East and Central Asia
ECB says iPhone is currently incompatible with digital euro
ECB says iPhone is currently incompatible with digital euro
The European Central Bank (ECB) is opposed to Apple’s proposed changes to the iPhone’s near-field communication (NFC) at the core of Apple Pay. The ECB argues that by not providing third parties with full access to the secure element (SE) of its NFC technology, Apple Pay maintains an unfair advantage against third-party payment apps on iPhones. Because of these limitations, contactless payments made through third-party apps on iPhone would be less user-friendly and ultimately be slower than Apple’s offering. Also, iPhones would be incompatible with the digital euro, because the current enabling legislation requires the ability to do peer-to-peer (P2P) and offline payments, the latter which requires access to the SE.
#Fintech#CBDC#Apple#ECB#Eurozone#NFC#DFC
·ecb.europa.eu·
ECB says iPhone is currently incompatible with digital euro
Kyrgyz Bank advances its digital som project
Kyrgyz Bank advances its digital som project
The Kyrgyz Bank Interagency Working Group (IWG) on Regulatory Impact Analysis (RIA) wrapped up its work on the implementation of a potential digital som. Their comprehensive analysis delved into ten Kyrgyz Republic legislative acts related to the introduction of the central bank digital currency (CBDC), proposing crucial amendments in the process. During a meeting of the Steering Committee on Digital Som, the IWG demonstrated a demo version of the digital som on the (blockchain) platform of one of the CBDC platform providers of CBDC. Going forward, the project team will continue further work on research, analysis of proposals, as well as negotiations with CBDC platform. https://www.linkedin.com/posts/altynbek-kamchybek-uulu-0883b927a_digitalsom-regulatoryimpactanalysis-economicdevelopment-activity-7188456348999712768-PDZw/
#Fintech#CBDC#Kyrgyzstan#DFC
·nbkr.kg·
Kyrgyz Bank advances its digital som project
Stablecoins and national security: Learning the lessons of Eurodollars
Stablecoins and national security: Learning the lessons of Eurodollars
The Brookings Institute published a paper by Timothy Massad, U.S. Commodity Futures Trading Commission (CFTC) , on how blockchain-based stablecoins could undermine the global financial system plumbing that has been exploited by U.S. authorities to protect national security interests (e.g., by implementing sanctions). He discusses various regulatory and legislative options, and finds them either insufficient or disrespecting reasonable privacy expectations. Mr. Massad suggests that, at minimum, stablecoin issuers should be required to engage in enhanced monitoring of blockchains for suspicious transactions and consider when the issuer must “freeze” stablecoins.
#Fintech#CryptoAssets#Stablecoins#Regulation#FinancialIntegrity#UnitedStates#DFC
·brookings.edu·
Stablecoins and national security: Learning the lessons of Eurodollars