DFC

5260 bookmarks
Newest
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
ECB looking for consultant to support digital euro offline functionality
ECB looking for consultant to support digital euro offline functionality
The European Central Bank (ECB) is looking for a senior payments industry expert to provide consultancy services on a 40% part-time basis to support the project team designing and developing the digital euro’s offline functionality. The successful candidate will support the team in (i) defining the deployment of the digital euro’s offline functionality in end users’ devices in line with the requirements set in the draft legislative proposal; (ii) designing and implementing an optimal user experience for offline contactless payments via smartphones; (iii) assessing how an offline digital euro can be integrated within the existing terminal landscape at the point of sale; (iv) supporting the drafting of detailed requirements for the digital euro’s offline functionality.
#CBDC#Eurozone#Fintech#ECB#Offline#Payments#DFC
·ecb.europa.eu·
ECB looking for consultant to support digital euro offline functionality
Between mBridge and SWIFT, Which Holds More Promise for Developing Countries?
Between mBridge and SWIFT, Which Holds More Promise for Developing Countries?
"mBridge stands out as an attractive choice for developing countries, especially due to its capability to support economic sovereignty, facilitate integration with existing financial infrastructure, and garner geopolitical support from BRICS countries. However, this does not diminish the value and importance of the SWIFT project, which, with its focus on interoperability and a long track record in the global payment system, provides a solid foundation for countries preparing to transition to more advanced and complex technologies."
#Fintech#CBDC#CrossBorder#mCBDC#SWIFT#BIS#DFC
·moderndiplomacy.eu·
Between mBridge and SWIFT, Which Holds More Promise for Developing Countries?
Idemia works with Qualcomm for offline CBDC payments
Idemia works with Qualcomm for offline CBDC payments
Idemia is working with Qualcomm to offer users offline payments on smartphones for central bank digital currencies (CBDCs) through the Snapdragon 8-series Mobile Platform which requires a Qualcomm Secure Processor Unit. Customers can make payments with traditional cards, biometric cards, smart phones, or smart watches. Idemia has already demonstrated offline CBDC on different payment devices. Now it can handle credentials and conduct payments offline, leveraging an integrated secure element in users’ phones.
#Fintech#CBDC#Payments#Offline#DFC
·biometricupdate.com·
Idemia works with Qualcomm for offline CBDC payments
The external financial spillovers of CBDCs
The external financial spillovers of CBDCs
The Journal of Economic Dynamics and Control (JEDC) published a paper that studies the macroeconomic consequences of a foreign CBDC available to residents in a small open economy using a DSGE model. It finds that a gradual and permanent increase in the domestic households' preferences toward the foreign CBDC leads to a structural reduction in economic activity, especially if the CBDC is designed to be similar to domestic deposits. The paper suggests several policy responses that may smooth the transition, limit disruptive effects and avoid the long-run GDP loss. It also shows that an economy with a large stock of foreign CBDC is better shielded from exogenous increases in the interest rate on foreign debt, if the CBDC remuneration remains constant.
#Fintech#CBDC#FinancialStability#DFC
·sciencedirect.com·
The external financial spillovers of CBDCs
Politics aside, what’s the plan for US central bank digital currency?
Politics aside, what’s the plan for US central bank digital currency?
The Hill published an article that calls for leaving the politics and fearmongering designed to squelch meaningful debate around a digital dollar and proceed with caution. Instead, it calls for investing in central bank digital currency (CBDC) research from a technical, legal, ethical and international perspective. That would include reviewing and possibly amending country’s legislation, laws and justice system so that it better protects individual freedoms, including the freedom to transact and the right to financial and individual privacy. The article points out that designing a CBDC with privacy controls that prevent government surveillance is possible, and this kind of technical development should continue. "To outright ban research, development and experimentation on CBDCs without attempting to find technological solutions to legitimate privacy risks first is a lazy and incomplete response that borders on censorship."
#Fintech#CBDC#UnitedStates#Privacy#DFC
·thehill.com·
Politics aside, what’s the plan for US central bank digital currency?
Powell's CBDC Puzzle: Deciphering Where the Fed Stands
Powell's CBDC Puzzle: Deciphering Where the Fed Stands
The Cato Institute published an article calling for the Federal Reserve to share more information regarding where it stands with respect to central bank digital currency (CBDC). The article recommends that the Fed come clean on the specific criteria that would influence it to make an official decision on whether it would or would not recommend launching a digital dollar. The article also calls on the Fed to come clean on whether it believes it has the authority to issue an intermediated CBDC, given that the Federal Reserve Act does not authorize direct Fed accounts for individuals, but may allow for an intermediated one. Also, it would be useful to know whether the Fed believes it has the authority to issue a distributed ledger technology (DLT) based wholesale CBDC, given that it already "issues" centralized ledger technology-based wholesale CBDC (e.g., commercial bank reserve accounts).
#Fintech#CBDC#UnitedStates#Cato#DFC
·cato.org·
Powell's CBDC Puzzle: Deciphering Where the Fed Stands
Custodia Bank Loses Lawsuit Challenging Fed Rejection of Master Account Application
Custodia Bank Loses Lawsuit Challenging Fed Rejection of Master Account Application
A federal judge has rejected Wyoming-based Custodia Bank's argument that it is entitled to a Federal Reserve master account and membership with the Fed. Judge Scott Skavdahl, of District of Wyoming, denied Custodia's motion for judgement on, writing that federal laws do not require the nation's central bank to give every eligible depository institution access to its master account system, nor did the provided evidence suggest that the Federal Reserve Board of Governors influence a regional branch of the Fed to deny its application for an account. Custodia is now "reviewing the Court’s decision and all of [its] options, including appeal".
#Fintech#Custodia#Stablecoins#Regulation#UnitedStates#FRB#DFC
·coindesk.com·
Custodia Bank Loses Lawsuit Challenging Fed Rejection of Master Account Application
Thailand retail CBDC pilot test project update (Thai only for now)
Thailand retail CBDC pilot test project update (Thai only for now)
The Bank of Thailand (BOT) published an update on its retail central bank digital currency (CBDC) pilot testing. Although the pilot successfully demonstrated the potential of the technology behind the retail CBDC system, the BOT said it has no plans to launch one and will use the technology design to further develop a more efficient payment system in the future. I’d like to say more about the paper, but it’s supposedly written in Thai, although Google Translate doesn’t seem to think so, and just returns gibberish.
#Fintech#CBDC#Thailand#DFC
·bot.or.th·
Thailand retail CBDC pilot test project update (Thai only for now)
CBDC and Other Digital Payments in Sub-Saharan Africa: A Regional Survey
CBDC and Other Digital Payments in Sub-Saharan Africa: A Regional Survey
The IMF published a Fintech Note on key findings from the Sub-Saharan Africa CBDC and Digital Payments Survey, shedding light on the motivations, benefits, and challenges of CBDC adoption, as well as the developments of digital private money and crypto assets in sub-Saharan Africa. More than 75% of the 33 central banks surveyed are engaged in—or are planning to engage in—CBDC research or pilot activities. Of these, roughly two-thirds are in the research phase, and slightly over one-third are planning to conclude their CBDC pilot programs within the next two years. More than a quarter are actively preparing to launch a CBDC by 2028, although legal challenges pose major hurdles to getting to that point. Financial inclusion, efficiency in domestic payments and facilitating remittances are the most dominant motivations for CBDC adoption. Fast payment systems and e-Money (such as mobile money) are considered as quick wins in sub-Saharan Africa, and about two-thirds of countries are in the process of implementing or considering fast payment systems that are mostly accessible through mobile phones or the internet.
#Fintech#CBDC#CryptoAssets#MobileMoney#FastPayments#Africa#IMF#DFC
·imf.org·
CBDC and Other Digital Payments in Sub-Saharan Africa: A Regional Survey
Connectedness between CBDC development status, financial stability and digital assets
Connectedness between CBDC development status, financial stability and digital assets
The Journal of International Financial Markets, Institutions and Money published a paper that examines the interconnectedness CBDC development and adoption levels, digital asset returns and financial stability. (CBDC development and adoption was measured with a news media coverage based "CBDC Uncertainty Index" developed by Wang et al (2022).) The paper finds a significant level of connectedness between CBDCs, digital assets and financial stability, but only a weak positive connectedness between CBDCs and returns on digital assets. Furthermore, the study finds bidirectional connectedness between CBDCs and other financial stability measures, suggesting that changes in CBDC performance can influence the overall stability of the financial system, and vice versa. [Wang paper: https://www.sciencedirect.com/science/article/pii/S0040162522002414]
#Fintech#CBDC#CryptoAssets#FinancialStability#DFC
·sciencedirect.com·
Connectedness between CBDC development status, financial stability and digital assets
A Macroeconomic model of central bank digital currency
A Macroeconomic model of central bank digital currency
A paper by a couple of San Francisco Federal Reserve Bank staff (Pascal Paul and Mauricio Ulate) published a paper that uses a New Keynesian DSGE model to study the introduction of a remunerated retail central bank digital currency (CBDC). At the heart of the model are monopolistic banks with market power in deposit and loan markets. When a remunerated retail CBDC is introduced, households benefit from an expansion of liquidity services and higher deposit rates as bank deposit market power is curtailed. However, even though deposits also flow out of the banking system and bank lending contracts, the paper finds substantial welfare gains as long as the CBDC interest rate doesn't exceed the policy rate minus 1%.
#Fintech#CBDC#rCBDC#DFC
·pascalpaul.de·
A Macroeconomic model of central bank digital currency
Digital Currencies Impact on Financial Stability and Financial Cycle
Digital Currencies Impact on Financial Stability and Financial Cycle
The Bank of Albania published a paper on the potential impact of digital currencies, including central bank digital currency (CBDC) on banking-centric small open economies. It concludes that the main risks come from global stablecoins, should they achieve major traction, which could result in large-scale currency substitution ("stablecoinization"). An effective policy approach towards global stablecoins would be through the cooperation of international standard-setting organizations and national authorities.
#Fintech#CBDC#Albania#DFC
·papers.ssrn.com·
Digital Currencies Impact on Financial Stability and Financial Cycle
Russian Central Bank and Finance Ministry discussing tests of budget payments in digital rubles
Russian Central Bank and Finance Ministry discussing tests of budget payments in digital rubles
The Bank of Russia and Russian Ministry of Finance are reportedly considering piloting the use of digital rubles for some social payments to citizens and subsidies to businesses, to ensure the targeted use of budget funds. In addition, the pilot would test the use of digital rubles for payments to the government.
#Fintech#CBDC#Russia#DFC
·interfax.ru·
Russian Central Bank and Finance Ministry discussing tests of budget payments in digital rubles
Kazakhstan tests cCBDC use in public procurement
Kazakhstan tests cCBDC use in public procurement
Kazakhstan authorities are planning to pilot the use smart contract-powered digital tenge to ensure that funds related to public procurement and government subsidies are spent precisely for their intended purposes. The Ministry of Finance and Anti-Corruption Agency as well as other key entities have signed a roadmap to collaborate with the National Bank of Kazakhstan on this particular central bank digital currency (CBDC) use case. This is made possible through the integration with government databases and registries, maintaining white and black lists of legal entities, goods and service categories.
#Fintech#CBDC#Kazakhstan#DFC
·globalgovernmentfintech.com·
Kazakhstan tests cCBDC use in public procurement
COVID-19 Hasn’t Killed Merchant Cash Acceptance in Canada
COVID-19 Hasn’t Killed Merchant Cash Acceptance in Canada
To better understand trends in payment methods accepted by Canadian businesses, including cash acceptance and the impact of innovations such as mobile payments, the Bank of Canada conducts the Merchant Acceptance Survey, a survey of small and medium-sized businesses. It finds that 96% of these businesses in Canada accepted cash in 2023. Acceptance of debit and credit cards has increased since 2021 to 89%, and acceptance of digital payments has increased as well. However, the vast majority of merchants (92%) have no plans to go cashless in the future.
#Fintech#Cash#Payments#Canada#DFC
·bankofcanada.ca·
COVID-19 Hasn’t Killed Merchant Cash Acceptance in Canada
The provision of multiple digital euro accounts to individual end users
The provision of multiple digital euro accounts to individual end users
The European Central Bank (ECB) published a technical note on the potential impact of users holding multiple digital euro accounts. Under the European Commission’s proposed digital euro regulations digital euro users would be able to hold multiple digital euro payment accounts with the same or different payment service providers (PSPs). This entails technical difficulties regarding the interplay of these accounts with the management of a consolidated holding limit. The analysis shows that it is technically feasible to provide users with multiple accounts in conjunction with an individual holding limit, but trade-offs would be necessary, mainly in terms of user experience as well as technical and operational implementation for PSPs.
#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
The provision of multiple digital euro accounts to individual end users
SWIFT hails results of CBDC connector testing
SWIFT hails results of CBDC connector testing
SWIFT says a new round of sandbox testing has found that its central bank digital currency interlinking technology can enable financial institutions to carry out a wide range of transactions using central bank digital currency (CBDC) and other forms of digital tokens, easily incorporating them into their business practices. Over six months, SWIFT worked with 38 global institutions and over 125 sandbox users, and made more than 750 transactions, including simulated digital trade, tokenized asset and FX networks, as well as CBDCs for payments. The testing showed that SWIFT’s CBDC connector has the potential to simplify and speed up trade flows, unlock growth in tokenized securities markets, and enable efficient FX settlement, while allowing financial institutions to continue to make use of their existing infrastructure.
#Fintech#CBDC#SWIFT#DFC
·swift.com·
SWIFT hails results of CBDC connector testing
Chilean central bank publishes CBDC exploration progress report
Chilean central bank publishes CBDC exploration progress report
Banco Central Chile (BCCh) published its second report on the issuance of central bank digital currency (CBDC). It gives an account of lessons learned from different stakeholders and indicates that it will continue with the exploration process, which will include proofs of concept. However, the continuation of exploration should in no way be understood as a decision to issue CBDC nor is it aimed at eliminating or replacing traditional means of payment, in particular cash, since the BCCh continues to consider that there is not yet sufficient information to make a final decision regarding its issuance.
#Fintech#CBDC#Chile#DFC
·bcentral.cl·
Chilean central bank publishes CBDC exploration progress report
Payment Stablecoins for Real-time Gross Settlements
Payment Stablecoins for Real-time Gross Settlements
Payment stablecoins, a type of stablecoin fully backed by high quality and liquid assets, are used proportionally less in crypto trading than fiat dollars are used in the trading of traditional assets. The adoption of digital token money such as payment stablecoins for general use in real-time gross settlement (RTGS) could potentially mitigate risks associated with concentration and liquidity in the current payment systems. Greater integration of payment stablecoins with fiat payment rails, through appropriate regulation and limited access to central bank accounts, can preserve the singleness of money and mitigate against financial stability concerns. (Gordon Liao, Circle)
#Fintech#CryptoAssets#Stablecoins#Circle#DFC
·papers.ssrn.com·
Payment Stablecoins for Real-time Gross Settlements
A Decentralized Central Bank Digital Currency
A Decentralized Central Bank Digital Currency
This paper proposes a decentralized CBDC that is controlled by many central banks together or countries in the world. It is only for international transactions between member countries. While domestic transactions continue to use the national currency of each country. A decentralized CBDC can explore the advantages of digital technologies more deeply than the centralized ones by making reconciliations between central banks in real-time. Furthermore, this system provides international liquidity for all (member) countries in the world sustainably and free of charge. This system eliminates global imbalances, makes the exchange rate more stable, and so makes the whole international monetary system naturally more stable. In doing so, the system does not require economic integration so that all countries in the world may join without many conditions.
#Fintech#CBDC#CrossBorder#mCBDC#DFC
·mpra.ub.uni-muenchen.de·
A Decentralized Central Bank Digital Currency
Turkish central bank digital currency project pilot phase confirmed
Turkish central bank digital currency project pilot phase confirmed
On February 19, 2024 I reported on the English version of the Türkiye Cumhuriyet Merkez Bankası (CBRT) report on the first phase of its digital Turkish lira testing (originally published in Turkish in December 2023). The report said that “pilot” testing had been done, without providing enough information as to whether the pilots are really pilots. However, thanks to Central Bank Payment News, we now have that clarity to label the CBRT phase one testing as pilot testing. Here’s CBRT Deputy Executive Directors Zeynel Abidin Avcı and Bilgehan Kürşad Öz: “The pilot tests involved real users and specific sale-points, such as cafes, restaurants, and giftshops. In total, the two pilot tests ran for close to a month, and more than 2.000 users, who are not central bank employees, made their payments and transfers. By doing so, they have tested the systems and provided valuable feedback.”
#Fintech#CBDC#Turkey#DFC
·cbpn.currencyresearch.com·
Turkish central bank digital currency project pilot phase confirmed
CBDC: Banking and Anonymity
CBDC: Banking and Anonymity
The Bank of Canada published a paper that examines the optimal amount of user anonymity in a CBDC in the context of bank lending. Anonymity, defined as the lender’s inability to discern an entrepreneur’s actions that enable fund diversion, influences the choice of payment instrument due to its impact on a bank’s lending decisions. The paper shows that moderate anonymity in CBDC leads to an inefficient pooling equilibrium. To avoid this, CBDC anonymity should be either low, reducing attractiveness, or high, discouraging bank lending. Specifically, the anonymity should be high when CBDC significantly benefits sales, and low otherwise. However, competition between deposits and CBDC may hinder the implementation of low anonymity.
#Fintech#CBDC#Anonymity#DFC
·bankofcanada.ca·
CBDC: Banking and Anonymity
CBUAE launches digital central bank digital currency strategy
CBUAE launches digital central bank digital currency strategy
In March 2023, the CBUAE announced the launch of its CBDC strategy, the first phase of which was expected to be complete June 2024. It included a soft launch of the BIS Innovation Hub led mBridge cross-border wholesale CBDC platform, proof-of-concept work for bilateral CBDC bridges with India, and proof-of-concept work for domestic wholesale and retail CBDC. The CBUAE aims to ensure the readiness of the UAE to integrate CBDC-based payment infrastructures with the future potential tokenization world.
#Fintech#CBDC#UAE#DFC
·centralbank.ae·
CBUAE launches digital central bank digital currency strategy