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Project mBridge update: experimenting with a multi-CBDC platform for cross-border payments
Project mBridge update: experimenting with a multi-CBDC platform for cross-border payments

BIS mBridge cross border CBDC project has 23 central banks, IMF and World Bank as observers

The Bank for International Settlements (BIS) Innovation Hub published an update on its mBridge multiple central bank digital currency (multi-CBDC) common platform for wholesale cross-border payments. Project mBridge supports real-time, peer-to-peer, cross-border payments and foreign exchange transactions using wholesale CBDCs, focusing on the use case of international trade. In 2022, a pilot involving real corporate transactions was conducted on the platform among participating central banks, selected commercial banks and their corporate customers in four jurisdictions. A minimum viable project (MVP) will be launched in the middle of next year. The project is a collaborative effort of the BIS Innovation Hub, four founding central banks and over 25 observing members

#Fintech#CBDC#wCBDC#mCBDC#BIS#CrossBorder#Payments#DFC
·bis.org·
Project mBridge update: experimenting with a multi-CBDC platform for cross-border payments
HKMA publishes the e-HKD Pilot Program Phase 1 Report
HKMA publishes the e-HKD Pilot Program Phase 1 Report

The Hong Kong Monetary Authority (HKMA) published a report on the key findings, learnings, and assessments of the 14 pilots conducted by the 16 participating firms under Phase 1 of the e-HKD pilot program. The pilots showed that the programmability, tokenization, and atomic settlement associated with an e-HKD central bank digital currency (CBDC) could add unique value to the Hong Kong payment ecosystem. An e-HKD has the potential to facilitate faster, more cost-efficient, and more inclusive transactions., and enable new types of economic transactions. The next phase of the program will explore new e-HKD use cases and delve deeper into select pilots from Phase 1. See also: -https://www.visa.com.hk/zh_HK/about-visa/newsroom/press-releases/nr-hk-231101.html -https://www.gi-de.com/en/group/press/press-releases/standard-chartered-hong-kong-and-giesecke-devrient-announce-key-findings-of-its-e-hkd-pilot-study-on-offline-payment

#Fintech#CBDC#HongKong#VISA#G+D#DFC
·hkma.gov.hk·
HKMA publishes the e-HKD Pilot Program Phase 1 Report
RBI’s wholesale pilot of CBDC losing steam after one year
RBI’s wholesale pilot of CBDC losing steam after one year
The Reserve Bank of India (RBI) wholesale central bank digital currency (CBDC) pilot started in November 2022 is seen as losing steam as the number of trades and settlement volumes has constantly fallen over the last few months, according to data compiled by Moneycontrol. The settlement of trades in government securities using digital rupees was in the range of Rs 5 billion to 6 billion a day in the first month of launch, which in the later months fell to just Rs 100 million to 600 million a day. The number of trades has fallen from 45 to 60 a day in the first month to just two to six a day in the later months.
#Fintech#CBDC#wCBDC#Settlement#India#DFC
·moneycontrol.com·
RBI’s wholesale pilot of CBDC losing steam after one year
Central Bank Digital Currency and Banking Choices
Central Bank Digital Currency and Banking Choices
Several Bank of Canada staffers published a paper that uses a structural model where each household chooses a financial institution to deposit their digital money to estimate the extent to which a central bank digital currency (CBDC) competes with deposit-taking financial institutions. Households value the interest paid on digital money, the possibility of obtaining complementary financial products, and access to in-branch services. Introducing a counterfactual CBDC that is non-interest-bearing and does not provide complementary financial products can substantially crowd out bank deposits only if it provides a better service network. Imposing a limit on CBDC holding would effectively limit this crowding out.
#Fintech#CBDC#Canada#DFC
·ecb.europa.eu·
Central Bank Digital Currency and Banking Choices
Sveriges Riksbank: Political decisions needed urgently so that everyone can pay
Sveriges Riksbank: Political decisions needed urgently so that everyone can pay
Sveriges Riksbank responded to the Parliamentary Payment Inquiry report that was published in March 2023. It agreed with the report's conclusion that too many people lack access to both digital and cash payments and that the state needs to take further measures to make digital systems more accessible, less vulnerable and more reliable. Legislation on cash needs to be tightened up so that retailers are obliged to accept cash as payment for essential goods, with exceptions, such as for smaller businesses. Also, banks should offer payment accounts with limited functionality. However, the Riksbank considers that the Inquiry has not gone far enough in its proposals for a future state role in the payment system and that, for example, legislative work on a possible e-krona should begin immediately. And although the Riksbank agrees with the Inquiry's proposals on state guarantees for offline card payments, regulatory push and technical standards are also required.
#Fintech#CBDC#Sweden#Offline#DFC
·riksbank.se·
Sveriges Riksbank: Political decisions needed urgently so that everyone can pay
BOE CBDC Consultation Garnered Over 50,000 Responses, Many Privacy Concerns
BOE CBDC Consultation Garnered Over 50,000 Responses, Many Privacy Concerns
In his final speech as Deputy Governor for Financial Stability, Jon Cunliffe revealed that the Bank of England (BOE) and HM Treasury (HMT) central bank digital currency (CBDC) consultation paper attracted over 50,000 responses. The majority expressed general, high-level concerns about privacy, programmability and the decline of cash. According to the paper, users of a digital pound would have the same level of privacy that they enjoy today when making electronic payments, and the BOE would not see people's data. Also, neither government nor the BOE would program a digital pound or constrain the uses to which it could be put. It would be for private sector firms to develop and offer, for user consent, payment services involving greater programmability. As regards cash, the government recently legislated to ensure the availability of physical cash to those who prefer to use it and the BOE has made clear that it will provide physical cash as long as there is any demand for it. https://www.bankofengland.co.uk/speech/2023/october/jon-cunliffe-speech-at-the-economics-of-payments-xii-conference
#Fintech#CBDC#UnitedKingdom#Privacy#Programmability#Cash#DFC
·coindesk.com·
BOE CBDC Consultation Garnered Over 50,000 Responses, Many Privacy Concerns
Project Polaris: high-level design guide for offline payments
Project Polaris: high-level design guide for offline payments
The Bank for International Settlements (BIS) Innovation Hub published a guide on the technology underpinning offline central bank digital currency (CBDC) payments. This follows up on an earlier overview report, by deep diving into the requirements and design choices, based on information gathered in a series of workshops conducted in collaboration with 12 solution vendors and 6 observing central banks. Currently, very few offline CBDC solutions are production-ready or working at scale in a live environment, but there are a number of mature pilots. The report discusses requirement trade-offs, for which the report suggests that central banks take an iterative approach to design, exploring alternative ways to achieve their objectives.
#Fintech#CBDC#Payments#Offline#BIS#DFC
·bis.org·
Project Polaris: high-level design guide for offline payments
The digital euro: what is it and what’s in it for us
The digital euro: what is it and what’s in it for us
Banco de España published an article that explains what a digital euro would be and its advantages if eventually adopted. The bottom line is that digital euro would be an additional option, ensuring that citizens also have access to public money, with all its guarantees, in an increasingly digital environment.
#Fintech#CBDC#Eurozone#Spain#DFC
·bde.es·
The digital euro: what is it and what’s in it for us
Southern Cross University and ANZ test digital currency
Southern Cross University and ANZ test digital currency
Australia and New Zealand Banking Group (ANZ) wrapped up a central bank digital currency (CBDC) pilot that successfully tested offline functionality. Ten students at Southern Cross University received NFC-enabled smart cards loaded with eAUD for spending at designated merchants within the campus.
#Fintech#CBDC#Australia#Offline#DFC
·lismorecitynews.com.au·
Southern Cross University and ANZ test digital currency
Argentine central bank to introduce digital peso bill ‘as soon as possible’
Argentine central bank to introduce digital peso bill ‘as soon as possible’
The Central Bank of the Argentine Republic is reportedly accelerating its work on a central bank digital currency (CBDC) legislative framework. Earlier in the month, the current Minister of Economy and presidential candidate Sergio Massa, committed to introduce a digital peso should he win the election. However, the latest election polls have Massa trailing Bitcoin-friendly Javier Milei, who advocates adopting the U.S. dollar as Argentina’s official currency while opposing the central bank’s role in the economy. Meanwhile, the central bank touts a digital peso's traceability by which the government could thwart tax evasion and avoidance. Update: In the 1st round of presidential voting, Massa got 37% of the tally versus Milei's 30%. They head to a run-off election on November 19, 2023.
#Fintech#CBDC#Argentina#DFC
·cointelegraph.com·
Argentine central bank to introduce digital peso bill ‘as soon as possible’
mBridge switches to new Chinese blockchain consensus protocol
mBridge switches to new Chinese blockchain consensus protocol
The Bank for International Settlements (BIS) Innovation Hub's mBridge multiple central bank digital currency (CBDC) cross-border payments project, has reportedly switched to a new blockchain consensus protocol. The project was first deployed on a customized network that borrowed aspects of popular blockchain networks such as Ethereum’s smart contract language Solidity. It relied on HotStuff, a Byzantine fault-tolerant consensus protocol. Local Chinese media is reporting that mBridge has transitioned to the Dashing Protocol, developed by the People's Bank of China's (PBoC’s) Digital Currency Research Institute. The PBOC is an mBridge project partner, along with the Hong Kong Monetary Authority (HKMA), Bank of Thailand, and the Central Bank of the United Arab Emirates. https://m.thepaper.cn/newsDetail_forward_24964633
#Fintech#Payments#CrossBorder#CBDC#wCBDC#BIS#China#DFC
·coingeek.com·
mBridge switches to new Chinese blockchain consensus protocol
Uncertainty, Politics, and Crises: The Case for Cash
Uncertainty, Politics, and Crises: The Case for Cash
A paper by Gerhard Rösl and Franz Seitz recommends that central banks should always be able and willing to provide cash to meet the demand for both transactional and store-of-value motives. Since people tend to increase their cash holdings, especially in times of uncertainty, both as a means of payment and as a store of value, central banks should not restrict their banknote denominations only to lower ones. In addition, a conscientious central bank should stockpile sufficient cash in its vaults to meet unexpected demand during crises. However, cash production and storage costs might seem unnecessarily high at first glance, but the social benefits in uncertain and unstable times unambiguously outweigh the costs. Therefore, those costs might be interpreted as an insurance premium the society pays for unanticipated events. https://mpra.ub.uni-muenchen.de/113784/1/MPRA_paper_113784.pdf
#Fintech#CBDC#Cash#DFC
·cashessentials.org·
Uncertainty, Politics, and Crises: The Case for Cash
Bank of China Hong Kong trials CBDC smart contracts for prepayments
Bank of China Hong Kong trials CBDC smart contracts for prepayments
The Bank of China (Hong Kong) launched a central bank digital currency (CBDC) trial for prepaid smart contracts using digital Hong Kong dollars (eHKD). The BOCHK issued simulated Hong Kong dollars to employees of the Bank, which they could spend at ten participating merchants. When employees buy a prepaid service contract from a participating merchant, the customer’s prepaid funds are converted into digital HKDs under their own name. Once the merchant provides the good or service, the smart contract executes automatically and the merchant receives the payment immediately. A key innovation of this trial was to layer the smart contract functionality onto the CBDC.
#Fintech#CBDC#China#DFC
·ledgerinsights.com·
Bank of China Hong Kong trials CBDC smart contracts for prepayments
Eurosystem proceeds to next phase of digital euro project
Eurosystem proceeds to next phase of digital euro project
The European Central Bank (ECB) digital euro project will move to the "preparation" phase on November 1, 2023, with the completion of the "investigation" phase launched in October 2021. Based on the findings from this phase, a digital euro would be widely accessible, free for basic use and available online and offline. It would offer the highest level of privacy and allow users to settle payments instantly in central bank money. It could be used from person to person, at the point of sale, in e-commerce and in government transactions. The preparation phase will initially last two years, and involve finalizing the digital euro rulebook and selecting providers that could develop a digital euro platform and infrastructure. It will also include testing and experimentation. https://www.ecb.europa.eu/paym/digital_euro/investigation/profuse/shared/files/dedocs/ecb.dedocs231018.en.pdf
#Fintech#CBDC#Eurozone#DFC
·ecb.europa.eu·
Eurosystem proceeds to next phase of digital euro project
ECB launches pre-call for wholesale CBDC trial participation
ECB launches pre-call for wholesale CBDC trial participation
The European Central Bank (ECB) has launched a survey targeting potential participants in its trials and experiments for central bank money settlement of wholesale financial transactions recorded on distributed ledger technology (DLT) platforms. The plan is to test three settlement solutions, including two that link to existing euro payment systems (from the central banks of Germany and Italy) and one wholesale central bank digital currency (CBDC) developed by the Banque de France. https://www.ecb.europa.eu/paym/intro/news/ecb.dedocs231013_annex.en.pdf
#Fintech#CBDC#wCBDC#Eurozone#DFC
·ledgerinsights.com·
ECB launches pre-call for wholesale CBDC trial participation
China opens CBDC industrial park
China opens CBDC industrial park
The Chinese government has reportedly launched a central bank digital currency (CBDC) industrial park to bolster the e-CNY ecosystem and payment solutions using the digital yuan. Residents are incentivised to move to the park for up to three years of free rent and loans. Commercial banks are being offered up to 20 million yuan to settle there, and start ups are offered up to 50 million yuan.
#Fintech#CBDC#China#DFC
·finextra.com·
China opens CBDC industrial park
Retail CBDC and the social costs of liquidity provision
Retail CBDC and the social costs of liquidity provision
The Centre for Economic Policy Research (CEPR) published an article by Dirk Niepelt that makes a case that a CBDC-based financial system can be a less costly than current two-tier regime that features non-banks that transact with bank deposits, and banks that settle payments with central bank reserves. The slightly lower direct costs of fractional reserve banking are more than offset by its "social" costs such as the fiscal resources and regulation needed to address the former's inherent frictions and instability. Furthermore, the paper argues that the interest rate on the digital currency should differ from zero and from the rate of interest on reserves.
#Fintech#CBDC#DFC
·cepr.org·
Retail CBDC and the social costs of liquidity provision
A Tokenised Future for the Australian Financial System?
A Tokenised Future for the Australian Financial System?
Reserve Bank of Australia (RBA) Assistant Governor Brad Jones provided an update on the RBA's central bank digital currency (CBDC) proof-of-concept work. First, the project highlighted a range of areas where CBDC could add value in wholesale payments, including by facilitating atomic settlement in tokenized asset markets. Second, it highlighted opportunities for a wholesale CBDC to act as a complement to new forms of privately issued digital money, such as tokenized bank deposits and asset-backed stablecoins. Third, further applied research is needed to better understand operational design issues for new forms of ledgers.
#Fintech#CBDC#Tokenization#Stablecoins#CryptoAssets#Australia#DFC
·rba.gov.au·
A Tokenised Future for the Australian Financial System?
G20 adopts IMF-FSB Synthesis Paper on crypto regulation
G20 adopts IMF-FSB Synthesis Paper on crypto regulation
The Group of Twenty (G20) unanimously adopted the “G20 Finance Ministers and Central Bank Governors Communique” during its meeting in Marrakesh, Morocco, and accepted the crypto regulatory roadmap proposed in the “IMF-FSB Synthesis Paper: Policies for Crypto-Assets“ joint report published by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) in September 2023. The paper advocates for comprehensive oversight of crypto instead of a blanket ban. Its high-level recommendations include cross-border cooperation and information sharing between regulators, a demand for comprehensive governance and risk management frameworks for crypto companies, and a guarantee of access to relevant data provided by companies to the authorities. https://twitter.com/FinMinIndia/status/1712589236765893035
#Fintech#CryptoAssets#Stablecoins#Regulation#G20#FSB#IMF#DFC
·cointelegraph.com·
G20 adopts IMF-FSB Synthesis Paper on crypto regulation
India starts second wholesale CBDC use case pilot
India starts second wholesale CBDC use case pilot
The Reserve Bank of India (RBI) reportedly started using its central bank digital currency (CBDC) in the call money markets for interbank lending. In November 2022, the RBI launched its first wholesale CBDC pilot to settle government bond transactions, but it fizzled out soon after. There's more hope for this new one because the blockchain-enabled instant atomic settlement and programmability means that if one bank lends to another, funds will automatically be returned at specific times without delays. Additionally, there's the potential to tokenize the collateral used for loans. However, none of this has been officially confirmed.
#Fintech#CBDC#wCBDC#Settlement#India#DFC
·ledgerinsights.com·
India starts second wholesale CBDC use case pilot
Japanese tokenized deposit network DCJPY to launch mid-2024
Japanese tokenized deposit network DCJPY to launch mid-2024
In July 2024, DeCurret plans to commercialize its DCJPY tokenized deposit network of over 100 Japanese institutions and enterprises that have explored proofs of concept (PoCs) for various use cases. DeCurret outlined several consumer oriented use cases, including retail in-store usage, to buy non fungible tokens (NFTs), and consumer carbon credits. All of them have programmable money elements. The DCJPY platform envisages a financial zone where banks issue deposit tokens and the money transfers take place, and separate distributed ledger technology (DLT) business zone networks (e.g., a metaverse zone, an NFT zone and an environmental value zone). https://www.decurret-dcp.com/en/news/nl-20231012.html
#Fintech#CryptoAssets#Stablecoins#Japan#DFC
·ledgerinsights.com·
Japanese tokenized deposit network DCJPY to launch mid-2024
Mastercard successfully wraps up RBA CBDC PoC
Mastercard successfully wraps up RBA CBDC PoC
Mastercard has completed a central bank digital currency (CBDC) proof-of-concept (PoC) with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre. (The MasterCard press release calls it a "pilot" but it's unclear whether live users were involved, a requirement for the "pilot" label.) It tested how authorized parties, who have gone through know-your-customer (KYC) protocols, could hold, use and redeem CBDCs. In addition, the project tested how a holder could purchase an Ethereum-based non-fungible token (NFT) by locking the pilot CBDC and minting an equivalent amount of Ethereum-based wrapped coins. https://www.mastercard.com/news/ap/en/newsroom/press-releases/en/2023/mastercard-demonstrates-interoperable-cbdc-for-trusted-web3-commerce-in-australia-and-beyond/ https://www.linkedin.com/pulse/welcome-weeks-edition-cbdc-chronicles-conrad-kraft-yafoe/
#Fintech#CBDC#Australia#MasterCard#DFC
·theblock.co·
Mastercard successfully wraps up RBA CBDC PoC
ECB launches technical talks on secure exchange of payer-payee digital euro data
ECB launches technical talks on secure exchange of payer-payee digital euro data
The European Central Bank (ECB) is inviting payments experts to participate in technical talks on options for the secure exchange of payment-related data between payer and payee for digital euro transactions. The talks will center around the latest retail payment market innovations that can ensure the secure exchange of end-user data between payment initiation and payment acceptance devices, and the key considerations for a secure exchange of front-end data for the envisaged digital euro use cases, form factors and core and optional services.
#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
ECB launches technical talks on secure exchange of payer-payee digital euro data
Zimbabwe turns gold-backed digital token into payment method
Zimbabwe turns gold-backed digital token into payment method
The Zimbabwe Gold (ZiG) digital asset backed by a physical gold held in the Reserve Bank of Zimbabwe's (RBZ's) reserves officially launched as a payment method. The RBZ first started issuing Mosi-oa-Tunya physical gold-backed tokens in 2022, and the ZiG was introduced in April 2023. The digital tokens can be stored in either e-gold wallets or e-gold cards and are tradeable for peer-to-peer and business transactions. https://twitter.com/ReserveBankZIM/status/1709929505144652153
#Fintech#CBDC#Zimbabwe#DFC
·cointelegraph.com·
Zimbabwe turns gold-backed digital token into payment method
Central Bank of Nigeria defends eNaira CBDC
Central Bank of Nigeria defends eNaira CBDC
The Central Bank of Nigeria (CBN) reasserted its confidence in its central bank digital currency (CBDC), in reaction to claims that an eNaira CBDC would pose a threat to Nigeria’s financial stability. These false claims were based on misinterpretations of papers in a 300-page book published by the CBN in September 2023 that detailed the financial implications of adopting a CBDC. https://www.cbn.gov.ng/Out/2023/CCD/CBN%20Press%20Release%20%20eNaira%20(091023).pdf
#Fintech#CBDC#Nigeria#DFC
·ledgerinsights.com·
Central Bank of Nigeria defends eNaira CBDC
Central bank digital currencies and financial stability in a modern monetary system
Central bank digital currencies and financial stability in a modern monetary system
"The aim of this study is to disentangle the effects of introducing an interest-bearing central bank digital currency (CBDC) for financial stability using a Diamond and Dybvig (1983) model in which (i) both CBDC and private bank deposits can be used in exchange and (ii) liquidity is created endogenously. Agents have direct access to a CBDC, which is a claim on the central bank. They use both sight deposits and CBDC to buy goods and commercial banks borrow reserves to cover liquidity needs. The introduction of an interest-bearing CBDC has direct implications for the sight deposit rate and the loan rate of banks. Besides, if the central bank aims to have a positive net worth and the absence of bank runs, a high demand for a CBDC is a necessary condition to achieve both objectives. If this is not the case, financial stability will be endangered." https://ddd.uab.cat/record/258890/
#Fintech#CBDC#FinancialStability#DFC
·sciencedirect.com·
Central bank digital currencies and financial stability in a modern monetary system
Canadian securities regulators clarify interim approach to value-referenced crypto assets
Canadian securities regulators clarify interim approach to value-referenced crypto assets
The Canadian Securities Administrators (CSA) indicated that it may allow, subject to terms and conditions, the continued trading of stablecoins or "value-referenced crypto-assets” (VRCAs). The interim framework sets certain standards to help ensure that investors receive the information they need about the assets they are purchasing, including the risks associated with them. Such information includes the composition and adequacy of reserves and their governance.
#Fintech#CryptoAssets#Stablecoins#Regulation#Canada#DFC
·osc.ca·
Canadian securities regulators clarify interim approach to value-referenced crypto assets
BOK, Samsung join hands for offline payment using CBDC
BOK, Samsung join hands for offline payment using CBDC
[Old news - May 2023] The Bank of Korea (BOK) and Samsung will reportedly work together to develop central bank digital currency (CBDC) technology that enables transactions to be made without internet access. In the BOK's proof-of-concept CBDC testing last year, Samsung worked out an offline technology which allows transactions and payments between mobile devices through near field communication (NFC) without online connection, using an embedded secure element security chip. They will continue this work on Samsung's Galaxy smartphones and watches.
#Fintech#CBDC#Offline#Korea#DFC
·koreaherald.com·
BOK, Samsung join hands for offline payment using CBDC
Central banks will face unfamiliar challenges to achieve CBDC inclusivity, study says
Central banks will face unfamiliar challenges to achieve CBDC inclusivity, study says
The Bank of Canada published a paper that explores quantitative and qualitative information about Canadians who face barriers to making digital payments, and implications for a potential central bank digital currency (CBDC). It identified three types of inclusion necessary for a universally accessible payment method: financial inclusion, digital inclusion and practical accessibility. The challenge is in the delivery of services rather than product design, and private financial institutions may not be incentivized to address the needs of those who are underserved. However, overcoming those challenges will require central banks to face problems that would otherwise be considered far from their scope of interest. https://www.bankofcanada.ca/2023/10/staff-discussion-paper-2023-22/ https://www.linkedin.com/pulse/welcome-weeks-edition-cbdc-chronicles-conrad-kraft-yafoe/
#Fintech#CBDC#FinancialInclusion#Canada#DFC
·cointelegraph.com·
Central banks will face unfamiliar challenges to achieve CBDC inclusivity, study says
Bank of Korea to start CBDC infrastructure pilot
Bank of Korea to start CBDC infrastructure pilot
The Bank of Korea (BOK) is launching a CBDC pilot that will include private banks and public institutions, while the Bank for International Settlements (BIS) providing technical support. It will assess the viability of a future monetary system grounded on wholesale CBDCs, with key motivations to include testing wholesale CBDC as a settlement asset for commercial bank tokenized deposits, and exploring the BIS Unified Ledger concept. Banks will issue payment instruments in the form of tokenized deposits - that will be accessible to the general public - within the “CBDC network” established by the BOK, using distributed ledger technology (DLT), and managed by the BOK, Financial Services Commission, and the Financial Supervisory Service. https://www.bok.or.kr/eng/bbs/E0000634/view.do?menuNo=400069&nttId=10079839&pageIndex=1&
#Fintech#CBDC#Korea#DFC
·cointelegraph.com·
Bank of Korea to start CBDC infrastructure pilot