DFC

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Know your (holding) limits: CBDC, financial stability and central bank reliance
Know your (holding) limits: CBDC, financial stability and central bank reliance
The European Central Bank (ECB) published a paper that analyzed the impact of the introduction of a digital euro on the ECB and commercial bank balance sheets, based on a theoretical model applied to Q3 2021 balance sheet data from over 2,000 euro area banks. It found that the impact depends on i) the number and speed of deposit withdrawals, ii) the liquidity available within the banking system at the time of the digital euro introduction, iii) the liquidity risk preferences of the markets and supervisors, iv) the bank’s business model, and v) the functioning of the interbank market. The paper found that a €3,000 digital euro holding limit per person, would have been successful in containing the impact on bank liquidity risks and funding structures and on the Eurosystem balance sheet, even in extremely pessimistic scenarios.
#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
Know your (holding) limits: CBDC, financial stability and central bank reliance
IMF Oman 2022 Article IV Consultation Staff Report
IMF Oman 2022 Article IV Consultation Staff Report
[November 15,2022] The IMF reported on the digitalization of Oman's financial system in the Oman 2022 Article IV Consultation Staff Report. The Central Bank of Oman (CBO) was continuing to develop the Fintech ecosystem by launching the Fintech Regulatory Sandbox Framework and testing the use of blockchain technology for trade finance. It was also developing an open banking strategy and exploring adopting a central bank digital currency (CBDC), which are currently at early stages.
#Fintech#CBDC#OpenBanking#Sandboxes#Oman#DFC
·imf.org·
IMF Oman 2022 Article IV Consultation Staff Report
Banco Central do Brasil clarifies doubts about Drex
Banco Central do Brasil clarifies doubts about Drex
Banco Central do Brasil (BCB) published an FAQ on its under-development Drex central bank digital currency (CBDC). "Drex will bring more speed, practicality, and lower cost to various contractual and financial transactions... In the same way that Pix - the Brazilian instant payment ecosystem - has democratized access to payment services, Drex arrives to democratize access to financial services, such as credit, investment and insurance." Programmability through smart contracts on distributed ledger technology (DLT) networks will be a key part of Drex’s platform. In the current testing phase, Drex is being developed on Hyperledger Besu.
#Fintech#CBDC#Brazil#SmartContracts#DFC
·bcb.gov.br·
Banco Central do Brasil clarifies doubts about Drex
Monetary Authority of Singapore finalizes stablecoin regulatory framework
Monetary Authority of Singapore finalizes stablecoin regulatory framework
The Monetary Authority of Singapore (MAS) published the features of a new regulatory framework that seeks to ensure a high degree of value stability for stablecoins regulated in Singapore. It will apply to single-currency stablecoins (SCS) pegged to the Singaporean dollar or any G10 currency. SCS reserve assets will be subject to requirements relating to their composition, valuation, custody and audit, to give a high degree of assurance of value stability. SCSs must hold minimum base capital of 1 million Singapore dollars ($740,000) and provide redemption within no more than five business days of a request. https://www.mas.gov.sg/news/media-releases/2023/mas-finalises-stablecoin-regulatory-framework
#Fintech#CryptoAssets#Stablecoins#Regulation#Singapore#DFC
·coindesk.com·
Monetary Authority of Singapore finalizes stablecoin regulatory framework
Let's Put the Future Behind Us
Let's Put the Future Behind Us
"America is an odd place when it comes to payments. It seems incredible to me that there is a business case to be built around taking cash and converting into cards at a ball park, but there you go. Interestingly, one of the providers of reverse ATMs in America speculated that in the future there might be no need to dispense a physical card from the machines, instead offering customers “a virtual card on your smartphone”, much as they did in Russia all those years ago!" [David Birch]
#Fintech#Cash#CBDC#LegalTender#DFC
·dgwbirch.substack.com·
Let's Put the Future Behind Us
Zimbabwe central bank to roll out gold-backed digital tokens for transactional purposes
Zimbabwe central bank to roll out gold-backed digital tokens for transactional purposes
The Reserve Bank of Zimbabwe (RBZ) has said it is now “at an advanced stage in preparations for the rolling out of gold-backed digital tokens (GBDTs) for transactional purposes.” The central bank said the rollout would see the gold tokens complement the U.S. dollar “in domestic transactions as retailers will be offered a safer, more convenient, and value-preserving medium of exchange.” This will be Phase II of the Zimbabwe Gold (ZiG) project. The RBZ reports that "GBDTs have proved to be an effective monetary policy instrument with strong potential to help restore normalcy to the domestic financial and capital markets within the short term." GBDTs, fully backed by physical gold held at the RBZ, were introduced in May 2023.
#Fintech#CBDC#Gold#Zimbabwe#DFC
·rbz.co.zw·
Zimbabwe central bank to roll out gold-backed digital tokens for transactional purposes
Offline payments: How does G+D Filia fare?
Offline payments: How does G+D Filia fare?
G+D Filia is intermittently offline. Payments are instantly settled offline, with occasional online reconciliation. But most importantly: funds received offline can be spent offline (consecutive offline payments). Our token format is the same online and offline, therefore the payment protocols are similar across different kinds of wallet (e.g., online wallets hosted at banks and hardware wallets). No conversion between online or offline ledger is needed. Tokens in hardware wallets are stored in tamper-resistant Secure Elements. Each wallet is equipped with a certificate, ensuring end-to-end encryption for every payment transaction. As an additional safety net, wallets keep a record of offline operations to detect counterfeiting.
#Fintech#CBDC#Offline#G+D#DFC
·linkedin.com·
Offline payments: How does G+D Filia fare?
Comparison of the Smart Contracts of PayPal PYUSD and USDC
Comparison of the Smart Contracts of PayPal PYUSD and USDC
Lars Ulbricht compared the smart contracts of the PayPal PYUSD and Circle USDC stablecoins. He found that they differ in terms of the degree and method of centralization and intervention. PYUSD's contract exhibits a more traditional approach with more control over the contract and the option to wipe accounts, while USDC enables a decentralization of minting whilst maintaining crucial control mechanisms. It is important to note that how these functionalities will be used will depend on the governance models employed by each organization. So while PYUSD seems to be just a little bit more centralized, the theoretical abuse possibilities don’t differ too much from USDC.
#Fintech#CryptoAssets#Stablecoins#PayPal#Circle#USDC#PYUSD#DFC
·linkedin.com·
Comparison of the Smart Contracts of PayPal PYUSD and USDC
Could a digital Caribbean guilder improve financial inclusion in Curaçao & Sint Maarten?
Could a digital Caribbean guilder improve financial inclusion in Curaçao & Sint Maarten?
[March 2023] The Centrale Bank van Curaçao en Sint Maarten is among the central banks analyzing the effects of a digital Caribbean guilder central bank digital currency (CBDC). One of the reasons to consider a digital Caribbean guilder is the potential positive impact on financial inclusion. However, the advantages of a digital Caribbean Guilder are not yet convincing given the current state of technology, the experience in other Caribbean countries, and the level of digital literacy of those concerned. Priority has been given to provide everyone access to regular banking services and to the legislative initiative to support this in Curaçao and Sint Maarten.
#Fintech#CBDC#CuracaoSintMaarten#Caribbean#DFC
·linkedin.com·
Could a digital Caribbean guilder improve financial inclusion in Curaçao & Sint Maarten?
Federal on its program to supervise novel bank activities
Federal on its program to supervise novel bank activities
The US Federal Reserve Board (FRB) published additional information on its program to supervise novel activities in the banks it oversees. Novel activities include complex, technology-driven partnerships with non-banks to provide banking services to customers; and activities that involve crypto-assets and distributed ledger or "blockchain" technology. The Fed also provided additional information on the process for Fed-supervised state banks to follow before engaging in certain dollar token or stablecoin activity, including demonstrating to its Fed supervisors that it has appropriate safeguards to conduct the activity safely and soundly.
#Fintech#CryptoAssets#Stablecoins#Regulation#UnitedStates#DFC
·federalreserve.gov·
Federal on its program to supervise novel bank activities
Why the digital euro might be dead on arrival
Why the digital euro might be dead on arrival
The Centre for Economic Policy Research (CEPR) published a paper that argues that, given the limited private incentives to adopt a digital euro, an aggressive marketing and product design strategy should be pursued. However, the pursuit of such an aggressive approach is unlikely as this runs counter to the European Central Bank’s (ECB's) implicit objective of protecting banks’ existing business model. This is evident in plans to impose paltry holding limits for consumers, even lower ones for merchants (zero), and negative interest premia during periods of financial stress. The authors argue that the advent of retail CBDC offers the opportunity to rethink the current monetary architecture and to re-evaluate the financial stability risks of private money creation and fractional reserve banking.
#Fintech#CBDC#ECB#Eurozone#DFC
·cepr.org·
Why the digital euro might be dead on arrival
Understanding the importance of cash for groups at risk
Understanding the importance of cash for groups at risk
De Nederlandsche Bank (DNB) published a paper about the payment behavior and preferences of Dutch consumers who encounter difficulties navigating this digital world, particularly individuals within groups at risk.  The research focused on people with low digital literacy, disabilities or financial difficulties. Using rich payment diary data it revealed that cash is an important means of payment to many. 7% said they always use cash at points of sale and 28% indicate they cannot do without cash. Cash is especially important for people with low digital literacy, people who are blind or visually impaired, people with limited or no hand function, people with a mild intellectual disability and people who find it difficult to make ends meet on their income.
#Fintech#CBDC#Cash#Netherlands#DFC
·dnb.nl·
Understanding the importance of cash for groups at risk
Unmet Payment Needs and a Central Bank Digital Currency
Unmet Payment Needs and a Central Bank Digital Currency
The Bank of Canada (BoC) published a paper that finds that most adult Canadians do not experience gaps in their access to a range of payment methods, and this would probably continue to be the case in a cashless environment. Some people could, however, face difficulties making payments if merchants no longer generally accepted cash. It suggests that addressing unmet payment needs for a minority of consumers by issuing a central bank digital currency (CBDC) could be challenging, because the minority of consumers with unmet payment needs will only be able to benefit from a CBDC if the majority of consumers experience material benefits and therefore drive its use.
#Fintech#CBDC#Canada#Cash#DFC
·bankofcanada.ca·
Unmet Payment Needs and a Central Bank Digital Currency
BoE CBDC Academic Advisory Group: Call for interest
BoE CBDC Academic Advisory Group: Call for interest
The Bank of England (BoE)  and HM Treasury (HMT) are inviting researchers to join a newly created central bank digital currency (CBDC) Academic Advisory Group. Through this Group, the BoE and HMT seeks academic input and promote interdisciplinary discussions on a range of topics related to retail CBDC, and of relevance to their digital pound work during the design phase.  The application deadline is September 3, 2023.
#Fintech#CBDC#UnitedKingdom#DFC
·bankofengland.co.uk·
BoE CBDC Academic Advisory Group: Call for interest
Russian banks have digital ruble questions
Russian banks have digital ruble questions
The Association of Russian Banks reportedly sent a letter of critical concerns regarding the digital ruble to the Bank of Russia. Although the central bank has said that it will not be compulsory to open a digital ruble account, bankers want that legislated. They also want to know whether they will be compensated for acting as intermediaries. Also, according to digital ruble surveys conducted by local media, few people (15%) know of the plans to introduce the CBDC in 2025, and of those that do only about half know the details. Around half of survey respondents struggled to answer why a digital ruble is needed, and only 13% said they would use the digital ruble.
#Fintech#CBDC#Russia#DFC
·ledgerinsights.com·
Russian banks have digital ruble questions
Bank of Russia launches digital ruble pilot testing
Bank of Russia launches digital ruble pilot testing
Pilot testing of the Bank of Russia's digital ruble central bank digital currency (#CBDC) on real transactions will be launched on August 15, 2023. It will be carried out with the participation of 13 banks and a limited number of their clients. The first stage will check basic transactions, including opening of accounts and money transfers to them, person-to-person transfers, simple automatic bill payments, and QR code-based payments. The participants will be able to make payments in digital rubles at 30 points of sale located in 11 Russian cities. Assuming successful completion of the stage-by-stage testing, the the digital ruble will roll out for broad use in 2025.
#Fintech#CBDC#Russia#DFC
·cbr.ru·
Bank of Russia launches digital ruble pilot testing
PayPal's PYUSD stablecoin is triggering apprehension
PayPal's PYUSD stablecoin is triggering apprehension
PayPal's PYUSD stablecoin, announced on August 7, 2023,  is fully backed by U.S. dollar deposits, short-term U.S. treasuries and similar cash equivalents, and can be redeemed 1:1 for U.S. dollars, which all sounds good. However, according to Sasha Hodder, the PTUSD terms of service there will be full know-your-customer (KYC) intrusion, and PayPal can reverse any transaction, so it would have all of the potential censorship capabilities of a CBDC. And according to Jamiel Sheikh's analysis of the underlying code, PayPal can freeze and unfreeze accounts, and wipe a frozen account and burn its tokens. https://www.linkedin.com/posts/jamiel_pyusd-activity-7094414458965356544-XSwc/
#Fintech#CryptoAssets#Stablecoins#PayPal#UnitedStates#DFC
·bitcoinist.com·
PayPal's PYUSD stablecoin is triggering apprehension
Banco Central do Brasil reveals the digital real's name and logo
Banco Central do Brasil reveals the digital real's name and logo
Banco Central do Brasil (BCB) announced that "DREX" will be the official name of the digital real central bank digital currency (CBDC). The D stands for digital, R for real, E for electronic, and X for modernity and connection. The BCB also released the new visual branding for DREX. On the CBDC logo, two arrows, inside the capital D, picture the evolution of the real to its digital version, while the transition from blue to light green colors stands for the “transaction completed” message. https://www.flickr.com/photos/bancocentralbr/53100738843/
#Fintech#CBDC#Brazil#DFC
·bcb.gov.br·
Banco Central do Brasil reveals the digital real's name and logo
The outcomes and findings of Project Inthanon Phase II
The outcomes and findings of Project Inthanon Phase II
[In July 2019] the Bank of Thailand published the results of Project Inthanon Phase II which built upon Project Inthanon Phase I and involved designing, developing and testing a proof-of- concept (POC) of the decentralised Real-Time Gross Settlement system by using wholesale CBDC. The scope of Phase II included 2 key areas: Delivery-versus-Payment (DvP) for interbank bond trading and repurchase transactions, and regulatory compliance and data reconciliation for third party funds transfer. The PoC concluded that DLT can help enhance the efficiency of the bond trading and repurchasing activities through the bonds’ life cycles, and process automation using smart contracts demonstrated capabilities that can help improve post-trade operational efficiency as well as liquidity management. https://www.bot.or.th/English/FinancialMarkets/ProjectInthanon/Documents/Inthanon_Phase2_Report.pdf
#Fintech#CBDC#wCBDC#PaymentSystems#DLT#Settlement#Thailand#DFC
·bot.or.th·
The outcomes and findings of Project Inthanon Phase II
The outcome and findings of Project Inthanon Phase I
The outcome and findings of Project Inthanon Phase I

[In January 2019] the Bank of Thailand published the results of Project Inthanon Phase I which indicated that DLT can fulfil basic payment functionalities. In addition, the technology demonstrated capabilities to help enhance payment efficiency and to support interbank transfer and settlement during off-hours. However, despite its high capabilities, DLT would need more time to mature to the stage in which the technology can be fully adopted for the payment system infrastructure. More experiments would be needed to further affirm DLT’s capabilities, and any challenges to comply with international payments standard such as scalability, security and system resiliency should be explored. https://www.bot.or.th/English/FinancialMarkets/ProjectInthanon/Documents/Inthanon_Phase1_Re port.pdf

#Fintech#CBDC#wCBDC#PaymentSystems#DLT#Thailand#DFC
·bot.or.th·
The outcome and findings of Project Inthanon Phase I
PayPal to Issue Dollar-Pegged Stablecoin Based on Ethereum
PayPal to Issue Dollar-Pegged Stablecoin Based on Ethereum
PayPal is entering the crypto-asset market with its own "PayPal USD" (PYUSD) U.S. dollar-pegged stablecoin. The Ethereum-based token will be available to PayPal users in the U.S., who will be able to transfer PYUSD between PayPal and supported external wallets, fund goods and services purchases, or convert any of PayPal's supported crypto-assets to and from PYUSD. PYUSD is issued by New York-based Paxos Trust and fully backed by US dollar deposits, short-term Treasuries and similar cash equivalents, and will be redeemable on demand for dollars. https://newsroom.paypal-corp.com/2023-08-07-PayPal-Launches-U-S-Dollar-Stablecoin
#Fintech#CryptoAssets#Stablecoins#PayPal#Paxos#UnitedStates#DFC
·coindesk.com·
PayPal to Issue Dollar-Pegged Stablecoin Based on Ethereum
The money tree: Exploring CBDC imaginaries
The money tree: Exploring CBDC imaginaries
"The BIS promotes a curiously botanical CBDC imaginary, from 'money flowers’ to ‘tree trunks’ and a ‘strong canopy’. This helps to naturalize CBDC without clarifying its sociopolitical implications or envisioned monetary future, such as geopolitical tensions and financial fragmentation, new modes of financial interaction or the strengthened role of central banks, while omitting the paradoxes and ambivalences of CBDC."
#Fintech#CBDC#DFC
·rai.onlinelibrary.wiley.com·
The money tree: Exploring CBDC imaginaries
The future of money and payments in Honduras, which route to follow?
The future of money and payments in Honduras, which route to follow?
The Central Bank of Honduras (BCH) has launched an investigation into possible alternatives to improve the national payment system. The BCH has invited interested sectors, professionals, and the general public to provide comments on a consultative paper that presents the BCH’s research on new payment options, including central bank digital currency (CBDC). A fast payment system already exists in Honduras, the bank-owned ACH PRONTO, but it operates only between 5am and 10pm with shorter hours on some days. Also, PRONTO only includes banks, and only 40% of Honduran adults have  bank accounts, but the central bank has approved a plan to expand access to nonbanks. https://web.archive.org/web/20231209022203/https://www.bch.hn/modernizacion/el-futuro-del-dinero/lee-el-documento
#Fintech#CBDC#Honduras#DFC
·bch.hn·
The future of money and payments in Honduras, which route to follow?
Bank of Russia reveals digital ruble’s logo and commission fees
Bank of Russia reveals digital ruble’s logo and commission fees
The Bank of Russia (BoR) revealed the logo for its digital ruble central bank digital currency (CBDC), and published the transaction fees. Person-to-person (P2P) transactions will be free of charge. However, starting from 2025, business-to-business (B2B) transactions will cost 15 rubles ($0.16) each, while person-to-business (P2B) transactions will be charged 0.3% of the total transaction sum up to a maximum of 1,500 rubles ($15.65). The P2B fee drops to 0.2% up to a maximum of 10 rubles ($10) when paying for housing and public services. https://cbr.ru/eng/press/event/?id=16985
#Fintech#CBDC#Russia#DFC
·cointelegraph.com·
Bank of Russia reveals digital ruble’s logo and commission fees
eNaira: Nigeria's digital currency has had a slow start - what's holding it back
eNaira: Nigeria's digital currency has had a slow start - what's holding it back
"The eNaira needs to get past certain challenges before it can be widely adopted domestically. These challenges include absence of technology infrastructure, lack of training for financial institution staff who have to manage the process, data privacy concerns, the electricity crisis and fear of financial crimes."
#Fintech#CBDC#Nigeria#DFC
·theconversation.com·
eNaira: Nigeria's digital currency has had a slow start - what's holding it back
European Central Bank FAQ on a digital euro
European Central Bank FAQ on a digital euro
The ECB updated its digital euro FAQ with particular focus on the rationale for issuing a central bank digital currency (CBDC). "A digital euro would be an electronic form of cash for the digitalized world [that] would give consumers the option to use central bank money in a digital format... [and] providing... a digital means of payment universally accepted throughout the euro area...  Moreover, a digital euro would strengthen Europe’s strategic autonomy and monetary sovereignty by boosting the efficiency of the European payments’ ecosystem as a whole."
#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
European Central Bank FAQ on a digital euro
MIT's Project Hamilton for CBDC open sources smart contract research
MIT's Project Hamilton for CBDC open sources smart contract research
"MIT's Digital Currency Initiative (MIT DCI) released the source code of research into smart contracts for central bank digital currency (CBDC) – PArSEC (Parallelized Architecture for Scalably Executing smart Contracts). Given the solution is designed for central banks, it is a centralized offering and sidesteps using blockchain, although it supports Ethereum smart contracts. The work is part of Project Hamilton, an initiative in conjunction with the Boston Federal Reserve and the source code is released under the umbrella of openCBDC. It claims to have sufficient scale for most potential central bank applications, although it is very much a research project rather than pilot or production ready. https://dci.mit.edu/parsec
#Fintech#CBDC#UnitedStates#DFC
·ledgerinsights.com·
MIT's Project Hamilton for CBDC open sources smart contract research
Digital Dollar Project Retail Remittance-Focused CBDC PoC
Digital Dollar Project Retail Remittance-Focused CBDC PoC
The Digital Dollar Project completed a proof-of-concept (PoC) with Western Union, BDO Unibank and Accenture that evaluated the potential benefits of using central bank digital currency (CBDC) for cross-border remittances. The platform leveraged distributed ledger technology (DLT) to simulate the payments infrastructure necessary to transfer digital dollars to Philippine pesos. A decentralized exchange (DEX) provided a market for currency pair exchange to explore potential benefits associated with a decentralized marketplace to improve competition and price transparency. The PoC found that CBDCs may improve remittance processing by settling a peer-to- peer payment in less than ten seconds, a key driver being atomic settlement, which reduced counterparty risk and optimized liquidity via streamlined foreign exchange (FX) spot orders and multi-party settlement.
#Fintech#CBDC#UnitedStates#Philippines#CrossBorder#DFC
·prnewswire.com·
Digital Dollar Project Retail Remittance-Focused CBDC PoC
Emtech to advance its regtech and CBDC stack solutions
Emtech to advance its regtech and CBDC stack solutions
"Emtech, an African provider of central banking infrastructure, introduced its Central Bank Digital Currency (CBDC) Innovation kit last month. The kit caters to fintechs and financial service providers interested in experimenting with solutions and business models based on digital currencies pioneered by central banks."
#Fintech#CBDC#Emtech#DFC
·techcrunch.com·
Emtech to advance its regtech and CBDC stack solutions