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Circle wanted to create a financial revolution. Instead, it’s losing the stablecoin wars to Tether
Circle wanted to create a financial revolution. Instead, it’s losing the stablecoin wars to Tether
Fortune magazine published a behind-the-scenes account of Circle's Silicon Valley Bank (SVB) trials and tribultations. Circle's management "devised a plan A, B, and C. The first failed when Circle’s attempted wire to get out its deposits didn’t go through. [They] remained optimistic that the government would guarantee its deposits—plan B. In case that didn’t work out, the executives spent the weekend negotiating deals with companies who would buy Circle’s SVB holdings for $0.85 on the dollar, which, along with Circle’s own balance sheet, would be enough to restore USDC’s reserves."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#SiliconValleyBank#DFC
·fortune.com·
Circle wanted to create a financial revolution. Instead, it’s losing the stablecoin wars to Tether
Circle says its USDC stablecoin was as diversified as possible. Is that accurate?
Circle says its USDC stablecoin was as diversified as possible. Is that accurate?
Circle has "no remorse" over its decision to hold $3.3B at SVB. It was "as diversified as possible" and blames banking for its woes, which is "extremely difficult" for crypto firms. However, Circle's stablecoin competitor, Paxos, didn't have single-bank exposure. As the screenshot below shows, $185.5 million worth of deposits held to back Paxos's USDP stablecoin were spread over thousands of banks using deposit placement networks like IntraFi, and were thus insured by the government. For the remainder, Paxos obtained $72 million worth private insurance. Only $10.9 million in deposits were effectively unprotected, a small 1.3% sliver of USDP's total assets. Rather than keeping 8% of its assets lodged at a second tier bank without insurance, why didn't Circle follow Paxos's risk reduction strategy?
#Fintech#CryptoAssets#Stablecoins#Circle#Paxos#USDC#USDP#SiliconValleyBank#DFC
·jpkoning.blogspot.com·
Circle says its USDC stablecoin was as diversified as possible. Is that accurate?
Hong Kong expands trial of China's digital yuan to more banks
Hong Kong expands trial of China's digital yuan to more banks
Hong Kong is reportedly actively testing China’s digital yuan and has entered the second phase of technical testing to incorporate a predominant local payment system. The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) have completed the initial technical tests for cross-border payments using the digital yuan in Hong Kong. Currently, they are conducting the second phase of the technical trial, involving more Hong Kong banks and testing the digital yuan wallet’s top-up function through the Faster Payment System.
#Fintech#CBDC#China#HongKong#CrossBorder#Payments#DFC
·theblock.co·
Hong Kong expands trial of China's digital yuan to more banks
Palau to freeze USD-backed stablecoin after PoC launch in July
Palau to freeze USD-backed stablecoin after PoC launch in July
Palau is wrapping up its US dollar stablecoin (PSC) proof-of-concept (PoC) on September 8, 2023, just over a month after launch in July that was slated to run for three months. Following the distribution halt, PSC will also be frozen after September 15, becoming unavailable for spending by users. The government will send a survey to PoC participants, the results of which will be critical to developing the final report for the Palau Congress and the president, and ultimately deciding whether to move forward with the next phase of the stablecoin program. https://twitter.com/JHX_1138/status/1699650336581882041
#Fintech#CryptoAssets#Stablecoins#GovCoins#CBDC#Palau#Ripple#DFC
·cointelegraph.com·
Palau to freeze USD-backed stablecoin after PoC launch in July
Bangko Sentral ng Pilipinas selects technology for CBDC project
Bangko Sentral ng Pilipinas selects technology for CBDC project
[September 7, 2023] The Bangko Sentral ng Pilipinas (BSP) has selected Hyperledger Fabric as the distributed ledger technology (DLT) for its Project Agila (formerly known as Project CBDCPh) wholesale central bank digital currency (CBDC) sandbox tests. Project Agila aims to orient the BSP and participating financial institutions on CBDC technology solutions that have the potential to enhance the country's large-value payment system. By the end of Project Agila, the participants are expected to have a clearer understanding of CBDC technology and assess the capability of wholesale CBDCs to foster advancements in the large-value payment system. [February 12, 2024 update: The BSP dropped the blockchain solution and will use the technology that underpins the Philippine Payment and Settlement System (PhilPaSSplus), the country's real time gross settlement payment system. https://www.ledgerinsights.com/philippines-wholesale-cbdc-two-years-no-blockchain/]
#Fintech#CBDC#wCBDC#Philippines#DFC
·bsp.gov.ph·
Bangko Sentral ng Pilipinas selects technology for CBDC project
IMF reports on Saudi Arabia's CBDC exploration
IMF reports on Saudi Arabia's CBDC exploration
The IMF in its Saudi Arabia 2023 Article IV staff report reported on the Saudi Central Bank (SAMA) central bank digital currency (CBDC) explorations. Through Project Aber, SAMA was one of the first central banks to experiment with domestic and cross-border wholesale CBDC. Leveraging the lessons of the experiment, SAMA is continuing to explore wholesale CBDC use cases. SAMA is undertaking a three-phased approach (evaluation, testing, implementation), allowing for ongoing assessment at each stage, against which the future roadmap will continue to evolve.
#Fintech#CBDC#SaudiArabia#wCBDC#DFC
·imf.org·
IMF reports on Saudi Arabia's CBDC exploration
Bank of Canada explores impact of quantum computing on CBDCs
Bank of Canada explores impact of quantum computing on CBDCs
The Bank of Canada has called in evolutionQ for a research project involving quantum-safe cybersecurity technologies for greenfield digital currencies. The Bank of Canada is exploring technologies and technical ecosystems that may inform decisions relating to the development of a potential digital loonie. The evolutionQ research will explore the impact of integrating quantum-safe encryption methods and crypto-agility as design goals for digital currencies. The code developed during the research will be released as open source to give developers and researchers the opportunity to explore the new cryptographic methods.
#Fintech#CBDC#Canada#QuantumComputing#CyberSecurity#DFC
·newswire.ca·
Bank of Canada explores impact of quantum computing on CBDCs
Macau establishes digital currency as legal tender
Macau establishes digital currency as legal tender
A new law regulating Macau’s currency issuance has come into effect, giving digital currency the same legal status as traditional money in the Chinese special administrative region. The new legal framework, proposed by the Macau government, became effective on September 1, 2013 after being approved by the SAR’s legislative assembly in June. However, there is no timeline for the launch of a digital pataca central bank digital currency (CBDC).
#Fintech#CBDC#Macau#DFC
·centralbanking.com·
Macau establishes digital currency as legal tender
UK RLN to experiment with digital pound as tokenized deposits
UK RLN to experiment with digital pound as tokenized deposits
The UK Regulated Liability Network (RLN) will experiment with a retail digital pound backed by tokenized bank deposits. Earlier in 2023, the RLN performed similar trials in the US involving several banks, Mastercard and the NY Fed. The RLN has separate partitions for the central bank and each bank, with interbank payments being settled on the central bank partition. The experiments will explore how the tokenized deposits could sit alongside a retail CBDC, how RLN could accommodate both forms of money on a single platform, how the functional equivalence of all retail digital money could be ensured, and if the RLN can provide a more effective platform for innovation. https://www.ukfinance.org.uk/policy-and-guidance/reports-and-publications/regulated-liability-network-uk-discovery-phase
#Fintech#CBDC#RegulatedLiabilityNetwork#Tokenization#DFC
·ledgerinsights.com·
UK RLN to experiment with digital pound as tokenized deposits
BIS and Reserve Bank of India announce winners of G20 TechSprint 2023
BIS and Reserve Bank of India announce winners of G20 TechSprint 2023

The Bank for International Settlements (BIS) and the Reserve Bank of India (RBI) announced the winners of the G20 TechSprint 2023 challenge. From the short list of 21 teams three winners for three problem statements were chosen: -Team Secretarium Ltd. from the UK won the category fon fighting money laundering, combating financing of terrorism, tax and sanctions evasion, with their solution on transaction monitoring and protecting anonymity and privacy using secure privacy technology. -Team Millicent Labs from the UK won the category for problem of improving liquidity in cross-border payments between emerging and developing countries' currencies, with their hybrid decentralised exchange for CBDCs, which features automated market makers and traditional order books, to optimise liquidity and reduce volatility risk. -Team Knox Networks from the US won the category for problem of developing multilateral cross-border CBDC platforms, with their multilateral CBDC solution based on File-Based Digital Assets (FBDAs).

#Fintech#BIS#TechSprint#CBDC#India#FinancialIntegrity#CrossBorder#DFC
·bis.org·
BIS and Reserve Bank of India announce winners of G20 TechSprint 2023
Customers of Indian banks can scan UPI QR code and pay via digital rupee
Customers of Indian banks can scan UPI QR code and pay via digital rupee
Growing numbers of Indian commercial banks have gone live with Unified Payments Interface (UPI) interoperability on the Reserve Bank of India (RBI) digital rupee central bank digital currency (CBDC) rupee app. With this move, the bank's customers will be able to scan any UPI QR code through the banks' digital rupee apps and pay for transactions. The UPI is the national payment portal operated by the National Payments Corporation of India (NPCI), a division of the RBI. The NPCI provides the infrastructure for both the UPI and the digital rupee.
#Fintech#CBDC#India#QR#Interoperability#DFC
·cnbctv18.com·
Customers of Indian banks can scan UPI QR code and pay via digital rupee
China insists digital yuan be usable everywhere
China insists digital yuan be usable everywhere
Mu Changchun, the head of the People's Bank of China (PBOC) Digital Currency Research Institute, said that the digital yuan must be available for all retail scenarios, with standard QR codes being one of the first steps. He also wants to see wholesale payment systems becoming interoperable with the central bank digital currency (CBDC), and he envisions the digital yuan and smart contracts being used for securities transactions, enabling settlement on a delivery versus payment (DvP) or payment versus payment (PvP) basis. https://finance.eastmoney.com/a/202309032835731424.html
#Fintech#CBDC#China#QR#wCBDC#DFC
·ledgerinsights.com·
China insists digital yuan be usable everywhere
Recent CBDC Developments in Asia and Their Implications
Recent CBDC Developments in Asia and Their Implications
The Asian Development Bank (ADB) published a paper that analyzes the evolution of central bank digital currencies (CBDCs) in Asia and the Pacific, assesses their potential risks and technical challenges, and shows their potential to improve cross-border payments and financial inclusion. It details various models and explores how China, Singapore, and Thailand are taking the lead. Outlining global developments and emerging trends, it shows why a robust digital infrastructure, strong public–private collaboration, and Fintech literacy are central to ensuring CBDCs help drive the transition to a digital economy.
#Fintech#CBDC#Asia#China#Singapore#Thailand#ADB#DFC
·adb.org·
Recent CBDC Developments in Asia and Their Implications
How does post-quantum cryptography affect Central Bank Digital Currency?
How does post-quantum cryptography affect Central Bank Digital Currency?
Lars Hupel (G+D) and Makan Rafiee (secunet) circulated a paper that provides insight into the future of cryptography as it applies to CBDC. They first give an overview of classical cryptographic algorithms and what they are used for in the CBDC context. Then, they introduce the threats that quantum computing poses, as well as post-quantum algorithms that address those threats. Equipped with this, they can then examine the cryptography in use for CBDC implementations and match them to appropriate algorithms. Finally, they propose an opinionated framework for rolling updates, i.e., to put the earlier insights into practice.
#Fintech#CBDC#CyberSecurity#QuantumComputing#G+D#DFC
·arxiv.org·
How does post-quantum cryptography affect Central Bank Digital Currency?
Enabling offline payment scalability
Enabling offline payment scalability
Lipis Advisors in partnership with Crunchfish released the fifth white paper in the "enabling offline payments in an online world” series. The new paper focuses on scalability, pointing out that the choice of hardware or software-based offline trusted environment can greatly impact the scalability features of offline payment systems. Software-based trusted environments are generally more scalable, because they don't require the distribution of physical components and may be updated more easily. However, in low-income countries where most potential users can't afford devices that support software-based trusted environments (i.e., smartphones), some combination of hardware- and software-based trusted environments should be implemented to ensure true scalability.
#Fintech#CBDC#Payments#Offline#Crunchfish#DFC
·crunchfish.com·
Enabling offline payment scalability
RBI to add support for NFC to India's UPI Lite digital wallet service
RBI to add support for NFC to India's UPI Lite digital wallet service
The Reserve Bank of India (RBI) will add support for near-field communications (NFC) payments to the country’s Unified Payments Interface (UPI) Lite digital wallet, enabling users to conduct transactions on their smartphone when there is no internet or mobile connection. The RBI is adding the option to the stored value wallet, launched in September 2022, to “optimize processing resources for banks, thereby reducing transaction failures". https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56174
#Fintech#CBDC#India#Offline#NFC#DFC
·nfcw.com·
RBI to add support for NFC to India's UPI Lite digital wallet service
Tether's Stablecoin USDT 'Has a Peg Stability Problem', Claims Analyst
Tether's Stablecoin USDT 'Has a Peg Stability Problem', Claims Analyst
USDT has a peg stability problem compared to other stablecoins. Its redemption fee and minimum means it’s often rational for USDT holders to sell the token on the market rather than redeem it for USD with Tether. As liquidity has dwindled, the market is no longer able to absorb significant USDT selling. Tether charges a 0.1% fee for fiat withdrawals over $1,000, meaning that USDT is redeemable at $0.99, with the minimum fiat withdrawal or deposit set at $100,000. Another catch is that users have to pay a non-refundable amount of $150 for “verification,” which, according to Tether, “is intended to ensure that only those who are serious about establishing an account apply.”
#Fintech#CryptoAssets#Stablecoins#Tether#USDT#DFC
·decrypt.co·
Tether's Stablecoin USDT 'Has a Peg Stability Problem', Claims Analyst
American's Trust in Government: 1958-2022
American's Trust in Government: 1958-2022
"Public trust in government remains low, as it has for much of the 21st century. Only two-in-ten Americans say they trust the government in Washington to do what is right “just about always” (2%) or “most of the time” (19%). Trust in the government has declined somewhat since last year, when 24% said they could trust the government at least most of the time."
#Fintech#CBDC#UnitedStates#DFC
·pewresearch.org·
American's Trust in Government: 1958-2022
CBDC: Inclusion of the 'Unbanked' or Illusion?
CBDC: Inclusion of the 'Unbanked' or Illusion?
The Durbin Amendment (Section 1075 of the 2010 Dodd‐​Frank Act) established price controls that made it more difficult for banks to offer low‐​cost accounts. Even from the perspective of merchants, one study found that the Durbin Amendment “had limited and unequal impact on reducing merchants’ costs… and it has produced unintended consequences for some merchants in terms of raising costs." https://scholarship.law.upenn.edu/faculty_scholarship/2046/
#Fintech#CBDC#Payments#Regulation#UnitedStates#Cato#FinancialInclusion#DFC
·cato.org·
CBDC: Inclusion of the 'Unbanked' or Illusion?
Russia is ramping up its CBDC. Will Putin’s ‘robot ruble’ work?
Russia is ramping up its CBDC. Will Putin’s ‘robot ruble’ work?
"The ruble, in digital or paper form, will not replace the dollar, the euro, the pound, or the yen in cross-border transactions. In fact, as Russia seeks to de-dollarize its economy, a likely avenue will be using the yuan or digital yuan. Last October, Russia became the fourth largest yuan offshore clearing center in the world, and simultaneously, China was a part of the first actual cross-border digital currency transaction. Russia has also taken advantage of China’s broader currency settlement system for transactions with other countries, creating intractable dependencies in the long term. For the time being, robot rubles will accomplish very little for Russia’s burgeoning economic woes."
#Fintech#CBDC#Russia#DFC
·atlanticcouncil.org·
Russia is ramping up its CBDC. Will Putin’s ‘robot ruble’ work?
Binance to 'Gradually' End Support for BUSD Products
Binance to 'Gradually' End Support for BUSD Products
Binance will "gradually" end support for its BUSD stablecoin, removing it from spot and margin trading pairs. Users have been asked to convert their BUSD into other assets by February next year. Binance is also delisting BUSD as a loanable asset on September 6 and will cease withdrawals of Binance-peg BUSD tokens via BNB Chain, Avalanche, Polygon and Tron on September 7. A decision to end support for BUSD has been expected since BUSD issuer Paxos was ordered to stop minting the coin in February.
#Fintech#CryptoAssets#Stablecoins#Binance#Paxos#BUSD#DFC
·coindesk.com·
Binance to 'Gradually' End Support for BUSD Products
Implementation of the Digital Euro
Implementation of the Digital Euro
IBM published a paper that set out what it believes it will take for a successful digital euro. For initial acceptance it should be simple and easy to use, and operate with other well established payment methods, besides commercial models, costs and innovations. For the long-term success, foundations for innovations need to be built, particularly for strong privacy, uniform digital payments including support for virtual worlds and tokenized economies. Key elements for the acceptance will be the active support by intermediaries, and digital euro components that integrate well with the incumbents’ existing infrastructures. Also, the digital euro should allow strong privacy for low-value proximity payments, independent of technical connectivity. Finally, IBM believes the platform should be built on distributed ledger technologies (DLTs) but centrally governed by the central bank.
#Fintech#CBDC#DFC
·admin03.prod.blogs.cis.ibm.net·
Implementation of the Digital Euro
Edelcoin: A Stablecoin Backed by Precious Metals
Edelcoin: A Stablecoin Backed by Precious Metals
Edelcoin is a stablecoin backed by a basket of precious and base metals which are used across various industries, including medicine, medical research, electronics, aerospace, military, energy, telecommunications, and navigation. These metals include Copper Isotope, Nickel Wire (NP1, NP2), and Caesium 133, each with unique applications and supply circumstances.
#Fintech#CryptoAssets#Stablecoins#Tokenization#PreciousMetals#DFC
·edelcoin.com·
Edelcoin: A Stablecoin Backed by Precious Metals
If You Can’t Beat the Lunatics, Join ‘Em
If You Can’t Beat the Lunatics, Join ‘Em
"Realizing that genuine informed debate with radical conspiracy-theorizing right-wingers is impossible, the South Dakota Bankers Association has made a sensible tactical move that costs them nothing to get the Uniform Commercial Code updates they want. Recall that last Session, Governor Kristi Noem vetoed House Bill 1193 under the utterly misinformative pretense that updating the Uniform Commercial Code to put cryptocurrency on a more solid footing would facilitate the creation of a central bank digital currency (CBDC). The Federal Reserve is nowhere near issuing a CBDC, and even if it were, the passage of HB 1193 would not have sped that issuance, and the veto of HB 1193 did nothing to slow that issuance."
#Fintech#CBDC#UnitedStates#UCC#DFC
·dakotafreepress.com·
If You Can’t Beat the Lunatics, Join ‘Em
Brazil's CBDC falls behind schedule as central bank suspends innovation lab
Brazil's CBDC falls behind schedule as central bank suspends innovation lab
Banco Central do Brasil has reportedly delayed its digital real DREX pilot by three months, and suspended its LIFT Lab innovation project indefinitely. The delay is being attributed to a slow start in onboarding pilot participants and because the bank isn’t yet satisfied with the privacy preserving technology it plans to use.
#Fintech#CBDC#Brazil#wCBDC#DFC
·ledgerinsights.com·
Brazil's CBDC falls behind schedule as central bank suspends innovation lab
Designing a privacy preserving rCBDC
Designing a privacy preserving rCBDC
"In 1983, cryptographer David Chaum invented the “blind signature”: a method of digitally signing a message that is “blinded” to the signatory.  This relatively old technique can be applied, in the context of rCBDCs, to deliver a privacy experience that resembles cash in many ways. "
#Fintech#Privacy#BlindSignatures#CBDC#SaudiArabia#DFC
·linkedin.com·
Designing a privacy preserving rCBDC
Palau's Stablecoin Audit Process Advances
Palau's Stablecoin Audit Process Advances
The audit process on Palau’s XRP Ledger-based stablecoin (PSC) pilot is advancing, as the Ministry of Finance collaborates with the government auditors. 202 documents were printed and will be submitted for review. The audit was requested on account of concerns around the legality of the program and the funds used for its implementation. Concerns about money laundering risks were also expressed, although the Ministry of Finance replied that, because the ledger is fully transparent, with all money and spending is 100% visible, traceable, and attributable, these risks are well mitigated. https://twitter.com/JHX_1138/status/1694307856487456845
#Fintech#CryptoAssets#Ripple#XRP#Palau#Stablecoins#CBDC#DFC
·news.bitcoin.com·
Palau's Stablecoin Audit Process Advances
The BoE on enabling innovation through a digital pound
The BoE on enabling innovation through a digital pound
The Bank of England (BoE) published an article that explores the academic literature on innovation for lessons on how to create a diverse, competitive, and innovative ecosystem of payment interface providers (PIPs) or external service interface providers (ESIPs) to provide a range of value-added services associated with a central bank digital currency (CBDC).
#Fintech#CBDC#UnitedKingdom#DFC
·bankofengland.co.uk·
The BoE on enabling innovation through a digital pound
What Behaviour Drives Cashless Payments in Africa?
What Behaviour Drives Cashless Payments in Africa?
"Within the extant literature, recommendations are for government policy to “invest more in nudging”, that is, to use psychological behavior and habits to influence, for instance, greater use of electronic payment methods or eliminate cash transactions. However, most people in our sample declared no preferred payment method. Instead, they choose according to transaction context in specific situations. These results suggest that authorities should ensure that a wide variety of payment alternatives is available for people to use, including cash, and let them choose. This option is aligned with the position of the leading central banks and the Bank of International Settlements’ recent joint proposal to launch CBDCs shortly. These recommendations thus support a view to managing the downsizing but not the total elimination of the cash management infrastructure."
#Fintech#CBDC#Cash#DFC
·cashessentials.org·
What Behaviour Drives Cashless Payments in Africa?
Functional Consistency across Retail CBDC and Commercial Bank Money
Functional Consistency across Retail CBDC and Commercial Bank Money
Three Barclays staffers circulated a paper on how functional consistency could mitigate the risk of retail CBDCs fragmenting payments markets and retail deposits. In the context of the Bank of England's digital pound platform model, they identify the common operational characteristics and design options to achieve this based on their provision by the central bank, payment interface providers, technical service providers (TSPs) or a financial market infrastructure (FMI). They conclude that a complete solution would need to combine the suitable design option(s) for each key capability and include common ecosystem services provided by an FMI and TSPs.
#Fintech#CBDC#UnitedKingdom#DFC
·arxiv.org·
Functional Consistency across Retail CBDC and Commercial Bank Money