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World needs a CBDC treaty, Cecchetti tells central bankers
World needs a CBDC treaty, Cecchetti tells central bankers
"Governments should consider an international moratorium on the development of central bank digital currencies (CBDCs) due to the financial stability risk they could pose for small jurisdictions, the former director of research at the Federal Reserve Bank of New York, Stephen Cecchetti, told central bankers in Finland on Thursday."
#Fintech#CBDC#DFC
·the-blindspot.com·
World needs a CBDC treaty, Cecchetti tells central bankers
Some Lessons from Asian E-Money Schemes for CBDC Adoption
Some Lessons from Asian E-Money Schemes for CBDC Adoption
The IMF published a paper that synthesizes four lessons from the experiences of six Asian e-money schemes (Alipay and WeChat Pay in China; Paytm in India; and GoPay, GrabPay, and ShopeePay in Southeast Asia) for central banks as they consider CBDC issuance: CBDC should embody trust, convenience, efficiency, and security; CBDC service providers can facilitate adoption by leveraging digital technology, targeting use cases, developing business models, and complying with legal and regulatory requirements; central banks could incentivize CBDC service providers to develop these four channels when considering CBDC adoption; and central banks may be able to establish data-sharing arrangements that preserve privacy while leaving room for CBDC service providers to explore the economic value of data.
#Fintech#CBDC#IMF#DFC
·imf.org·
Some Lessons from Asian E-Money Schemes for CBDC Adoption
Digital euro scheme Rulebook Development Group status update
Digital euro scheme Rulebook Development Group status update
The European Central Bank (ECB) published an update on the work of its digital euro scheme Rulebook Development Group (RDG) including progress with drafting based on the design choices endorsed by the ECB's Governing Council, and the group's next steps. The ultimate goal of the Group’s work is to define the roles and contributions of the different actors so that the desired digital euro functionalities and user experience can be coherently created by those different actors, while allowing for innovation and competition.
#Fintech#ECB#CBDC#Eurozone#DFC
·ecb.europa.eu·
Digital euro scheme Rulebook Development Group status update
Privacy-Preserving Post-Quantum Credentials for Digital Payments
Privacy-Preserving Post-Quantum Credentials for Digital Payments
The Bank of Canada published a paper that proposes a pseudonymous credential scheme for use in payment systems to protect users from fraud and abuse while retaining privacy in individual transactions. The scheme is privacy-preserving, efficient for practical applications, and hardened against quantum computing attacks. A practical and interactive credential mechanism was constructed, in which users are issued pseudonymous credentials against their personally identifiable information that can be used to register with financial service providers without revealing personal information. The protocol is shown to be secure and free of information leakage, preserving the user’s privacy regardless of the number of registrations. Comparison reveals that the scheme is more efficient than equivalent, state-of-the-art post-quantum schemes.
#Fintech#CBDC#Canada#Payments#Privacy#QuantumComputing#DFC
·bankofcanada.ca·
Privacy-Preserving Post-Quantum Credentials for Digital Payments
ECCB pleased with progress of digital currency initiative
ECCB pleased with progress of digital currency initiative
Eastern Caribbean Central Bank (ECCB) Governor Timothy Antoine reportedly says he is pleased with the performance of its DCash central bank digital currency (CBDC) pilot aimed at improving financial inclusion and modernizing payment systems. He said that partnerships with licensed financial institutions and regional businesses and organizations have enabled DCash to expand its reach, enhance platform features, and ensure regional impact.
#Fintech#CBDC#Caribbean#ECCB#DFC
·trinidadexpress.com·
ECCB pleased with progress of digital currency initiative
The digital euro: A precautionary device, not a deus ex machina
The digital euro: A precautionary device, not a deus ex machina
The Leibniz Institute for Financial Research SAFE published a paper that weighs the pros and cons of a possible digital euro. It concludes that, if the decision on adoption had to be taken today, the arguments against would outweigh those in favor. However, a reasonable case can be made that having in place digital payment infrastructures at the central bank, potentially accessible by a very large user base, may help overcome adverse contingencies. The related operational and legal infrastructures require a long preparatory phase. Preparing in advance can therefore be useful, even though the eventual use may appear uncertain or even unlikely.
#Fintech#CBDC#Eurozone#DFC
·safe-frankfurt.de·
The digital euro: A precautionary device, not a deus ex machina
Circle Singapore Obtained Major Payment Institution (MPI) License
Circle Singapore Obtained Major Payment Institution (MPI) License
Circle's Singapore affiliate received its Monetary Authority of Singapore (MAS) Major Payment Institution (MPI) license for digital payment token services in Singapore, after having obtained in-principle approval last November. It allows Circle Singapore to offer digital payment token services, cross-border money transfer services and domestic money transfer services in the city-state. Circle is the issuer of USDC stablecoin.
#Fintech#CryptoAssets#Stablecoins#Circle#Singapore#Regulation#DFC
·circle.com·
Circle Singapore Obtained Major Payment Institution (MPI) License
Update on the Bahamas Sand Dollar
Update on the Bahamas Sand Dollar
The Central Bank of The Bahamas  (CBOB) published a Sand Dollar update in late May. During April and May 2023 they continued with more accelerated outreach, and technical developments to extend proprietary wallet access to the Bahamas Automated Clearing House (ACH) via the Sand Dollar infrastructure were completed. Meanwhile, the first iteration of Wallet 2.0, which will permit user self-activation, progressed to beta testing, with a general release targeted for the middle of the summer of 2023.
#Fintech#CBDC#Bahamas#DFC
·centralbankbahamas.com·
Update on the Bahamas Sand Dollar
Principles for creating “Acceptance” and “Network Effect” for a Digital Shekel
Principles for creating “Acceptance” and “Network Effect” for a Digital Shekel
The Bank of Israel (BoI) published a paper on how to ensure that a potential central bank digital currency (CBDC) is broadly adopted. The characteristics that should increase digital shekel adoption and network effects among users include (i) making it possible to receive (make) payments from (to) the State, (ii) providing an efficient and convenient payment experience, and (iii) making it broadly useful  for payment between individuals (P2P) including offline. Also, costs to merchants should be less than existing alternatives, and should streamline their operational processes such as the payment of taxes. In addition, defining a digital shekel as “legal tender” will help provide the currency with the status that the public attributes to cash, and thereby support its broader acceptance.
#Fintech#CBDC#Israel#DFC
·boi.org.il·
Principles for creating “Acceptance” and “Network Effect” for a Digital Shekel
Bangko Sentral ng Pilipinas Media and Research - Speeches
Bangko Sentral ng Pilipinas Media and Research - Speeches
Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla provided an update to the central bank's digital payments transformation roadmap in which he underscored the lack of interest in issuing retail central bank digital currency (CBDC). He was particularly concerned about the potential loss of payments privacy ("of course, [retail CBDC] saves a lot of money in printing [but] the government will actually know more about you than your wife. In my case, that is not dangerous; there is nothing to know about me. But for many people, that is a bit of a concern. So, all of those things have to be addressed.")
#Fintech#CBDC#Philippines#Asia-Pacific#DFC
·bsp.gov.ph·
Bangko Sentral ng Pilipinas Media and Research - Speeches
Bitcoin-based Stablecoins Emerge, Potentially Altering Price Dynamics
Bitcoin-based Stablecoins Emerge, Potentially Altering Price Dynamics
"The new stablecoin using the Bitcoin blockchain was created by Stably, a Delaware-based startup. The dollar-pegged stablecoin is called #USD, and it takes the most fundamental unit of Bitcoin, called a ‘satoshi’ or ‘sat’ for short, and turns those smaller units into tokens that represent a claim against US dollars held by a custodian. It is the first stablecoin that is native to the Bitcoin blockchain, whereas others, like Rootstock or Sovryn, offer Bitcoin-collateralized stablecoins on layer two architectures."
#Fintech#CryptoAssets#Stablecoins#Bitcoin#Stably#DFC
·forbes.com·
Bitcoin-based Stablecoins Emerge, Potentially Altering Price Dynamics
Central Bank Digital Currency: What Is A CBDC?
Central Bank Digital Currency: What Is A CBDC?
"However, Adam Jordan, director of investments for Paul R. Ried Financial Group, says any American who uses a debit card can already have their payments tracked. “The concern about privacy is a real one, but only if a government went so far as to try to eliminate physical currencies,” Jordan says. “The government already has the ability to track all our digital electronic payments.”"
#Fintech#CBDC#UnitedStates#DFC
·forbes.com·
Central Bank Digital Currency: What Is A CBDC?
Japanese Banking Giant MUFG to Deploy Stablecoins on Public Blockchains
Japanese Banking Giant MUFG to Deploy Stablecoins on Public Blockchains
Mitsubishi UFJ Financial Group (MUFG) plans to deploy and distribute bank-backed stablecoins on different public blockchains. The Japanese bank has partnered with Datachain, a blockchain interoperability company, and Toki, a cross-chain bridge, to allow the interoperation of these licensed stablecoins along several blockchains using its Progmat Coin protocol. The announcement comes after Japan's revised funds’ settlement law passed in 2022 came into take effect to allow financial institutions to issue stablecoins. Stablecoin issuance on public blockchains doesn't seem to be explicitly covered in the legislation as summarized in a slide deck from Japan's Financial Services Agency (FSA) and this document, although a white paper published by the country's Liberal Democratic Party implies that clarity on this issue would be forthcoming, which I suppose has indeed arrived.
#Fintech#CryptoAssets#Stablecoins#Japan#Regulation#DFC
·news.bitcoin.com·
Japanese Banking Giant MUFG to Deploy Stablecoins on Public Blockchains
National Bank of Kazakhstan Digital Tenge Update
National Bank of Kazakhstan Digital Tenge Update
Binur Zhalenov, CEO of the Kazakhstan Interbank Settlement Center of the National Bank of Kazakhstan, provided an update on the three-year Digital Tenge project. The plan in 2023 is to deliver a production-grade central bank digital currency (CBDC). Pilots will test various specific use cases, starting with building a scalable platform for social aid distribution for the central bank's government partners. The project aims to  provide a scheme that provides business value across the value chain, and there will be several minimum viable products (MVPs) to optimize cross-border payments, wholesale transactions, and distributed ledger technology (DLT) integration
#Fintech#CBDC#Kazakhstan#DFC
·linkedin.com·
National Bank of Kazakhstan Digital Tenge Update
The Digital Economy’s New Monetary Imperative
The Digital Economy’s New Monetary Imperative
Project Syndicate published an article that claims that a full accounting will show that the benefits of CBDCs outweigh their costs and risks. However, a CBDC would need to be accompanied by strong privacy and due-process protections as well as an upfront, forceful prohibition against inappropriate central-bank lending activity (at least outside of major crises such as a war or pandemic).
#Fintech#CBDC#DFC
·project-syndicate.org·
The Digital Economy’s New Monetary Imperative
Only 16% of Americans Support the Government Issuing a CBDC
Only 16% of Americans Support the Government Issuing a CBDC
Despite the mangled headline (only a "central bank" can issue central bank digital currency (CBDC)) this Cato survey contains some interesting statistical nuggets. It found that, while only 16% of Americans polled support a digital dollar, 49% haven't even formed an opinion (34% oppose it). A majority opposes a digital dollar that would allow the government to monitor their spending (68%) or control how they spend (74%). On fears that the government could potentially do either of these things, 76% of those polled said that the government should forbid the Fed from issuing a digital dollar. There are interesting differences between CBDC opinions of those who identify as Republicans (right leaning) and Democrats (left leaning) with the former being more wary of CBDC across all of the permutations and combinations of questions.
#Fintech#CBDC#rCBDC#UnitedStates#Cato#DFC
·cato.org·
Only 16% of Americans Support the Government Issuing a CBDC
David Chaum's OFFLINE ECASH 2.0
David Chaum's OFFLINE ECASH 2.0
"A physical card solution to the “double spending problem” that provides a secure fallback in case of network or device failures. Smartphones communicate locally and use onboard cameras to capture barcodes and security features that they then cryptographically verify."
#Fintech#CBDC#Payments#Offline#DFC
·chaum.com·
David Chaum's OFFLINE ECASH 2.0
How to Design a Compliant, Privacy-Preserving Fiat Stablecoin Via Zero-Knowledge Proofs
How to Design a Compliant, Privacy-Preserving Fiat Stablecoin Via Zero-Knowledge Proofs
"This paper explores the feasibility of a fiat stablecoin that provides similar privacy guarantees to cash. We show how individuals in a stablecoin privacy pool can exchange small amounts of value within pre-assigned limits outside the view of third parties, such as banks, central banks, crypto exchanges, regulators, or other parties, in a regulatorily compliant way. High privacy guarantees and compliance with limits are ensured in a trustless way via the use of cryptographic zero-knowledge proofs. "
#Fintech#CBDC#Payments#Privacy#DFC
·papers.ssrn.com·
How to Design a Compliant, Privacy-Preserving Fiat Stablecoin Via Zero-Knowledge Proofs
Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments
Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments
The NBER published a paper develops a dynamic model of technology adoption featuring strategic complementarities: the benefits of usage increase with the number of adopters. It studies the diffusion of new means of payments, where such complementarities are pervasive. It shows that complementarities give rise to multiple equilibria, suboptimal allocations, and study the planner’s problem. The model generates gradualism in adoption, as individuals optimally wait for others to adopt before doing so. It applies the theory to the adoption of SINPE, an electronic peer-to-peer (P2P) payment app developed by the Central Bank of Costa Rica. A calibrated version of the model shows that the optimal subsidy pushes the economy to universal adoption.
#Fintech#Payments#P2P#CostaRica#CBDC#DFC
·nber.org·
Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments
Bank of Mauritius launches public survey on a digital rupee
Bank of Mauritius launches public survey on a digital rupee
The Bank of Mauritius (BoM) released a consultation paper on the issuance of a digital rupee central bank digital currency (CBDC). The BoM is envisaging the rolling out of a digital rupee pilot phase following a sandboxing exercise and finalization of design attributes in November 2023. Key proposed features include offline capability, 24/7 availability, programmability for specific purposes, and being interest-free like physical cash, with the digital currency intended to complement—not replace—physical banknotes and coins. Meanwhile, the BoM launched an online survey to get public views and suggestions, and will shortly invite members of the public to be part of the pilot.
#Fintech#CBDC#Mauritius#DFC
·bom.mu·
Bank of Mauritius launches public survey on a digital rupee
Reforming the Monetary System for the Digital Age
Reforming the Monetary System for the Digital Age
"As recent bank runs (Silicon Valley Bank, Signature Bank, First Republic Bank, Credit Suisse) have highlighted, the current two-tiered monetary system — where both the central bank and private banks create money — is too fragile for the digital age. The State (central bank) should exclusively issue money, thus severing the link between ‘money creation’ and the extension of private bank credit. Central bank digital currencies make possible the design of a monetary system that eliminates bank runs, shields the payment system from the financial system, and reduces the need for government intervention in the financial sector. Monetary policy would likely be more effective and financial cycles dampened."
#Fintech#CBDC#Money#DFC
·suerf.org·
Reforming the Monetary System for the Digital Age
Kenya central bank says digital currency not a 'compelling priority'
Kenya central bank says digital currency not a 'compelling priority'
The Central Bank of Kenya (CBK) does not consider the issuance of a central bank digital currency (CBDC) a "compelling priority in the short to medium term" but it will continue monitoring developments in the area to inform future assessments of the need for CBDC in Kenya . In February 2022, the CBK issued a consultative paper on CBDC and the comments have been compiled into a new discussion paper. It also provides an update on key global CBDC developments since February 2022, concluding that "the allure of CBDCs is fading". https://www.centralbank.go.ke/uploads/press_releases/103592893_Press%20Release%20-%20Issuance%20of%20Discussion%20Paper%20on%20Central%20Bank%20Digital%20Currency%20-%20Comments%20from%20the%20Public.pdf
#Fintech#CBDC#Kenya#DFC
·reuters.com·
Kenya central bank says digital currency not a 'compelling priority'
Empowering central bank money for a digital future
Empowering central bank money for a digital future
SUERF published a paper that suggests that central banks and policymakers start with trigger solutions when considering wCBDC. Trigger solutions connect the distributed ledger technology (DLT) world with conventional settlement systems and enable the settlement of tokenised assets in central bank money. By connecting DLT networks with conventional payment systems, they combine the advantages of decentralised infrastructures with the reliability of the central bank. No new form of (tokenised) money needs to be introduced. The trigger solution can play a neutral role and is agnostic across three dimensions: use cases, payment systems and asset systems. Furthermore, trigger solutions are characterised by comparatively low technical and operational complexity, and are a convenient way to test the case for wCBDC and observe market adaptation.
#Fintech#CBDC#wCBDC#PaymentSystems#SettlementSystems#DFC
·suerf.org·
Empowering central bank money for a digital future
Mooney unveils bill to block central bank digital currency pilot program
Mooney unveils bill to block central bank digital currency pilot program
Alex Mooney of West Virginia introduced in the House of Representatives the Digital Dollar Pilot Prevention Act, which aims to prevent the Federal Reserve from launching a pilot program that would test the operability of a central bank digital currency (CBDC) in the U.S. financial system. According too Mooney, "CBDCs would threaten the liberties of law-abiding Americans and are being used by authoritarian countries right now to crack down on dissent.” https://mooney.house.gov/congressman-mooney-introduces-the-digital-dollar-pilot-prevention-act/
#Fintech#CBDC#UnitedStates#DFC
·foxbusiness.com·
Mooney unveils bill to block central bank digital currency pilot program
RBI CBDC pilot to be expanded to include more locations and banks
RBI CBDC pilot to be expanded to include more locations and banks
The Reserve Bank of India (RBI) is gradually expanding the scope of its retail central bank digital currency (CBDC) pilot to include more locations and banks. The pilot launched on December 1, 2022 in four cities with four banks. Four more banks were subsequently added, and now four more will be added, along with ten more cities.
#Fintech#CBDC#India#DFC
·rbi.org.in·
RBI CBDC pilot to be expanded to include more locations and banks
Results and findings from Bank of Japan CBDC PoC phase 2
Results and findings from Bank of Japan CBDC PoC phase 2
The Bank of Japan (BOJ) published the English translation of the results of the second phase of its proof-of-concept (PoC) in which it confirmed the technical feasibility of the basic functions of a central bank digital currency (CBDC). In April 2023 the prototype phase began, in which the end-to-end process flow will be tested, the measures and potential challenges for connection with external systems will be explored, and considerations and solutions indicated as necessary in the PoCs will also be explored. No decision has been made to issue a digital yen, but the BOJ will continue to its technical work, to be prepared to go.
#Fintech#CBDC#Japan#DFC
·boj.or.jp·
Results and findings from Bank of Japan CBDC PoC phase 2
Digital euro technology market research outcome report
Digital euro technology market research outcome report
The aim of the market research exercise was to obtain feedback from relevant interested parties and to gain non-binding information on potential technical solutions for a digital euro. The feedback received has helped the Eurosystem to better understand the current level of knowledge in the market and the existing experience in building solutions and identifying suitable technologies to potentially implement a digital euro.
#Fintech#CBDC#ECB#Eurozone#DFC
·ecb.europa.eu·
Digital euro technology market research outcome report
Think Twice Before Introducing a Holding Limit for the Digital Euro
Think Twice Before Introducing a Holding Limit for the Digital Euro
"There is a risk that the digital euro will struggle to reach mass adoption, and measures like the holding limit could further undermine its adoption. Most retail depositors may not see a reason to adopt the digital euro due to the presence of deposit insurance and the lack of understanding of the difference between central bank money and commercial bank money. The holding limit could act as an additional barrier to the digital euro's success."
#Fintech#CBDC#DFC
·blog.digital-euro-association.de·
Think Twice Before Introducing a Holding Limit for the Digital Euro