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BIS Finalizes Bitcoin Bank Limits
BIS Finalizes Bitcoin Bank Limits
The BIS Basel Committee on Banking Supervision has finalized a proposed policy that would place a 2% limit on banks' Tier 1 capital held in bitcoin and other "Group 2" crypto-assets. Tier 1 capital is the core capital held in a bank's reserves that is used to fund business activities for the bank's clients. It includes common stock, as well as disclosed reserves and certain other assets. Group 1 crypto-assets include tokenised traditional assets (Group 1a) and crypto-assets with effective stabilization mechanisms (Group 1b). Group 1 crypto-assets are subject to capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework. Group 2 crypto-assets are those that fail to meet any of the Group 1 classification conditions. https://www.bis.org/press/p221216.htm
#Fintech#CryptoAssets#Stablecoins#Tokenization#Regulation#Basel#DFC
·bitcoinmagazine.com·
BIS Finalizes Bitcoin Bank Limits
Pre-announcement of the digital euro market research
Pre-announcement of the digital euro market research
In January 2023, the European Central Bank (ECB) will invite market participants to take part in market research to obtain an overview of options for the technical design of possible digital euro components and services. The market research will consist of a set of questions to obtain technical input, as well as cost and time estimations. Participation will not be remunerated. It will not have any impact on eligibility for future procurement procedures related to a digital euro or any other procurement procedures. Nor will it imply any pre-selection for a potential subsequent tender. The ECB intends to publish the findings of the market research in the second quarter of 2023.
#Fintech#CBDC#Eurozone#DFC
·ecb.europa.eu·
Pre-announcement of the digital euro market research
The interoperability of CBDCs across networks and currencies
The interoperability of CBDCs across networks and currencies
The Banque de France in partnership with HSBC and IBM demonstrated the use of a wholesale central bank digital currency (CBDC) to enable transactions across borders and technology platforms whilst facilitating the lifecycle of digital assets and currencies in wholesale markets. A combined proof of concept tested the issuance and distribution of a CBDC, bond subscription in primary and secondary markets followed by coupon redemption, and execution of cross border and cross network payments. It proved that each transaction flowed correctly through the network of systems, automatically triggering the required events, whilst retaining visibility and control over the CBDC in circulation.
#Fintech#CBDC#Blockchain#Settlement#wCBDC#Eurozone#France#DFC
·gbm.hsbc.com·
The interoperability of CBDCs across networks and currencies
Crypto's Retreat Opens a Quantum Leap for Central Banks
Crypto's Retreat Opens a Quantum Leap for Central Banks
Where the relationship between citizens and the state has a trust deficit to begin with, technology may offer better solutions than institutions. One such idea comes from the world of polling. The election officer (read, the monetary authority) signs a sealed envelope that carries your secret ballot (the payment details); carbon paper (cryptography) carries the signature to the vote inside. So when the envelope is opened (the payee is credited), all that the receiver’s bank sees is the signature attached to the ballot, not where the vote (the funds) came from. You, however, will know what you did or didn’t intend to do. If a terror financier steals your wallet, you’d go to law enforcement to show them where your tokens are. You might even get them back.
#Fintech#CBDC#Switzerland#BlindSignatures#DFC
·bloomberg.com·
Crypto's Retreat Opens a Quantum Leap for Central Banks
Central Bank Digital Currencies, an Old Tale With a New Chapter
Central Bank Digital Currencies, an Old Tale With a New Chapter
"Michael Bordo and William Roberds consider the debut of a new monetary instrument, central bank digital currencies (CBDCs). Drawing on examples from monetary history, they argue that a successful monetary transformation must combine microeconomic efficiency with macroeconomic credibility. A paradoxical feature of these transformations is that success in the micro dimension can encourage macro failure. Overcoming this paradox may require politically uncomfortable compromises. They propose that such compromises will be necessary for the success of CBDCs."
#Fintech#CBDC#DFC
·nber.org·
Central Bank Digital Currencies, an Old Tale With a New Chapter
Tether to reduce secured loans to zero in 2023 amid battle against FUD
Tether to reduce secured loans to zero in 2023 amid battle against FUD
Tether has pledged to stop the practice of lending out funds from the reserves that back its USDT stablecoin. The move is likely in response to a Wall Street Journal report earlier this month alleging these loans were risky, claiming that the “company may not have enough liquid assets to pay redemptions in a crisis,” even though Tether claims that the loans are over-collateralized and covered by “extremely liquid assets." Tether said that starting from now, throughout 2023, it will reduce secured loans in its reserves to zero.
#Fintech#CryptoAssets#Stablecoins#Tether#USDT#DFC
·cointelegraph.com·
Tether to reduce secured loans to zero in 2023 amid battle against FUD
Bank of Canada plans 2023 CBDC consultation as it moves to development
Bank of Canada plans 2023 CBDC consultation as it moves to development
Bank of Canada Governor Tiff Macklem reportedly said that next year (2023) the central bank plans to consult the public on a potential central bank digital currency (CBDC). It is moving from the research phase into the development phase to be prepared if the need arises to issue a CBDC. However, the Governor made clear that a decision on whether to issue a CBDC is up to parliament. Macklem outlined three drivers that could result in the launch of a retail CBDC;  a loss of control over the Bank's monetary authority if there is a dramatic switch from cash usage into other digital currencies, or if Canadians heavily adopt a private sector stablecoin, particularly one not denominated in Canadian dollars.
#Fintech#CBDC#Canada#DFC
·ledgerinsights.com·
Bank of Canada plans 2023 CBDC consultation as it moves to development
CSA provides update to crypto trading platforms operating in Canada
CSA provides update to crypto trading platforms operating in Canada
The Canadian Securities Administrators (CSA) is strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada. Also, the CSA announced that it is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives. In that context, crypto trading platforms that are registered or that have entered into a pre-registration undertaking are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative. Crypto trading platforms are expected to have established policies and procedures to determine whether each crypto asset they provide exposure to is a security and/or derivative.
#Fintech#CryptoAssets#Regulation#Stablecoins#Canada#DFC
·osc.ca·
CSA provides update to crypto trading platforms operating in Canada
An update on rationales for CBDC issuance and systemic design considerations
An update on rationales for CBDC issuance and systemic design considerations
Reserve Bank of Australia (RBA) central bank digital currency (CBDC) research partner, the Digital Finance Cooperative Research Centre (DFCRC) published an update on the state-of-play regarding the possible CBDC issuance in higher-income economies with good electronic payments systems. It concludes that it is unlikely that there will be actual issuance of retail CBDCs in higher-income countries anytime soon. However, it conjectures that wholesale CBDCs could potentially be implemented sooner, reflecting that, conceptually, they arguably represent only a modest technological modification to the settlement/reserve accounts that central banks currently provide, and might be less of an issue politically than retail CBDCs.
#Fintech#CBDC#Australia#DFC
·dfcrc.com.au·
An update on rationales for CBDC issuance and systemic design considerations
Tron-backed USDD loses dollar parity as stablecoin dips below $0.97
Tron-backed USDD loses dollar parity as stablecoin dips below $0.97
"Tron's Decentralized USDD algorithmic stablecoin slipped further from parity with the US dollar today. USDD dropped to slightly below 0.97 before recovering to around $0.98. This marks the second time the stablecoin has slipped out of dollar parity since it was first founded earlier this year. In June, the stablecoin dipped all the way to $0.96 before bouncing back to its intended value."
#Fintech#CryptoAssets#Stablecoins#Tron#USDD#DFC
·theblock.co·
Tron-backed USDD loses dollar parity as stablecoin dips below $0.97
Snake oil sellers in the stablecoin world
Snake oil sellers in the stablecoin world
"Contrary to what the Barclays note says, placing funds on deposit at the Fed through the ON RRP facility would not make USDC a "closer substitute for insured bank deposits". Since ON RRP deposits are not liquid, it would actually make it less like an insured bank deposit, since it would not be possible to redeem it overnight. "
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·coppolacomment.com·
Snake oil sellers in the stablecoin world
Anti-money laundering: EU Council agrees its position on a strengthened rulebook
Anti-money laundering: EU Council agrees its position on a strengthened rulebook
"By limiting large cash payments, the EU will make it harder for criminals to launder dirty money. An EU-wide maximum limit of €10.000 is set for cash payments. Member states will have the flexibility to impose a lower maximum limit if they wish."
#Fintech#Cash#Regulation#FinancialIntegrity#AMLCFT#Europe#DFC
·consilium.europa.eu·
Anti-money laundering: EU Council agrees its position on a strengthened rulebook
E-rupee transactions will not be tracked
E-rupee transactions will not be tracked
The RBI has said the central bank digital currency (CBDC) will remain anonymous and regulations that are applicable to paper currency will prevail on the e-rupee. RBI deputy-governor T. Rabi Sankar said the central bank was looking at solutions to make CBDC at par with paper currency when it comes to having the key feature of anonymity which has ensured that cash is still used in the developed world. ``The challenge is to ensure the anonymity because the normal understanding is that anything digital leaves a footprint. This can have various solutions,” Sankar said. The RBI is looking at a technological solution and also a legal solution to help assuage the concerns on this problem. Sankar said the start-up or the fintech ecosystem would have to innovate and launch various use cases for the new currency. RBI governor Shaktikanta Das said the rules governing deposits and withdrawal of paper cash will also apply to digital currency.
#Fintech#CBDC#Privacy#Anonymity#Asia#India#DFC
·telegraphindia.com·
E-rupee transactions will not be tracked
Bank of England CBDC Sample Wallet Proof of Concept and Research
Bank of England CBDC Sample Wallet Proof of Concept and Research
The Bank of England has put out a request for proposal (RFP) for proof of concept work on a sample central bank digital currency (CBDC) wallet, to help make a potential CBDC product more tangible for internal and external stakeholders, eg. as a prototype for future user testing. It will also support the Bank’s work towards the BIS Innovation Hub’s ‘Project Rosalind’, by testing integration of a front-end with the Rosalind API. Key deliverables will be (1) a mobile wallet app (built on both android as well as iOS); (2) wallet website; and, (3) an example merchant website, and (4) back-end server to serve mobile app and website, including calling the core ledger API and stored user data and transaction history.
#Fintech#CBDC#UnitedKingdom#DFC
·digitalmarketplace.service.gov.uk·
Bank of England CBDC Sample Wallet Proof of Concept and Research
The Economics of a Central Bank Digital Currency in Australia
The Economics of a Central Bank Digital Currency in Australia
Reserve Bank of Australia (RBA) Assistant Governor Brad Jones discussed where the case for a retail CBDC in Australia fits into the wider international debate over the future of money, and provided an update on the RBI's retail CBDC pilot project. On balance, the RBA does not yet see a case for issuing an eAUD, but the central bank is "keeping an open mind" as its eAUD pilot program remains in full swing. The program has not prescribed use cases in advance, instead inviting the applicants (80 of them) to propose their own use cases (140), from which the RBA eAUD project team will select to take forward into the pilot phase in early 2023.
#Fintech#CBDC#Asia-Pacific#Australia#DFC
·rba.gov.au·
The Economics of a Central Bank Digital Currency in Australia
The OMFIF 2022 Future of Payments Report
The OMFIF 2022 Future of Payments Report
The Official Monetary and Financial Institutions Forum (OMFIF) published the 2022 edition of its Future of Payments report. It focuses particularly on the challenges of cross-border payments for emerging market countries, delving into the validity of cryptocurrencies and stablecoins as a means of escaping domestic inflation and sending cheap remittances. It also examines the value proposition of CBDC for emerging markets, as well as looking at some of the progress made by CBDC cross-border integration projects. Notably, while central banks think that interlinking CBDCs might be a promising avenue for enhancing cross-border payments, they are not pursuing CBDC in order to provide a solution to the cross-border payments problem. The consensus is that CBDCs must justify their existence with other merits , such as improving financial inclusion.
#Fintech#Payments#CBDC#CryptoAssets#Stablecoins#CrossBorder#DFC
·omfif.org·
The OMFIF 2022 Future of Payments Report
Banco de España - Services
Banco de España - Services
The Banco de España is starting a wholesale central bank digital currency (CBDC) project, and asking financial institutions and tech providers to submit proposals for the initiative by January 31. The project will focus on (i) simulating wholesale CBDC funds transfers; (ii) testing the integration of a wholesale CBDC in the settlement of financial assets; and, arising from the above, (iii) analyzing possible pros and cons of a wholesale CBDC versus traditional processes, procedures and infrastructures. https://www.bde.es/f/webbde/INF/MenuHorizontal/Servicios/tokens_digitales_mayoristas/Programa_de_experimentacion.pdf
#Fintech#CBDC#Eurozone#Spain#wCBDC#DFC
·bde.es·
Banco de España - Services
Documents for the digital euro prototyping exercise
Documents for the digital euro prototyping exercise
The European Central Bank (ECB) will be running a digital euro prototyping exercise to allow market participants to develop front-end prototypes that can be integrated with the back-end infrastructure developed by the Eurosystem. The documents were provided to the five companies that were selected to carry out the experimental work (CaixaBank (peer-to-peer online payments), Worldline (peer-to-peer offline payments), EPI (point of sale payments initiated by the payer), Nexi (point of sale payments initiated by the payee), and Amazon (e-commerce payments)). The material published provides the information needed by any market participant to develop front-end prototypes compatible with the Eurosystem’s back-end infrastructure, without restricting participants’ potential to innovate. The prototyping exercise is expected to be completed in the first quarter of 2023.
#Fintech#CBDC#Eurozone#DFC
·ecb.europa.eu·
Documents for the digital euro prototyping exercise
Tether Launches Offshore Chinese Yuan (CNH₮) on Tron
Tether Launches Offshore Chinese Yuan (CNH₮) on Tron
"Tether Operations Limited (Tether), the company operating the blockchain-enabled platform tether.to that powers the first and most widely used stablecoin by market capitalization announced today the addition of its offshore Chinese Yuan (CNH₮) to the Tron blockchain. At launch, Bitfinex will be the first exchange to enable its users to deposit and withdraw CNH₮ using the Tron blockchain transport layer from the platform. "
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·tether.to·
Tether Launches Offshore Chinese Yuan (CNH₮) on Tron
CBN reduces over-the-counter withdrawals to N100k, N500k per week for individuals, companies
CBN reduces over-the-counter withdrawals to N100k, N500k per week for individuals, companies
The Central Bank of Nigeria (CBN) has imposed limits on cash withdrawals to push consumers towards alternatives, including its own eNaira central bank digital currency (CBDC). Over-the-counter cash withdrawals by individuals and corporate entities are not to exceed N100,000 and N500,000, respectively, per week. All cash withdrawals above the the limits will attract processing fees of 5% and 10%, respectively. Withdrawals from automatic teller machines and point-of-sale terminals will also be subject to a N20,000 daily withdrawal limit. https://www.cbn.gov.ng/Out/2022/CCD/RevisedCashWithdrawal.pdf
#Fintech#CBDC#Cash#Regulation#Africa#Nigeria#DFC
·nairametrics.com·
CBN reduces over-the-counter withdrawals to N100k, N500k per week for individuals, companies
Fnality and HQLAX demonstrate the first cross-chain repo swap pilot
Fnality and HQLAX demonstrate the first cross-chain repo swap pilot
Fnality and HQLAX demonstrated together with Banco Santander, Goldman Sachs and UBS, the first cross-chain repo swap pilot across Corda and Enterprise Ethereum, paving the way for the settlement of intraday transactions. This is part of Fnality’s mission to provide its participants with a single pool of liquidity to facilitate payments (P), cross-currency payments (PvP) and delivery versus payment (DvP) use cases. This pilot also proves interoperability across the Fnality Payment System and HQLAX’s Digital Collateral Registry, bridging Corda and Enterprise Ethereum. Fnality was founded to create a network of decentralised financial market Infrastructures (dFMIs) to deliver the means of payment-on-chain in wholesale banking markets, based on wholesale stablecoins backed by central bank reserves. The HQLAᵡ operating model leverages distributed ledger technology to enable atomic delivery verses delivery (DvD) for baskets of securities residing at multiple custodians.
#Fintech#CryptoAssets#Stablecoins#Blockchain#Fnality#HQLAX#Settlement#DFC
·fnality.org·
Fnality and HQLAX demonstrate the first cross-chain repo swap pilot
USDC issuer Circle terminates SPAC merger with Concord
USDC issuer Circle terminates SPAC merger with Concord
USD Coin (USDC) stablecoin issuer Circle has announced the mutual termination of its proposed merger with special purpose acquisition company (SPAC) Concord Acquisition. The deal was announced in July 2021 with a preliminary valuation of $4.5 billion and was then amended in February 2022 when Circle's valuation ballooned to $9 billion. USDC is currently the 2nd largest stablecoin in circulation, with a market cap of $43 billion.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#SPAC#DFC
·cointelegraph.com·
USDC issuer Circle terminates SPAC merger with Concord
Pakistan to tap into digital currency potential by 2025
Pakistan to tap into digital currency potential by 2025
The State Bank of Pakistan (SBP) has reportedly launched new Electronic Money Institutions (EMIs) regulations that pave the way towards issuing CBDC by 2025. Deputy Governor Jameel Ahmad said that the SBP the aim of issuing CBDC would be to promote financial inclusion and reduce corruption, and inefficiency. I can't find any official announcements of SBP CBDC plans, in a November 23, 2022 speech, Mr. Ahmad said that the central bank was researching CBDC. The speech is worth a read because it provides a nice update of Pakistani payment system developments.https://www.sbp.org.pk/about/speech/Governors/JameelAhmed/23-Nov-2022.pdf
#Fintech#CBDC#Asia#Pakistan#DFC
·arabnews.pk·
Pakistan to tap into digital currency potential by 2025
Mongolia joins the CBDC race
Mongolia joins the CBDC race
The Bank of Mongolia (BOM) has reportedly included central bank digital currency (CBDC) experiments in its 2023 monetary policy agenda. It has already  established a working group and preliminary research has begun, with priority CBDC design questions including the degree of anonymity, whether to impose caps on holdings, whether it should bear interest, and can it be used to mitigate money laundering and terrorist financing? The story is plausible because back in September, 2022, the IMF reported that the BOM was one of the Asia-Pacific central banks that were exploring CBDC issuance.
#Fintech#CBDC#Asia-Pacific#Mongolia#DFC
·insidemongolia.beehiiv.com·
Mongolia joins the CBDC race
Rising Tether Loans Add Risk to Stablecoin, Crypto World
Rising Tether Loans Add Risk to Stablecoin, Crypto World
The Wall Street Journal published an article that claims that Tether has increasingly been lending its own USDT stablecoins to customers rather than selling them for hard currency upfront. "The shift adds to risks that the company may not have enough liquid assets to pay redemptions in a crisis." Tether says it does indeed make short-term USDT loans to carefully vetted customers, but they are required to post "lots of extremely liquid” collateral, which could be sold for dollars if borrowers default. About 9% of USTD's backing assets are comprised of such secured loans, according to Bloomberg's Matt Levine. https://www.bloomberg.com/opinion/articles/2022-12-01/sbf-missed-ftx-s-risks
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·wsj.com·
Rising Tether Loans Add Risk to Stablecoin, Crypto World
Bank of Namibia consultation paper on central bank digital currency (CBDC)
Bank of Namibia consultation paper on central bank digital currency (CBDC)
The Bank of Namibia (BoN) published a consultation paper on central bank digital currency (CBDC). It notes that its degrees of freedom is likely to be influenced by Namibia's Common Monetary Area (CMA) membership, with the South African Rand co-circulating alongside the Namibia Dollar as legal tender in Namibia. The options open to Rand holders are likely to also impact the options that the BoN would give Namibia Dollar holders. Hence, the CBDC direction taken by South African Reserve Bank is likely to have an impact on the BoN's decisions in this regard. Consultations and collaborations between the CMA member countries are being held to push for and develop as far as possible, a common view and approach on CBDCs that will serve all the CMA countries optimally.
#Fintech#CBDC#Africa#Namibia#DFC
·bon.com.na·
Bank of Namibia consultation paper on central bank digital currency (CBDC)
Ensuring adoption of central bank digital currencies – An easy task or a Gordian knot?
Ensuring adoption of central bank digital currencies – An easy task or a Gordian knot?
The European Central Bank (ECB) published a paper that surveys the key elements involved in the adoption of any new means of payment and discusses failed and ongoing initiatives with public digital money. It concludes that ensuring the desired level of adoption of retail central bank digital currency (CBDC) may impose significant constraints on central bank design choices and policy goals. In fact, in some settings, central banks may find themselves on the horns of a dilemma in seeking to balance the needs to (i) preserve the central bank’s hierarchy of policy goals, (ii) increase the chances of adoption and use of CBDCs by consumers and retailers, and (iii) avoid any adverse economic effects.
#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
Ensuring adoption of central bank digital currencies – An easy task or a Gordian knot?