DFC

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The Banque de France and the Banque centrale du Luxembourg jointly conducted a successful wholesale central bank digital currency initiative
The Banque de France and the Banque centrale du Luxembourg jointly conducted a successful wholesale central bank digital currency initiative
The European Investment Bank (EIB) launched Project Venus, their second euro-denominated digitally native bond issue and first using private blockchain technology. The €100 million, two-year bond was issued, recorded and settled using private blockchain-based technology on Goldman Sachs’ GS DAPTM tokenization platform. Although investors purchased and paid for the security tokens using traditional currency, the transactions were settled in wholesale CBDC issued by the Banque de France and the Banque Centrale du Luxembourg. Société Générale Security Securities Services (SGSS Luxembourg) provided on-chain custodian services. https://www.eib.org/en/press/all/2022-449-eib-innovates-further-with-project-venus-the-first-euro-denominated-digital-bond-on-a-private-blockchain https://www.bcl.lu/fr/publications/Blog/Blog-22/index.html
#Fintech#CBDC#wCBDC#Eurozone#Settlement#France#Luxembourg#DFC
·banque-france.fr·
The Banque de France and the Banque centrale du Luxembourg jointly conducted a successful wholesale central bank digital currency initiative
Digital Dollar Could Streamline Settlements, DTCC Says
Digital Dollar Could Streamline Settlements, DTCC Says
A digital dollar could streamline settlements to make post-trade financial markets more efficient, according to a report published by the Depository Trust & Clearing Corp. A CBDC could help speed up settlement, in part by automating reports the DTCC must send to the Federal Reserve. It cited evidence that distributed-ledger technology (DLT) could save billions of dollars per year by simplifying how trades are confirmed and reconciled. https://www.finextra.com/pressarticle/95098/dtcc-shares-findings-on-digital-dollar-settlement-project
#Fintech#CBDC#DTCC#UnitedStates#DFC
·coindesk.com·
Digital Dollar Could Streamline Settlements, DTCC Says
Project Garuda: Navigating The Architecture Of Digital Rupiah
Project Garuda: Navigating The Architecture Of Digital Rupiah
Bank Indonesia issued a white paper on the high-level design considerations of a Digital Rupiah central bank digital currency (CBDC). Key drivers for this so-called "Project Garuda" include strengthening Bank Indonesia's role in the international stage, and accelerating integration of the national digital economy and finance. There will be three phases, each starting with public consultations, followed by technological experimentation, and concluding with policy stance review.
#Fintech#CBDC#Asia#Indonesia#DFC
·bi.go.id·
Project Garuda: Navigating The Architecture Of Digital Rupiah
India to Test Digital Rupee in 4 Cities With 4 Banks
India to Test Digital Rupee in 4 Cities With 4 Banks
The Reserve Bank of India (RBI) will start pilot testing its digital rupee retail central bank digital currency (CBDC), on December 1, 2022 in Mumbai, New Delhi, Bengaluru and Bhubaneswar with the initial participation of four banks: State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank, later extending to nine more cities and another four institutions. The pilot will be conducted in a closed user group of participating customers and merchants. The CBDC will be issued in the same denominations currently used for notes and coins. Payments to merchants will be made using QR codes and, like cash, the digital rupee will not earn any interest. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=54773
#Fintech#CBDC#India#DFC
·coindesk.com·
India to Test Digital Rupee in 4 Cities With 4 Banks
National Bank of Ukraine releases draft concept for digital hryvnia
National Bank of Ukraine releases draft concept for digital hryvnia
The National Bank of Ukraine (NBU) presented a draft concept for its potential e-hryvnia central bank digital currency (CBDC). It considers three possible design options. The first option would be a retail CBDC with smart contract functionality to implement targeted government (G2P) payments. The second option envisions what sounds like a wholesale e-hryvnia for usage in operations related to virtual asset operations, including on crypto exchanges. The third option include cross-border payments functionality, although it's not clear that this is being looked at at the retail or wholesale level. https://bank.gov.ua/ua/news/all/natsionalniy-bank-predstaviv-uchasnikam-platijnogo-rinku-ta-rinku-virtualnih-aktiviv--proyekt-kontseptsiyi-e-grivni
#Fintech#CBDC#Ukraine#DFC
·cointelegraph.com·
National Bank of Ukraine releases draft concept for digital hryvnia
President of Bank of Brazil Shows 'Open Finance' Digital Real Concept Featuring Stablecoin Integration and Payments Functionality
President of Bank of Brazil Shows 'Open Finance' Digital Real Concept Featuring Stablecoin Integration and Payments Functionality
The president of Banco Central do Brasil (BCB), Roberto Campos Neto reportedly introduced some novel ideas that the central bank has for a possible CBDC, including the integration of the digital real with traditional and decentralized financial structures and institutions. He also showed off a “super app” that will allow customers to hold stablecoins and the CBDC, and showcased the connection the system will have with the already available PIX payments network.
#Fintech#CBDC#Stablecoins#DeFi#LATAM#Brazil#DFC
·news.bitcoin.com·
President of Bank of Brazil Shows 'Open Finance' Digital Real Concept Featuring Stablecoin Integration and Payments Functionality
Stablecoins and Their Risks to Financial Stability
Stablecoins and Their Risks to Financial Stability
The Bank of Canada [BoC] published a paper on the risks stablecoins could pose to the financial system. It argues that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader crypto-asset markets and the traditional financial sector. It also argues that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance (DeFi). Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, it explores the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.
#Fintech#CryptoAssets#Stablecoins#FinancialStability#DFC
·bankofcanada.ca·
Stablecoins and Their Risks to Financial Stability
Visa: How CBDC Can Help Drive Digitization and Responsible Innovation
Visa: How CBDC Can Help Drive Digitization and Responsible Innovation
"Visa’s CBDC Payments Module is a proof-of-concept (POC) that envisions bringing web3 assets into a web2 user experience by providing an on-ramp for individuals, business owners, governments, and users of all kinds. The POC is designed to be a bridge connecting a CBDC system with existing forms of payment products and outlets. In linking CBDC with card payments—whether in the form of prepaid or debit cards—CBDC becomes a fast and nearly ubiquitous alternative payment choice users can easily adopt alongside existing forms of money, all while benefiting from economies of scale derived from today’s mature payment networks. The illustration below captures the flow of a payment transaction that integrates Visa’s scale and messaging protocols with a participating central bank’s ledger technology. Importantly, all this is designed to happen at the backend without major disruption for users, businesses, and financial intermediaries."
#Fintech#CBDC#VISA#DFC
·cbpn.currencyresearch.com·
Visa: How CBDC Can Help Drive Digitization and Responsible Innovation
Custodia Bank Wins Important Digital Asset Decision
Custodia Bank Wins Important Digital Asset Decision
US Law firm Davis Wright Tremaine LLP (DWT) published a report on Wyoming's Custodia Bank's successful complaint regarding the Federal Reserve's tardy response to the bank's application for a Master Account. DWT represented Custodia in the legal action, and they believe We believe this is the first case in which claims seeking to compel the grant of a master account have proceeded beyond the motion to dismiss stage. I reported on this some weeks ago but with little of the detail included here. I am quite surprised at the crypto press hasn't picked up on this important news, but I guess they prefer their stories spoon fed to them.
#Fintech#CryptoAssets#Stablecoins#Custodia#Regulation#UnitedStates#DFC
·dwt.com·
Custodia Bank Wins Important Digital Asset Decision
TCH White Paper Outlines Legal Authority for US Insured Depository Institutions to Issue and Provide Stablecoin-related Activities, including Digitized Deposits
TCH White Paper Outlines Legal Authority for US Insured Depository Institutions to Issue and Provide Stablecoin-related Activities, including Digitized Deposits
The Clearing House (TCH) published a paper that analyzes US insured depository institutions legal authority to issue stablecoins and engage in stablecoin-related activities. It finds that, in 2020 and 2021, Office of the Comptroller of the Currency (OCC) gave national banks the clear legal authority to issue and exchange stablecoins, based on language in the National Bank Act, and consistent with numerous legal decisions and regulatory determinations regarding a bank’s authority to issue payments and deposit instruments. National banks have always been permitted to develop innovative deposit and payment mechanisms, as receiving deposits and acting as financial intermediaries are core functions of banks.
#Fintech#CryptoAssets#Stablecoins#Regulation#UnitedStates#DFC
·theclearinghouse.org·
TCH White Paper Outlines Legal Authority for US Insured Depository Institutions to Issue and Provide Stablecoin-related Activities, including Digitized Deposits
Envisioning the Future of Payments
Envisioning the Future of Payments
There's not much that's new on the Bank of Japan's (BoJ's) central bank digital currency (CBDC) plans in this speech by Executive Director Uchida Shinichi, but I'm posting it anyways to debunk continuing stories about the BoJ abandoning its CBDC project. The fake news seems to go back to an article in The Paypers that misinterprets the BoJ May progress report, which opened with "the BOJ currently has no plans to issue CBDC" but made it clear that it would continue to undertake technical experiments to be prepared if plans change. Mr. Shinichi reiterated this stance: Whether or not a CBDC should be issued would be a judgment by the people [and] considering the lead time for investment, the day will come when a decision needs to be made... [so] the Bank will proceed with its technical experiments to test the feasibility of CBDCs and explorations into institutional arrangements so as to support such decision making."
#Fintech#CBDC#Asia#Japan#DFC
·boj.or.jp·
Envisioning the Future of Payments
Crunchfish Digital Cash – 100% payment availability for e-Wallets
Crunchfish Digital Cash – 100% payment availability for e-Wallets

Crunchfish Digital Cash separates the payment process into three distinct steps - Reserve-Pay-Settle:

  1. Reserve funds in a bank account and represent it as an offline balance in a Digital Cash Wallet.
  2. Pay by debiting the offline balance in the Digital Cash Wallet. Offline payments are transferred using proximity interaction, e.g. QR or BLE, and are verified in a Digital Cash Verifier (for P2B transactions) or in the Digital Cash Wallet (for P2P transactions).
  3. Settle Digital Cash transactions by transferring money from the payer’s bank account with the reserved funds to the payee’s bank account. The transfer can be initiated by both the payee and the payer, whoever gets connectivity first.
#Fintech#CBDC#Offline#Crunchfish#DFC
·crunchfish.com·
Crunchfish Digital Cash – 100% payment availability for e-Wallets
Pay offline to anyone, anywhere with new Crunchfish Digital Cash version
Pay offline to anyone, anywhere with new Crunchfish Digital Cash version
"Crunchfish Digital Cash is all about offline payments. Payers should not have to worry whether they are online or not. Payments should work regardless of banking services are down or lack of internet connectivity. This new version extends the use of Crunchfish Digital Cash even more as it becomes possible to pay anywhere using telecom connectivity, and to anyone on a domestic payment scheme. Although internet may not be present to connect online, often the telecom network is available to make a call or send an SMS."
#Fintech#CBDC#Offline#USSD#Crunchfish#DFC
·crunchfish.com·
Pay offline to anyone, anywhere with new Crunchfish Digital Cash version
An Examination of First-Mover Advantage for a CBDC
An Examination of First-Mover Advantage for a CBDC
The US Fed published a paper that explores whether there could be a first-mover advantage for a jurisdiction issuing a central bank digital currency (CBDC) compared to other jurisdictions that subsequently issue their own CBDC. The academic literature provides a framework by which one can assess a CBDC in the domestic payments market, the international payments market, and the technology markets that support payments. However, a CBDC may be more than just a means of payment and thus first-mover advantage is examined for both the asset component of reserve currency and a future financial system built on CBDCs. Overall, the first mover literature does not suggest that there is a compelling first-mover advantage for issuing a CBDC.
#Fintech#CBDC#UnitedStates#DFC
·federalreserve.gov·
An Examination of First-Mover Advantage for a CBDC
Central banks consider backing stablecoins instead of launching CBDCs
Central banks consider backing stablecoins instead of launching CBDCs
According to the New York Fed's Antoine Martin, “instead of issuing a retail central bank digital currency (#CBDC), central banks could support stablecoins by allowing them to be backed one-for-one with balances in a central bank account. They could also facilitate a bankruptcy remote legal structure to ensure that end-users are paid in full even if the issuer becomes bankrupt. Such stablecoins could be a close substitute for central bank digital money, while balances in a central bank account are risk free and could earn interest. Though stablecoin issuers should be subject to some oversight in exchange for access to a central bank account.”
#Fintech#CBDC#CryptoAssets#Stablecoins#sCBDC#DFC
·financefeeds.com·
Central banks consider backing stablecoins instead of launching CBDCs
Crunchfish Digital Cash in CBDC evaluation with the Central Bank of Nigeria
Crunchfish Digital Cash in CBDC evaluation with the Central Bank of Nigeria
Crunchfish and the Central Bank of Nigeria (CBN) have entered into a Development and Demonstration Agreement for a proof-of-concept of Crunchfish Digital Cash. Crunchfish will deliver Digital Cash for iOS and Android and support CBN throughout this process. The Proof-of-concept will integrate Digital Cash into the eNaira Wallet and backend to fully evaluate the user experience in a potential commercial deployment.
#Fintech#CBDC#Offline#Africa#Nigeria#DFC
·crunchfish.com·
Crunchfish Digital Cash in CBDC evaluation with the Central Bank of Nigeria
Central bank digital currencies in Africa
Central bank digital currencies in Africa
The Bank for International Settlements (BIS) published a paper that analyses the development, motivations and concerns of central bank digital currencies (CBDCs) in Africa. While all of those surveyed are analyzing CBDCs, only few have projects at advanced stages (pilot or live). Some countries, in particular in East and West Africa, stand out as promoting fast payment systems through mobile money, but half of the surveyed central banks think that CBDCs can provide a superior solution. A key motivation for African central banks is achieving greater payment system efficiency. In addition, a higher proportion than in other regions see potential benefits for monetary policy, an important consideration for a region where the transmission mechanism is weak. Central banks in Africa also place more emphasis on financial inclusion. At the same time, they are more worried than other regions about cyber security risks and cross-border spillovers and are also concerned about high operational burdens... And speaking of high operational burdens,  only just over 40% of respondents favored a two-tier business model, with the central bank at the core, but private agents (banks and payment service providers) interacting with users (e.g., performing customer onboarding, including KYC/AML functions). Almost all central bank CBDC explorers I follow have dismissed the direct model in which the central bank does all of the "donkey work". However, it should be noted that almost all of the other 60% or so of respondents were simply undecided about the business model at this point. The preference for a two-tier model is strongest among central banks for which financial disintermediation is a top concern. Bringing banks – and other PSPs – on board would encourage them to accept CBDCs. A two-tier model would facilitate collaboration and potentially draw on synergies with the private sector.
#Fintech#CBDC#Africa#BIS#DFC
·bis.org·
Central bank digital currencies in Africa
Stablecoins could offer central banks a shortcut, says New York Fed advisor
Stablecoins could offer central banks a shortcut, says New York Fed advisor
"Stablecoins could offer central banks a shortcut to having their own digital currencies, according to the NY Fed's Antoine Martin. “Instead of issuing a retail [central bank digital currency], central banks could support stablecoins by allowing them to be backed one-for-one with balances in a central bank account... Adapting our regulatory and legislative environment to support stablecoins is already a formidable task, but it is probably easier than managing a CBDC for retail use, especially as the private sector currently provides all retail digital means of payments on legacy technology."
#Fintech#CryptoAssets#CBDC#Stablecoins#UnitedStates#DFC
·theblock.co·
Stablecoins could offer central banks a shortcut, says New York Fed advisor
CBDCs and other new forms of digital money: Goodbye privacy and anonymity?
CBDCs and other new forms of digital money: Goodbye privacy and anonymity?
"With an increasing focus on anti-money laundering and counter-terrorist financing, it is extremely unlikely that the opportunity will not be taken here to reduce the level of anonymity that currently exists. That said, privacy is a closely intertwined matter, and the adoption of a risk-based approach can help address privacy concerns whilst supporting regulatory objectives around prevention and detection of financial crime. "
#Fintech#CBDC#Privacy#FinancialIntegrity#AMLCFT#DFC
·blog.digital-euro-association.de·
CBDCs and other new forms of digital money: Goodbye privacy and anonymity?
The US Dollar, Cryptocurrency, and the National Interest
The US Dollar, Cryptocurrency, and the National Interest
"China is challenging the predominance of the American dollar by adopting digital currencies, which significantly reduce transaction costs and allow for smoother exchange in the marketplace. Efforts to strengthen the dollar must recognize the growing influence of digital currencies on the international landscape while understanding the importance of stability and predictability. The Fed should establish a wholesale digital currency to capture the importance of technological innovation while ensuring that volatility does not jeopardize the dollar’s predominance." [Kevin Warsh, AEI]
#Fintech#CBDC#UnitedStates#DFC
·americanrenewalbook.com·
The US Dollar, Cryptocurrency, and the National Interest
An assessment of the volatility spillover from crypto to traditional financial assets: the role of asset-backed stablecoins
An assessment of the volatility spillover from crypto to traditional financial assets: the role of asset-backed stablecoins
The Hong Kong Monetary Authority (HKMA) published a paper on volatility spillover from asset-backed stablecoins to money market instruments, focusing on Tether. Stablecoins bear liquidity mismatch risks similar to money market funds, which may expose them to a fire-sale of reserve assets in times of crypto ecosystem instability and in turn increase the volatility of these reserve assets. It finds that, in extreme circumstances, these fire-sales could have material impacts on the traditional financial system such as the money market. The paper proposes regulations that require stablecoin issuers to provide standardized and regular disclosures of their reserve assets holdings, and possibly imposing restrictions on the composition of reserve assets and requiring well- defined redemption rights
#Fintech#CryptoAssets#Stablecoins#Regulation#Contagion#DFC
·hkma.gov.hk·
An assessment of the volatility spillover from crypto to traditional financial assets: the role of asset-backed stablecoins
BOJ eyes pilot experiments next year to issue digital yen - source
BOJ eyes pilot experiments next year to issue digital yen - source
The Bank of Japan (BOJ) will reportedly begin preparations to conduct a retail central bank digital currency (CBDC) pilot next Spring (2023) year. According to Nikkei Asia, "after spending two years verifying whether there are any problems with bank account deposits and withdrawals, the BOJ will decide whether to go ahead with a digital yen in 2026." However, it's not clear yet whether this is a "pilot" (testing in the "wild" with real live users) or a proof of concept (tested among financial institutions in a "laboratory" setting).
#Fintech#CBDC#Asia#Japan#DFC
·reuters.com·
BOJ eyes pilot experiments next year to issue digital yen - source
How is the "world's most advanced central bank digital currency" progressing?
How is the "world's most advanced central bank digital currency" progressing?
The LSE Business Review published an article by the Center for Evidence-Based Management's Martin C. W. Walker that reviews the Central Bank of the Bahama’s Sand Dollar CBDC experience. He documents the Sand Dollar's very low take-up and opines that it was aimed at solving a financial exclusion problem that was not really a major problem, and it didn't do it very well. Also there did not seem to be an objective evaluation of alternatives solutions, such as encouraging greater use of bank issued debit cards and more efforts to educate the older generation in the use of electronic payments.
#Fintech#CBDC#Caribbean#Bahamas#DFC
·blogs.lse.ac.uk·
How is the "world's most advanced central bank digital currency" progressing?
Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths
Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths
For fans of "straw man" arguments, the Cato Institute published a digital dollar takedown. Most of the report is actually quite good, and I agree with most of the things the authors say about the dubious case for a US Fed-issued central bank digital currency (CBDC). But starting on page 7, they go down the privacy/control rabbit hole by assuming that a digital dollar will be designed as a control/surveillance coin, completely ignoring the possibility that it could be designed to offer the same privacy and user control as physical cash (see my IMF F&D article). Rather than completely diss CBDC, they could have made their paper a call for action to insist that at least one layer of the digital dollar offer complete offline usability and privacy, or lend support to the ECash Act.
#Fintech#CBDC#UnitedStates#Cato#DFC
·cato.org·
Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths
Crunchfish partner with a financial platform provider in India to create Turnkey Offline Payment Solution
Crunchfish partner with a financial platform provider in India to create Turnkey Offline Payment Solution
"Crunchfish partner with a financial platform provider to create a Turnkey Offline Payment Solution for banks and payment services. The financial platform provider has almost 100 existing integrations with Indian banks already. Roll-out of Crunchfish Digital Cash is expected to accelerate with this turnkey solution as it may be used by any bank or payment service."
#Fintech#CBDC#Offline#Crunchfish#DFC
·crunchfish.com·
Crunchfish partner with a financial platform provider in India to create Turnkey Offline Payment Solution
Easier said than done: why Italians pay in cash while preferring cashless
Easier said than done: why Italians pay in cash while preferring cashless
The Banca d'Italia published a paper that, based on data from a 2019 ECB survey of consumers, studies the determinants of Italian consumers' payment choices at the physical point of sale (POS). The study also assesses the reasons why consumers mainly use cash for their payments although they would prefer to use other instruments, such as cards. The acceptance of cashless instruments at the point of sale and the value of the transaction are the main factors influencing payment choice. Men and residents in Northern and Central Italy pay with cards more than women and residents in Southern Italy, but these gaps narrow among people with digital skills. Consumers pay in cash, even though they would prefer to use a different payment instrument, due to a lack of acceptance of cashless instruments by merchants.
#Fintech#Payments#Cash#Europe#Italy#DFC
·bancaditalia.it·
Easier said than done: why Italians pay in cash while preferring cashless
Sustany Capital Digital Currency Ontology
Sustany Capital Digital Currency Ontology
"Engineers introducing the designation identity to describe objectives or operational aspects of technology, must establish a functional definition of the term identity before committing the concept to source code. As such the objective of this taxonomy project is to provide a peer-reviewed library to serve as a reference for engineers in general, and software engineers aiming to facilitate legally relevant (commercial) activities in particular."
#Fintech#CryptoAssets#CBDC#Stablecoins#Ontology#Taxonomy#DFC
·github.com·
Sustany Capital Digital Currency Ontology
FSB outlines framework for monitoring progress toward the G20 cross-border payments targets
FSB outlines framework for monitoring progress toward the G20 cross-border payments targets
The Financial Stability Board (FSB) published its report to the G20 on the framework for monitoring progress toward meeting the targets for the G20 Roadmap for Enhancing Cross-border Payments, to achieve cheaper, faster, more transparent, and more accessible payments. The framework includes key performance indicators defined across the 11 targets for the three market segments – wholesale, retail, and remittances. Notably, the definitions of the wholesale and retail market segments have been adjusted to more clearly separate the differing use cases and end-user experiences and better align the definitions with those most typically used by the payments industry and end-users. Wholesale transactions were defined as those between financial institutions, and retail transactions as those that were neither between financial institution end-users nor in the third market segment - remittances. Going forward, the wholesale market segment will include all payments with a value equal to or exceeding a specified threshold regardless of whether the end-users are financial institutions. The threshold will be set at a level that captures the use cases in this market segment, such as high-value corporate business-to-business. Relatedly, retail payments will be payments with a value less than the specified threshold, not including remittances.
#Fintech#CBDC#Payments#CrossBorder#rCBDC#wCBDC#FSB#DFC
·fsb.org·
FSB outlines framework for monitoring progress toward the G20 cross-border payments targets
Regulated Liability Network
Regulated Liability Network
"The Regulated Liability Network (RLN) is a contribution to the global debate on the future of money offered by a group of industry participants. It explores the technical, legal and business characteristics necessary to provide on-chain, 24*7 programmable, final settlement in sovereign currencies, consisting of the liabilities of both public and private regulated financial institutions. These activities could enable a more functionally rich financial system that is compliant with all existing laws and regulations."
#Fintech#CryptoAssets#Stablecoins#RegulatedLiabilityNetwork#DFC
·regulatedliabilitynetwork.org·
Regulated Liability Network