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Stablecoins Come Into Focus in EU’s MiCa Legislation
Stablecoins Come Into Focus in EU’s MiCa Legislation
Regulatory guidance and oversight are topics that regularly intrude in the stablecoin market and are sure to shape the future of the ecosystem. Last week, the European Council voted in favor of the EU’s Markets in Crypto Assets (MiCA) legislation, set to come into force in 2024, to provide greater transparency and accountability to individuals and businesses operating in the crypto industry with stablecoins given special treatment. In particular, the new rules forbid the collection of interest by investors on stablecoins, which could provide motivation for securitization of tokenized retail money-market funds or commercial bank deposits, which do not fall under MiCA and are free to pay interest.
#Fintech#CryptoAssets#Stablecoins#Regulation#Europe#DFC
·coinmetrics.substack.com·
Stablecoins Come Into Focus in EU’s MiCa Legislation
Central Bank of Eswatini partners with Giesecke+Devrient to further explore CBDC issuance
Central Bank of Eswatini partners with Giesecke+Devrient to further explore CBDC issuance
The Central Bank of Eswatini (CBE) has partnered with Giesecke+Devrient (G+D) to research and explore the development of a central bank digital currency (CBDC). G+D's appointment stems from the completion of the 1st phase of the CBDC Diagnostic Study conducted in 2020 which found that a retail CBDC presented the strongest and direct opportunity for the adoption of a digital currency in Eswatini.
#Fintech#CBDC#Africa#G+D#Eswatini#DFC
·centralbank.org.sz·
Central Bank of Eswatini partners with Giesecke+Devrient to further explore CBDC issuance
National Bank of the Republic of Kazakhstan launches CBDC proof-of-concept
National Bank of the Republic of Kazakhstan launches CBDC proof-of-concept

The National Bank of the Republic of Kazakhstan (NBK) launched a one-week DigitalTenge central bank digital currency (CBDC) proof-of-concept (PoC) involving NBK staff and local merchants. (This is much like the National Bank of Ukraine 2019 PoC.) The NBK PoC will test basic payment scenarios (e.g., C2B, P2P), non-functional requirements, and programmability. For example, it will test special-purpose tokens on which consumer might purchase only from the “white list” of merchants or products, within particular time period etc. In parallel, the NBK is finalizing its research and development for offline and advanced smart contract deployment on its platform. Updates: Day 2: https://www.linkedin.com/posts/binur-zhalenov_digitaltenge-voucher-cbdc-activity-6988129761147408384-ygn9 Day 3: https://www.linkedin.com/posts/binur-zhalenov_digitaltenge-userjourney-anonymity-activity-6988542488122650624-hJWq Day 4: https://www.linkedin.com/posts/binur-zhalenov_digitaltenge-cbdc-cybersecurity-activity-6988850914920919040-OSaK

#Fintech#CBDC#Asia#Kazakhstan#DFC
·linkedin.com·
National Bank of the Republic of Kazakhstan launches CBDC proof-of-concept
Stablecoins, meet 3% interest rates
Stablecoins, meet 3% interest rates
"The global rise in interest rates is finally beginning to percolate into the stablecoin sector. One of the effects of this rise is that centralized stablecoins, which by default pay 0% to holders, are introducing backdoor routes for paying interest to large customers. While large stablecoin holders may be benefiting from this trend, small holders of stablecoins are being ignored. Small stablecoin holders need to unite. By working together through a StablecoinDAO, their bargaining power vis-a-vis the big stablecoin issuers improves. They may be able to negotiate the same interest payments that large stablecoin customers are getting... A StablecoinDAO would work along the same lines as a high-interest savings ETF. People would deposit their stablecoins -- USD Coin, Gemini Dollar, Binance USD, USDP, Tether, Dai -- into a smart contract. In return they'd get a new stablecoin called, say, UniteUSD, which would be redeemable on demand into any of the DAO's underlying stablecoins. UniteUSD itself would be useful. It could be used for purchases, deposited into smart contracts, or traded on decentralized exchanges and whatnot. StablecoinDAO would have the authority to swap one underlying stablecoin out with a new one. That potential threat would give the DAO the necessary leverage to negotiate interest payments."
#Fintech#CryptoAssets#Stablecoins#DFC
·jpkoning.blogspot.com·
Stablecoins, meet 3% interest rates
The potential of central bank digital currencies for cross-border payments
The potential of central bank digital currencies for cross-border payments
This SUERF Policy Brief presents the key findings of the annual BIS survey of central banks about their engagement in central bank digital currency (CBDC) and it discusses these findings in the context of cross-border payments. As in previous years, the motivations to consider issuing a CBDC differ between AE and EMDE central banks and between retail and wholesale CBDCs. Overall, the retail CBDC work in AEs is driven mainly by domestic payments efficiency, payments safety and financial stability considerations. The same reasons are also important drivers for the retail CBDC work in EMDEs, however, their CBDC engagement is, above all, driven by financial inclusion-related motivations.
#Fintech#CBDC#CrossBorder#DFC
·suerf.org·
The potential of central bank digital currencies for cross-border payments
The real reason Circle de-risked its USDC reserves?
The real reason Circle de-risked its USDC reserves?
"Back in 2020-21, Circle was investing USDC's reserves in all sorts of riskier assets. Then it shifted to a 100% Treasury bill policy. Why? Circle feared being classified as an 'investment company' as defined in the Investment Company Act of 1940." (HT @jp_koning) See page 70 here: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001876042/d372f208-1c41-4909-b529-f2b0614fc1ea.pdf
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#Regulation#UnitedStates#DFC
·twitter.com·
The real reason Circle de-risked its USDC reserves?
Central bank digital currencies: An active role for commercial banks
Central bank digital currencies: An active role for commercial banks
McKinsey & Company published a report that pitches active commercial bank involvement in central bank digital currency (CBDC) decision-making processes. But more interestingly for me, the report advocates central banks taking a more "agile" approach to CBDC research and development. "By adopting an agile approach, central banks can deploy a CBDC within three years, compared with five years or more using a traditional waterfall development model. Although adoption and realization of scale will likely prove to be longer-term efforts, lessons from early launches and a set of best practices can help foster early market acceptance.
#Fintech#CBDC#DFC
·mckinsey.com·
Central bank digital currencies: An active role for commercial banks
Digital yuan transactions volume crossed $14B mark
Digital yuan transactions volume crossed $14B mark
China’s central bank digital currency (CBDC) project has reached the roughly 100 billion yuan ($14 billion) transaction mark during its pilot phase. “Multiple e-government service platforms have opened digital renminbi payment services, supporting online and offline channels to handle various public utility payments, using digital renminbi to issue tax rebate funds, special funds for monthly medical insurance payment, funds for helping people in need, and ‘specialized, special and new’ enterprise support funds, etc.” Going forward, the People's Bank of China (PBOC) plans to launch the cross-border payments between Hong Kong and mainland China, following the principle of “anonymity for small amounts and traceability of large amounts” to protect the user’s personal data. https://mp.weixin.qq.com/s/mrc_vPXAZf4glX9_NEfmUQ
#Fintech#CBDC#China#DFC
·cointelegraph.com·
Digital yuan transactions volume crossed $14B mark
European Data Protection Board statement on the digital euro
European Data Protection Board statement on the digital euro
The European Data Protection Board (EDPB) reiterated the importance of ensuring digital euro privacy and data protection by design and by default. The EDPB cautioned against the use of systematic validation and tracing of all transactions in digital euros. In this respect, the EDPB recommended that the digital euro be made available both online and offline, along a threshold below which no tracing is possible, to allow full anonymity of daily transactions.
#Fintech#CBDC#Eurozone#Privacy#Offline#DFC
·edpb.europa.eu·
European Data Protection Board statement on the digital euro
The Central Bank of Namibia is actively exploring CBDC issuance
The Central Bank of Namibia is actively exploring CBDC issuance
The Bank of Namibia is exploring issuing a Namibia Dollar central bank digital currency (CBDC), and will reportedly soon publish a public consultation paper on the topic. The main motivation would be to "ensure that individuals operating in an increasingly digitalized economy continue to have access to central bank money".
#Fintech#CBDC#Africa#Namibia#DFC
·bon.com.na·
The Central Bank of Namibia is actively exploring CBDC issuance
Banque de France participates in a new wholesale CBDC experiment with SWIFT
Banque de France participates in a new wholesale CBDC experiment with SWIFT
The Banque de France has joined a consortium of 14 banks and market infrastructures launched by SWIFT, to conduct a new central bank digital currency (CBDC) experiment for interbank settlement purposes. The objective of the experiment is to issue cross-border payments in a test environment to study the interoperability between different distributed ledger technologies (DLTs) and existing payment systems. These payments will be made in simulated CBDC issued by the participating central banks.
#Fintech#CBDC#Eurozone#wCBDC#CrossBorder#France#DFC
·banque-france.fr·
Banque de France participates in a new wholesale CBDC experiment with SWIFT
Merchants - key to the success of the digital euro
Merchants - key to the success of the digital euro
"As Fabio Panetta, member of the Executive Board of the ECB, suggested at the last Annual Congress of the European Economic Association in Milan, “the market for payments is two-sided”. In this sense, the success of the digital euro would largely depend on its adoption not only by consumers but also by merchants. Much of the discussion so far around the digital euro has focused on the first group of stakeholders, which has led to vibrant policy and academic debates on privacy issues, security factors, safety of funds or accessibility matters. However, less attention has been given to merchants’ willingness to support this new means of payment. "
#Fintech#CBDC#Eurozone#DFC
·blog.digital-euro-association.de·
Merchants - key to the success of the digital euro
FSB warns stablecoins aren't 'stable', recommend action around crypto assets
FSB warns stablecoins aren't 'stable', recommend action around crypto assets
The Financial Stability Board (FSB) released two crypto-related reports, one on high-level recommendations for crypto-asset regulation that prescribes a “same activity, same risk, same regulation,” approach to digital assets, and the other an assessment of how broadly stablecoin issuers would meet the “high-standard” criteria set by the group in 2020. Citing limits on redemptions, including the ability to delay or deny them, the FSB found that most users have to sell stablecoins on exchanges in order to liquidate them, and the price could drop below the value of the currency that the coin is pegged to. The FSB also cast doubt on how most stablecoins would be able to maintain their pricing under market stress.
#Fintech#CryptoAssets#Stablecoins#Regulation#FSB#DFC
·fsb.org·
FSB warns stablecoins aren't 'stable', recommend action around crypto assets
ECB seeks scheme rulebook manager for the digital euro
ECB seeks scheme rulebook manager for the digital euro
The European Central Bank (ECB) Directorate General Market Infrastructure and Payments is looking for a senior expert from the payments industry to coordinate the group that will draft a potential digital euro scheme rulebook, i.e. a set of rules for payment transactions with a digital euro.
#Fintech#CBDC#Eurozone#DFC
·ecb.europa.eu·
ECB seeks scheme rulebook manager for the digital euro
Stablecoin Technology and Related Security Considerations
Stablecoin Technology and Related Security Considerations
The US National Institute of Standards and Technology (NIST) published a technical paper on the ways in which stablecoins are architected and implemented. This includes a descriptive definition, commonly found properties, and distinguishing characteristics, as well as an exploration of stablecoin taxonomies, descriptions of the most common types, and examples from a list of top stablecoins by market capitalization. This document also explores related security, safety, and trust issues with an analysis conducted from a computer science and information technology security perspective as opposed to the financial analysis and economics focus of much of the stablecoin literature
#Fintech#CryptoAssets#Stablecoins#NIST#DFC
·csrc.nist.gov·
Stablecoin Technology and Related Security Considerations
India's Central Bank Crystalizes CBDC Vision in Concept Note
India's Central Bank Crystalizes CBDC Vision in Concept Note
The Reserve Bank of India (RBI) published a report on its central bank digital currency (CBDC) plans, indicating that a digital rupee pilot will be launched "soon". Motivations include reducing physical cash management operational costs, fostering financial inclusion, payments system resilience and efficiency, and cross-border payments. A key requirement will be to offer availability and resilience benefits when electrical power or mobile network is not available in remote locations. https://rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=1218
#Fintech#CBDC#Asia#India#DFC
·coindesk.com·
India's Central Bank Crystalizes CBDC Vision in Concept Note
Archetypes for a retail CBDC
Archetypes for a retail CBDC
The Bank of Canada published a paper that proposes a common framework to analyze and compare the different possible retail CBDC designs, independent of vendor, platform and technology. It is based on five archetypes—common patterns that recur in system designs—and discuss their trade-offs from the perspective of privacy, compliance, visibility, scalability, resilience, extensibility, online and offline payments. The five archetypes are centralized, leaderless, macro-partitioned (money service businesses (MSBs) own and operate partitions), micro-partitioned (users maintain the different partitions) and direct (users directly provide their own oversight). The analysis suggests that a design based on a single archetype is unlikely to achieve all policy goals.
#Fintech#CBDC#Canada#DFC
·bankofcanada.ca·
Archetypes for a retail CBDC
Central Bank Digital Currency (CBDC): identifying appropriate policy goals and design for Nepal
Central Bank Digital Currency (CBDC): identifying appropriate policy goals and design for Nepal
Nepal Rastra Bank (NRB) published a concept report on central bank digital currency (CBDC) for public consultation. The report recommends that the NRB move forward in with CBDC issuance plans, with design focusing on four policy goals; improving access to payments, enhancing payment system resilience, reducing currency management costs, and promoting financial inclusion. It suggests that a retail, intermediated, semi-centralized infrastructure-based CBDC that is interoperable with other domestic payment systems, is most suitable for Nepal. Also, it should be unremunerated, available 24/7 hours, quantity restrictive, and programmable for broader usage options. The next steps is to set up a cross-functional dedicated team, to carry out the exhaustive and rigorous next steps.
#Fintech#CBDC#Asia#Nepal#DFC
·web.archive.org·
Central Bank Digital Currency (CBDC): identifying appropriate policy goals and design for Nepal
SWIFT innovation paves way for global use of CBDCs and tokenised assets
SWIFT innovation paves way for global use of CBDCs and tokenised assets
SWIFT has successfully shown that central bank digital currencies (CBDCs) and tokenized assets can move seamlessly on existing financial infrastructure. The findings, from two separate experiments, bridged between different distributed ledger technology (DLT) networks and existing payment systems, allowing digital currencies and assets to flow smoothly alongside, and interact with, their traditional counterparts.
#Fintech#CBDC#CrossBorder#SWIFT#DFC
·swift.com·
SWIFT innovation paves way for global use of CBDCs and tokenised assets
Privacy in cross-border digital currency: A transatlantic approach
Privacy in cross-border digital currency: A transatlantic approach
The Atlantic Council published an article illustrating how various technical design choices can affect the privacy and transparency of cross-border central bank digital currencies (CBDCs). Many of the cross-border CBDC pilot studies to date have adopted the technical designs provided by enterprise distributed ledger (DLT) platforms. However, some of these designs make tradeoffs regarding privacy, efficiency, and/or security. Whether these tradeoffs are acceptable is a matter of policy, and requires coordination between different regulators and central banks.
#Fintech#CBDC#CrossBorder#Privacy#DFC
·atlanticcouncil.org·
Privacy in cross-border digital currency: A transatlantic approach
Tether Increases US Treasury Portfolio, Cuts Commercial Paper Holdings to Below $50M
Tether Increases US Treasury Portfolio, Cuts Commercial Paper Holdings to Below $50M
Tether has cut its commercial paper holding to less than $50 million, as of September 30, and increased its holding of U.S. Treasuries to 58.1% of its total portfolio from 43.5% of its total portfolio as of June 30, according to a Tweet by its Chief Technology Officer, Paolo Ardoino.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·coindesk.com·
Tether Increases US Treasury Portfolio, Cuts Commercial Paper Holdings to Below $50M
Digital Cash Is Not Physical Cash
Digital Cash Is Not Physical Cash
"We now have zero-knowledge proofs, blinding, homomorphic encryption and many other tried and tested techniques that we can use to keep data private in normal circumstances but that can reveal it in special circumstances, such as the production of a court order. Let’s be optimistic about the privacy apples and put the anonymous oranges to one side."
#Fintech#CBDC#Privacy#Offline#DFC
·forbes.com·
Digital Cash Is Not Physical Cash
Why CBDC stands to benefit banks
Why CBDC stands to benefit banks
"The argument that national currencies are already digital is a valid one. However, the innovation with CBDC is not that it is digital but that it is a digital token on a distributed ledger. Digital tokens enable instant settlement, reducing open positions and risk exposures. That gives them unique functions, including programmability, that conventional monies do not hold and that unlock new possibilities in payments. Further, the deferred settlement embedded in several current payment methods requires financial institutions to hold additional liquidity in various accounts like nostro/vostro. This could be significantly optimised using wholesale CBDC schemes."
#Fintech#CBDC#DFC
·bankingblog.accenture.com·
Why CBDC stands to benefit banks
AML by design: Designing a CBDC to stifle money laundering
AML by design: Designing a CBDC to stifle money laundering
This article explores how technical CBDC design choices can be used to make a CBDC inherently resistant to money laundering. These design choices not only further anti-money laundering (AML), but they can also help to better balance AML priorities with other goals including financial inclusion, privacy and compliance costs. Moreover, CBDCs provide an opportunity to measure the effectiveness of different design choices in real time. These measurements can facilitate the iterative redesign of CBDCs to identify optimal approaches to meeting regulatory objectives.
#Fintech#CBDC#AMLCFT#FinancialIntegrity#DFC
·sciencepolicyreview.org·
AML by design: Designing a CBDC to stifle money laundering
Central Bank Unveils RamzRial, an 'Iranian National Cryptocurrency'
Central Bank Unveils RamzRial, an 'Iranian National Cryptocurrency'
More details are being reported on the CBDC pilot reportedly launched by Iran's central bank. It's reportedly a partnership with two local banks (Bank Melli and Mellat Bank) that have have given 1 billion tomans ($311,000) to a limited number of people, and two shops have been designated for the use of the currency.
#Fintech#CBDC#MiddleEast#Iran#DFC
·iranwire.com·
Central Bank Unveils RamzRial, an 'Iranian National Cryptocurrency'
SORAMITSU to Lead Feasibility Study on Digital Currency in Oceania
SORAMITSU to Lead Feasibility Study on Digital Currency in Oceania
On January 10, 2022 Soramitsu was selected by the NTT Data Institute of Management Consulting to evaluate the potential risks and benefits of introducing CBDC in Fiji, Solomon Islands, Tonga, and Vanuatu. Confirmed by the IMF in September 2022: https://www.imf.org/en/Publications/fintech-notes/Issues/2022/09/27/Towards-Central-Bank-Digital-Currencies-in-Asia-and-the-Pacific-Results-of-a-Regional-Survey-523914
#Fintech#CBDC#Asia-Pacific#DFC
·soramitsu.co.jp·
SORAMITSU to Lead Feasibility Study on Digital Currency in Oceania
SORAMITSU, JICA, and Bank of the Lao PDR to Inaugurate CBDC Research
SORAMITSU, JICA, and Bank of the Lao PDR to Inaugurate CBDC Research
On October 4, 2021, Soramitsu was selected by the Japan International Cooperation Agency to explore with the Bank of the Lao PDR the potential contribution of CBDC to the inclusive development of the financial system of the Lao People's Democratic Republic. Confirmed: https://www.imf.org/en/Publications/fintech-notes/Issues/2022/09/27/Towards-Central-Bank-Digital-Currencies-in-Asia-and-the-Pacific-Results-of-a-Regional-Survey-523914
#Fintech#CBDC#Asia-Pacific#DFC
·soramitsu.co.jp·
SORAMITSU, JICA, and Bank of the Lao PDR to Inaugurate CBDC Research
The digital euro progress report key takeaways
The digital euro progress report key takeaways

The digital euro project has just published a new progress report. Here are the Bank of Finland's Aleksi Grym's key takeaways: 1/ A key objective for the digital euro would be to preserve public money as a monetary anchor for the economy, a role now played by cash. Perhaps, in the future, cash will no longer be used, therefore a digital anchor is needed. 2/ Another key objective would be to strengthen Europe's strategic autonomy and economic efficiency when it comes to retail payments. This market is now too dependent on non-European infrastructures. 3/ Privacy is considered important, but full anonymity will not be possible. Intermediaries would have visibility on their own customers for compliance purposes. The central bank would have minimal visibility on data. 4/ Mechanics would be built in to prevent hoarding. These could be a combination of holding limits and tiered remuneration. Building these mechanics into the product does not imply how and when they would be used. That would require a separate policy decision. https://www.ecb.europa.eu/paym/digital_euro/investigation/profuse/shared/files/dedocs/ecb.dedocs220929.en.pdf

#Fintech#CBDC#Eurozone#DFC
·twitter.com·
The digital euro progress report key takeaways