DFC

The Bank of England and HM Treasury have today announced the membership of the central bank digital currency (CBDC) Engagement and Technology Forums. The creation of these groups was announced in April 2021, alongside the CBDC Taskforce which coordinates the exploration of a potential UK CBDC. The Engagement Forum consists of senior stakeholders from industry, civil society and academia to gather strategic input on policy considerations and functional requirements pertaining to CBDC. The Forum will have an important role in helping the Bank and HM Treasury understand the practical challenges of designing, implementing and operating a CBDC.

The Celo Foundation launched Provo, a sandbox for public and official sector experimentation on Celo that’s designed to allow central banks to explore and experiment with central bank digital currency (CBDC) and other digital assets. Provo will enable financial and regulatory authorities to test CBDC designs and implementation mechanisms in permissioned and/or permissionless, risk-free environments on the Celo platform.

"Even centralized stablecoins operate as software running on decentralized blockchains, and it’s important to keep in mind that stablecoins involve layers of software that are not used in traditional financial institution activity. If this software doesn’t operate safely and securely, or if the decentralized networks don’t operate as expected, there could be a loss of confidence in the stablecoin or even outright theft. As it stands now, regulators, issuers, and users of a stablecoin need to understand stablecoin software and the underlying blockchain platforms they run on in order to accurately measure technical and operational risk."

"The National Bank of Tajikistan informs that it has not signed any cooperation agreement with Fantom Foundation on Digital Currency Platform (CBDC) and has no intentions to do so. The information on introduction of Digital Currency Platform (CBDC) through the National Bank of Tajikistan in the Republic of Tajikistan is incorrect and untrue, therefore the National Bank of Tajikistan has already sent a letter to the Fantom Foundation concerning the disclosure of false information."

A prototype payment platform developed by the Bank for International Settlements Innovation Hub and the Hong Kong Monetary Authority, Bank of Thailand, People's Bank of China, and Central Bank of the United Arab Emirates, demonstrated the potential of using multiple central bank digital currency (mCBDC) and distributed ledger technology (DLT) for delivering real-time, cheaper and safer cross-border payments and settlements. The mBridge project common prototype platform for mCBDC settlements, part of phase two of Project Inthanon-LionRock, was able to complete international transfers and foreign exchange operations in seconds, as opposed to the several days normally required for any transaction to be completed using the existing network of commercial banks and operate in a 24/7 basis. The cost of such operations to users can also be reduced by up to half.

Latin American stablecoin issuer Anclap is expanding its Stellar-based stablecoin network by launching a new stablecoin in Peru. Pegged to the Peruvian sol (PEN), the new stablecoin is designed to enable instant transactions across Anclap’s network, including conversions in other fiat currencies as well as any other digital asset. Called the “digital sol,” the stablecoin is said to be 100% backed by local fiat currency and is available on the Stellar network to be integrated into any platform, and exchangeable against several foreign currencies, including Argentine peso, Brazilian real, US dollars and the euro.

"Stablecoin issuer Circle said that it is partnering with financial data aggregator Plaid to make it easier for consumers to move their money out of the bank and into Circle’s USDC. Like its partnership with Visa, working with Plaid is another way for Circle to become more deeply integrated with networks that allow users to move faster between fiat and dollar-backed crypto tokens via the Automated Clearing House (ACH) network."

Bhutan’s Royal Monetary Authority (RMA) will use a private version of Ripple Lab's open-source XRP Ledger solution to pilot retail, wholesale and cross border use cases for a digital Ngultrum central bank digital currency (CBDC) in phases. Ripple’s CBDC solution ensures central banks have greater control over issuance, management, privacy, and validation than they would get with public blockchains, and it can handle payments at the volume of transactions required by a successful retail CBDC.

Singapore-based Conflux is piloting an offshore renminbi (RMB) stablecoin in a free trade zone (FTZ) in Shanghai, in a move to boost cross-border payments. It will run on the Conflux Network, China’s only regulatory compliant public blockchain, which has also received endorsements from the Shanghai and Hunan governments. As part of China’s five-year plan, Shanghai will be the central focus of global free trade and shipping in China. In July the Government of China granted Shanghai permission to explore free trade with an offshore RMB stablecoin; the only free trade zone in China to pilot trade with RMB.

"Tier 3 are also consumers with existing bank account, with transaction and balance limit of N1,000,000 and N5,000,000,"

"While the motivation behind the inclusion of TEEs in mobile devices is positive, the current implementations are still lacking in many regards. The introduction of new features and the ever increasing number of trustlets result in a dangerous expansion of the TCB. This fact, coupled with the current lack of exploit mitigations in comparison to those offered by modern operating systems, make TEEs a prime target for exploitation."

Tether reportedly said that it doesn’t hold any commercial paper or other debt or securities issued by the embattled Chinese real estate giant Evergrande. In China, there are serious concerns about Evergrande, which has run up a $300 billion debt and is struggling to pay interest. If the company were to collapse, it would have a huge impact on the financial system.

The Reserve Bank of Australia has posted a job advertisement for multiple positions within its new central bank digital currency (CBDC) research team. The cross-disciplinary team is researching "whether there is a case for a CBDC in Australia, and if so, how it might be designed and what benefits and other implications it would have."

Di Gang, Deputy Director of the PBOC Digital Currency Research Institute, reportedly said the central bank is exploring using distributed ledger technology (DLT) at the e-CNY issuance layer. Until now, the PBOC has been working with a centralized ledger technology approach because of DLT's immaturity, performance, and scalability challenges. However, he acknowledged that perhaps these can be addressed using sidechains, multichain architectures and hardware acceleration.

People’s Bank of China (PBOC) Deputy Governor Fan Yifei provided a progress report on the PBOC's e-CNY central bank digital currency (CBDC) pilot project. So far there have been no technical glitches, but the PBOC is working to support the connection between e-CNY and traditional payment systems and the connection between e-CNY digital wallets and bank accounts. He also mentioned that regulations need to be improved and optimized. For example, setting the boundaries between account- and value-based transactions may need to be refined (account-based transfers are large-scale transfers, while value-based transfers are smaller offline P2P payments). According to Richard Turrin, a Shanghai-based fintech consultant who recently published Cashless: China’s Digital Currency Revolution, "One big issue... would be what limit to put on value-based transfers to make them cash-like especially for rural users.

The central banks of Honduras and Guatemala are reportedly studying digital currencies with the aim of eventually introducing them into the economy, including via a central bank digital currency (CBDC).

"Roxe’s full stack solution knits together issuance, management, distribution, and interoperation of different CBDCs with banks, central banks, cross-border money transfer companies, and peer-to-peer payment providers in a single network. This is an audacious vision, to rework the global payments system. DeFi and CeFi are losing their distinction. The global payments system needs a rework, integrating CBDCs into it and providing payment rails come as the first step in true digital asset trading towards a global capital market."

Global payment network Roxe has recruited Andreas Jobst, an International Monetary Fund (IMF) Senior Economist. As Roxe’s chief currency economist, Jobst will be tasked with helping to scale Roxe’s Bitcoin blochchain-based central bank digital currency (CBDC) project. The CBDC Plus Program appears to be a wholesale CBDC designed for cross-border interoperability among financial institutions.

"Fluency Aureum is the world's first permissioned enterprise platform, made for the purpose of building and interconnecting national CBDC networks. With the smart use of advancements in DLT (Distrubuted Ledger Technology), our platform is designed to provide all tools necessary for easy deployment, configuration and management of custom CBDC networks. Using a lightweight consensus mechanism and sharding approach, our platform is designed to achieve commercialisation viability, by maximising scalability and flexibility of the underlying network, while providing regulatory compliance by creation of separated, yet interconnected, compliance zones for each CBDC."

"Sand Dollar is the digital version of the Bahamian dollar (B$). Like cash, Sand Dollar is issued by the Central Bank of The Bahamas through authorised financial institutions (AFIs)."

"A more practical and efficient method of backing a privately-issued stablecoin, discussed in detail in our “Shaping the Future of Digital Currencies” report, would be to replace (off-chain) central bank reserves with an (on-chain) central bank blockchain-based liability, or CBBL for short."

Beware, this is likely a scam! "USD Mint is a Public Benefit Central Bank that Directly Issues & Settles USD Globally. USD Mint offers Free Universal Access to USD Accounts and Income as a Public Good."

Whether a stablecoin needs dollar reserves depends on its actual or potential use in the conventional payments system. A stablecoin used only within the crypto ecosystem wouldn’t need 100% dollar reserves. It would only need sufficient dollar liquidity to maintain its peg – and if exchanges are compliant and redemptions restricted, that might not be very much. However, stablecoins could replace conventional rails for international payments, potentially making them faster, cheaper and available 24/7. Stablecoins used for this purpose would need to be fully exchangeable for U.S. dollars or other fiat currencies on demand 24/7, and would therefore either need 100% dollar reserves or access to central bank liquidity. [Hence,] rather than wasting time and energy trying to regulate crypto-only stablecoins as if they are banks or money market funds, regulators should concentrate on ensuring that stablecoins that are, or show signs of becoming, payment media within the conventional financial system have 100% reserves and/or are licensed banks.

The Monetary Authority of Singapore (MAS) announced the 15 finalists for the global competition to develop retail central bank digital currency (CBDC) solutions (Global CBDC Challenge). The finalists will progress to the Acceleration Phase before they pitch their solutions to a panel of judges and an international audience at this year’s Singapore FinTech Festival. The Challenge attracted over 300 submissions from more than 50 countries. Participants were invited to address 12 problem statements relating to (i) CBDC instrument; (ii) CBDC distribution; and (iii) CBDC infrastructure; covering topics such as inclusivity, interoperability and programmability. The proposals from the finalists sought to address multiple problem statements through a variety of technology approaches including hardware wallets, digital identity and asset tokenisation solutions.

The Central Bank of Nigeria (CBN) reportedly has sent a presentation to Nigerian banks about the e-Naira central bank digital currency (CBDC) project. The CBDC, which will not be renumerated, will run on a Hyperledger Fabric DLT platform, and users will access it with the CBN's three-tier Speed Wallet. The first tier, which does not require users to have a bank account, will require users to register their phone number validated as a National Identity Number (NIN) and has a daily send/receive limit of N50,000 (about $120) and a maximum balance of N300,000 ($730). Tier Two wallet users, who must have a bank account and Bank Verification Number (BVN), will be able to send and receive N200,000 ($485) and hold up to N500,000 ($1,200). The third Tier allows daily transactions up to N1,000,000 ($2,430) with holdings limited to N5,000,000 ($12,150).