DFC

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The Digital Divide at the Heart of Financial Inclusion
The Digital Divide at the Heart of Financial Inclusion
The KYC/AML requirements of the VASPs would largely block off the potential inclusion of the 1.7+ billion who are already unbanked, creating simply a new digital version of the exclusive system we have now. Unhosted wallets could help solve this problem by catering to refugees, small-holder farmers and other vulnerable populations around the world by facilitating smaller transaction amounts and account balances; activities consistent with the financial reality in many of the places where we work.
#Fintech#CryptoAssets#CBDC#FinancialInclusion#DFC
·medium.com·
The Digital Divide at the Heart of Financial Inclusion
Central bank digital currencies risk becoming a gigantic flop
Central bank digital currencies risk becoming a gigantic flop
This VoxEU/CEPR article argues that there is no obvious justification for retail central bank digital currency (CBDC) in most advanced economy (AE) jurisdictions where a large share of the population has access to bank accounts. From a user perspective, such CBDC do not seem attractive enough to compete successfully with private bank deposits and private retail payment systems like PayPal. The key advantage of CBDC, its absolute safety, is irrelevant for retail payments. However, for emerging and developing economies (EMDEs), retail CBDC could be a suitable tool to approach the problem of a large share of the population being unbanked. However, in both AE and EMDE jurisdictions, there is a huge potential for wholesale CBDC as a store of value for retail payment service providers.
#Fintech#CryptoAssets#CBDC#wCBDC#DFC
·voxeu.org·
Central bank digital currencies risk becoming a gigantic flop
Ulrich Bindseil on the launch of the digital euro
Ulrich Bindseil on the launch of the digital euro
The European Central Bank (ECB) has made clear that banknotes are here to stay. Even if you cannot use banknotes for e-commerce, you could still hoard them at home as a store of value. And the ECB is not only committed to issuing banknotes, but also to supporting the efforts of the European Commission and others to maintain the usability of banknotes. The ECB has no intention at all to make banknotes disappear, but the opposite. Hence, there is no intention to use negatively-renumerated central bank digital currency (CBDC) to help monetary policy below the effective lower bound on policy rates. However, one could imagine a tiering system where citizens can hold up to a certain amount – for example, €3,000 – for which remuneration would never be negative, while for holdings beyond that, an interest rate would be applied which would be below other risk-free liquid investments, and possibly negative.
#Fintech#CryptoAssets#CBDC#DFC
·centralbanking.com·
Ulrich Bindseil on the launch of the digital euro
China’s SWIFT joint venture shows Beijing eyeing global digital currency use, to internationalise yuan
China’s SWIFT joint venture shows Beijing eyeing global digital currency use, to internationalise yuan
The People’s Bank of China (PBoC) China National Clearing Center (CNCC) and its Digital Currency Research Institute (DCRI) has partnered with SWIFT to launch a new financial payment service, Finance Gateway Information Service Limited. No further details on the functions or scope of the funding were offered on the registration document. SWIFT owns 55% of the incorporation contribution, CNCC owns 34%, DCRI 3%, CNCC’s subsidiary Cross-border Interbank Payments and Settlement Limited (5%), and the Clearing Association of China (3%).
#Fintech#CryptoAssets#CBDC#China#DFC
·scmp.com·
China’s SWIFT joint venture shows Beijing eyeing global digital currency use, to internationalise yuan
Money creation, bank profits, and central bank digital currency
Money creation, bank profits, and central bank digital currency
The role of central bank digital currency is increasingly being discussed, both in terms of its utility in monetary policy as well as the controversy of bank-level profit from money creation. This column presents a method for quantifying the funding cost reduction enjoyed by banks, highlighting that money creation substantially contributes to profits. This raises important questions for policymakers to address as they seek to optimise the deployment of digital currencies within financial institutions.
#Fintech#CryptoAssets#CBDC#DFC
·voxeu.org·
Money creation, bank profits, and central bank digital currency
Hardware wallet for digital yuan debuts in Xiong’an New Area
Hardware wallet for digital yuan debuts in Xiong’an New Area
The Xiong’an branch of the Agricultural Bank of China in Hebei has produced the first hardware wallet designed for the digital yuan. The product was developed by the Party Working Committee of the Xiongan New Area and the People’s Bank of China branch in Shijiazhuang. The new hardware wallet supports dual offline payments without an internet connection. The digital yuan wallet also features payments without the use of mobile phones. https://mp.weixin.qq.com/s/Fnr4u8IjdgVi9_FIjOyFZQ
#Fintech#CryptoAssets#CBDC#Offline#China#DFC
·cointelegraph.com·
Hardware wallet for digital yuan debuts in Xiong’an New Area
With Beijing onboard, China has so far issued $17 million in digital yuan
With Beijing onboard, China has so far issued $17 million in digital yuan
With Beijing being the next city joining the digital yuan test, China has now issued a total of 110 million (worth $17 million) of its central bank digital currency, also known as DC/EP. Beijing will be distributing 10 million digital yuan to 50,000 local residents via a lottery. Similar to previous tests, lottery-winners will be able to spend the free digital yuan in offline and online merchants that support the DC/EP payment method. https://mp.weixin.qq.com/s/EGsbFLvCMxB7WUXHJ1z_JA
#Fintech#CryptoAssets#CBDC#China#DFC
·theblockcrypto.com·
With Beijing onboard, China has so far issued $17 million in digital yuan
Bank of Korea: CBDCs Are Fiat Currency Not Virtual Assets
Bank of Korea: CBDCs Are Fiat Currency Not Virtual Assets
The Bank of Korea has published the results of research it conducted last year on the legal issues surrounding central bank digital currency (CBDC). It concludes that the Bank of Korea Act would need to be amended to accommodate the issuance of a digital currency, because the act only accounts for notes and coins at present. However, CBDC would meet the requirements of currency legislation and could be freely exchanged with cash as the two share the same legal status. Therefore it would be reasonable to treat a CBDC in the same way as cash deposits held by financial institutions. http://www.bok.or.kr/portal/bbs/P0000559/view.do?nttId=10062857&menuNo=200690
#Fintech#CryptoAssets#CBDC#DFC
·coindesk.com·
Bank of Korea: CBDCs Are Fiat Currency Not Virtual Assets
The conversation on general-purpose central bank digital currency
The conversation on general-purpose central bank digital currency
According to a Minneapolis Fed article, "the benefits of a central bank digital currency (CBDC) in the United States are not immediately obvious. Largely due to the legal and regulatory framework supporting the payments infrastructure, an end user’s buying power and ability to trust in the integrity of a transaction are the same for banknotes and bank account balances. Because the banking sector facilitates the exchange of funds between parties, the absence of central bank-issued digital money for general purposes is not currently an issue for most Americans."
#Fintech#CryptoAssets#CBDC#DFC
·minneapolisfed.org·
The conversation on general-purpose central bank digital currency
MasterCard announces support for crypto on its network
MasterCard announces support for crypto on its network
MasterCard has announced plans to support cryptocurrencies in 2021, paving the way for its nearly one billion users to spend digital assets at more than 30 million merchants. MasterCard also noted it is “actively engaging with several major central banks around the world” to support central bank digital currency initiatives, or CBDCs. Last year, the firm released a "virtual sandbox" tool to demonstrate how a CBDC can be used to settle consumer purchases using MasterCard’s infrastructure. https://www.mastercard.com/news/perspectives/2021/why-mastercard-is-bringing-crypto-onto-our-network/
#Fintech#CryptoAssets#MasterCard#CBDC#DFC
·cointelegraph.com·
MasterCard announces support for crypto on its network
Canadian universities propose designs for a central bank digital currency
Canadian universities propose designs for a central bank digital currency
The Bank of Canada engaged three independent university project teams to conduct CBDC exploratory design work with minimal direction from the Bank. All three design proposals were published. While the Bank is ramping up contingency planning for a central bank digital currency, it currently has no plans to issue one. The proposed designs are therefore not intended to be adopted by the Bank. Rather, the Bank will use these reports to inform its thinking and advance public conversation on a central bank digital currency design.
#Fintech#CryptoAssets#CBDC#Canada#DFC
·bankofcanada.ca·
Canadian universities propose designs for a central bank digital currency
Regulators and banks are now testing a ‘digital currency’ system in South Africa
Regulators and banks are now testing a ‘digital currency’ system in South Africa
The South African Intergovernmental Fintech Working Group (IFWG) launched ‘Project Khokha 2’ to explore the use of tokenised money, blockchains and digital currency in South Africa. This comes after the group’s first Project Khokha test which looked at using blockchain technology to speed up payment systems in the country. As part of Project Khokha 2, the IFWG said it will further investigate the use of Distributed Ledger Technology (DLT) in the country’s financial sector. https://www.ifwg.co.za/wp-content/uploads/PK2_IFWG_PressRelease_Project_Launch.pdf
#Fintech#Blockchain#CBDC#DFC
·businesstech.co.za·
Regulators and banks are now testing a ‘digital currency’ system in South Africa
Technical solution for the e-krona pilot
Technical solution for the e-krona pilot

There is currently no decision on issuing an e-krona, how an e-krona might be designed or what technology might be used. In partnership with Accenture, the Riksbank is conducting a pilot project to develop a proposal for a technical solution for an e-krona that can work as a complement to cash. The main aim of the pilot is for the Riksbank to increase its knowledge of a central bank-issued digital krona. The project is now being extended to the end of February 2022. The aim for the coming year is to continue developing the technical solution, with the focus on performance, scalability, testing of off-line functions and bringing external participants into the test environment. There is currently no decision on issuing an e-krona, how an e-krona might be designed or what technology might be used.

#Fintech#CryptoAssets#CBDC#DFC
·riksbank.se·
Technical solution for the e-krona pilot
South Africa launches second CBDC trial
South Africa launches second CBDC trial
The South African Intergovernmental Fintech Working Group (IFWG) launched 'Project Khokha 2' to explore the use of tokenised money, blockchains and wholesale central bank digital currency (CBDC) in South Africa. The CBDC will use R3’s Corda enterprise blockchain, and the settlement token and debenture will use a variant of Cosmos blockchain interoperability solution. Accenture will be responsible for tokenizing the wholesale CBDC on Corda. Block Markets Africa will help with distributed ledger technology, tokenizing the bonds and the wholesale payment token using its custom Cosmos-based solution. And Deloitte will document the insights. Other participants in the trials will include commercial banks Absa, FirstRand, Investec, Nedbank, and Standard Bank, the Johannesburg Stock Exchange (JSE), and Strate, South Africa’s central securities depository.
#Fintech#Blockchain#CBDC#DFC
·ledgerinsights.com·
South Africa launches second CBDC trial
Central Bank Digital Money Won't Replicate Cash, Sweden's Riksbank Says
Central Bank Digital Money Won't Replicate Cash, Sweden's Riksbank Says
According to a Sveriges Riksbank staff memo, it would be misguided to expect cash-like features of a central bank digital currency (CBDC). In order for a CBDC to be cash-like, it would need to be both anonymous and usable off-line. But the paper claims that the technical construction of digital currencies requires that they be verified by a remote ledger, in order to avoid double spending.
#Fintech#CryptoAssets#CBDC#Offline#DFC
·bloomberg.com·
Central Bank Digital Money Won't Replicate Cash, Sweden's Riksbank Says
Can digital central bank currencies function as cash?
Can digital central bank currencies function as cash?
According to a Sveriges Riksbank staff memo, it would be misguided to expect cash-like features of a central bank digital currency (CBDC). In order for a CBDC to be cash-like, it would need to be both anonymous and usable off-line, but the paper claims that the technical construction of digital currencies requires that they be verified by a remote ledger, in order to avoid double spending. It dismisses the possibility of using local devices that cannot be tampered with and program them such that a token cannot be spent more than once, claiming that such 100% tamper-proof devices do not exist. However, this is untrue. Mondex used tamper-resistant hardware to do exactly what the paper says is impossible. It failed due to a flawed business model, and not any technical shortcomings.
#Fintech#CryptoAssets#CBDC#Offline#DFC
·riksbank.se·
Can digital central bank currencies function as cash?
Proposed Legislation for the Regulation of the provision and use of Central Bank issued Electronic Bahamian Dollars
Proposed Legislation for the Regulation of the provision and use of Central Bank issued Electronic Bahamian Dollars
The Central Bank of The Bahamas (CBOB) has released a consultation paper setting out its proposals for legislation to regulate the provision and use of central bank digital currency (CBDC). It summarizes the key provisions of the draft Central Bank (Electronic Bahamian Dollars) Regulations 2021. These include qualification of wallet providers, interoperability, consumer protection, financial stability and financial inclusion. The CBOB is also proposing other consequential amendments to the Payment Systems Act (No. 7 of 2012) & the Computer Misuse Act (Ch. 107A). These legislative amendments are set out in the draft Payment Systems (Amendment) Bill 2021 and the draft Computer Misuse (Amendment) Bill 2021. The consultation period will end on 31st March, 2021. https://www.centralbankbahamas.com/viewPDF/documents/2021-02-15-11-24-12-Central-Bank-Electronic-Bahamian-Dollars-Regulations-2021.pdf https://www.centralbankbahamas.com/news/press-releases/public-consultation-on-proposed-legislation-for-the-regulation-of-the-provision-and-use-of-central-bank-issued-electronic-bahamian-dollars
#Fintech#CryptoAssets#CBDC#Regulation#DFC
·linkedin.com·
Proposed Legislation for the Regulation of the provision and use of Central Bank issued Electronic Bahamian Dollars
Chinese bank tests biometric hardware wallet for digital yuan payments
Chinese bank tests biometric hardware wallet for digital yuan payments
The Postal Savings Bank of China has reportedly created a biometric hardware wallet for the People's Bank of China central bank digital currency (CBDC) pilot. The new wallet enables easy identity verification for users via fingerprint sensors on the card to provide easier access to the CBDC and healthcare services for the elderly without needing to use smartphones.
#Fintech#CryptoAssets#CBDC#China#DFC
·cointelegraph.com·
Chinese bank tests biometric hardware wallet for digital yuan payments
Public and Private Money Can Coexist in the Digital Age
Public and Private Money Can Coexist in the Digital Age
According to this IMF blog, if and when countries move ahead with central bank digital currencies, they should consider how to leverage the private sector. Today’s dual-monetary system can be extended to the digital age. Central bank currency—along with regulation, supervision, and oversight—will continue to be essential to anchor stability and efficiency of the payment system. And privately-issued money can supplement this foundation with innovation and diversity—perhaps even more so than today. Where central banks decide to end up on the continuum between private-sector and public-sector involvement in the provision of money will vary by country, and ultimately depend on preferences, technology, and the efficiency of regulation.
#Fintech#CryptoAssets#CBDC#DFC
·blogs.imf.org·
Public and Private Money Can Coexist in the Digital Age
Russia to present new concept of national digital currency
Russia to present new concept of national digital currency
Central Bank of Russia Governor, Elvira Nabiullina, said that detailed feedback banking community on its October report supports a two-level model of the digital ruble, which allows banks to open wallets for their clients on the central bank’s platform and conduct operations. The central bank will "develop a more detailed concept and start discussing it with the public, market participants, and banks at the beginning of summer.” The next step will be launching and testing a special platform, and amending legislation.
#Fintech#CryptoAssets#CBDC#DFC
·rt.com·
Russia to present new concept of national digital currency
Morocco's central bank to investigate the use of CBDC
Morocco's central bank to investigate the use of CBDC
Morocco’s central bank Bank-Al-Maghrib (BAM) has reportedly launched an exploratory committee to investigate the pros and cons of a central bank digital currency (CBDC) for the Moroccan economy. But this could be the same old news that was reported back in 2019 because there's nothing new reported on the BAM website. http://www.bkam.ma/en/content/view/full/563630
#Fintech#CryptoAssets#CBDC#DFC#Morocco
·thepaypers.com·
Morocco's central bank to investigate the use of CBDC
Press release: Central banks of China and United Arab Emirates join digital currency project for cross-border payments
Press release: Central banks of China and United Arab Emirates join digital currency project for cross-border payments
The Digital Currency Institute (DCI) of the People's Bank of China (PBC) and the Central Bank of the United Arab Emirates (CBUAE) have joined the m-CBDC Bridge central bank digital currency (CBDC) project for cross-border foreign currency payments. The m-CBDC Bridge initiative is run in partnership with the BIS Innovation Hub (BISIH), the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BoT). It will further explore the capabilities of distributed ledger technologies (DLT) by developing a proof-of-concept (PoC) prototype to support real-time cross-border foreign exchange payment-versus-payment transactions in multiple jurisdictions, operating 24/7. It will analyse business use cases in a cross-border context with both domestic and foreign currencies.
#Fintech#Blockchain#CBDC#CrossBorder#DFC
·bis.org·
Press release: Central banks of China and United Arab Emirates join digital currency project for cross-border payments
Launch of the ECCB DCash CBDC Pilot is Imminent
Launch of the ECCB DCash CBDC Pilot is Imminent
February 13, 2021, Bitt, in partnership with the Eastern Caribbean Central Bank (ECCB), executed the first successful retail central bank digital currency (CBDC) consumer-to-merchant transaction using DCash, the ECCB digital currency. The transaction was completed at Geo F. Huggins’ Foodland, in the island of Grenada. The ECCB has begun to issue DCash to participating financial institutions to enable customer purchases at selected merchants, as part of the closed segment of the DCash pilot. This live exercise is the final step before the public launch in four of the ECCU’s eight sovereign member countries (Antigua and Barbuda, Grenada, Saint Kitts and Nevis and Saint Lucia).
#Fintech#CryptoAssets#CBDC#DFC
·blog.bitt.com·
Launch of the ECCB DCash CBDC Pilot is Imminent