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Missing Key: The challenge of cybersecurity and central bank digital currency
Missing Key: The challenge of cybersecurity and central bank digital currency
The Atlantic Council published a report on cybersecurity issues related to central bank digital currency (CBDC). It analyzes the intertwined questions of policy, design, and security to focus policy makers on how to build secure CBDCs that protect users’ data and maintain financial stability. The analysis shows that privacy-preserving CBDC designs are not only possible, but also come with inherent security advantages, compared to current payment systems, that may reduce the risk of cyberattacks.
#Fintech#CBDC#CyberSecurity#DFC
·atlanticcouncil.org·
Missing Key: The challenge of cybersecurity and central bank digital currency
Seven lessons from the e-Peso pilot plan
Seven lessons from the e-Peso pilot plan
The Banco Central del Uruguay's Adolfo Sarmiento writes about seven lessons from the 2017-18 e-Peso CBDC pilot, highlighting that CBDC choices are based not only on technical considerations but also on money use culture. This implies a holistic assessment of the payment environment and a clear understanding of the cultural implications of a change that will be incremental but not reversible. This implies that research on CBDC must concern idiosyncratic aspects: economy organization, historical aspects, and even social implications of money.
#Fintech#CBDC#LATAM#DFC
·sciencedirect.com·
Seven lessons from the e-Peso pilot plan
BIS Innovation Hub, Bank of Israel and Hong Kong Monetary Authority will cooperate to test retail CBDC
BIS Innovation Hub, Bank of Israel and Hong Kong Monetary Authority will cooperate to test retail CBDC
The BIS Innovation Hub, the Bank of Israel and the Hong Kong Monetary Authority will join forces to test the feasibility of a cyber secure two-tier retail central bank digital currency (CBDC) in which intermediaries are "exposure-less". Intermediaries in "Project Sela" will have technological access to the CBDC system, conduct the know your customer (KYC) processes, and provide consumer services, but are not financially exposed, at any point of the processes of obtaining, transferring, or redeeming CBDC. This architecture is assumed to have several benefits: less financial risk for customers, more liquidity, lower costs, increased competition, and wider access, plus  enhanced resilience to sophisticated cyber attacks.
#Fintech#CBDC#DFC
·boi.org.il·
BIS Innovation Hub, Bank of Israel and Hong Kong Monetary Authority will cooperate to test retail CBDC
Central Bank preparing concept of digital manat
Central Bank preparing concept of digital manat
"Central Bank of Azerbaijan (CBA) is preparing the concept of a digital manat [country’s national currency], an expert of the National Payment Systems Development Division of the Payment Systems and Settlements Department of CBA Rashad Gasimov said during еру Fintex Summit 2022 [Finance and Technologies Expo is being held in Azerbaijan’s Baku, on June 16-17], Trend reports."
#Fintech#CBDC#Asia#DFC
·azernews.az·
Central Bank preparing concept of digital manat
Philippines, Vietnam conducting CBDC feasibility studies with Soramitsu
Philippines, Vietnam conducting CBDC feasibility studies with Soramitsu
"Japanese blockchain firm Soramitsu has reportedly landed feasibility studies for central bank digital currency (CBDC) with both Vietnam and the Philippines. Soramitsu is establishing a considerable footprint in Southeast Asia following its successful implementation of Cambodia’s Bakong project in 2020. Last year it also started working with Laos’ central bank on a CBDC research project."
#Fintech#CBDC#Asia-Pacific#DFC
·ledgerinsights.com·
Philippines, Vietnam conducting CBDC feasibility studies with Soramitsu
Bangladesh exploring CBDC as an alternative to ‘risky’ private digital currencies
Bangladesh exploring CBDC as an alternative to ‘risky’ private digital currencies
Bangladesh Bank will be conducting a central bank digital currency (CBDC) feasibility study, according to the country's Minister of Finance AHM Mustafa Kamal. The main motivation is to "facilitate currency in virtual transactions and to encourage startups and e-commerce businesses.
#Fintech#CBDC#Asia#DFC
·mof.portal.gov.bd·
Bangladesh exploring CBDC as an alternative to ‘risky’ private digital currencies
Project Rosalind Phase 1 - Invitation for Expression of Interest (EOI) for API Users and Advisors Group
Project Rosalind Phase 1 - Invitation for Expression of Interest (EOI) for API Users and Advisors Group
The BIS Innovation Hub London Centre invites companies and organizations to submit expressions of interest to join the Project Rosalind to develop application programming interface (API) prototypes for distributing CBDCs. The group will be structured into two tiers – API users and technical advisors, with different roles and responsibilities for each. The project, run jointly with the Bank of England, aims to address some of the questions around developing a retail CBDC system, including: how to improve public-private sector collaboration? How to maximize interoperability, encourage competition and enable adoption? How might retail CBDC meet current and future consumer needs in a fast-changing payments landscape? The objective is to explore how this interface could best enable a central bank ledger to interact with private sector service providers to safely provision retail payments.
#Fintech#CBDC#BIS#DFC
·bis.org·
Project Rosalind Phase 1 - Invitation for Expression of Interest (EOI) for API Users and Advisors Group
CBDCs, Not Crypto, Will Be Cornerstone of Future Monetary System, BIS Says
CBDCs, Not Crypto, Will Be Cornerstone of Future Monetary System, BIS Says
According to a 42-page chapter in the Bank for International Settlements (BIS) 2022 Annual Economic Report crypto’s structural flaws make it an unsuitable basis for a monetary system, and instead envisions a future where programmability and tokenization are built on top of central bank digital currencies (CBDCs). Structural flaws make the crypto universe unsuitable as the basis for a monetary system: because it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralization narrative, crypto often relies on unregulated intermediaries that pose financial risks. https://www.bis.org/publ/arpdf/ar2022e3.htm
#Fintech#CBDC#BIS#DFC
·coindesk.com·
CBDCs, Not Crypto, Will Be Cornerstone of Future Monetary System, BIS Says
Bank of Israel investigates anonymous digital shekel payments
Bank of Israel investigates anonymous digital shekel payments
The Bank of Israel published an update on their CBDC proof-of-concept (PoC) experiments, including some that were based on distributed-ledger technology (DLT) infrastructure on the cloud, and the application of a Quorum blockchain based on Ethereum. They also examined a platform developed by VMware in which there would be a wallet that can hold “ordinary” digital shekels, the transfer of which is recorded in the ledger, and “private” digital shekels, the transfer details of which are not recorded openly, and where both sides to the transaction enjoy complete privacy as with cash payments. There would be a periodic (e.g., monthly) “budget” for payment using private shekels. https://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/20-6-22.aspx
#Fintech#CBDC#MiddleEast#Privacy#DFC
·finextra.com·
Bank of Israel investigates anonymous digital shekel payments
New types of digital money
New types of digital money
Danmarks Nationalbank published a paper that summarizes the central bank's thoughts on digital currency, including retail central bank digital currency (CBDC). At present, and with the associated costs and possible risks, the paper concludes that it is not clear how retail CBDCs will create significant added value relative to the existing solutions in Denmark. However, the central bank will continue to continuously assess the various reasons for issuing retail CBDC and their possible relevance in relation to the Danish financial system
#Fintech#CBDC#Europe#Denmark#DFC
·nationalbanken.dk·
New types of digital money
More African Central Banks Are Exploring Digital Currencies
More African Central Banks Are Exploring Digital Currencies
The IMF published a blog that provides a summary of African central bank digital currency (CBDC) activity based on CBDCTracker.org data. It points to the need for governments to improve access to digital infrastructure such as a phone or internet connectivity, and the importance of offline access, for a retail CBDC to be effective, particularly if financial inclusion is a primary motivator. It also underscores the need for central banks to develop the expertise and technical capacity to manage data privacy and financial integrity risks, including strengthening national identification systems so know-your-customer requirements are more easily enforced. There is also a risk that users pull too much money out of banks to purchase CBDCs, affecting banks’ ability to lend.
#Fintech#CBDC#Africa#IMF#Offline#DFC
·blogs.imf.org·
More African Central Banks Are Exploring Digital Currencies
Himes Proposes Central Bank Digital Currency
Himes Proposes Central Bank Digital Currency
"Congressman Jim Himes (CT-04) today released a proposal for the issuance of a Central Bank Digital Currency (CBDC) by the Federal Reserve. In the white paper, Rep. Himes argues that along with many other benefits, the implementation of digital currency by the U.S. government could play a critical role in preserving the dollar’s role as the global reserve currency of choice."
#Fintech#CBDC#UnitedStates#DFC
·himes.house.gov·
Himes Proposes Central Bank Digital Currency
Bank of Russia Accelerates Schedule for Digital Ruble Project
Bank of Russia Accelerates Schedule for Digital Ruble Project
The Central Bank of Russia is continuing to step up efforts to test and issue the digital ruble, with a roadmap for full implementation now expected by the end of 2023, with pilot testing scheduled to begin in April 2023. In February (2022) the central bank had implied that it had started pilot testing already, but this new announcement makes the earlier efforts sound more like proof of concept work ("clients were able to exchange non-cash rubles in their accounts for digital ones, and then they transferred digital rubles between themselves").
#Fintech#CBDC#Russia#DFC
·cbr.ru·
Bank of Russia Accelerates Schedule for Digital Ruble Project
Ripple Launches CBDC Competition to Encourage XRPL Innovation
Ripple Launches CBDC Competition to Encourage XRPL Innovation
Ripple has announced the CBDC Innovate challenge, with a total prize pool of $150,000. The Ripple CBDC Innovate challenge seeks to inspire programmers to build applications capable of running on the XRP Ledger and supporting retail central bank digital currencies (CBDCs), interoperability and financial inclusion. The deadline for the first batch of submissions is August 25. Competitors are expected to build or update a fintech or payment solution that makes use of CBDC and can run on the XRP Ledger, create a solution that can take advantage of CBDC's advantages or create an interface that allows any human to engage with a CBDC.
#Fintech#CryptoAssets#Ripple#CBDC#DFC
·ripplecbdc.devpost.com·
Ripple Launches CBDC Competition to Encourage XRPL Innovation
Central bank provider SICPA to create CBDC venture with INX
Central bank provider SICPA to create CBDC venture with INX
INX, the inter-dealer broker and digital asset trading platform, is planning a joint venture with central bank provider SICPA to develop a central bank digital currency (CBDC) offering. While SICPA is best known for its secure inks that have been used on Euro notes, it also has extensive digital capabilities. The CBDC offering will be based on blockchain and aims to expand interoperability between different stakeholders across borders.
#Fintech#CBDC#DFC
·ledgerinsights.com·
Central bank provider SICPA to create CBDC venture with INX
Taiwan completes trials of its prototype CBDC for retail use
Taiwan completes trials of its prototype CBDC for retail use
[This is a 2022 story] Taiwan has completed trials of its prototype retail central bank digital currency (CBDC) in technical simulations. Taiwan started to study and test a retail CBDC in September 2020, and the central bank has engaged with at least Taiwanese five commercial banks in the proof-of-concept (POC) work. They also tested a wholesale CBDC. Next steps are to educate the public on purported benefits, draw up regulations and put in place a sound legal framework, before proceeding to a public pilot. https://www.cbc.gov.tw/tw/cp-302-153094-0954b-1.html
#Fintech#CBDC#Asia#China#wCBDC#DFC
·forkast.news·
Taiwan completes trials of its prototype CBDC for retail use
Recent Technological Advances in Financial Market Infrastructure in ASEAN+3
Recent Technological Advances in Financial Market Infrastructure in ASEAN+3
This Asian Development Bank (ADB) report ascertains the current status of technology adoption, including wholesale CBDC applications, by its Cross-Border Settlement Infrastructure Forum member organizations. They include central securities depositories and central banks in the Association of Southeast Asian Nations (ASEAN) plus the People’s Republic of China, Japan, and the Republic of Korea (collectively known as ASEAN+3) region.
#Fintech#CBDC#wCBDC#Asia#FMIs#DFC
·adb.org·
Recent Technological Advances in Financial Market Infrastructure in ASEAN+3
The road to enhanced payments
The road to enhanced payments
In this March 31 speech, the Bank of England's Victoria Cleland introduces Project Meridian, a joint initiative with the BIS Innovation Hub that will prototype and test end-to-end flow of real-time gross settlement (RTGS) platform synchronized settlement, which could be used for different trades such as securities and foreign exchange. Synchronization would enable the cash movements in RTGS to happen if and only if a corresponding asset on another ledger is transferred, which is something that wholesale central bank digital currency (WCBDC) aficionados imply requires a distributed ledger technology (DLT) platform. Ms. Cleland makes a point that I make frequently in webinars and workshops:  "I do wonder though whether the term “wholesale CBDC” is a misnomer. Electronic central bank money has been available to financial institutions for decades via RTGS systems. In the provision of central bank infrastructure the key is not the label, but who can access it and what functionality is provided."
#Fintech#CBDC#wCBDC#RTGS#PaymentSystems#DFC
·bankofengland.co.uk·
The road to enhanced payments
Russia exploring CBDC for settlements of real estate deals
Russia exploring CBDC for settlements of real estate deals
"The Central Bank of Russia (CBR) is expanding its trails for the digital ruble it is developing. The CBR is now also exploring more use cases for the central bank digital currency (CBDC), including for use in settlement of real estate deals."
#Fintech#CBDC#Russia#DFC
·coingeek.com·
Russia exploring CBDC for settlements of real estate deals
Montran and eCurrency announce the very first CBDC solution fully integrated with a Central Bank's RTGS solution for central bank currency management
Montran and eCurrency announce the very first CBDC solution fully integrated with a Central Bank's RTGS solution for central bank currency management
"Montran Corporation and eCurrency Mint announced today the successful integration of Montran's Real Time Gross Settlement (RTGS) with eCurrency's Central Bank Digital Currency (CBDC) platform. As a result, CBDC is seamlessly interfaced with central bank currency management payment operations. The first implementation is the Bank of Jamaica which currently has Montran's RTGS deployed for final settlement in Jamaican Dollars and is in the process of a national rollout of the eCurrency solution to provide Jamaica's Central Bank Digital Currency, Jam-Dex."
#Fintech#CBDC#RTGS#PaymentSystems#Caribbean#eCurrency#DFC#FastPayments
·wfmz.com·
Montran and eCurrency announce the very first CBDC solution fully integrated with a Central Bank's RTGS solution for central bank currency management
The Case for Central Bank Digital Currencies
The Case for Central Bank Digital Currencies
"Andreas Dombret and Oliver Wünsch see an opportunity in the proliferation of digital currencies and argue for central banks to issue their own digital currencies to create a viable alternative to cash and deposit money that also allows policymakers to ensure that the official monetary system remains the most attractive one."
#Fintech#CBDC#DFC
·atlantik-bruecke.org·
The Case for Central Bank Digital Currencies
Visa: Public willingness to use CBDCs is the biggest challenge
Visa: Public willingness to use CBDCs is the biggest challenge
"“Perhaps the greatest challenge to CBDC deployment will come from the public’s willingness to use it. Inevitably, CBDCs will come up against payment solutions that the public has already come to rely on, and given that there are only a handful of CBDCs in operation, how people will respond to this new innovation is an open question,” the report stated."
#Fintech#CBDC#VISA#DFC
·coingeek.com·
Visa: Public willingness to use CBDCs is the biggest challenge
Prosper-Coin
Prosper-Coin
"Prosper-Coin is a money operating system enabling the issue, control and regulation of digital currencies for a wide range of implementations."
#Fintech#CBDC#Platforms#DFC
·prosperus.tech·
Prosper-Coin
The Identity, Fungibility, and Anonymity of Money
The Identity, Fungibility, and Anonymity of Money
"The fungibility of money is a characteristic which contributes to the quality of money. Fungibleness is itself related to the technical ability to associate a unit of currency with its past instances of exchange. This history is analogous to the identity of money. The identity of an individual unit of exchange is increasingly important as cash becomes less common, and banks require more information about the provenance of money. Private currencies, including Bitcoin and Libra, are themselves subject to tracking. The prior financial—and potentially political—activities of a user determine the fungibility of the currency they hold. Different money technologies provide varied levels of privacy, while cryptocurrencies offer users the potential to choose the level of information they share."
#Fintech#CBDC#Fungibility#DFC
·papers.ssrn.com·
The Identity, Fungibility, and Anonymity of Money
Why Fungibility Is Important in Understanding Money and Crypto
Why Fungibility Is Important in Understanding Money and Crypto
Money facilitates business on the market by serving as a medium of exchange, store of value, and a unit of account. The Federal Reserve Bank of St. Louis lists six characteristics of money: durability, portability, divisibility, limited supply, uniformity, and acceptability. The latter two of these attributes are directly impacted by a currency’s fungibility. In order to satisfy Berg’s (2020) fungibility criteria, “each unit of a currency, or any commodity used in a money function, should be indistinguishable from others of the same denomination,” and “an individual unit of said currency should not be reidentifiable through time and change.”
#Fintech#CBDC#Fungibility#DFC
·ecopolresearch.institute·
Why Fungibility Is Important in Understanding Money and Crypto
Central Bank Digital Currency and Quantitative Easing
Central Bank Digital Currency and Quantitative Easing
"We study how the introduction of a central bank digital currency (CBDC) interacts with ongoing monetary policies. We distinguish two policies: standard policy, where the central bank holds treasuries, and quantitative easing, where the central bank holds risky securities. We introduce an interest-bearing CBDC in each scenario and study the equilibrium allocations. We reach three main conclusions. First, the equilibrium impact of a CBDC depends on the ongoing monetary policy. Second, when the central bank conducts quantitative easing, the introduction of a CBDC is neutral under two conditions: the cost of issuing a CBDC is equal to the interest on reserves, and the demand for CBDC deposits is smaller than the amount of excess reserves in the system. Third, the introduction of a CBDC might render quantitative easing a quasi-permanent policy, as commercial banks optimally use their excess reserves to accommodate retailers' demand for switching from bank to CBDC deposits."
#Fintech#CBDC#MonetaryPolicy#DFC
·papers.ssrn.com·
Central Bank Digital Currency and Quantitative Easing
Central African Republic Dives Into Crypto With The Sango
Central African Republic Dives Into Crypto With The Sango
Central African Republic (CAR) President Faustin Archange Touadera reportedly announced the creation of the Sango Coin and a zero-taxation crypto-hub. The currency is named after Sango, which with French is one of the country’s two official languages. Through a platform called Crypto Island, the Sango will become “the catalyst for tokenizing (CAR’s) vast natural resources,” Touadera declared, providing no timeline or other details. In April Touadera’s office had announced that the CAR had adopted Bitcoin as legal tender alongside the CFA franc, a currency the country shares with five other central African economies.
#Fintech#CryptoAssets#CBDC#Africa#DFC
·barrons.com·
Central African Republic Dives Into Crypto With The Sango