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Swedish inquiry calls for state-run digital ID and low-risk bank accounts
Swedish inquiry calls for state-run digital ID and low-risk bank accounts
According to a Swedish government-appointed investigation “too many people are stuck outside the digital system” and suggested pressuring banks in Sweden to offer so-called “low-risk accounts” with limited functions (such as, for example, limits on international payments). It also calls on the government to to develop and run its own digital ID system, or to put out a tender for one which would be run by a private provider, to replace the private bank-run BankID system that excludes foreigners, such as refugees, foreign students, and people working on short-term contracts, making it impossible for them to identify themselves and use digital payment systems.
#Fintech#CBDC#Sweden#DigitalID#DFC
·thelocal.se·
Swedish inquiry calls for state-run digital ID and low-risk bank accounts
Ghana: e-Cedi launch delay due to economic challenges – BoG
Ghana: e-Cedi launch delay due to economic challenges – BoG
The Bank of Ghana (BoG) is delaying the launch of its e-Cedi central bank digital currency (CBDC) due to the impact of economic dislocation caused in 2022. The pilot phase has been completed, with selected consumers at Sefwi Asafo in the Western North Region using the currency to buy items, goods, food and services, including when users were offline. "At a certain point, [the BoG] will go back to the e-Cedi project and decide on the launch date.” https://www.facebook.com/thebankofghana/videos/889240668812916
#Fintech#CBDC#Africa#Ghana#Offline#DFC
·african-markets.com·
Ghana: e-Cedi launch delay due to economic challenges – BoG
National Bank of Denmark Governor says low cash usage doesn't justify retail CBDC
National Bank of Denmark Governor says low cash usage doesn't justify retail CBDC
National Bank of Denmark (NBD) Governor, Signe Krogstrup, delivered a speech on March 9, 2023 arguing that the decline in the use of cash in Denmark does not necessarily justify the issuance of a retail CBDC. He does not believe that the decline in cash per se is a substantial risk to monetary and financial stability, and doesn't reflect the sort of erosion of trust that would warrant a retail CBDC. He argued that commercial banks still have to hold central bank reserves, so central bank money is still at the core of the financial system. https://www.nationalbanken.dk/en/pressroom/speeches/Pages/2023/Governor-Signe-Krogstrups-speech-at-Danmarks-Nationalbanks-conference-New-types-of-digital-money.aspx
#Fintech#CBDC#Denmark#DFC
·ledgerinsights.com·
National Bank of Denmark Governor says low cash usage doesn't justify retail CBDC
European banking industry sets out a vision for digital euro EBF
European banking industry sets out a vision for digital euro EBF
The European Banking Federation (EBF), which represents the vast majority of the European banking sector, published a paper on a digital euro ecosystem. It argues that a retail digital euro could be envisaged in the mix of new tools and solutions to meet evolving payment needs, as long as it adds value to consumers, is appropriately designed, in close cooperation with the private sector, and mitigates ex ante the accompanying risks. a retail digital euro could – if properly designed – support the strategic autonomy of Europe and ensure a monetary anchor role of the euro. A wholesale digital euro based on distributed ledger technology (DLT) for the settlement of interbank transfers and related wholesale transactions in central bank reserves, would support the international role of the euro, enhance global cross-border payments and match the needs arising from digital finance.
#Fintech#CBDC#Eurozone#DFC
·ebf.eu·
European banking industry sets out a vision for digital euro EBF
Swiss Payments Vision - an ecosystem for future-proof payments
Swiss Payments Vision - an ecosystem for future-proof payments
The Swiss National Bank (SNB) plans to continue with the wholesale central bank digital currency (CBDC) securities settlement experimentation (Project Helvetia) that was concluded in January 2022. That had tested the issuance and settlement of tokenized securities with wholesale CBDC on the SIX Digital Exchange (SDX). In the next phase, the SNB will issue wholesale CBDC on SDX and test selected transactions with market participants. They will also test the use of "synthetic" wholesale CBDC (privately-issued stablecoins backed by SNB deposits) in a similar context. The SNB will also experiment with the processing of tokenized securities in which the payment leg is synchronized via a link to the Swiss Interbank Clearing (SIC) real-time gross settlement (RTGS) system, which also tested in the first phase of Project Helvetia. Such synchronization turned out to be technically possible but clunky compared to integrated processing, since the DLT functionalities had been restricted. As part of the new project, it will be investigated whether these disadvantages can be minimized by making adjustments to the SIC system or to the link itself.
#Fintech#CBDC#wCBDC#Settlement#Switzerland#DFC
·snb.ch·
Swiss Payments Vision - an ecosystem for future-proof payments
The Electronic Purse (1995)
The Electronic Purse (1995)
"The electronic purse, a new payments instrument offering advantages to both consumers and merchants, may soon replace currency in many routine transactions. Widespread use of the electronic purse could, however, raise concerns about consumer protection and the safety and soundness of the instrument. "
#Fintech#CBDC#Offline#Payments#DFC
·papers.ssrn.com·
The Electronic Purse (1995)
Kuwait central bank studying potential CBDC issuance
Kuwait central bank studying potential CBDC issuance
Central Bank of Kuwait (CBK) Governor Basel Al Haroon in an interview published in the Banker discussed the central bank's ongoing central bank digital currency (CBDC) research. The bank has formed a team of experts from various fields within the CBK to study the topic. According to Al Haroon, any such issuance would need to be accomplished in a way that preserves monetary and financial stability, while maintaining confidence in Kuwait’s payment system.
#Fintech#CBDC#Kuwait#MiddleEast#DFC
·laraontheblock.blogspot.com·
Kuwait central bank studying potential CBDC issuance
Banco Central de Reserve del Peru is actively exploring CBDC
Banco Central de Reserve del Peru is actively exploring CBDC
Banco Central de Reserve del Peru (BCRP), with technical assistance from the International Monetary Fund (IMF), is actively investigating the benefits and risks of central bank digital currency (CBDC). Possible benefits include lowering financial inclusion barriers, as well as strengthening monetary and financial stability, and the security and efficiency of payment systems. A survey has been issued to learn the views of the stakeholders, including market agents, on key aspects contained accompanying white paper.
#Fintech#CBDC#LATAM#Peru#DFC
·bcrp.gob.pe·
Banco Central de Reserve del Peru is actively exploring CBDC
What makes for a successful CBDC adoption?
What makes for a successful CBDC adoption?
G+D has compiled a handy checklist of aspects that constitute a successful central bank digital currency (CBDC) exploration and implementation strategy.  It starts with finding the proper balance between pain points, motivations, and opportunities for all stakeholders in that particular ecosystem. Successful implementation could be based on an innovative use case that solves one or more pain points, or it could also offer an opportunity that was previously unavailable. Also, all ecosystem stakeholders - consumers, financial service providers, and merchants – should feel that their interests are kept in mind. Finally, CBDC should not be just a solution to a particular problem in itself, but rather, it is should also provide a platform for innovation that enables new business models.
#Fintech#CBDC#G+D#DFC
·gi-de.com·
What makes for a successful CBDC adoption?
India Targeting One Million CBDC Users in Three Months, Prioritizing Offline Transfers: Sources
India Targeting One Million CBDC Users in Three Months, Prioritizing Offline Transfers: Sources
"The RBI is hoping to conduct offline transactions by testing the use of wearables, cards like debit and credit, bluetooth technology, and a smartphone. Another key concern the RBI is looking to address is the risk of double spending. More than 50 proposals have been submitted to the RBI on the closing date of March 24, 2023 to solve the problem of offline transactions, one source said."
#Fintech#Payments#CBDC#Offline#DFC
·coindesk.com·
India Targeting One Million CBDC Users in Three Months, Prioritizing Offline Transfers: Sources
The Digital Euro Conference 2023: A Recap
The Digital Euro Conference 2023: A Recap
The Digital Euro Association (DEA) published a summary of the key takeaways from its Digital Euro Conference held on March 31, 2023, that brought together experts, policymakers, and industry leaders in a hybrid format. Both on-site and remote participants engaged in insightful discussions, presentations, and panel sessions centered around central bank digital currencies (CBDCs), stablecoins, and tokenized commercial bank deposits.
#Fintech#CBDC#Europe#DFC
·blog.digital-euro-association.de·
The Digital Euro Conference 2023: A Recap
How can the public access digital central bank money?
How can the public access digital central bank money?
Sweden's Riksbank published an update on its technical work aimed at examining how an e-krona could work if a decision is taken in the future to issue central bank digital currency (CBDC). The focus during Phase 3 has been to examine how the Riksbank could interact with other actors in the payment market to give the general public access to, and the possibility to pay with, an e-krona, how conditional payments can be made and whether a digital central bank currency can simplify cross-border payments.
#Fintech#CBDC#Europe#Sweden#DFC
·riksbank.se·
How can the public access digital central bank money?
FedNow is not a central bank digital currency
FedNow is not a central bank digital currency
The FedNow is an instant payments service provided by the U.S. Fed, launching in July 2023. It will be available to U.S. depository institutions, such as banks and credit unions, and will enable individuals and businesses to send payments through their depository institution accounts 24/7, so that the receiver of a can use the funds almost instantly.  FedNow is like other Fed payments services, such as Fedwire and FedACH. To be absolutely clear, FedNow is neither a form of currency nor a step toward eliminating any form of payment, including cash.
#Fintech#CBDC#FedNow#FastPayments#UnitedStates#DFC
·federalreserve.gov·
FedNow is not a central bank digital currency
BIS research suggests optimal level of CBDC is 40% of GDP
BIS research suggests optimal level of CBDC is 40% of GDP
The Bank for International Settlements (BIS) published a paper on the potential impact of introducing retail central bank digital currency (CBDC). It argues for a fairly aggressive issuance policy with an optimal outstanding level equal to about 40% of annual gross domestic product (GDP). In the paper's theoretical model, GDP increases by more than 6%, with only a 6% drop in commercial bank deposits, albeit based on restrictive assumptions, like limited on-demand convertibility of bank deposits into CBDC, and issuance only permitted against government securities (and not reserves). Many of the macroeconomic benefits come from the fiscal budgetary space created by replacing higher-interest government debt by CBDC remunerated at an interest rate below that on central bank reserves. https://www.bis.org/publ/work1086.htm
#Fintech#CBDC#BIS#DFC
·ledgerinsights.com·
BIS research suggests optimal level of CBDC is 40% of GDP
CBDCs can help central banks tame inflation
CBDCs can help central banks tame inflation
"CBDC architecture provides central bank economists and regulators with a wealth of near real-time information on the CBDC balances of financial institutions, along with metadata that could tag which industry each CBDC is spent in, allowing real-time CPI measuring and even triangulated inflation fighting, while maintaining robust privacy of all transactions for all users. A central bank doesn’t need to wait for institutions to report its CBDC assets and liabilities; instead, central bank staff can query the CBDC balances directly."
#Fintech#CBDC#Bitt#DFC
·omfif.org·
CBDCs can help central banks tame inflation
Jamaican government to incentivizing JAM-DEX CBDC uptake and usage
Jamaican government to incentivizing JAM-DEX CBDC uptake and usage
The Jamaican government launched two new incentive programs to increase the adoption of its JAM-DEX central bank digital currency (CBDC). The first is the “Small/Micro Merchant Incentive Program”, which will reward the first 10,000 merchants who sign up for the official JAM-DEX platform as of April 1, 2023, with a J$25,000 (about $164) deposit. The second is the “Wallet-holder Individual Loyalty Program”, which provides regular JAM-DEX users with loyalty points that may be redeemed for things such as 2% cashbacks on qualified purchases. https://jis.gov.jm/media/2023/03/HMFPS-BUDGET-PRESENTATION-Edited-Final-E-.pdf
#Fintech#CBDC#Jamaica#DFC
·ledgerinsights.com·
Jamaican government to incentivizing JAM-DEX CBDC uptake and usage
Central Bank Digital Currency and Financial Inclusion
Central Bank Digital Currency and Financial Inclusion
The IMF published a paper that models the financial inclusion impact of introducing a retail CBDC in a developing country context.  It finds that CBDC issuance can increase bank deposits from the previously unbanked by incentivizing the opening of bank accounts for access to CBDC wallets (offsetting potential flows from deposits to CBDCs among those already banked). Second, data from CBDC usage allows for the building of credit to reduce credit-risk information asymmetry in lending. However, if non-bank payment system providers can distribute CBDC, fewer funds will flow into deposit accounts from the unbanked, but if CBDC data is shareable with banks, those without bank accounts can still build credit and access lower interest rate loans. This design is optimal for welfare if the gains from greater access to CBDC outweigh the contraction in lending.
#Fintech#CBDC#IMF#DFC
·imf.org·
Central Bank Digital Currency and Financial Inclusion
Update on The Bahamas Sand Dollar
Update on The Bahamas Sand Dollar
The Central Bank of the Bahamas (CBOB) published an update on the uptake of its Sand Dollar central bank digital currency (CBDC). At present, only about 100,000 Sand Dollar wallets have been downloaded usage remains low when compared to the overall size of the domestic payments system. In order to bump up usage, a new version of the wallet will be introduced that will allow digital payment providers to offer fee-based merchant services from within the core Sand Dollar platform. Financial institutions will be able to customize the appearance of the app to display their individual brand identities, including logos and branding color preferences. Also the CBOB will ramp up promotional activities at civic and cultural events, and it has has committed to a giveaway of $1 million in Sand Dollars to early adopters through 2024.
#Fintech#CBDC#Bahamas#Caribbean#DFC
·centralbankbahamas.com·
Update on The Bahamas Sand Dollar
IMF Approach to Central Bank Digital Currency Capacity Development
IMF Approach to Central Bank Digital Currency Capacity Development
The IMF reported that over 40 countries have approached with requests for CBDC capacity development assistance. Countries’ questions range from objectives and design choices to pilots and analysis of macro-financial implications. In the past two years, the IMF has started to engage with almost 30 countries. The IMF will also publish a Handbook that will be the basis for CBDC capacity development and help countries make well-informed decisions when taking the major step to design and issue their own CBDC. The Handbook chapters will provide mostly a framework for structuring CBDC exploration and cover five priority areas: (1) policy objectives and operational framework of CBDC; (2) foundational requirements and readiness to issue CBDC, such as legal considerations, cyber resilience, central bank governance, and regulation and supervision; (3) CBDC design processes, considerations, and choices; (4) project approaches and technology; and (5) potential macrofinancial impacts of CBDC. The initial wave of chapters, slated for publication around the 2023 Annual Meetings, will (1) provide a methodological framework for conducting CBDC exploration; (2) address the most common requests that IMF staff encounter in capacity development engagement; and (3) be based on relatively well-established knowledge and experiences. [
#Fintech#CBDC#IMF#DFC
·imf.org·
IMF Approach to Central Bank Digital Currency Capacity Development
The Digital Euro as a Monetary Anchor of the Financial System
The Digital Euro as a Monetary Anchor of the Financial System
The European Money abd Finance Forum (SUERF) published a paper that disputes the European Central Bank (ECB) two of the three "monetary anchor" digital euro issuance rationales. First, to be an anchor for commercial bank deposits, guaranteeing their convertibility into central bank money, the ECB would have to allow unlimited access to digital euros as a store of value, whereas the ECB envisages very limited CBDC holdings as a means of payment. Second, to be an anchor for maintaining the central bank’s control over the financial system, it is crucial that banks need central bank money as a means of payment and settlement. Thus, it is the holding of central bank money by banks, and not by non-banks, that is required as the ultimate monetary anchor for the financial system. Finally, the experience of several major central banks shows that the appropriate response to the declining use of cash in retail payments is not a CBDC, but the orchestration of competitive national retail payment systems.
#Fintech#CBDC#Eurozone#SUERF#DFC
·suerf.org·
The Digital Euro as a Monetary Anchor of the Financial System
Is Fednow a CBDC?
Is Fednow a CBDC?
"Although FedNow is not a CBDC, that’s not to say there is no reason to object to it. Faster payments are needed in the United States, but FedNow is not the only option. FedNow was announced in 2019, but that was two years after the Clearing House (TCH) introduced the Real‐​Time Payments (RTP) Network. In fact, while not offering instant payments, even just expanding the operating hours of Fedwire and the National Settlement Service (NSS) to run 24x7x365 would have improved the U.S. financial system. Yet, the Federal Reserve seems to have chosen to ignore the simpler option and walk over the private sector. Both choices are grounds for fair and longstanding objections to FedNow."
#Fintech#CBDC#FedNow#FastPayments#UnitedStates#DFC
·cato.org·
Is Fednow a CBDC?
DigiTally
DigiTally
"DigiTally is an overlay payment scheme for use on mobile phones, whose goals are to extend mobile phone payments to areas with poor connectivity and reduce transaction fees. DigiTally enables two people to do a payment transaction by simply copying short strings of numbers between their phones. This doesn't need either smartphones or a network connection. Either phone can upload the transaction later, once it gets a network connection. A short-term goal was a pilot project to explore the factors that affect payment service uptake."
#Fintech#Payments#Offline#CBDC#DFC
·kbaqer.com·
DigiTally
Towards a Two-Tier Hierarchical Infrastructure: An Offline CBDC Payment System
Towards a Two-Tier Hierarchical Infrastructure: An Offline CBDC Payment System
"We propose an offline payment system (OPS) protocol for CBDC that allows a user to make digital payments to another user while both users are temporarily offline and unable to connect to payment intermediaries (or even the Internet). OPS can be used to instantly complete a transaction involving any form of digital currency over a point-to-point channel without communicating with any payment intermediary, achieving virtually unbounded throughput and real-time transaction latency. "
#Fintech#CBDC#Offline#VISA#DFC
·arxiv.org·
Towards a Two-Tier Hierarchical Infrastructure: An Offline CBDC Payment System
Digital Currency: Central Banks Get Started with Digital Money
Digital Currency: Central Banks Get Started with Digital Money
"In this article, we discuss the key benefits and potential of CBDCs, provide an overview of the current landscape of projects in early 2022 and present some of the challenges that CBDC deployments will face. One such challenge is the support of offline CBDC payments, and the article is complemented with a position paper from Thales describing how offline CBDC payments could be designed."
#Fintech#CBDC#Offline#Thales#DFC
·thalesgroup.com·
Digital Currency: Central Banks Get Started with Digital Money
LUK: A simple new crypto primitive in Android 12 and its implications on decentralized double-spend detection with applications to Digital Cash
LUK: A simple new crypto primitive in Android 12 and its implications on decentralized double-spend detection with applications to Digital Cash
"This post describes a simple but foundational new cryptographic primitive – called LimitedUseKey or LUK – introduced in Android 12 (aka Android S, to be released later this year). This crypto primitive has far reaching implications on secure detection of decentralized double-spend in mobile devices. Hopefully this primitive and its variants enable new applications that are decentralized, peer-to-peer, faster and work offline (without Internet connectivity). Examples include digital ticketing, coupons, payments systems and Central Bank Digital Currencies (CBDCs)."
#Fintech#Payments#Offline#CBDC#Google#DFC
·zkblogyogins.wordpress.com·
LUK: A simple new crypto primitive in Android 12 and its implications on decentralized double-spend detection with applications to Digital Cash
Potential Scenarios for Deciding to Issue a Digital Shekelל
Potential Scenarios for Deciding to Issue a Digital Shekelל
The Bank of Israel outlined potential scenarios for deciding to issue a digital shekel central bank digital currency (CBDC), although a decision has not yet been made as to whether the Bank intends on doing so. One scenario would be if  the United States or the European Union were to decide to issue CBDC, or a significant number of other developed economies. Other scenarios include a decline in the legitimate use of cash and its acceptance in transactions in Israel, significant penetration of stablecoins or other private means of payment that would be broadly used, and continued and growing concentration in key segments of the domestic payments system.
#Fintech#CBDC#Israel#DFC
·boi.org.il·
Potential Scenarios for Deciding to Issue a Digital Shekelל
Considerations for a US central bank digital currency
Considerations for a US central bank digital currency
US Federal Reserve Board Governor Michelle Bowman" gave a speech on her thoughts regarding U.S. central bank digital currency (CBDC). The whole speech is worth a read, but here is her key takeaways" "A potential U.S. CBDC, must be viewed through the lens of whether and how the payment system would be improved beyond what instant payment services will achieve. We should ask what current frictions exist or may emerge in the payment system that only a CBDC can solve, or that a CBDC can solve most efficiently? ...There could be some promise for wholesale CBDCs in the future for settlement of certain financial market transactions and processing international payments. When it comes to some of the broader design and policy issues, particularly those around consumer privacy and impacts on the banking system, it is difficult to imagine a world where the tradeoffs between benefits and unintended consequences could justify a direct access CBDC for uses beyond interbank and wholesale transactions."
#Fintech#CBDC#UnitedStates#DFC
·federalreserve.gov·
Considerations for a US central bank digital currency
Global Money Transfers: It's Nexus Versus Icebreaker
Global Money Transfers: It's Nexus Versus Icebreaker
"Nexus or Icebreaker? Two competing ideas are jostling for attention, each promising to reshape the inefficiency-ridden landscape of moving money from one country to another. Instead of trying to choose between them, central banks ought to give both a shot. The European payment system recently did a trial linkup with Malaysia and Singapore under the Bank for International Settlements’ Nexus protocol, designed to transfer funds between bank accounts in different countries under 60 seconds. Meanwhile, the monetary authorities of Israel, Norway and Sweden have tested a separate BIS-backed initiative that achieves the same goal of fast cross-border retail payments. Project Icebreaker uses central bank digital currencies, or CBDCs, instead of bank accounts."
#Fintech#CBDC#FastPayments#CrossBorder#Payments#BIS#DFC
·bloomberg.com·
Global Money Transfers: It's Nexus Versus Icebreaker
EU Parliament report warns of the risks of a digital euro
EU Parliament report warns of the risks of a digital euro
The European Parliament published a briefing ahead of a vote on whether to proceed with the technical implementation phase of a digital euro. While the report is broadly supportive of the preparatory work carried out by the European Central Bank (ECB), it is not a proponent of a digital euro itself. It casts doubts on the eventual launch of a central bank digital currency (CBDC), arguing that “when in doubt, [one should] abstain (but be prepared).” https://www.europarl.europa.eu/thinktank/en/document/IPOL_IDA(2023)741507
#Fintech#CBDC#Eurozone#DFC
·ledgerinsights.com·
EU Parliament report warns of the risks of a digital euro