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India starts second wholesale CBDC use case pilot
India starts second wholesale CBDC use case pilot
The Reserve Bank of India (RBI) reportedly started using its central bank digital currency (CBDC) in the call money markets for interbank lending. In November 2022, the RBI launched its first wholesale CBDC pilot to settle government bond transactions, but it fizzled out soon after. There's more hope for this new one because the blockchain-enabled instant atomic settlement and programmability means that if one bank lends to another, funds will automatically be returned at specific times without delays. Additionally, there's the potential to tokenize the collateral used for loans. However, none of this has been officially confirmed.
#Fintech#CBDC#wCBDC#Settlement#India#DFC
·ledgerinsights.com·
India starts second wholesale CBDC use case pilot
Retail CBDC and the social costs of liquidity provision
Retail CBDC and the social costs of liquidity provision
The Centre for Economic Policy Research (CEPR) published an article by Dirk Niepelt that makes a case that a CBDC-based financial system can be a less costly than current two-tier regime that features non-banks that transact with bank deposits, and banks that settle payments with central bank reserves. The slightly lower direct costs of fractional reserve banking are more than offset by its "social" costs such as the fiscal resources and regulation needed to address the former's inherent frictions and instability. Furthermore, the paper argues that the interest rate on the digital currency should differ from zero and from the rate of interest on reserves.
#Fintech#CBDC#DFC
·cepr.org·
Retail CBDC and the social costs of liquidity provision
China opens CBDC industrial park
China opens CBDC industrial park
The Chinese government has reportedly launched a central bank digital currency (CBDC) industrial park to bolster the e-CNY ecosystem and payment solutions using the digital yuan. Residents are incentivised to move to the park for up to three years of free rent and loans. Commercial banks are being offered up to 20 million yuan to settle there, and start ups are offered up to 50 million yuan.
#Fintech#CBDC#China#DFC
·finextra.com·
China opens CBDC industrial park
ECB launches pre-call for wholesale CBDC trial participation
ECB launches pre-call for wholesale CBDC trial participation
The European Central Bank (ECB) has launched a survey targeting potential participants in its trials and experiments for central bank money settlement of wholesale financial transactions recorded on distributed ledger technology (DLT) platforms. The plan is to test three settlement solutions, including two that link to existing euro payment systems (from the central banks of Germany and Italy) and one wholesale central bank digital currency (CBDC) developed by the Banque de France. https://www.ecb.europa.eu/paym/intro/news/ecb.dedocs231013_annex.en.pdf
#Fintech#CBDC#wCBDC#Eurozone#DFC
·ledgerinsights.com·
ECB launches pre-call for wholesale CBDC trial participation
Eurosystem proceeds to next phase of digital euro project
Eurosystem proceeds to next phase of digital euro project
The European Central Bank (ECB) digital euro project will move to the "preparation" phase on November 1, 2023, with the completion of the "investigation" phase launched in October 2021. Based on the findings from this phase, a digital euro would be widely accessible, free for basic use and available online and offline. It would offer the highest level of privacy and allow users to settle payments instantly in central bank money. It could be used from person to person, at the point of sale, in e-commerce and in government transactions. The preparation phase will initially last two years, and involve finalizing the digital euro rulebook and selecting providers that could develop a digital euro platform and infrastructure. It will also include testing and experimentation. https://www.ecb.europa.eu/paym/digital_euro/investigation/profuse/shared/files/dedocs/ecb.dedocs231018.en.pdf
#Fintech#CBDC#Eurozone#DFC
·ecb.europa.eu·
Eurosystem proceeds to next phase of digital euro project
Bank of China Hong Kong trials CBDC smart contracts for prepayments
Bank of China Hong Kong trials CBDC smart contracts for prepayments
The Bank of China (Hong Kong) launched a central bank digital currency (CBDC) trial for prepaid smart contracts using digital Hong Kong dollars (eHKD). The BOCHK issued simulated Hong Kong dollars to employees of the Bank, which they could spend at ten participating merchants. When employees buy a prepaid service contract from a participating merchant, the customer’s prepaid funds are converted into digital HKDs under their own name. Once the merchant provides the good or service, the smart contract executes automatically and the merchant receives the payment immediately. A key innovation of this trial was to layer the smart contract functionality onto the CBDC.
#Fintech#CBDC#China#DFC
·ledgerinsights.com·
Bank of China Hong Kong trials CBDC smart contracts for prepayments
mBridge switches to new Chinese blockchain consensus protocol
mBridge switches to new Chinese blockchain consensus protocol
The Bank for International Settlements (BIS) Innovation Hub's mBridge multiple central bank digital currency (CBDC) cross-border payments project, has reportedly switched to a new blockchain consensus protocol. The project was first deployed on a customized network that borrowed aspects of popular blockchain networks such as Ethereum’s smart contract language Solidity. It relied on HotStuff, a Byzantine fault-tolerant consensus protocol. Local Chinese media is reporting that mBridge has transitioned to the Dashing Protocol, developed by the People's Bank of China's (PBoC’s) Digital Currency Research Institute. The PBOC is an mBridge project partner, along with the Hong Kong Monetary Authority (HKMA), Bank of Thailand, and the Central Bank of the United Arab Emirates. https://m.thepaper.cn/newsDetail_forward_24964633
#Fintech#Payments#CrossBorder#CBDC#wCBDC#BIS#China#DFC
·coingeek.com·
mBridge switches to new Chinese blockchain consensus protocol
Argentine central bank to introduce digital peso bill ‘as soon as possible’
Argentine central bank to introduce digital peso bill ‘as soon as possible’
The Central Bank of the Argentine Republic is reportedly accelerating its work on a central bank digital currency (CBDC) legislative framework. Earlier in the month, the current Minister of Economy and presidential candidate Sergio Massa, committed to introduce a digital peso should he win the election. However, the latest election polls have Massa trailing Bitcoin-friendly Javier Milei, who advocates adopting the U.S. dollar as Argentina’s official currency while opposing the central bank’s role in the economy. Meanwhile, the central bank touts a digital peso's traceability by which the government could thwart tax evasion and avoidance. Update: In the 1st round of presidential voting, Massa got 37% of the tally versus Milei's 30%. They head to a run-off election on November 19, 2023.
#Fintech#CBDC#Argentina#DFC
·cointelegraph.com·
Argentine central bank to introduce digital peso bill ‘as soon as possible’
Southern Cross University and ANZ test digital currency
Southern Cross University and ANZ test digital currency
Australia and New Zealand Banking Group (ANZ) wrapped up a central bank digital currency (CBDC) pilot that successfully tested offline functionality. Ten students at Southern Cross University received NFC-enabled smart cards loaded with eAUD for spending at designated merchants within the campus.
#Fintech#CBDC#Australia#Offline#DFC
·lismorecitynews.com.au·
Southern Cross University and ANZ test digital currency
The digital euro: what is it and what’s in it for us
The digital euro: what is it and what’s in it for us
Banco de España published an article that explains what a digital euro would be and its advantages if eventually adopted. The bottom line is that digital euro would be an additional option, ensuring that citizens also have access to public money, with all its guarantees, in an increasingly digital environment.
#Fintech#CBDC#Eurozone#Spain#DFC
·bde.es·
The digital euro: what is it and what’s in it for us
Project Polaris: high-level design guide for offline payments
Project Polaris: high-level design guide for offline payments
The Bank for International Settlements (BIS) Innovation Hub published a guide on the technology underpinning offline central bank digital currency (CBDC) payments. This follows up on an earlier overview report, by deep diving into the requirements and design choices, based on information gathered in a series of workshops conducted in collaboration with 12 solution vendors and 6 observing central banks. Currently, very few offline CBDC solutions are production-ready or working at scale in a live environment, but there are a number of mature pilots. The report discusses requirement trade-offs, for which the report suggests that central banks take an iterative approach to design, exploring alternative ways to achieve their objectives.
#Fintech#CBDC#Payments#Offline#BIS#DFC
·bis.org·
Project Polaris: high-level design guide for offline payments
Sveriges Riksbank: Political decisions needed urgently so that everyone can pay
Sveriges Riksbank: Political decisions needed urgently so that everyone can pay
Sveriges Riksbank responded to the Parliamentary Payment Inquiry report that was published in March 2023. It agreed with the report's conclusion that too many people lack access to both digital and cash payments and that the state needs to take further measures to make digital systems more accessible, less vulnerable and more reliable. Legislation on cash needs to be tightened up so that retailers are obliged to accept cash as payment for essential goods, with exceptions, such as for smaller businesses. Also, banks should offer payment accounts with limited functionality. However, the Riksbank considers that the Inquiry has not gone far enough in its proposals for a future state role in the payment system and that, for example, legislative work on a possible e-krona should begin immediately. And although the Riksbank agrees with the Inquiry's proposals on state guarantees for offline card payments, regulatory push and technical standards are also required.
#Fintech#CBDC#Sweden#Offline#DFC
·riksbank.se·
Sveriges Riksbank: Political decisions needed urgently so that everyone can pay
Central Bank Digital Currency and Banking Choices
Central Bank Digital Currency and Banking Choices
Several Bank of Canada staffers published a paper that uses a structural model where each household chooses a financial institution to deposit their digital money to estimate the extent to which a central bank digital currency (CBDC) competes with deposit-taking financial institutions. Households value the interest paid on digital money, the possibility of obtaining complementary financial products, and access to in-branch services. Introducing a counterfactual CBDC that is non-interest-bearing and does not provide complementary financial products can substantially crowd out bank deposits only if it provides a better service network. Imposing a limit on CBDC holding would effectively limit this crowding out.
#Fintech#CBDC#Canada#DFC
·ecb.europa.eu·
Central Bank Digital Currency and Banking Choices
RBI’s wholesale pilot of CBDC losing steam after one year
RBI’s wholesale pilot of CBDC losing steam after one year
The Reserve Bank of India (RBI) wholesale central bank digital currency (CBDC) pilot started in November 2022 is seen as losing steam as the number of trades and settlement volumes has constantly fallen over the last few months, according to data compiled by Moneycontrol. The settlement of trades in government securities using digital rupees was in the range of Rs 5 billion to 6 billion a day in the first month of launch, which in the later months fell to just Rs 100 million to 600 million a day. The number of trades has fallen from 45 to 60 a day in the first month to just two to six a day in the later months.
#Fintech#CBDC#wCBDC#Settlement#India#DFC
·moneycontrol.com·
RBI’s wholesale pilot of CBDC losing steam after one year
HKMA publishes the e-HKD Pilot Program Phase 1 Report
HKMA publishes the e-HKD Pilot Program Phase 1 Report

The Hong Kong Monetary Authority (HKMA) published a report on the key findings, learnings, and assessments of the 14 pilots conducted by the 16 participating firms under Phase 1 of the e-HKD pilot program. The pilots showed that the programmability, tokenization, and atomic settlement associated with an e-HKD central bank digital currency (CBDC) could add unique value to the Hong Kong payment ecosystem. An e-HKD has the potential to facilitate faster, more cost-efficient, and more inclusive transactions., and enable new types of economic transactions. The next phase of the program will explore new e-HKD use cases and delve deeper into select pilots from Phase 1. See also: -https://www.visa.com.hk/zh_HK/about-visa/newsroom/press-releases/nr-hk-231101.html -https://www.gi-de.com/en/group/press/press-releases/standard-chartered-hong-kong-and-giesecke-devrient-announce-key-findings-of-its-e-hkd-pilot-study-on-offline-payment

#Fintech#CBDC#HongKong#VISA#G+D#DFC
·hkma.gov.hk·
HKMA publishes the e-HKD Pilot Program Phase 1 Report
Project mBridge update: experimenting with a multi-CBDC platform for cross-border payments
Project mBridge update: experimenting with a multi-CBDC platform for cross-border payments

BIS mBridge cross border CBDC project has 23 central banks, IMF and World Bank as observers

The Bank for International Settlements (BIS) Innovation Hub published an update on its mBridge multiple central bank digital currency (multi-CBDC) common platform for wholesale cross-border payments. Project mBridge supports real-time, peer-to-peer, cross-border payments and foreign exchange transactions using wholesale CBDCs, focusing on the use case of international trade. In 2022, a pilot involving real corporate transactions was conducted on the platform among participating central banks, selected commercial banks and their corporate customers in four jurisdictions. A minimum viable project (MVP) will be launched in the middle of next year. The project is a collaborative effort of the BIS Innovation Hub, four founding central banks and over 25 observing members

#Fintech#CBDC#wCBDC#mCBDC#BIS#CrossBorder#Payments#DFC
·bis.org·
Project mBridge update: experimenting with a multi-CBDC platform for cross-border payments
Bank of Spain Report: Most Spaniards Don't Want Digital Euro, 65% Would Not Use It
Bank of Spain Report: Most Spaniards Don't Want Digital Euro, 65% Would Not Use It
The Banco de España published the results of a survey that revealed the low preference that a potential digital euro would have compared to other payment alternatives. 65% of the Spanish population using cash daily. Credit and debit cards follow while payment apps and electronic payments are marginally used but growing in use. Only 20% of those surveyed had heard about a possible digital euro, and 65% said they would not use the digital euro as they feel comfortable with today’s available payment methods.
#Fintech#CBDC#Eurozone#Spain#DFC
·news.bitcoin.com·
Bank of Spain Report: Most Spaniards Don't Want Digital Euro, 65% Would Not Use It
Korea Exchange, Bank of Korea to trial DLT, CBDC for carbon trading
Korea Exchange, Bank of Korea to trial DLT, CBDC for carbon trading
The Bank of Korea and Korea Exchange signed an agreement to collaborate in exploring distributed ledger technology (DLT) and central bank digital currency (CBDC) for carbon trading. Simulated trials will take place in the third and fourth quarters of 2024. Both organizations already have related programs. The Korea Exchange is currently conducting simulated DLT experiments and plans to support listed security tokens next year. The central bank said this trial would form part of its CBDC usability tests. However, both the exchange and central bank emphasized this is just a test. It will not impact the functioning of current carbon credit markets. http://www.bok.or.kr/portal/bbs/P0000559/view.do?menuNo=200690&nttId=10080261&pageIndex=1
#Fintech#Blockchain#DLT#Carbon#CBDC#Korea#DFC
·ledgerinsights.com·
Korea Exchange, Bank of Korea to trial DLT, CBDC for carbon trading
SNB launches wholesale CBDC bond settlement pilot project
SNB launches wholesale CBDC bond settlement pilot project
The Swiss National Bank (SNB) and six commercial banks will launch a wholesale central bank digital currency (CBDC) pilot project on December 1, 2023. Project Helvetia Phase III will test the settlement of tokenized bonds against SNB-issued wholesale CBDC on a delivery-versus-payment (DVP) basis on a distributed ledger technology (DLT) based platform run by the SIX Digital Exchange (SDX). The pilot, which will run until June 2024, will use the SNB's Swiss Interbank Clearing (SIC) payment infrastructure for the tokenization of central bank money and that of the SIX SIS central securities depository (CSD) for integration with the traditional bond settlement infrastructure. This follows up on the Phase I and II proof-of-concept (POC) work conducted with the BIS Innovation Hub between 2020 and 2022.
#Fintech#CBDC#wCBDC#Settlement#Switzerland#DFC
·snb.ch·
SNB launches wholesale CBDC bond settlement pilot project
Indian banks offer incentives to lift digital currency transactions
Indian banks offer incentives to lift digital currency transactions
Indian banks are reportedly offering incentives for conducting transactions using the e-rupee retail CBDC nudged by the Reserve Bank of India (RBI) to boost underwhelming transaction volumes. The incentives range from cash-backs to reward points, similar to those offered by the banks on credit and debit cards, they said. The RBI started e-rupee pilot program in December 2022 and is targeting a million transactions daily by end-2023. But retail transactions are still tracking below the target, averaging around 25,000 a day.
#Fintech#CBDC#India#DFC
·reuters.com·
Indian banks offer incentives to lift digital currency transactions
Ripple to power Georgia’s central bank digital currency, the digital lari
Ripple to power Georgia’s central bank digital currency, the digital lari
The National Bank of Georgia (NBG) has selected Ripple Labs as its technology partner for developing a digital lari (GEL) central bank digital currency (CBDC). The proof-of-concept work will experiment with Ripple’s CBDC technology and evaluate the practical use cases to gauge potential benefits for the public sector, businesses and retail users. The NBG made the decision following a competition process, which consisted of two phases: submission of a Project Execution Plan (PEP) by nine shortlisted candidates in the first phase, and demonstration of their technology solutions in the second. https://nbg.gov.ge/en/media/news/ripple-the-flagship-international-company-becomes-the-technology-partner-for-the-digital
#Fintech#CBDC#Georgia#Ripple#DFC
·cointelegraph.com·
Ripple to power Georgia’s central bank digital currency, the digital lari
The battle for control over the digital euro wallet
The battle for control over the digital euro wallet
Deutsche Bank staffers Manual Klein and Dr. Alexander Bechtel argue for greater control over the digital euro user interface by banks and payment providers rather than the European Central Bank (ECB). The draft digital euro laws require that the “app developed and provided by the ECB should serve as the dominant front end”. It says the private sector can provide alternatives, but it requires the ECB option always be offered to end users. Also, the ECB plans to provide a clearly defined range of functions for front ends, which will limit the ability of payment service providers and banks to develop their own solutions, and inhibit innovation going forward. https://www.faz.net/pro/d-economy/transformation/digitaler-euro-das-ezb-projekt-ist-mehr-als-nur-geld-19264685.html
#Fintech#CBDC#Eurozone#DFC
·ledgerinsights.com·
The battle for control over the digital euro wallet
Who Needs an e-Yuan?
Who Needs an e-Yuan?
Christian Pfister and Nicolas de Sèze provide an historical overview of the People's Bank of China's (PBOC) e-Yuan project, putting it in political perspective, then present its main features. They recall the strategic objectives put forward by the PBOC, discuss them and ask whether other objectives may not matter more. They conclude that, although its role in increasing social welfare would be unclear, especially in view of the already high-level in the quality and quantity of payment services in China, the roll-out of a digital yuan could be useful for the Chinese government, especially in pursuing objectives which are not officially put forward.
#Fintech#CBDC#China#DFC
·suerf.org·
Who Needs an e-Yuan?
DEA statement on the digital euro project
DEA statement on the digital euro project
"The ECB mentions that a digital euro would address a market gap by providing a means of payment that is widely accepted, free for basic use, inclusive, secure, can operate offline and offers the highest possible protection of privacy. These features, however, are not sufficient to drive large-scale adoption - in particular, with a digital euro that has a relatively low account limit."
#Fintech#CBDC#Eurozone#DEA#DFC
·blog.digital-euro-association.de·
DEA statement on the digital euro project
ECB pushes back on commitment to immediate availability of offline digital euro
ECB pushes back on commitment to immediate availability of offline digital euro
The regulation proposed by the European Parliament and Council requires both online and offline digital euro payment transactions to be available on the first issuance of the digital euro. However, the European Central Bank (ECB) says that "further testing by the Eurosystem will be necessary to guarantee that all relevant digital euro models offer sufficient security and maturity… Enshrining the ECB's intent in a legally binding provision will constrain its capacity to react to the higher level of uncertainty that the offline digital euro model involves, as well as to react to exceptional circumstances necessitating an imminent issuance of any available model. If trade-offs that have not yet been identified arise, postponing the overall issuance of the digital euro would be the only option available to the ECB… For these reasons, the ECB invites the co-legislators to consider the imposition of a requirement upon the ECB to deliver both online and offline versions of the digital euro, coupled with a 'best efforts' provision under which the ECB would make available both online and offline models as of the first issuance of the digital euro."
#Fintech#CBDC#Offline#Eurozone#ECB#DFC
·ecb.europa.eu·
ECB pushes back on commitment to immediate availability of offline digital euro
IMF update on its Peru CBDC technical assistance
IMF update on its Peru CBDC technical assistance
The IMF has been providing central bank digital currency (CBDC) technical assistance (TA) to the Banco Central de Reserva del Perú (BCRP) since 2021. The initial TA mission supported the central bank during the first phase of the project, which involved clarifying the context, key questions, and potential approaches to study a CBDC. The second phase started with the publication of a paper by the central bank. The white paper outlined the context, goals and challenges related to a potential CBDC in Peru. Consistent with recommendations from the first mission, the BCRP recognized the need to focus on an initial engagement with stakeholders, including representatives of the banking sector, payment service providers, and the fintech and technology sector.
#Fintech#CBDC#Peru#IMF#DFC
·imf.org·
IMF update on its Peru CBDC technical assistance
Mastercard Shows How Existing Commercial Bank Rails Could Drive CBDC Adoption
Mastercard Shows How Existing Commercial Bank Rails Could Drive CBDC Adoption
"Mastercard has completed the Hong Kong Monetary Authority's (HKMA) e-HKD Pilot Programme, which demonstrated the efficacy of the Mastercard Multi-Token Network solution to settle Web3 transactions involving decentralized applications and digital assets, such as NFTs. The pilot also showcased the potential for seamless funding and settlement in and out of Web3 marketplaces via a retail central bank digital currency (CBDC), such as e-HKD in the future.
#Fintech#CBDC#MasterCard#HongKong#DFC
·prnewswire.com·
Mastercard Shows How Existing Commercial Bank Rails Could Drive CBDC Adoption
First official ECB mention of CBDC plans?
First official ECB mention of CBDC plans?
[January 2020] "In terms of the road ahead, the ECB will continue to assess the costs and benefits of issuing a central bank digital currency (CBDC) that would ensure that the general public remains able to use central bank money even if the use of physical cash eventually declines. However, the prospect of central bank initiatives should neither discourage nor crowd out private market-led solutions for fast and efficient retail payments in the euro area. We are looking closely into the feasibility and merits of a CBDC, also because it could have major implications for the financial sector and for the transmission of monetary policy. At the end of 2019 we created an expert task force at the ECB that will work closely with the national central banks to study the feasibility of a euro area CBDC in various forms, covering all the practical aspects, including how to minimise possible unintended side-effects."
#Fintech#CBDC#Eurozone#DFC
·ecb.europa.eu·
First official ECB mention of CBDC plans?
SARB commences feasibility study for a retail CBDC
SARB commences feasibility study for a retail CBDC
[May 2021] "The South African Reserve Bank (SARB) has embarked on a study to investigate the feasibility, desirability and appropriateness of a central bank digital currency (CBDC) as electronic legal tender, for general-purpose retail use, complementary to cash. A retail CBDC can be defined as a digital form of cash aimed at providing the best attributes of both cash and electronic payments."
#Fintech#CBDC#SouthAfrica#Africa#DFC
·resbank.co.za·
SARB commences feasibility study for a retail CBDC
ECCB preparing to launch 'DCash 2.0'
ECCB preparing to launch 'DCash 2.0'
The Eastern Caribbean Central Bank (ECCB) is preparing for a full "commercial deployment" of DCash, the central bank digital currency (CBDC) it has been piloting since March 2021. Governor Timothy Antoine said the ECCB "intends to move forward with alacrity" on the CBDC project, "and will conclude its pilot [by end-2023] and launch DCash 2.0, which is commercial deployment".
#Fintech#CBDC#ECCB#DFC
·centralbanking.com·
ECCB preparing to launch 'DCash 2.0'