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Interoperability aspects of CBDC across ecosystems and borders
Interoperability aspects of CBDC across ecosystems and borders
The Journal of Payments Strategy & Systems published a paper by Gieseke+Devrient's Lars Hupel that describes the state of the art for interoperability between different digital ecosystems, including bridges, exchanges and wrappers. The precise design of such solutions is highly context-dependent and requires careful analysis of use cases, stakeholders, and operational concerns. With regards to central bank digital currency (CBDC) the challenges relate to the multiple connection points, and the absence of a single technological means to address all of them uniformly. The paper puts forward some suggestions around different CBDC design options and potential use cases, and discusses some case studies.
#Fintech#CBDC#Interoperability#DFC
·papers.ssrn.com·
Interoperability aspects of CBDC across ecosystems and borders
Securing privacy in offline payments for retail CBDCs
Securing privacy in offline payments for retail CBDCs
This study focuses on the development of a CBDC protocol that ensures privacy and security for offline payments. Its foundation makes use of blind signature technology, a method that keeps a message's content secret from the signer and upholds the privacy of transaction Data. The zk-SNARK (Zero-knowledge Succint Non-interactive Argument of Knowledge) protocol, which assures that transactions are both private and verifiable without necessitating interaction between the prover and verifier, provides a complement to this. By leveraging blind signature technology and the zk-SNARK protocol, we explore how to overcome privacy-related challenges in retail CBDC while ensuring resilience against quantum attacks.
#Fintech#CBDC#Privacy#BlindSignatures#DFC
·fime.com·
Securing privacy in offline payments for retail CBDCs
BoE retail digital pound project should proceed with caution, MPs warn
BoE retail digital pound project should proceed with caution, MPs warn
The U.K. Parliamentary Treasury Committee urged the Bank of England and HM Treasury to address data privacy and financial stability concerns before considering the implementation of a retail central bank digital currency (CBDC) or ‘digital pound’. To mitigate financial stability risks, the Committee's report suggested lowering the mooted £20,000 individual holding limit to £10,000. The report also urged the government to alleviate privacy concerns that organizations or the government could use a retail digital pound to monitor or control how users spend their money. These concerns could be mitigated through robust regulation and legislated protections related to the ability of any future government to access people’s data.
#Fintech#CBDC#UnitedKingdom#FinancialStability#Privacy#DFC
·committees.parliament.uk·
BoE retail digital pound project should proceed with caution, MPs warn
First digital securities transactions commercially settled with real wholesale CBDC
First digital securities transactions commercially settled with real wholesale CBDC
December 1, 2023 saw the world's first commercial settlements of digital securities transactions with real wholesale CBDC on a regulated distributed ledger technology (DLT) based financial market infrastructure (SDX). One was a CHF 105 million franc digital four-year bond issued by the Canton of Basel-Stadt, and the second was a CHF 100 million digital 11-year bond issued by the Canton of Zurich. The wholesale CBDC was issued by the Swiss National Bank as part of Helvetia III. In addition to the settlement on the SDX platform, part of the settlement took place on SIX SIS, the national central securities depository (CSD) of the Swiss financial market and an International Central Securities Depository (ICSD), which runs a node on SDX.
#Fintech#CBDC#wCBDC#Switzerland#Settlement#Tokenization#DFC
·linkedin.com·
First digital securities transactions commercially settled with real wholesale CBDC
Chinese visitors to Singapore can use digital yuan CBDC
Chinese visitors to Singapore can use digital yuan CBDC
The Monetary Authority of Singapore (MAS) and People’s Bank of China (PBOC) have agreed to allow tourists from either country to use the pilot digital yuan central bank digital currency (CBDC). Visitors to China have likely been able to use the digital yuan for some time, so the innovation here is that Chinese visitors will be able to use it in Singapore. This follows increasing integration between the digital yuan and Hong Kong, enabling visitors in both directions to use the CBDC, but given China’s control over Hong Kong, that’s rather different. https://www.mas.gov.sg/news/media-releases/2023/singapore-and-china-enhance-digital-finance-and-capital-markets-cooperation
#Fintech#CBDC#CrossBorder#China#Singapore#DFC
·ledgerinsights.com·
Chinese visitors to Singapore can use digital yuan CBDC
Piloting CBDC for Social Assistance Distribution
Piloting CBDC for Social Assistance Distribution
"The implementation of Central Bank Digital Currency (CBDC) in social assistance distribution offers significant advantages, particularly in the context of developing countries. CBDC enables more transparent and traceable transactions, which are crucial steps in reducing corruption and fund misappropriation. Traditional systems often suffer from high transaction costs and slow settlement processes, but with CBDC, both of these issues can be minimized. CBDC also eliminates intermediaries in fund distribution, which is highly relevant in developing countries where distribution chains are often long and complex, increasing the risk of fund loss. "
#Fintech#CBDC#Corruption#G2P#DFC
·moderndiplomacy.eu·
Piloting CBDC for Social Assistance Distribution
UTXO in Digital Currencies: Account-based or Token-based? Or Both?
UTXO in Digital Currencies: Account-based or Token-based? Or Both?
"The UTXO design of Bitcoin exhibits partially characteristics of a token-based system and partially characteristics of an account-based system. A discussion on the difficulty to implement the economic notion of tokens in the digital domain, along with an exposition of the design of UTXO, is given in order to discuss why UTXO-based systems should be viewed as account-based according to the classical economic notion. Besides, a detailed comparison between UTXO-based systems and account-based systems is presented. Using the data structure of the system state representation as the defining feature to distinguish digital token-based and account-based systems is therefore suggested. This extended definition of token-based systems covers both physical and digital tokens while neatly distinguishing token-based and account-based systems."
#Fintech#CryptoAssets#CBDC#Ontology#Taxonomy#DFC
·arxiv.org·
UTXO in Digital Currencies: Account-based or Token-based? Or Both?
Taiwan continues work on wholesale, retail CBDC targeting tokenization
Taiwan continues work on wholesale, retail CBDC targeting tokenization
The Central Bank of the Republic of China (Taiwan) has completed a technical feasibility study for a wholesale central bank digital currency (CBDC) and is planning retail CBDC pilots to follow up on the proof-of-concept completed in 2022. Supporting tokenization is a main motivation for the wholesale CBDC work, including providing an anchor for tokenized deposits, stablecoins and a unified ledger, plus an additional payment option in a tokenized world. The retail CBDC work will include researching an offline solution. https://www.cbc.gov.tw/tw/cp-302-164924-0423d-1.html
#Fintech#CBDC#Taiwan#wCBDC#rCBDC#Tokenization#DFC
·ledgerinsights.com·
Taiwan continues work on wholesale, retail CBDC targeting tokenization
Digital ruble proof-of-concept project will continue until end of 2024
Digital ruble proof-of-concept project will continue until end of 2024
The digital ruble launch will begin no earlier than 2025, after the completion of the proof-of-concept (POC) that started on August 15, 2023. The first group of participants consists of 600 Bank of Russia employees and 30 businesses in eleven cities. In 2024 the number of participants will expand, but will still remain limited. The POC will continue at least until the end of 2024 and, if necessary, will be extended. The Bank of Russia also noted that, although there are no transaction fees to users, merchants pay a 0.3% commission fee for accepting payments in digital rubles.
#Fintech#CBDC#Russia#DFC
·tass.com·
Digital ruble proof-of-concept project will continue until end of 2024
High-level technical requirements for a functional CBDC architecture
High-level technical requirements for a functional CBDC architecture
The Bank for International Settlements (BIS) published a report by the Consultative Council for the Americas (CCA) Consultative Group on Innovation and the Digital Economy (CGIDE) that outlines high-level technical requirements for a retail central bank digital currency (CBDC) architecture that will shape a future CGIDE proposal for a CBDC proof of concept. The technical requirements considered include interoperability, scalability, user-centric design, security and data privacy. The proposed CBDC architecture based on these technical requirements aims to serve as a general reference for central banks conducting research on CBDC or developing their own initiatives.
#Fintech#CBDC#BIS#DFC
·bis.org·
High-level technical requirements for a functional CBDC architecture
SC Ventures and G+D Complete PoC on Different Types of CBDC Systems
SC Ventures and G+D Complete PoC on Different Types of CBDC Systems
Standard Chartered and Giesecke+Devrient (G+D) completed a proof-of-concept (PoC) that tested the feasibility of conducting real-time multilateral cross-currency transfers on the Universal Digital Payments Network (UDPN), involving both distributed ledger technology (DLT) and non-DLT-based technologies. The PoC explored the indirect model, where commercial banks manage CBDC wallets and settlements directly on the UDPN, while the central bank handles wholesale settlement between commercial banks and keeps all transaction records. It also tested the direct model where central banks manage wallets and settlements within a centralized CBDC system
#Fintech#CBDC#G+D#CrossBorder#DFC
·fintechnews.sg·
SC Ventures and G+D Complete PoC on Different Types of CBDC Systems
Report of the Japan Ministry of Finance Expert Panel on CBDC
Report of the Japan Ministry of Finance Expert Panel on CBDC
Japan's Ministry of Finance (MOF) has published an English translation of the Report of the Expert Panel on CBDC. The Panel asks MOF to coordinate with relevant ministries and Bank of Japan (BOJ) on design, and to clearly explain the rationale behind CBDC to the public. The Panel also recommends that the government and BOJ maintain their commitment to supplying cash as long as there is demand from the public, and it found no strong reason for offline functions to be introduced at the outset considering risks of double spending and counterfeiting. Also, remuneration is not recommended for the time being as it could undermine the convertibility with cash at par.
#Fintech#CBDC#Japan#DFC
·mof.go.jp·
Report of the Japan Ministry of Finance Expert Panel on CBDC
JCB, IDEMIA extend offline digital currency pilot
JCB, IDEMIA extend offline digital currency pilot
Japanese card payments network JCB, identity firm IDEMIA and Malaysia’s Soft Space are exploring offline digital currency functionality. A first phase of the project demonstrated connectivity between existing card and payment infrastructures, and a potential [central bank?] digital currency, showing that current point of sale solutions don’t need adaptation. The new phase will test using mobile wallets to transfer digital currency between them without an internet connection using near field communications (NFC). Another scenario will test the offline use of stored value payment cards that transfer digital currency via mobile phones using NFC to transfer funds. https://www.idemia.com/press-release/jcb-idemia-and-soft-space-launch-jcbdc-phase-2-pilot-trial-cbdc-offline-p2p-payments-2023-12-13
#Fintech#CBDC#Offline#IDEMIA#DFC
·ledgerinsights.com·
JCB, IDEMIA extend offline digital currency pilot
Fnality launches DLT wholesale payment system in United Kingdom
Fnality launches DLT wholesale payment system in United Kingdom
London-based Fnality, launched its distributed ledger technology (DLT) based Sterling Fnality Payment System (£FnPS). This digital financial market infrastructure (FMI) and regulated payment system leverage an Omnibus Account held by £FnPS in the Bank of England real-time gross settlement (RTGS) service. The intent is to scale it up to create a seamless global liquidity management ecosystem for payment, payment versus payment (PvP), and delivery versus payment (DvP) transactions in both wholesale financial markets and emerging tokenized asset markets. This is arguably a wholesale central bank digital currency (CBDC) based platform, or at least a synthetic CBDC one, although I'm waiting for more architectural detail to make that determination.
#Fintech#Blockchain#Fnality#CBDC#wCBDC#Tokenization#Settlement#DFC
·fnality.org·
Fnality launches DLT wholesale payment system in United Kingdom
Exploring new technologies for wholesale central bank money settlement
Exploring new technologies for wholesale central bank money settlement
The European Central Bank (ECB) is calling for expressions of interest from financial market stakeholders to take part in trials with central bank money settlement and in experiments with mock settlement in a test environment. The trials and experiments will be conducted with three Eurosystem solutions enabling wholesale financial transactions recorded on distributed ledger technology (DLT) platforms to be settled in central bank money in the T2 real-time gross settlement system (RTGS) operated by the Eurosystem.
#Fintech#CBDC#wCBDC#Blockchain#Eurozone#ECB#DFC
·ecb.europa.eu·
Exploring new technologies for wholesale central bank money settlement
The macroeconomic implications of central bank digital currencies
The macroeconomic implications of central bank digital currencies
The Centre for Economic Policy Research (CEPR) and the European Central Bank (ECB) hosted a joint conference that brought together academics and policy makers to discuss theoretical and practical aspects of central bank digital currencies (CBDCs). Relying on a combination of research presentations, keynote speeches and panel discussions, it was aimed at advancing the understanding of the potential benefits and costs of CBDCs from a macroeconomic and policy perspective. Lots of interesting downloadable papers!
#Fintech#CBDC#Macrofinancial#FinancialStability#DFC
·ecb.europa.eu·
The macroeconomic implications of central bank digital currencies
Results of the National Bank of Kazakhstan's first digital tenge pilot phase
Results of the National Bank of Kazakhstan's first digital tenge pilot phase
The National Bank of Kazakhstan (NBK) published an update on its digital tenge project. It includes the high-level architecture of the platform, scenarios where digital tenge is making an impact, and the preliminary results of the pilot launched in November 2023. The white paper also lays out the project's plans for 2024 and 2025, including expanding the platform's functionality and enhance the coverage of use cases. All of this is presented in great detail, making the NBK, in my view, an icon of central bank transparency. https://cointelegraph.com/news/kazakhstan-central-bank-reviews-digital-tenge-pilot-successes-next-steps
#Fintech#CBDC#Kazakhstan#DFC
·nationalbank.kz·
Results of the National Bank of Kazakhstan's first digital tenge pilot phase
Bank Of China Completes First Cross-Border Digital Yuan Commodities Trade
Bank Of China Completes First Cross-Border Digital Yuan Commodities Trade
"The Bank of China has opened the path for companies to settle their cross-border payments using the Chinese central bank digital currency (CBDC), the digital yuan. The Hong Kong branch of the bank, the second-largest financial institution in the region, has achieved a milestone in serving as an intermediary for the settlement of a $3.4 million bulk commodity payment between Baosteel group, a steel and iron powerhouse, and Bao-trans Enterprises, a manufacturer of premium steel products." https://www.thestandard.com.hk/section-news/section/2/258740/BOCHK-makes-first-eCNY-cross-border-deal Later in the month, the Bank of China used digital yuan to complete a $14 million precious metal settlement with the Shanghai Gold Exchange. https://news.cnstock.com/news,bwkx-202312-5166462.htm
#Fintech#CBDC#China#CrossBorder#DFC
·news.bitcoin.com·
Bank Of China Completes First Cross-Border Digital Yuan Commodities Trade
CBDC Suite – Adhara
CBDC Suite – Adhara
Adhara’s CBDC Suite brings together the key components needed for a Central Bank to model and manage being a direct issuer of their currency on their own distributed domestic network provides end-to-end tools for managing direct issuance, transfers, limits, value dates, bank onboarding and modelling RTGS connections. Benefits to participants include reduced settlement risk, new liquidity options, increased traceability and transparency and simplified reporting and compliance. Ability for Commercial Banks to connect from day one (via DC Commander), helping Treasuries manage intraday funding and the orchestration of settlement flows for new domestic digital platforms.
#Fintech#CBDC#Fnality#DFC
·adhara.io·
CBDC Suite – Adhara
Australia's new central bank chief backs wholesale CBDC over retail
Australia's new central bank chief backs wholesale CBDC over retail
Reserve Bank of Australia (RBA) Governor, Michele Bullock, expressed support for a wholesale central bank digital currency (CBDC) over a retail version, pointing to the successes gleaned from recent case studies. She cited the use cases in cattle auctions but is “still not convinced on the retail CBDC side". Instead, the RBA will continue to investigate using CBDCs to settle tokenized asset transactions "for a much more efficient and safer settlement process". https://www.rba.gov.au/speeches/2023/sp-gov-2023-12-12-q-and-a-transcript.html
#Fintech#CBDC#WCBDC#Australia#Tokenization#Settlement#DFC
·coingeek.com·
Australia's new central bank chief backs wholesale CBDC over retail
Central Bank of Armenia sees no need to hurry in introduction of digital dram
Central Bank of Armenia sees no need to hurry in introduction of digital dram
The Central Bank of Armenia reportedly has been holding internal discussions on the introduction of digital dram that are expected to intensify early next year. The central bank's Chairman said that "we are not in a hurry to introduce digital drams, but certain resources will be invested in opportunities for issuing our own electronic money".
#Fintech#CBDC#Armenia#DFC
·armbanks.am·
Central Bank of Armenia sees no need to hurry in introduction of digital dram
LG CNS to develop CBDC system for Korean tokenized deposits
LG CNS to develop CBDC system for Korean tokenized deposits
The Bank of Korea (BOK) announced the award of a contract to LG CNS to develop and test wholesale CBDC systems. One of the tests involves banks issuing tokenized deposits and using a wholesale CBDC for interbank settlement. The other will use wholesale CBDC for securities settlement using distributed ledger technology (DLT) platforms. https://www.bok.or.kr/portal/bbs/P0000559/view.do?nttId=10081177&menuNo=200690
#Fintech#CBDC#WCBDC#Korea#DFC
·ledgerinsights.com·
LG CNS to develop CBDC system for Korean tokenized deposits
Norges Bank Aims to Be Set for Digital Currency Verdict in 2025
Norges Bank Aims to Be Set for Digital Currency Verdict in 2025
Norges Bank plans to prepare a recommendation by end-2025 on whether a retail central bank digital currency (CBDC) should be introduced in Norway and in what form. The just-completed fourth phase consisted of experimental testing of technical solutions, analysis of scenarios for the payment system, evaluation of consequences for liquidity management and monetary policy and a review of the legislative changes necessary to permit the introduction of a CBDC. The fifth and final phase will analyse the possibilities afforded by, and the impact of, introducing a retail CBDC and test candidate solutions, and also research new forms of settlement in central bank money that can facilitate innovation in the financial system (e.g., wholesale CBDC). Norges Bank also published a research paper CBDC-related paper on potential effects of a CBDC on liquidity and monetary policy. https://www.norges-bank.no/en/news-events/news-publications/Reports/Norges-Bank-Papers/2023/memo-22023-dsp-rapport-fase-4/
#Fintech#CBDC#WCBDC#Norway#DFC
·norges-bank.no·
Norges Bank Aims to Be Set for Digital Currency Verdict in 2025
EMTECH completes Ghana CBDC hackathon on public DLT
EMTECH completes Ghana CBDC hackathon on public DLT
The Bank of Ghana concluded its first central bank digital currency (CBDC) hackathon. The event involved ten teams developing eCedi solutions deployed on Hedera’s public DLT, using EMTECH’s Beyond Cash digital currency solution. KPMG participated as a service provider on a pro bono basis, establishing the competition criteria and supervising the event. The hackathon participants included developers, banks and fintechs. https://www.bog.gov.gh/speeches/governors-opening-remarks-at-ecedi-hackathon-awards-dinner/
#Fintech#CBDC#Ghana#Emtech#Hackathon#DFC
·ledgerinsights.com·
EMTECH completes Ghana CBDC hackathon on public DLT
IMF and World Bank Approach to Cross-Border Payments Technical Assistance
IMF and World Bank Approach to Cross-Border Payments Technical Assistance
The IMF and World Bank published a paper that outlines their multi-year strategy to provide technical assistance (TA) to help member countries meet the G20 Roadmap for Enhancing Cross-border Payments. A stocktaking exercise shows that their TA supports the Roadmap’s three interconnected priority themes: (i) payment system interoperability and extension, (ii) legal, regulatory, and supervisory frameworks, and (iii) cross-border data exchange and message standards. Going forward, the TA will focus on access to payment systems, extending and aligning operating hours, interlinking of payment systems (especially fast payment systems), promoting the access to and use of digital ID and data exchange across borders, ISO 20022 message standards harmonization, and the application of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) rules.
#Fintech#CBDC#IMF#WorldBank#CrossBorder#Payments#DFC
·imf.org·
IMF and World Bank Approach to Cross-Border Payments Technical Assistance
Micropayment Systems for Migrant Workers
Micropayment Systems for Migrant Workers
"This paper by Craig Wright proposes implementing a micropayment system to facilitate remittances for migrant workers moving from Central and South America to the United States. Traditional remittance methods often involve high transaction fees that significantly decrease the value of money sent to families in workers’ home countries. The proposed system addresses this inefficiency and fosters a more equitable economic landscape."
#Fintech#CBDC#CrossBorder#Payments#Remittances#Satoshi#DFC
·craigwright.net·
Micropayment Systems for Migrant Workers
ECCB DCash 2.0 CBDC request for vendor information
ECCB DCash 2.0 CBDC request for vendor information
The Eastern Caribbean Central Bank (ECCB) issued a Request for Vendor Information (RFVI) seeking input from vendors to shape the discovery process for the commercial deployment of its DCash retail central bank digital currency (CBDC) technology solution. In particular, the ECCB is seeking input from vendors that have "developed a retail CBDC solution or core components of such a solution which is deployment-ready". Upon evaluation of responses vendors may be invited to further participate in a subsequent request for proposals (RFP) exercise. The ECCB, working with technology partner Bitt, has been piloting the DCash across its eight-member island countries since 2021, so this announcement comes as a surprise.
#Fintech#CBDC#Bitt#ECCB#DFC
·eccb-centralbank.org·
ECCB DCash 2.0 CBDC request for vendor information
BoB considers introducing a ‘digital pula’
BoB considers introducing a ‘digital pula’
[June 17, 2022] The Bank of Botswana (BoB) is studying the possibility of introducing a digital currency and says a unit is in place assessing the impact on the bank’s mandate and functions, as well as prospective responses. The assessment is looking at the impact of a digital currency on price and financial stability, monetary policy transmission, regulation and oversight of the financial and payments system as well as promotion of financial sector development.
#Fintech#CBDC#Botswana#DFC
·mmegi.bw·
BoB considers introducing a ‘digital pula’
Costa Rica's central bank sees no immediate need for CBDC
Costa Rica's central bank sees no immediate need for CBDC
[August 6, 2021] Banco Central de Costa Rica (BCCR) has been studying the topic of central bank digital currency (CBDC) in depth and, for the moment, does not consider it necessary to launch one. The reason is that the main objectives of doing so (financial inclusion and provision of secure, agile and low-cost digital payments) have been achieved in the country, thanks to the successful Sistema Nacional de Pagos Electrónicos (SINPE). This platforms has reduced transaction costs and increased efficiency, safety, and reliability. In other words, through SINPE, Costa Rica already has a digital colon. In any case, if there comes a time when it is necessary to launch a CBDC, the BCCR will have the technological infrastructure base on which it was developed, through the Central Direct online services platform.
#Fintech#CBDC#CostaRica#DFC
·bccr.fi.cr·
Costa Rica's central bank sees no immediate need for CBDC
Bank of England and HM Treasury form CBDC Academic Advisory Group
Bank of England and HM Treasury form CBDC Academic Advisory Group
The Bank of England (BOE) and HM Treasury (HMT) formed a central bank digital currency (CBDC) Academic Advisory Group (AAG) of experts from a range of disciplines related to the BOE/HMT work on the digital pound. The AAG will serve as a platform for knowledge exchange and research collaboration during the design phase, and will include academics from a range of disciplines including monetary policy, finance, competition economics, industrial organization, behavioral science, law, innovation theory, marketing, and business.
#Fintech#CBDC#UnitedKingdom#DFC
·bankofengland.co.uk·
Bank of England and HM Treasury form CBDC Academic Advisory Group