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Simulating the Adoption of a Retail CBDC
Simulating the Adoption of a Retail CBDC
Jahrbücher für Nationalökonomie und Statistik (JNS) published a paper by two Financial Network Analytics (FNA) staff that uses agent-based modelling to simulate retail central bank digital currency (CBDC) adoption, calibrated to Spain’s retail payment ecosystem. Results suggest that the distribution of government subsidies via CBDC creates incentives to reduce the use of cash. Also, reverse waterfall functionality (automatic transfer of funds from bank deposits to CBDC wallets) and a positive remuneration spread to bank deposits are effective in fostering adoption. However, the model did not model banks as adaptive decision makers that would include their ability to counter CBDC remuneration.
#Fintech#CBDC#DFC
·degruyter.com·
Simulating the Adoption of a Retail CBDC
Minimum Viable Offline CBDC using Groth-Sahai proofs
Minimum Viable Offline CBDC using Groth-Sahai proofs
This paper proposes a design and a first implementation for an offline-first digital euro. The protocol offers complete privacy during transactions using zero-knowledge proofs. Furthermore, transactions can be executed offline without third parties and retroactive double-spending detection is facilitated. To protect the users’ privacy, but also guard against money laundering, bank and trusted third parties for law enforcement must collaborate to decrypt transactions, revealing the digital pseudonym used in the transaction. Importantly, the transaction can be decrypted without decrypting prior transactions attached to the digital euro. The protocol has a working initial implementation showcasing its usability and demonstrating functionality.
#Fintech#CBDC#Offline#DFC
·arxiv.org·
Minimum Viable Offline CBDC using Groth-Sahai proofs
BSP wholesale CBDC proof-of-concept nearing completion
BSP wholesale CBDC proof-of-concept nearing completion
The Bangko Sentral ng Pilipinas (BSP) is reportedly progressing towards issuing its own wholesale central bank digital currency (CBDC), codenamed Project Agila, sooner than anticipated, with the proof-of-concept (POC) phase expected to conclude by the end of 2024. Deputy Governor Mamerto E. Tangonan confirmed that the CBDC could likely be launched in the earlier part of BSP Governor Eli M. Remolona Jr.'s six-year term, which runs from 2023 until 2029. Three uses cases mentioned; interbank settlement on weekends and holidays, securities settlement and cross border payments. With regards to the latter, the BSP is an observer of Project mBridge involving the BIS Innovation Hub and the central banks of China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia. HyperLedger Fabric's distributed ledger technology (DLT) is being used for BSP's sandbox experiments.
#Fintech#CBDC#wCBDC#Philippines#HyperLedger#DLT#DFC
·fintechnews.ph·
BSP wholesale CBDC proof-of-concept nearing completion
Thailand distributing stimulus payments in digital currency
Thailand distributing stimulus payments in digital currency
Thailand’s finance ministry is going ahead with a plan to pay a social benefit in digital currency. Up to 45 million Thais will be eligible to receive 10,000 baht (about $280) in digital money on August 1, 2024, about two-thirds of the average monthly income in the country. There are numerous restrictions on usage, including know your customer (KYC) verification that will exclude prisoners and people and businesses with records of economic abuse. There are also restrictions on the items that can be purchased with the digital currency.
#Fintech#CBDC#GovCoins#Thailand#DFC
·cointelegraph.com·
Thailand distributing stimulus payments in digital currency
CBDC and Transmission of Monetary Policy
CBDC and Transmission of Monetary Policy
The Bank of Canada (BOC) published a paper on how a central bank digital currency (CBDC) changes monetary policy transmission in a general equilibrium model with nominal rigidities, liquidity frictions, and a banking sector where commercial banks face a leverage constraint. It finds that the effects of a shock to the Taylor rule that governs interest on central bank reserves, is magnified with the introduction of a fixed-interest-rate CBDC. More generally, whether CBDC magnifies or abates the response of the economy depends on the type of shock (e.g., interest rate or quantity of reserves shock). The paper also finds that the response of the economy depends on the monetary policy framework—whether the central bank implements monetary policy through reserves or through CBDC—as well as central bank balance sheet rules that govern the quantity of CBDC and reserves.
#Fintech#CBDC#Canada#DFC
·bankofcanada.ca·
CBDC and Transmission of Monetary Policy
Global Developments in Central Bank Digital Currency ($$$$)
Global Developments in Central Bank Digital Currency ($$$$)
IFI Global's "Global Developments in Central Bank Digital Currency" offers a holistic view of CBDC initiatives, unraveling the intricate web of motivations, challenges, and implications. From Africa to Asia, from Europe to Oceania, the book delves into country-specific developments, shedding light on the role of politics, culture, and informal institutions in shaping CBDC adoption.
#Fintech#CBDC#DFC
·igi-global.com·
Global Developments in Central Bank Digital Currency ($$$$)
ERPB technical session on digital euro
ERPB technical session on digital euro
The European Central Bank (ECB) published two documents discussed at the June 28, 2024 meeting of the European Retail Payments Board (ERPB) technical session of the digital euro. One was a summary of inputs on the methodology for calibrating holding limits, and the other was on the strategies for conducting euro user research and engaging with market participants (payment service providers and merchants). https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse/shared/pdf/ecb.deprep240723_item4_feedback_holding_limit_factors.en.pdf https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse/shared/pdf/ecb.deprep240723_item2_user_research_experimentation.en.pdf
#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
ERPB technical session on digital euro
ECB Receives over 50 PSP Applications to Participate in Digital Euro Pilot (ECB)
ECB Receives over 50 PSP Applications to Participate in Digital Euro Pilot (ECB)
The European Central Bank(ECB) announced that it has received over 50 applications to participate in the twelve-month digital euro pilot scheduled to begin in the second half of 2027. Applications came from both acquiring and distributing payment service providers (PSPs) and small and large banks from across the euro area. It will use a non‑legal‑tender “beta” digital euro in a controlled environment to test technical, operational and user experience (UX) aspects of P2P (online/offline) and P2B payments at physical and online points of sale. PSPs will onboard users and merchants without remuneration. The ECB will now review the applications and announce the outcome in July. [ECB via LinkedIn] See also: https://www.ecb.europa.eu/euro/digital_euro/pilot/html/index.en.html
#CBDC#ECB#Eurozone#Fintech#DFC
·linkedin.com·
ECB Receives over 50 PSP Applications to Participate in Digital Euro Pilot (ECB)