Erratum: In yesterday’s Digest I gave the wrong URL for the IMF paper on retail central bank digital currency (CBDC) design choices and capital flow measures (CFMs). It should be: https://www.imf.org/en/Publications/fintech-notes/Issues/2023/09/15/Capital-Flow-Management-Measures-in-the-Digital-Age-2-Design-Choices-for-Central-Bank-538509
The National Bank of Kazakhstan announced the next steps in its digital tenge (DT) project. Initially it has focused on developing a retail CBDC, but has now sprouted several sub-projects and initiatives covering wholesale applications and usage, including securities settlement, stablecoin-related initiatives, and cross-border and social payments. In this regard, two separate environments of the DT platform, industrial and experimental (R&D), are planned for 2023. The industrial environment will implement the DT’s main functionality of the DT and its subsequent operation, and the R&D environment will test several use-case scenarios. [Read more at the NBK]
The U.S. Federal Reserve (Fed) published a paper that explores whether distributed ledger technology (DLT) based wholesale CBDC is essential for new platforms that process wholesale payment transactions. Central bank money currently exists for wholesale transactions in the form of depository institution balances at the Fed. Examining the key technological characteristics and potential arrangements of tokenized distributed platforms and comparing them with existing settlement assets, transfer mechanisms, and balance sheet entries, the paper argues that DLT-based wholesale CBDC is not essential for a tokenized wholesale payment system. [Read more at the Fed]
In September 2023, the European Central Bank’s (ECB’s) New Technologies for Wholesale Settlement Contact Group (NTW-CG) met for the third time to discuss business cases in the payments, securities, and collateral management domains where DLT could make a difference compared to non-DLT settlement systems. [Read the meeting summary at the ECB; See the slide decks presented at the meeting here and here]
*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.
Kiffmeister’s central bank digital currency monthly monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at firstname.lastname@example.org.
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