In partnership with Accenture, the Riksbank is conducting a pilot project to develop a proposal for a technical solution for an e-krona that can work as a complement to cash. The main aim of the pilot is for the Riksbank to increase its knowledge of a central bank-issued digital krona. The project is now being extended to the end of February 2022. The aim for the coming year is to continue developing the technical solution, with the focus on performance, scalability, testing of off-line functions and bringing external participants into the test environment. There is currently no decision on issuing an e-krona, how an e-krona might be designed or what technology might be used.
It has come to light that Deutsche Bank is developing a fully integrated custody platform for institutional clients and their digital assets providing seamless connectivity to the broader cryptocurrency ecosystem. It will introduce a secure connected bridge between digital assets and a customer’s traditional banking services, manage the array of digital assets and fiat holdings in one easy-to-use platform, and create the gateway for value added services either supplied by the custodian or via third-party providers, and ensure the safety and accessibility of assets for clients by offering an institutional-grade hot/cold storage solution with insurance-grade protection. A proof of concept has been completed and the bank and is aiming for a minimum viable product in 2021, while exploring global client interest for a pilot initiative.
Cointerpoint Global, a subsidiary of Morgan Stanley Investment Management with $150 billion in assets under management, is reportedly exploring whether the cryptocurrency would be a suitable option for its investors.
This Boston Fed paper discusses the key developments, drivers, and considerations in the U.S. market that support progress towards open banking and application programming interfaces (APIs) and how APIs offer a wide variety of new services. It finds that opening a bank’s platform to third-party applications can create synergies with innovative technology businesses to build a new generation of digital financial activities that enhance the consumer experience. Open banking can create a paradigm shift in how financial institutions (FIs) treat the issue of ownership, storage, and use of data. However, several risks and challenges need to be addressed. The industry is waiting for guidance from the Consumer Financial Protection Bureau (CFPB). Interoperability is lacking and many FIs struggle to replace legacy infrastructures with fully digital platforms, which can require considerable investment. FIs may be struggling to prioritize open banking and API permissioned data with competing projects.
* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.