Kiffmeister’s #Fintech Daily Digest (20220518)(Revised)

Nahmii selected to to build Norges Bank CBDC sandbox (Revised)

Norges Bank has chosen Norwegian startup Nahmii to work it on its experimental central bank digital currency (CBDC) sandbox project, following a competitive tender process. Many technologies including so-called layer-2 blockchain protocols, will be considered. Layer 2s allow for the leveraging of public blockchain security, e.g. Ethereum, whilst providing an increased performance and allowing for regulatory compliance. The sandbox trial is expected to include all major Norwegian banks. In another workstream, the central bank will also test out the “Project Hamilton” open source CBDC platform being developed jointly by the Boston Fed and the MIT Digital Currency Initiative.  [Read more]

Banking in the shadow of Bitcoin? The institutional adoption of cryptocurrencies

A new Bank for International Settlements (BIS) working paper uses a novel global supervisory database of commercial bank cryptocurrency exposures and a range of complementary data sources for other types of institutions to explore the roles of traditional financial intermediaries in cryptocurrency markets and what drives their engagement. It shows that major banks’ exposures remain at very modest levels. However, substantial activity is concentrated in lightly regulated crypto exchanges, with this “shadow crypto financial system” serving both retail and institutional clients, such as dedicated investment funds. [Download paper here]

Upcoming events I’m affiliated with:

Satoshi Capital Advisors is hosting a virtual workshop on wholesale CBDC, stablecoins and digital capital markets on May 24 (starting at 08:00 EST). [Register here with the passcode: CBDC]

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]