Central Bank Digital Currency (CBDC): identifying appropriate policy goals and design for Nepal
Nepal Rastra Bank (NRB) published a concept report on central bank digital currency (CBDC) for public consultation. The report recommends that the NRB move forward in with CBDC issuance plans, with design focusing on four policy goals; improving access to payments, enhancing payment system resilience, reducing currency management costs, and promoting financial inclusion. It suggests that a retail, intermediated, semi-centralized infrastructure-based CBDC that is interoperable with other domestic payment systems, is most suitable for Nepal. Also, it should be unremunerated, available 24/7 hours, quantity restrictive, and programmable for broader usage options. The next steps is to set up a cross-functional dedicated team, to carry out the exhaustive and rigorous next steps. [Read more at the NRB]
Archetypes for a retail central bank digital currency
The Bank of Canada published a paper that proposes a common framework to analyze and compare the different possible CBDC designs, independent of vendor, platform and technology. It is based on five archetypes—common patterns that recur in system designs—and discuss their trade-offs from the perspective of privacy, compliance, visibility, scalability, resilience, extensibility, online and offline payments. The five archetypes are centralized, leaderless, macro-partitioned (money service businesses (MSBs) own and operate partitions), micro-partitioned (users maintain the different partitions) and direct (users directly provide their own oversight). The analysis suggests that a design based on a single archetype is unlikely to achieve all policy goals. [Read more at the Bank of Canada]
Europe finalizes landmark crypto rules
The Council of the European Union Permanent Representatives Committee approved the legal text for its Markets in Crypto Asset Regulation (MiCA), marking a significant step in the journey towards a fully authorized and regulated crypto-asset market in Europe. The European Parliament’s Committee on Economic and Monetary Affairs will now vote to pass the final text on October 10, before a date is decided for the implementation of the regulation. [Read more at the Council of the European Union]
IMF releases the 2022 financial access survey results
The International Monetary Fund released the results of the 13th annual Financial Access Survey which presents the 2021 data and highlights the continued expansion in the use of digital financial services—considerably higher than pre-pandemic levels. The usage of digital financial services has also increased, with the value of mobile money transactions growing from about 40% of GDP to 70% in low-income countries, and the value of mobile and internet banking transactions increasing from 225% of GDP to 324% in middle-income countries between 2019 to 2021. [Read more at the IMF]
Tickets available for CBDC Think Tank masterclass
The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components. Tickets are $99. [Register here]
Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]
Kiffmeister’s Global 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 for any of you out there who work for a central bank, ministry of finance or international financial institution 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 chronicles@kiffmeister.com.
