My posts this week may get a bit spotty, as I’ll be in Washington DC for the Georgetown University DC Fintech Week, the CBDC Think Tank Summit, and various activities around the International Monetary Fund / World Bank Annual Meetings.

CBDC Manifesto: Design recommendations for a retail CBDC

The Digital Euro Association (DEA) and the CBDC Think Tank (CBDC TT) announced the CBDC Manifesto at the CBDC Summit 2022 in Washington DC. The document was developed by the DEA, the CBDC TT, and world-leading CBDC experts. The Manifesto proposes five major central bank digital currency (CBDC) design recommendations which can be used as a guide by central banks to devise an optimal CBDC development plan. [Read more at CBDCManifesto.com]

BIS Innovation Hub and Bank Indonesia announce winners of G20 TechSprint

The Bank for International Settlements (BIS) and Bank Indonesia today announced the winners of the G20 TechSprint 2022 challenge. This year’s competition was launched in April to catalyse new technologies that would better enable the development and future use of CBDC. From 21 shortlisted teams the three winners were: [Read more at the BIS]

• Team Dragonfly Fintech Pte Ltd from Singapore won the “Effective and robust means to issue, distribute and transfer CBDCs” category for their solution End-to-End CBDC Solution, which is a proprietary blockchain ledger with unique in-built features and includes a mobile wallet and digital identity platform.
• Team Bitt-IDEMIA from the US won the “Enabling Financial Inclusion” category for their solution Secure Offline CBDC Payment Solution, which is a platform that allows monetary authorities to launch interoperable CBDCs while also leveraging on a layer-2 solution to enable offline payments.
• Team Partior from Singapore won the “Improving interoperability” category for their solution Project Naucratis: Enabling Connectivity & Interoperability for mCBDC, which is a blockchain-based multi-CBDC network that supports both account-based and token based CBDC models.

European Parliament Ratifies MiCA Framework in Landslide Vote

“The long-awaited Markets in Crypto Assets (MiCA) regulation has just scaled through the European Parliament as MPs voted massively in favor of the bill. the bill received a 28:1 vote to scale, completing the tripartite deal needed to push the bill into its next implementation phase.” [Read more at Blockchain News]

Banque de France participates in a new wholesale central bank digital currency experiment with SWIFT

The Banque de France has joined a consortium of 14 banks and market infrastructures launched by SWIFT, to conduct a new central bank digital currency (CBDC) experiment for interbank settlement purposes. The objective of the experiment is to issue cross-border payments in a test environment to study the interoperability between different distributed ledger technologies (DLTs) and existing payment systems. These payments will be made in simulated CBDC issued by the participating central banks. [Read more at the Banque de France]

SEC Rejects WisdomTree Bitcoin Spot ETF Application—Again

The U.S. Securities and Exchange Commission (SEC) rejected Cboe BZX Exchange’s latest application for a spot Bitcoin exchange traded fund (ETF) launch, on grounds similar to those cited in multiple applications before it. The decision follows two previous delays on the company’s application decision, and the denial of a former application from WisdomTree in December on the exact same grounds. [Read more at Decrypt]

Grasping De(centralized) Fi(nance) Through the Lens of Economic Theory

The Bank of Canada published a paper that uses a simple stylized model of collateralized lending to analyze the value proposition and limitations of decentralized finance (DeFi). DeFi uses a decentralized ledger to run smart contracts that automatically enforce the terms of a lending contract and safeguard the collateral. DeFi can lower the costs associated with intermediated lending and improve financial inclusion. Limitations are the volatility of the crypto collateral and stablecoins used for settlement, the possible incompleteness of smart contracts and the lack of a reliable oracle. A proper infrastructure reducing such limitations could improve the value of DeFi. [Read more at the Bank of Canada]

US Treasury Fines Bittrex Exchange $29m for Multi-Year Sanctions Violation

U.S.-based cryptocurrency trading platform, Bittrex Has been fined $29 million by the U.S. Treasury Department through the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN). According to the OFAC announcement, the trading platform “failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions between March 2014 and December 2017.” [Read more at Blockchain News]

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.