Central Bank of Turkey plans to pilot test a CBDC in 2023
According to Turkey’s Presidential Annual Program for 2023, the Central Bank of Turkey will start piloting a central bank digital currency (CBDC) in 2023. Many news services are reporting that a Digital Lira will be launched in 2023, but according to Google Translate the key passage in the Annual Program Budget Rationale (“kullanım testlerine başlanacaktır”) translates to “usage tests will begin” which sounds like a pilot to me. But it does sound like several proofs of concept (PoC) have been done (the Annual Program calls them “pilots”, but if they didn’t include “usage tests” then they’re PoCs by my definition. Also, wholesale CBDCs will be the subject of research, development and testing activities that will be carried out with banks. [Read more at the Turkish Presidency of Strategy and Budget]
Project mBridge: Connecting economies through CBDC
The BIS Innovation Hub’s (BISIH’s) Hong Kong Center and its partner central banks published the results of its pilot testing of its mBridge multi-CBDC (mCBDC) multi-currency cross-border transaction platform. Over six weeks in 2022, the platform was put to the test through a pilot involving real-value transactions among 20 commercial banks from four different jurisdictions. Over $12 million was issued on the platform, facilitating over 160 payment and FX payment-versus-payment (PVP) transactions totaling more than $22 million in value. [Read more at the BIS and for a nice summary, including a discussion of some of the challenges faced, see this CoinDesk article]
Singapore lays down the law for crypto trading and stablecoins
The Monetary Authority of Singapore (MAS) published two consultation papers proposing strict regulatory measures to reduce the risk to consumers from cryptocurrency trading while supporting the development of stablecoins as a credible medium of exchange. One of the papers is focused on reducing the risk to consumers from speculative trading in cryptocurrencies, requiring that digital payment token (DPT) service providers ensure proper business conduct and adequate risk disclosure. The other paper is focused on ensuring that stablecoins have a high degree of value stability, including imposing capital requirements on nonbank issuers. [Read more at the MAS]
Alipay enables transfers to WeChat users via QR codes
AntGroup’s Alipay added a feature that permits its users to transfer sums to WeChat users, bridging the two Chinese digital payments providers. To perform a transfer, Alipay users first need to select the payment amount they would like to transfer. After that, the app generates a QR code that can be shared with counterparties via WeChat, QQ, Sina Weibo, or DingDing. The move follows the launch of anti-trust measures by the Chinese central government targeting the two payment platforms, as well as practices such as exclusive agreements with vendors and the use of big data to engage in discriminatory pricing. [Read more at the Paypers]
The macroeconomic impact of cryptocurrency and stablecoin economics
The World Economic Forum’s (WEF’s) Digital Currency Governance Consortium has published a summary of the earlier-published comprehensive analysis of the macroeconomic impact of cryptocurrency and stablecoins. The project had two objectives: (i) to project economic outcomes of crypto and stablecoins given various possible high-level regulatory paths and (ii) to arm policymakers and business leaders with the projections to inform decision-making. The rising concern around the potential spillover effects of crypto and stablecoins on the financial system was another impetus. [Read more at the WEF]
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.
The CBDC Think Tank is a New York-based technology- and vendor-agnostic digital currency knowledge-sharing hub for staff of central banks, international financial institutions (IFIs) and non-government organizations (NGOs). It runs webinars, workshops, and masterclasses to disseminate knowledge and facilitate communication. It also engages in advisory work, focusing on delivering impact that best aligns with the needs of its clients and the forward progress of human civilization. The CBDC Think Tank welcomes requests from central bank officials for CBDC advisory services. [click here for more information].
Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]
WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]
