Some have asked me for a summary of my central bank digital currency (CBDC) position, but I’m not inclined to be so absolute and dogmatic about the topic, since it’s all so jurisdiction specific, but the Digital Euro Association (DEA) CBDC Manifesto comes pretty close to expressing my views on retail CBDC. Here it is in a nutshell:
- A retail CBDC should have a strong value proposition (SVP) and tangible benefits for citizens.
- A CBDC should provide the highest degree of privacy. In this context, a CBDC should supply technically guaranteed privacy by design and by default, without the need to trust the central bank to preserve privacy.
- A CBDC should not be designed in a way to do harm to society, e.g., via very negative interest rates, or via so-called programmable money that restricts the use of money for specific types of expenditures, or that expires after a certain amount of time.
- The development of a CBDC should follow a collaborative approach involving all stakeholders (central banks, financial institutions, associations, end-users, companies, researchers, etc.) and have a well-defined governance system. The design and development processes should be transparent, public, and open. Ideally, a CBDC should be open-source and use open-source technology to increase transparency.
- The CBDC should exhibit technical, regulatory and usage interoperability, both locally and globally.
For more detail and/or to sign it, if you agree with its principles, click here.
Kazakhstan to build central bank digital currency on BNB Chain
The National Bank of Kazakhstan (NBK) will test the Binance blockchain network BNB Chain for potential integration into the country’s Digital Tenge retail CBDC. This comes a week after the NBK completed a week of CBDC proof-of-concept tests, imitating an actual production environment with Digital Tenge wallets provided through local financial institutions’ interfaces, with 200 real central bank staffers and 4 merchants. [Read more about the BNB Chain testing here, and last week’s tests here]
Central Bank of Nigeria Marks First Anniversary of eNaira
This week, the Central Bank of Nigeria (CBN) commemorated the first anniversary of the launch of its eNaira retail CBDC, which was formally launched on October 25, 2021. The press release is notable, because until now, according to that official announcement in 2021, it was a pilot launch, so sometime in the last year it morphed into a full launch, which many of us (me included) suspected it was from the start, despite the use of the word “pilot”. [Read this week’s press release here and last year’s here]
UK Stablecoin Rules Approved by Lawmaker Committee
U.K. lawmakers agreed on new rules for stablecoins, as the government promised to consult on further crypto-asset regulations and a digital pound in coming weeks. The Financial Services and Markets Bill builds upon existing measures to broaden regulations of stablecoins and mentions “Digital Settlement Assets” (DSA) as a new term, moving away from the use of “crypto assets.” According to the U.K. government, “crypto assets use some form of distributed ledger technology (DLT),” whereas DSA includes stablecoins, “given their potential to develop into a widespread means of payment.” [Download the Financial Services and Markets Bill parliamentary discussions here]
Biden Administration Wants To Make It Easier To Seize Crypto Without Criminal Charges
“Buried deep in a 61-page recent report by the U.S. Attorney General, the Biden Administration called for a dramatic expansion in the federal government’s ability to seize and keep cryptocurrency. If enacted, the proposed changes would bolster both criminal forfeiture, which requires a conviction to permanently confiscate property, as well as civil forfeiture, which doesn’t require a conviction or even criminal charges to be filed.” [Read more on Forbes]
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]
