India’s Central Bank to Start Wholesale CBDC Pilot November 1
The Reserve Bank of India [RBI] will launch a pilot wholesale central bank digital currency (CBDC) on November 1. The use case for the wholesale Digital Rupee is the “settlement of secondary market transactions in government securities” because it would reduce transaction costs. Nine prominent banks have been identified for participation in the pilot. A pilot of the retail version is planned for launch within a month in select locations in closed user groups comprising customers and merchants. [Read more at the RBI]
MAS Report on Potential Uses of a Purpose-Bound Digital Singapore Dollar
The Monetary Authority of Singapore (MAS) released a report detailing potential uses of a purpose-bound digital Singapore dollar (SGD) and the supporting infrastructure required, marking the successful completion of Phase 1 of Project Orchid. While MAS has assessed that the case for a retail CBDC in Singapore is not compelling for now, Project Orchid aims to build the technical capabilities and competencies necessary for MAS to issue a retail CBDC, should the need arise. Phase 1 explored the concept of purpose-bound digital SGD that enables senders to specify conditions, such as validity period and types of shops, when making transfers in digital SGD. Some of its use cases will be tested through trials with the public and private sector in 2022 and 2023. The next phase of Project Orchid will look at what the best ledger technology is and how this can be integrated with the existing infrastructure. [Read more at the MAS]
Speech by PBOC Governor YI Gang at the Hong Kong FinTech Week 2022
In a Hong Kong Fintech Week 2022 speech, Yi Gang, Governor of the People’s Bank of China (PBOC), described the “delicate balance between protecting privacy and combating illicit activities” in developing its e-CNY central bank digital currency (CBDC). “The e-CNY operates on a two-tiered system. At tier one, the PBOC supplies e-CNY to the authorized operators and processes inter-institutional transaction information only. At tier two, the authorized operators only collect the personal information necessary for their exchange and circulation services to the public. Transaction-related data is encrypted for storage. Sensitive consumer information is de-identified to non-transacting parties. Entities and individuals are prohibited from arbitrary inquiry or information usage without rigorous legal authorization. There are small-amount soft wallets and hard wallets to meet the need for small-value anonymous transactions, both online and offline.” [Read more at the PBOC]
Buy Now, Pay Later Drives Gen Z Into Debt
“Younger consumers of Buy Now Pay Later (BNPL) products, which require little or no credit history, now hold the most defaulted accounts in the programs. While 11% of all borrowers paid at least one late fee on the installment loans in 2021, 18% of those aged 18 to 29 fell behind on their payments, according to a Federal Reserve report. The programs, which gained popularity as the pandemic forced shoppers online, are now in the sights of credit bureaus. Equifax and Experian have said they’ll start including BNPL purchases on consumers’ credit reports — and that loans sent to debt collectors can also be reflected.” [Read more at Bloomberg]
New German regulations enable the issuance of securities on distributed ledger technology
The German government has published the regulation on requirements of electronic securities registers in the official journal Bundesgesetzblatt. It entered into force on October 29, 2022. This was the final missing regulation to clarify and enable the issuance of securities (only bearer bonds so far) and fund shares on distributed ledger technology (DLT) platforms in Germany. [Read more on LinkedIn H/T Kurt Zeimers]
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]
