Kiffmeister’s #Fintech Daily Digest (20221104)

CBDCTracker.org has published its monthly global central bank digital currency (CBDC) developments update, and Atakan Kavuklu provides capsule summaries of the notable highlights here.

New York Fed on advances in digital currency experimentation

The New York Fed provided an update on its Project Cedar,  the inaugural project of the New York Innovation Center (NYIC). It built and tested a working prototype distributed ledger technology (DLT) solution for wholesale FX settlement that results in instant and atomic settlement in which a wholesale CBDC is the settlement asset. “Results from the experiment indicated that settlement could occur in fewer than 10 seconds on average and that horizontal scaling was possible. This indicates that a modular ecosystem of ledgers has the potential for continued scalability, and that DLT could enable settlement times well below the current industry standard of two days, with the added guarantee of atomic settlement.” [Read more at the New York Fed]

Call for interest: technical talks on programmable digital euro payments

The European Central Bank (ECB) is inviting experts from the payment industry to take part in technical talks, in order to explore options for the provision of programmable payment services in digital euro. The talks will center around the questions regarding retail payments use cases, standards, and back-end IT architecture core payment settlement capabilities. The talks are expected to take place in December 2022. They will be held at expert level as closed sessions with members of the ECB’s digital euro project team, and observers from euro area national central banks. [Read more at the ECB]

UBS Issues First Bond on Both Digital, Traditional Exchanges

UBS AG issued the first ever digital bond by a banking institution globally that will be listed, traded and settled on a regulated digital exchange (an SFR375 million three-year senior unsecured bond). The digital bond has the same instrument structure, legal status and rating as a traditional UBS AG senior unsecured note but will be dual listed at SIX Swiss Exchange where they will settle on the SIX SIS central securities depository (CSD) traditional rails, and SDX Trading where they will settle via the SIX Digital Exchange (SDX) distributed ledger-based central securities depository (CSD) network through atomic settlement technology. Settlement via SDX CSD is instant and automatic and does not require a central clearing counterparty. Investors will have the ability to automatically settle and clear the UBS digital bond on either SDX CSD directly or on SIX SIS via the operational link. [Read more at UBS]

HSBC, Visa, G+D winners of Hong Kong’s Global Fast Track CBDC competition

The Hong Kong Monetary Authority (HKMA) reportedly announced the six winners of its Global Fast Track CBDC competition, who will now work with the HKMA on central bank digital currency (CBDC) research projects: ARTA TechFin Corporation Limited (technology), Bank of China (Hong Kong) (use case), Giesecke+Devrient (G+D Filia) (technology), Hang Seng Bank (use case), HSBC (ecosystem) and Visa (ecosystem). [Read more at Ledger Insights]:

EU Delays Vote on MiCA Crypto Legislation Until February

“European Union (EU) lawmakers [reportedly] won’t vote on the Markets in Crypto Assets regulation (MiCA) until February, likely meaning further delays in the landmark licensing regime for crypto companies within the bloc. A previous tentative plan for the parliament to vote at its December plenary session has been abandoned given the length and complexity of the text. EU procedures require legal acts such as MiCA, which was negotiated in English, to be available in all the bloc’s 24 official languages.” [Read more at CoinDesk]

Swiss Financial Watchdog Releases Revised AML Ordinance, Clarifies Crypto Requirements

The Swiss Financial Market Supervisory Authority (FINMA) has partially revised its Anti-Money Laundering Ordinance, clarifying the application of a maximum limit for unidentified crypto exchange transactions. The regulations, which will come into force on January 1, 2023, now reflect the latest amendments to Switzerland’s Anti-Money Laundering Act and the Federal Council’s Anti-Money Laundering Ordinance. [Read more at FINMA]

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.

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