CBDCTracker.org updated its central bank digital currency (CBDC) database. Key highlights include the Reserve Bank of India starting a digital rupee pilot, the Bank of Korea sharing its second phase results, the BIS sharing the results of their joint six-week pilot project, a Central bank of the Bahamas dive into to the unexpected low adoption of its Sand Dollar, and the Central Bank of Türkiye’s plans to start piloting a retail CBDC in 2023. [Check the data out at CBDCTracker.org here and read Atakan Kavuklu’s summary of the key changes here]
OMFIF publishes the 2022 edition of its Future of Payments report
The Official Monetary and Financial Institutions Forum (OMFIF) published the 2022 edition of its Future of Payments report. It focuses particularly on the challenges of cross-border payments for emerging market countries, delving into the validity of cryptocurrencies and stablecoins as a means of escaping domestic inflation and sending cheap remittances. It also examines the value proposition of CBDC for emerging markets, as well as looking at some of the progress made by CBDC cross-border integration projects. Notably, while central banks think that interlinking CBDCs might be a promising avenue for enhancing cross-border payments, they are not pursuing CBDC in order to provide a solution to the cross-border payments problem. The consensus is that CBDCs must justify their existence with other merits , such as improving financial inclusion. [Download the report at OMFIF]
Bank of England CBDC Sample Wallet Proof of Concept and Research
The Bank of England has put out a request for proposal (RFP) for proof of concept work on a sample central bank digital currency (CBDC) wallet, to help make a potential CBDC product more tangible for internal and external stakeholders, eg. as a prototype for future user testing. It will also support the Bank’s work towards the BIS Innovation Hub’s ‘Project Rosalind’, by testing integration of a front-end with the Rosalind API. Key deliverables will be (1) a mobile wallet app (built on both android as well as iOS); (2) wallet website; and, (3) an example merchant website, and (4) back-end server to serve mobile app and website, including calling the core ledger API and stored user data and transaction history. [Read more at the Gov.UK Digital Marketplace]
The economics of a retail central bank digital currency in Australia
Reserve Bank of Australia (RBA) Assistant Governor Brad Jones discussed where the case for a retail CBDC in Australia fits into the wider international debate over the future of money, and provided an update on the RBI’s retail CBDC pilot project. On balance, the RBA does not yet see a case for issuing an eAUD, but the central bank is “keeping an open mind” as its eAUD pilot program remains in full swing. The program has not prescribed use cases in advance, instead inviting the applicants (80 of them) to propose their own use cases (140), from which the RBA eAUD project team will select to take forward into the pilot phase in early 2023. [Read more at the RBA]
Spain’s central bank opens call for proposals for wholesale CBDC project
The Banco de España is starting a wholesale CBDC project, and asking financial institutions and tech providers to submit proposals for the initiative by January 31. The project will focus on (i) simulating wholesale CBDC funds transfers; (ii) testing the integration of a wholesale CBDC in the settlement of financial assets; and, arising from the above, (iii) analyzing possible pros and cons of a wholesale CBDC versus traditional processes, procedures and infrastructures. [Read more at the Banco de España]
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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