Month: December 2022

Kiffmeister’s #Fintech Daily Digest (20221217)

~ kiffmeister

Brazil central bank plans to launch a CBDC in 2024

President Roberto Campos Neto said that the Banco Central do Brasil (BCB) plans to introduce a central bank digital currency (CBDC) by 2024. The central bank will conduct proof of concept work with some financial institutions before launching a full-blown pilot. [Download the BCB presentation here] 

Basel Committee finalizes policy suggesting 2% bitcoin cap for banks

The BIS Basel Committee on Banking Supervision has finalized a proposed policy that would place a 2% limit on banks’ Tier 1 capital held in bitcoin and other “Group 2” crypto-assets. Tier 1 capital is the core capital held in a bank’s reserves that is used to fund business activities for the bank’s clients. It includes common stock, as well as disclosed reserves and certain other assets. Group 1 crypto-assets include tokenised traditional assets (Group 1a) and crypto-assets with effective stabilization mechanisms (Group 1b). Group 1 crypto-assets are subject to capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework. Group 2 crypto-assets are those that fail to meet any of the Group 1 classification conditions. [Read more at the BIS]

Why the UN is sending war-torn people In Ukraine aid in stablecoins

Through a new blockchain-based humanitarian program, the Office of the UN High Commissioner for Refugees (UNHCR) will send cryptocurrency to Ukrainians displaced by Russia’s atrocities. Stellar Development Foundation has partnered with UNHCR to deliver USD Coin (USDC) to Stellar’s Vibrant digital wallets of eligible applicants. The relief beneficiaries can then convert the USDC into the currency of their choice at at MoneyGram outlets, of which there are 4,500 in Ukraine. The program’s developers hope that this will allow refugees to get aid more easily, regardless of whether or not they have access to a bank account. [Read more at Bitcoinist]

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221216)

~ kiffmeister

The Atlantic Council published an update to their central bank digital currency (CBDC) tracker. It shows that 114 *countries* are exploring CBDC, 11 of which have fully launched. All G7 economies have now moved into the development stage, and 18 of the G20 countries are now in the advanced stage of CBDC development, of which 7 are already piloting. As mentioned before, the Atlantic Council numbers are higher than what I count in my retail and wholesale CBDC tabulations, and what CBDCTracker.org counts, largely because the Atlantic Council tracker counts countries, whereas the others count on the basis of *currency zones* (which contain multiple countries). [Check out the Atlantic Council CBDC Tracker here]

Pre-announcement of the digital euro market research

In January 2023, the European Central Bank (ECB) will invite market participants to take part in market research to obtain an overview of options for the technical design of possible digital euro components and services. The market research will consist of a set of questions to obtain technical input, as well as cost and time estimations. Participation will not be remunerated. It will not have any impact on eligibility for future procurement procedures related to a digital euro or any other procurement procedures. Nor will it imply any pre-selection for a potential subsequent tender. The ECB intends to publish the findings of the market research in the second quarter of 2023. [Read more at the ECB]

Banque de France, HSBC, IBM test interoperability of wholesale CBDC

The Banque de France in partnership with HSBC and IBM demonstrated the use of a wholesale CBDC to enable transactions across borders and technology platforms whilst facilitating the lifecycle of digital assets and currencies in wholesale markets. A combined proof of concept tested the issuance and distribution of a CBDC, bond subscription in primary and secondary markets followed by coupon redemption, and execution of cross border and cross network payments. It proved that each transaction flowed correctly through the network of systems, automatically triggering the required events, whilst retaining visibility and control over the CBDC in circulation. [Read more at HSBC]

Accountant That Vetted Binance Reserves Halts Crypto Work

Mazars Group, the accounting firm used by Binance and other big players in the crypto industry to vouch for their assets held in reserve, has halted all such work for crypto clients, because markets haven’t been reassured by the proof-of-reserves reports it had published so far. Also, the firm was concerned about intense media scrutiny. However, the suspension is limited to its provision of proof-of-reserves reports, citing “concerns regarding the way these reports are understood by the public.” [Read more at Bloomberg]

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221214)

~ kiffmeister

Tether commits to reduce secured loans to zero

Tether has pledged to stop the practice of lending out funds from the reserves that back its USDT stablecoin. The move is likely in response to a Wall Street Journal report earlier this month alleging these loans were risky, claiming that the “company may not have enough liquid assets to pay redemptions in a crisis,” even though Tether claims that the loans are over-collateralized and covered by “extremely liquid assets.” Tether said that starting from now, throughout 2023, it will reduce secured loans in its reserves to zero. [Read more at Coin Telegraph]

Lessons from the crypto winter: DeFi versus CeFi

The OECD published a paper that assesses the role of centralised finance (CeFi) and decentralised finance (DeFi), and the disproportionate impact the crypto market turmoil has had on retail market participants. It examines learnings of the recent crypto-asset market downturn, including high interconnectedness within the crypto-asset ecosystem; elaborate mechanisms of financial engineering that heavily use leverage and are built on the composability offered by DeFi (i.e., components of DeFi are pieced together to create new products); and increased market concentration. The paper also highlights the urgency for policy action and provides policy recommendations. [Read more at the OECD]

Institutional Demand for Cryptocurrencies Global Survey 2022

Coin Telegraph published a paper on the institutional demand for crypto-assets, based on a survey of more than 6,000 registered professional investors from 11 countries. [Download the report at Coin Telegraph] Jonas Gross provided some highlights on LinkedIn:

  • 62% of the professional investors surveyed currently hold digital assets (43%) or plan to buy them in the future (19%).
  • 3.3% of the respondents’ total assets ($316 billion) is invested into crypto-assets ($10.43 billion).
  • Institutional investors including public corporations and governments own 1.39 million Bitcoin equal to 7.2% of the circulating supply.
  • Professional investors are primarily holding Bitcoin (94%) and Ether (75%).

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221213)

~ kiffmeister

Bank of Canada plans 2023 CBDC consultation as it moves to development

Bank of Canada Governor Tiff Macklem reportedly said that next year (2023) the central bank plans to consult the public on a potential central bank digital currency (CBDC). It is moving from the research phase into the development phase to be prepared if the need arises to issue a CBDC. However, the Governor made clear that a decision on whether to issue a CBDC is up to parliament. Macklem outlined three drivers that could result in the launch of a retail CBDC;  a loss of control over the Bank’s monetary authority if there is a dramatic switch from cash usage into other digital currencies, or if Canadians heavily adopt a private sector stablecoin, particularly one not denominated in Canadian dollars. [Read more at Ledger Insights]

An update on rationales for CBDC issuance and systemic design considerations

Reserve Bank of Australia (RBA) central bank digital currency (CBDC) research partner, the Digital Finance Cooperative Research Centre (DFCRC) published an update on the state-of-play regarding the possible CBDC issuance in higher-income economies with good electronic payments systems. It concludes that it is unlikely that there will be actual issuance of retail CBDCs in higher-income countries anytime soon. However, it conjectures that wholesale CBDCs could potentially be implemented sooner, reflecting that, conceptually, they arguably represent only a modest technological modification to the settlement/reserve accounts that central banks currently provide, and might be less of an issue politically than retail CBDCs. [Download the paper at the DFCRC] 

CSA provides update to crypto trading platforms operating in Canada

The Canadian Securities Administrators (CSA) is strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada. Also, the CSA announced that it is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives. In that context, crypto trading platforms that are registered or that have entered into a pre-registration undertaking are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative. Crypto trading platforms are expected to have established policies and procedures to determine whether each crypto asset they provide exposure to is a security and/or derivative. [Read more at the CSA]

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221211)

~ kiffmeister

Bank of England to consult on central bank digital currency

According to the UK Chancellor of the Exchequer Jeremy Hunt, the Bank of England will publish a consultation paper by the end of December that explores the case for a digital pound central bank digital currency (CBDC) and on its potential design. The Bank will also release a working paper setting out technology considerations informing the potential build of a digital pound. The Bank has published a couple of CBDC consultation papers, the most recent in June 2021, the responses to which were published in March 2022. [Read the Jeremy Hunt speech here]

Grayscale says SEC filed first legal brief in ongoing bitcoin futures ETF lawsuit

Grayscale Investments said the U.S. Securities Exchange Commission (SEC) has filed its first legal brief in the lawsuit the crypto asset manager filed over the rejection of its application for a spot bitcoin exchange-traded fund (ETF). The SEC rejected Grayscale’s request to convert its flagship GBTC fund into an ETF in late June 2022. Grayscale is arguing that the SEC is applying law unevenly by  approving ETFs tied to bitcoin futures, but not those tied to spot market pricing like the GBTC fund. In its 73-page response brief the SEC argued that futures and spot-based bitcoin funds are fundamentally different products. The SEC previously approved ETFs that hold only futures contracts that trade on the [CFTC regulated] CME, where “the underlying assets are thus subject to robust surveillance… the bitcoin spot market, by contrast, is fragmented and unregulated.” [Read more at the Block]

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221209)

~ kiffmeister

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221207)

~ kiffmeister

Technical onboarding package for digital euro prototyping

The European Central Bank (ECB) will be running a digital euro prototyping exercise to allow market participants to develop front-end prototypes that can be integrated with the back-end infrastructure developed by the Eurosystem. The documents were provided to the five companies that were selected to carry out the experimental work (CaixaBank (peer-to-peer online payments), Worldline (peer-to-peer offline payments), EPI (point of sale payments initiated by the payer), Nexi (point of sale payments initiated by the payee), and Amazon (e-commerce payments)). The material published provides the information needed by any market participant to develop front-end prototypes compatible with the Eurosystem’s back-end infrastructure, without restricting participants’ potential to innovate. The prototyping exercise is expected to be completed in the first quarter of 2023. [Read more at the ECB]

Central Bank of Nigeria reduces over-the-counter withdrawals to N100k, N500k per week

The Central Bank of Nigeria (CBN) has imposed limits on cash withdrawals to push consumers towards alternatives, including its own eNaira central bank digital currency (CBDC). Over-the-counter cash withdrawals by individuals and corporate entities are not to exceed N100,000 and N500,000, respectively, per week. All cash withdrawals above the the limits will attract processing fees of 5% and 10%, respectively. Withdrawals from automatic teller machines and point-of-sale terminals will also be subject to a N20,000 daily withdrawal limit. [Read more at Nairametrics]

Central Bank of Kenya resumes charges for mobile money wallet and bank transactions

The Central Bank of Kenya (CBK) has resumed charges for mobile money and bank account transactions. Transaction charges were stopped in 2020 to facilitate the use of mobile money during the COVID-19 pandemic. While the CBK resumes charges, they will be significantly lower than before the pandemic. [Read more at the CBK]

 

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221206)

~ kiffmeister

I’ve updated my tabulation of wholesale central bank digital currency (CBDC) explorers to add the Banque de France and Banque Centrale du Luxembourg Project Venus. [Download the tabulation here]

The pandemic, cash and retail payment behavior: insights from the future of payments database

The Bank for International Settlements (BIS) published a paper uses a new “Future of Payments” database to document a number of salient patterns of retail payment behavior during and after the pandemic. It finds that cash in circulation, use of card-not-present transactions and downloads of payment apps all spiked when the pandemic was more severe (ie during strict lockdowns, periods of restricted mobility and periods with higher numbers of new cases). However, changes were less pronounced in countries with higher mobile penetration, and recent data suggest that some effects reversed once lockdowns were eased, and mobility rebounded. [Read more at the BIS]

Fnality, HQLAX Demonstrate Cross-Chain Repo Swap Pilot

Fnality and HQLAX demonstrated together with Banco Santander, Goldman Sachs and UBS, the first cross-chain repo swap pilot across Corda and Enterprise Ethereum, paving the way for the settlement of intraday transactions. This is part of Fnality’s mission to provide its participants with a single pool of liquidity to facilitate payments (P), cross-currency payments (PvP) and delivery versus payment (DvP) use cases. This pilot also proves interoperability across the Fnality Payment System and HQLAX’s Digital Collateral Registry, bridging Corda and Enterprise Ethereum. Fnality was founded to create a network of decentralised financial market Infrastructures (dFMIs) to deliver the means of payment-on-chain in wholesale banking markets, based on wholesale stablecoins backed by central bank reserves. The HQLAᵡ operating model leverages distributed ledger technology to enable atomic delivery verses delivery (DvD) for baskets of securities residing at multiple custodians. [Read more at Fnality]

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221205)

~ kiffmeister

I’ve updated my tabulation of retail central bank digital currency (CBDC) explorers. Aside from the Reserve Bank of India (RBI) pilot launch, most of the updates are minor updates. [Download the tabulation here]

Mongolia to enter the CBDC race

The Bank of Mongolia (BOM) has reportedly included CBDC experiments in its 2023 monetary policy agenda. It has already  established a working group and preliminary research has begun, with priority CBDC design questions including the degree of anonymity, whether to impose caps on holdings, whether it should bear interest, and can it be used to mitigate money laundering and terrorist financing? The story is plausible because back in September, 2022, the IMF reported that the BOM was one of the Asia-Pacific central banks that were exploring CBDC issuance. [Read more at Inside Mongolia] 

Pakistan to tap into digital currency potential by 2025

The State Bank of Pakistan (SBP) has reportedly launched new Electronic Money Institutions (EMIs) regulations that pave the way towards issuing CBDC by 2025. Deputy Governor Jameel Ahmad said that the SBP the aim of issuing CBDC would be to promote financial inclusion and reduce corruption, and inefficiency. [Read more at Arab News] I can’t find any official announcements of SBP CBDC plans, but in a November 23, 2022 speech, Mr. Ahmad said that the central bank was researching CBDC. The speech is worth a read because it provides a nice update of Pakistani payment system developments. [Read more at the SBP] 

Digital payments transformation: The key to financial inclusion

Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla provided an update on Philippine payment system developments, including the BSP signifying interest in joining the Bank for International Settlements Innovation Hub’s Project Nexus. Nexus seeks to connect multiple national payment systems into a cross-border platform that could enable international payments to happen as quickly as sending a text message. [Read more at the BSP]

USDC issuer Circle terminates SPAC merger with Concord

USD Coin (USDC) stablecoin issuer Circle has announced the mutual termination of its proposed merger with special purpose acquisition company (SPAC) Concord Acquisition. The deal was announced in July 2021 with a preliminary valuation of $4.5 billion and was then amended in February 2022 when Circle’s valuation ballooned to $9 billion. USDC is currently the 2nd largest stablecoin in circulation, with a market cap of $43 billion. [Read more at Coin Telegraph]

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.

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]

Kiffmeister’s #Fintech Daily Digest (20221203)

~ kiffmeister

Bank of Namibia consultation paper on central bank digital currency (CBDC)

The Bank of Namibia (BoN) published a consultation paper on central bank digital currency (CBDC). It notes that its degrees of freedom is likely to be influenced by Namibia’s Common Monetary Area (CMA) membership, with the South African Rand co-circulating alongside the Namibia Dollar as legal tender in Namibia. The options open to Rand holders are likely to also impact the options that the BoN would give Namibia Dollar holders. Hence, the CBDC direction taken by South African Reserve Bank is likely to have an impact on the BoN’s decisions in this regard. Consultations and collaborations between the CMA member countries are being held to push for and develop as far as possible, a common view and approach on CBDCs that will serve all the CMA countries optimally. [Read more at the BoN]

Curb your enthusiasm: The Fintech hype meets reality in the remittances market

The IMF published a paper that investigates claims that the remittances market is on the verge of being disrupted by Fintechs. As remittances are considered too costly and incumbent remittance service providers inefficient, opaque, and outdated. The paper concludes that, contrary to expectations, instead of disrupting incumbents Fintechs have increasingly been entangled with them. Therefore, not only there is no evidence of disruption, but it is unlikely to occur in the foreseeable future. Even so, the paper argues that Fintechs play an important role in the remittances market. Richard Turrin provides an excellent summary of the paper on LinkedIn. [Download the paper at the IMF]

Rising Tether loans add risk to stablecoin, crypto world

The Wall Street Journal published an article that claims that Tether has increasingly been lending its own USDT stablecoins to customers rather than selling them for hard currency upfront. “The shift adds to risks that the company may not have enough liquid assets to pay redemptions in a crisis.” Tether says it does indeed make short-term USDT loans to carefully vetted customers, but they are required to post “lots of extremely liquid” collateral, which could be sold for dollars if borrowers default. About 9% of USDT’s backing assets are comprised of such secured loans, according to Bloomberg’s Matt Levine. [Read more at the Wall Street Journal]

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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