Month: January 2023

Kiffmeister’s #Fintech Daily Digest (20230131)

~ kiffmeister

DC³ Conference – From Cryptocurrencies to CBDCs

For those of you who missed the offline central bank digital currency (CBDC) panels that I moderated at last week’s International Telecommunication Union (ITU) DC³ conference, they have been recorded and posted on the conference agenda, along with all the other sessions. [Watch them at the ITU]

Iran’s CBDC: CryptoRial reportedly ready for launch

The Central Bank of Iran will reportedly make its CryptoRial CBDC available to the public on February 7, 2023, following its pilot phase, of which little is known. Bank Melli, Bank Mellat and Bank Tejarat were involved in the experimental stages of the project, and Bank Melli and Bank Mellat conducted the pilot. If anyone out there knows more about the pilot, or upcoming launch, please let me know! [Read more at the Financial Tribune]

Digital payments make gains but cash remains

The Committee on Payments and Market Infrastructures (CPMI) published a brief that documents the acceleration of consumers’ and businesses’ migration away from cash and checks towards electronic payments, and a growing use of contactless and fast payments. The Covid-19 pandemic was likely responsible for the surge but at the same time, public demand for cash remains steady,  both as a means of payment and as a safe haven. [Read more at the Bank for International Settlements]

HKMA issues consultation conclusion to the discussion paper on crypto-assets and stablecoins

The Hong Kong Monetary Authority (HKMA) issued the consultation conclusion to the discussion paper on crypto-assets and stablecoins. Respondents were supportive of regulating stablecoins with a risk-based and agile approach. The respondents also broadly supported the need to take into account the latest market developments and draw reference from the discussion of international regulatory bodies when developing the relevant regulatory regime. he HKMA will announce the regulatory arrangements and next steps in due course. [Read more at the HKMA]

Upcoming conferences, webinars and speaking engagements:

  • I’ll be speaking at SettleMint’s “central banks leading the way in the decentralized world” webinar on February 1 at 17:00 GST. [Register here]
  • I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230130)

~ kiffmeister

I’ve updated my tabulation of the 92 central banks that have issued, piloted, experimented with and/or researched retail central bank digital currency (CBDC). [See it here]

Tailored CBDC technical assistance in emerging markets: a critical gap in the pursuit of reaching the SDGs

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) published a stocktaking paper that I co-authored on the degrees of CBDC technical assistance (TA) support for lower- and middle-income countries (LMICs).  It highlights the different options for CBDC support for LMIC authorities in their general-purpose/retail and wholesale CBDC exploration journeys. It also shows how demand outstrips supply in fit-for- purpose assistance and the important role of development partners in closing this gap in order to ensure that CBDCs can meet the expectations in relation to achieving the sustainable development goals (SDGs). Also the paper highlights the remaining gaps in optimally equipping authorities in LMICs in their CBDC pursuit. [Read more at Cenfri.org]

Montenegro starting work on a central bank- or government-issued stablecoin

Prime Minister Dritan Abazovic, announced that, in collaboration with Ripple and the central bank, the government is starting work on a digital currency or stablecoin for Montenegro. Montenegro uses the EUR, despite not being a member of the Eurozone, although it is a candidate country for European Union (EU) membership. Is this a CBDC? Palau is working on something similar to this but Palau doesn’t have a central bank so giving it the thumbs down seems logical. However, even though what they propose is very similar to Palau’s concept, Montenegro does have a central bank and the stablecoin will be presumably backed and issued by the central bank, and denominated in the country’s unit of account. What do others think. Is this a CBDC project? [Read more on Twitter]

UPI – The golden child of payments in India

Arthur Bedel provides a nice explainer on the National Payments Corporation Of India (NPCI) Unified Payment Interface (UPI), the fastest growing payment system in the world. The UPI allows users to transfer money between bank accounts across a single window. It’s a system that powers multiple bank accounts into a single mobile app. This means you can send or receive money or scan a QR code to pay an individual, a merchant or a service provider to shop, pay bills or authorize payments. It was launched in 2016, to reduce the use of cash in the India. The NPCI is governed by the Reserve Bank of India (RBI), and its primary goal is to drive India towards becoming a digital economy. [Read more on LinkedIn]

Data shows 50% of bitcoin hashrate controlled by two mining pools

Bitcoin hashrate is becoming highly centralized, with a few mining pools controlling most of the blockchain mining power. The latest data from Mempool indicates that over 50% of the total hashrate is held by Foundry USA and Antpool. The graph below shows that over 80% of Bitcoin’s mining power is concentrated among just 5 pools. This contrasts with the beginning of 2022, when these five mining pools barely exceeded 60% of the hashrate. This poses significant dangers to the cryptocurrency, because the miners could agree to reject transactions that do not meet a specific parameter leading to a 51% attack. [Read more at Bitcoinist]  [Use pie chart!]

Upcoming conferences, webinars and speaking engagements:

  • I’ll be speaking at SettleMint’s “central banks leading the way in the decentralized world” webinar on February 1 at 17:00 GST. [Register here]
  • I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230128)

~ kiffmeister

Are there tech solutions to the privacy and compliance trade-offs for CBDCs?

Users will likely demand cash-like privacy protections for central bank digital currency (CBDC), which may be thwarted by regulations. However, in an article for CoinDesk, Jonas Gross and I outline new technology solutions that may enable high degrees of privacy while complying with regulations. [Read more at CoinDesk]

Banks will dominate stablecoins, and two other predictions about the future of money

My SODA colleague Chris Ostrowski and Chris Hayes, in another CoinDesk article, make three predictions on the landscape for CBDCs and stablecoins in Europe and in the U.S. based on the trends they’ve seen through engagement with central bankers and policymakers. [Read more at CoinDesk]

DC³ conference – from cryptocurrencies to CBDCs​​

I moderated a couple of sessions on offline central bank digital currency (CBDC) at the International Telecommunication Union (ITU) DC³ “From Cryptocurrencies to CBDCs”​​ conference on January 27, 2023. The first session was on the importance of offline payments for CBDCs and financial inclusion at which cases were presented by Lars Hupel (G+D), Razvan Dragomirescu (WhisperCash), Joachim Samuelsson (Crunchfish) and Jerome Ajdenbaum (IDEMIA). The second session was a deep dive into offline CBDC implementaion and risk management presented by Lauren Del Giudice (IDEMIA) and Stuart Smith (VISA). [Both sessions were recorded and are available at the ITU]

Kansas City Fed rejects Custodia’s master account application

The Federal Reserve Bank of Kansas City has denied Custodia Bank’s application for a master account, according to a U.S. district court filing. The Kansas City Fed disclosed the rejection in a motion to dismiss filed with the U.S. District Court of Wyoming on Friday afternoon. Custodia is suing both the Kansas City Fed and the Fed Board of Governors over its long-delayed application for a master account, which grants access to the Fed’s various financial services, including its payment system. In its filing, the Kansas City Fed and the Board of Governors argue that the ruling should render Custodia’s lawsuit moot. The bank had sought to pressure the Fed to make a decision about its two-year-old application, arguing that it had been subject to an unreasonable delay. Nathan Miller, a spokesman for Custodia, said the bank plans to continue its litigation against the Fed, noting that the bank intends to challenge whether the bank has congressional authority to pick and choose which institutions can have master accounts. Custodia and others argue that any state chartered depository is entitled to master account access. [Read more at the American Banker] 

Federal Reserve Board issues policy statement to promote a level playing field for all banks with a federal supervisor, regardless of deposit insurance status

The Federal Reserve Board (FRB) issued a policy statement to promote a level playing field for all banks with a federal supervisor, regardless of deposit insurance status. The statement makes clear that uninsured and insured banks supervised by the Board will be subject to the same limitations on activities, including novel banking activities, such as crypto-asset-related activities. The statement also makes clear that uninsured and insured banks supervised by the Board would be subject to the limitations on certain activities imposed on national banks, which are overseen by the Office of the Comptroller of the Currency. The equal treatment will promote a level playing field and limit regulatory arbitrage… The Board generally believes that issuing dollar- denominated tokens (dollar tokens) using distributed ledger technology or similar technologies on open, public, and/or decentralized networks, or similar systems is highly likely to be inconsistent with safe and sound banking practices. The Board believes such tokens raise concerns related to operational, cybersecurity, and run risks, and may also present significant illicit finance risks, because—depending on their design—such tokens could circulate continuously, quickly, pseudonymously, and indefinitely among parties unknown to the issuing bank. Importantly, the Board believes such risks are pronounced where the issuing bank does not have the capability to obtain and verify the identity of all transacting parties, including for those using unhosted wallets. [Read more at the FRB]

White House calls on congress to ‘step up its efforts’ on crypto regulation

The Biden administration published a statement urging Congress to “step up its efforts” with respect to regulating the cryptocurrency market. Other suggestions included strengthening transparency and disclosure requirements for crypto companies, strengthening penalties for violations of illicit-finance rules, and working more closely with international law enforcement partners. The officials also made suggestions about what Congress should not do in terms of crafting new crypto regulation, including “greenlight[ing] mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets.” [Read more at the White House] 

Upcoming conferences, webinars and speaking engagements:

  • I’ll be speaking at SettleMint’s “central banks leading the way in the decentralized world” webinar on February 1 at 17:00 GST. [Register here]
  • I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230127)

~ kiffmeister

To demand or not to demand: on quantifying the future appetite for CBDC

The IMF published a paper by Marco Gross and Elisa Letizia that proposes a structural, stock-flow consistent model of banks, the central bank, and the private sector economic environment. It can be used to examine the impact of introducing a central bank digital currency (CBDC), to estimate its uptake, alongside its impact on bank balance sheets and profitability, monetary policy effectiveness, central bank seigniorage, and various other metrics. A “deposit-like” CBDC remunerated at the policy rate results in an estimated upper bound of CBDC uptake share of 25% of total “money” (cash, bank deposits and CBDC) in the United States and up to 20% in the Eurozone. However, uptakes of unremunerated “cash-like” CBDCs would be well below 5%. The less deposit-like (and the more cash-like) and the lower the remuneration rate, the smaller the CBDC uptake (see figure below). The model codes have been made publicly available, for transparency and to allow applying the model to other countries. [Read more at the IMF]

The U.S. Federal Reserve Board denies Custodia Bank’s Federal Reserve System application

The Federal Reserve Board has denied Custodia Bank’s application to become a member of the Federal Reserve System, saying that it is inconsistent with the required factors under the law. Custodia is a Wyoming-chartered special purpose depository institution, which does not have federal deposit insurance. According to the denial, Custodia is proposing to engage in “novel and untested crypto activities that include issuing a crypto asset on open, public and/or decentralized networks that… present significant safety and soundness risks… The Board has previously made clear that such crypto activities are highly likely to be inconsistent with safe and sound banking practices, and it found that Custodia’s risk management framework was insufficient to address [these] concerns [and] its ability to mitigate money laundering and terrorism financing risks. [Read more at the Federal Reserve Board]

Enabling offline payments in an online world

Crunchfish and Lipis Advisors published a guide to offline payments design, providing insights to how offline payments relate and can interoperate with online payment system. It provides a way of categorizing offline payment solutions by three design choices which provides the payment ecosystem with a better understanding of the nuances of offline payments:

  • Online Payment Rail: (i) distributed ledger technology (DLT) based or (ii) centralized account-based. (The paper incorrectly labels DLT-based as token-based (see the 2020 New York Fed article on this misnomer)).
  • Offline Security Protocol: (i) native (layer-1) or (ii) non-native (layer-2) digital currency security protocol, described in relation to the underlying online payment rail.
  • Offline Trusted Environment: (i) hardware-based or (ii) software-based.

On a layer-1 solution the offline payment solution uses the same native security protocols as the underlying payment service. On a non-native layer-2 security protocol, digital currency is signed out by debiting a locally held offline balance. A non-native layer-2 solution can be integrated with any type of payment rail and general ledger as the offline security protocol can be interoperable with any underlying payment system. [Read more at Crunchfish]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230126)

~ kiffmeister

Crypto collapse: US banks leave crypto, how Genesis kept Gemini hanging on, FTX, Binance, Nexo

I don’t extensively cover the monkey business and shady activity in crypto markets, but if you’re interested in that (plus a few good laughs) I highly recommend you subscribe to the regular newsletters (about once a week) published by David Gerard and Amy Castor. For their latest update and (free) subscription link head here.

Moody’s Is working on scoring system for stablecoins

Moody’s is reportedly working on a scoring system for stablecoins that will include an analysis of up to 20 stablecoins based on the quality of attestations on the reserves backing them. The project is still in early stages and apparently won’t represent an official credit rating. [Read more at Bloomberg]

ISDA launches standard definitions for digital asset derivatives

The International Swaps and Derivatives Association (ISDA) published new standard digital assets derivatives definitions and documentation, to create an unambiguous contractual framework under the ISDA Master Agreement umbrella. The definitions initially cover non-deliverable forwards and options on Bitcoin and Ether, but could be expanded cover other distributed ledger technology (DLT) based digital assets. The definitions have been drafted to facilitate Common Domain Model integration and automation within smart contracts. [Read more at ISDA]

Navigating bankruptcy in digital asset markets: netting and collateral enforceability

ISDA also published a whitepaper that addresses some of the derivatives-related legal issues raised by the recent bankruptcies of major crypto exchanges and market participants. It focuses on the importance of close-out netting and collateral arrangements for derivatives referencing digital assets and identifies several areas of focus for policymakers and market participants to ensure greater certainty. This includes use of standardized contractual frameworks and further legal clarity from national authorities on the property status of digital assets. [Read more at ISDA]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230125)

~ kiffmeister

CBDCTracker.org updated it’s (almost) real-time basis central bank digital currency (CBDC) database. Jonas Gross provides highlights on Twitter.

Privacy and central bank digital currencies

The Digital Euro Association (DEA) published actionable recommendations for enhancing privacy in #CBDC systems. The paper can be downloaded here, but the DEA provided a punchier version on Twitter. [Download the paper here]

Agility in the design and development of CBDCs: From discovery through launch

Amazon Web Services (AWS) published their views on best CBDC design practices through an agile development lifecycle. This framework aligns the design of a CBDC to the goals of a particular central bank and its stakeholders. Each stage throughout this process encourages reflection on a central bank’s policy vision and only recommends proceeding with a CBDC if alignment remains with all relevant policy goals. [Download the paper here]

UK Treasury Is Looking for CBDC Head as It Explores Digital Pound

The U.K. Treasury is seeking a “Head of Central Bank Digital Currency” to lead its work on a potential digital pound. The CBDC chief will lead the Treasury team as it works with the Bank of England on the government’s soon to be issued consultation on the digital pound, the listing continues. This role will fit into the existing Payments and Fintech Team and is a separate from the current head of crypto-assets and digital currencies. [Read more at CoinDesk]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230124)

~ kiffmeister

The December 2022 CBDCTracker.org Update on global CBDC developments

Atakan Kavuklu has provided a nice update of central bank digital currency (CBDC) developments covered in the December 2022 update to the CBDCTracker.org database. [Read it at Medium]

The Saudi Central Bank (SAMA) continues CBDC experimentations

The Saudi Central Bank (SAMA) is working on a phase of a project that focuses on domestic wholesale CBDC use cases in collaboration with local banks and fintechs. SAMA stressed that although no decision has been made regarding the introduction of CBDC in the Kingdom, it continues to focus on exploring the benefits and potential risks of implementing CBDC. [Read more at SAMA]

The digital euro: our money wherever, whenever we need it

Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European Parliament: “Our priority for the digital euro project… is to preserve the role of central bank money in retail payments by offering an additional option for paying with public money, including where this is not possible today, for example in e-commerce. The digital euro would not replace other electronic payment methods, or indeed cash. Rather, it would complement them. And by doing so, it would safeguard our monetary sovereignty while strengthening Europe’s strategic autonomy.” [Read the whole speech here]

Jamaica’s JAM-DEX CBDC facilitates select government wage payments

The Bank of Jamaica (BOJ) successfully used its JAM-DEX CBDC to pay wages to, and conduct of transactions by, select workers employed in the Christmas Work Programme from December 19 to 23, 2022. This involved  onboarding three contractors, more than 100 workers and 70 small merchants to the Lynk app within select communities. Onboarded merchants were primarily market vendors and owners of food shops, restaurants and bars. [Read more at the BOJ]

Norway government to use public blockchain to track SME stock ownership

BRØK, the Norwegian government public blockchain-based platform to track unlisted stock ownership, has moved into the sandbox phase. It is using Arbitrum, a layer 2 scaling solution for Ethereum with lower transaction costs. The solution is GDPR compliant, so personal information is not stored directly on the blockchain. However, it uses the Ceramic protocol for the personal information, an open distributed database that allows for data to be deleted and corrected, as required by GDPR. [Read more at Ledger Insights]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230122)

~ kiffmeister

Binance says Signature Bank sets transaction minimum amid pullback

Binance said Signature Bank will only handle user transactions of more than $100,000 as of February 1, 2023. According to Binance, this is the case for all of Signature Bank’s crypto exchange clients, and only its Signature Bank customers are affected. An earlier story from AsiaMarkets.com said that this limit applied to all banks. Also, Binance said that only 0.01% of its average monthly users are serviced by Signature Bank, but those customers would still be able to use their credit or debit cards to buy or sell cryptocurrencies. Also, SWIFT-based transfers would remain in operation for non-USD bank transfers, and the change wouldn’t impact its “corporate accounts.” [Read more at CoinTelegraph]

On-Chain Foreign Exchange and Cross-Border Payments

Circle Financial and Uniswap Labs staff published the results of their studies of the use of distributed ledger technology (DLT) in the trading and settlement of foreign exchange (FX) on public blockchains. They compared the traditional trading and settlement of FX with DLT-based implementations using stablecoins and automated market makers. Using public blockchain data, they quantified the liquidity, stability, and transaction costs of on-chain FX transactions in early adoption. They found consistency between on-chain FX exchange rate and those observed through traditional trading venues and stable on-chain liquidity throughout all times of the day and weekends. Their estimates suggest that on-chain FX can reduce the cost of remittance by as much as 80 percent. [Read More at SSRN]

Empirical evidence on the ownership and liquidity of real estate tokens

A paper by Robeco’s Laurens Swinkels examined the financial and economic consequences of tokenizing 58 residential rental properties in the US, particularly those in Detroit. Tokenization aims at fragmented ownership. He found that the residential properties examined have 254 owners on average. Investors with a greater than $5,000 investment in real estate tokens, diversified their real estate ownership across properties within and across the cities. Property ownership changed about once yearly, with more changes for properties on decentralized exchanges. He reported that real estate token prices moved according to the house price index; hence, investing in real estate tokens provided economic exposure to residential house prices. [Read more at Financial Innovation]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230120)

~ kiffmeister

Genesis’ crypto lending businesses file for bankruptcy protection

Digital Currency Group (DCG) owned Genesis Global Holdco LLC filed for Chapter 11 bankruptcy protection. Genesis owes over $3.5 billion to its top 50 creditors, including crypto exchange Gemini. The bankruptcy could have broader implications because DCG also owns digital assets manager Grayscale, which operates the Grayscale Bitcoin Trust (GBTC), which has $10 billion-plus in assets under management. There would be serious crypto market  repercussions if the Genesis bankruptcy somehow leads to the liquidation of 600,000+ bitcoin holdings. [Read more at CoinDesk]

Universal digital payments network for stablecoins, CBDCs launches at Davos

A consortium led by Red Date Technology, the developer of the Chinese state-backed Blockchain Service Network, launched the Universal Digital Payments Network (UDPN) to provide interoperability between regulated stablecoins and central bank digital currencies (CBDCs). Multiple global banks will participate in use case proof of concepts (PoCs) to show how the UDPN will integrate digital currencies into daily businesses, banking and payment. The first two PoCs will involve two banks testing UDPN’s digital currency cross-border transfer and swap capabilities, and how financial institutions can execute anonymous stablecoin transfers through the “travel rule” function. [Read more at UDPN.io]

Project Rosalind Phase 2 TechSprint – Invitation for expressions of interest

The BIS Innovation Hub London Centre has launched the Project Rosalind TechSprint, inviting expressions of interest to come up with retail central bank digital currency (CBDC) use cases. Participants will be required to develop feasible prototypes by using the set of application programming interfaces (APIs) developed in phase one of Project Rosalind. It aims to develop prototypes of an API platform for the distribution of retail CBDC. The purely experimental setup is based on a two-tier distribution model, comprising a central bank at the foundation of the retail CBDC system and with customer-facing activities carried out by the private sector payment interface providers (PIPs). [Read more at the BIS]

The technology of decentralized finance (DeFi)

The BIS published a paper that provides a deep dive into the architecture, technical primitives, and financial functionalities of decentralized finance (DeFi) protocols. It analyzes and explains the individual components and how they interact through the lens of a DeFi stack reference model featuring three layers: settlement, applications and interfaces. Then, it describes the financial services for the most relevant DeFi categories, i.e., decentralized exchanges, lending protocols, derivatives protocols and aggregators. It discusses how composability allows complex financial products to be assembled, which could have applications in the traditional financial industry. [Read more at the BIS]

A couple of papers of interest to central bank digital currency (CBDC) aficionados were published this week:

  • The Digital Dollar Project published an updated version of its white paper “Exploring a U.S. CBDC,” offering a global perspective on rapidly accelerating CBDC developments. [Download at the DDP]
  • The Digital Euro Association (DEA) published a paper on CBDC Privacy, examining the importance of privacy and how it impacts successful CBDC adoption, usage, and implementation. It also examines privacy-preserving technologies and provides recommendations for ensuring CBDC privacy and security. [Download at the DEA]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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 (20230119)

~ kiffmeister

US authorities dismantle ransomware-friendly Bitzlato exchange, arrest co-founder

The U.S. Attorney for the Eastern District of New York (EDNY) charged Anatoly Legkodymov, co-founder of the Bitzlato digital asset exchange, with conducting a money transmitting business that transported and transmitted illicit funds and that failed to meet U.S. regulatory safeguards, including anti-money laundering (AML) requirements. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) alleged that Bitzlato facilitated “illicit transactions for ransomware actors operating in Russia, including Conti, a Ransomware-as-a-Service group that has links to the Government of Russia.” Also it said that Binance was among the biggest counterparties that received Bitcoin from Bitzlato between May 2018 and September 2022. [Read more at CoinGeek]

Digital Currency Group halts dividends as Genesis preps bankruptcy filing

Genesis Global Capital, the crypto lending unit of Digital Currency Group (DCG), is reportedly laying the groundwork for a bankruptcy filing. It has been in confidential negotiations with various creditor groups amid a liquidity crunch, and has warned that it may need to file for bankruptcy if it fails to raise cash. Genesis suspended withdrawals in November, soon after crypto exchange FTX — where Genesis held some of its funds — filed for bankruptcy. Meanwhile, DCG has informed its shareholders the firm is suspending dividends until further notice, and CoinDesk has reportedly hired Lazard to advise it on a sale that would carve it out from DCG. [Read more at CoinGeek]

National Australia Bank Becomes Second Australian Bank to Build Stablecoin

The National Australia Bank (NAB) aims to launch an Australian dollar-pegged stablecoin (AUDN) in the middle of 2023. Its purpose would be to allow its customers to settle transactions in real-time using Australian dollars, and several other purposes including “carbon credit trading, overseas money transfers and repurchase agreements.” The stablecoin will launch on the Ethereum and Algorand blockchains. NAB is the second major Australian bank to be involved in the creation of a stablecoin. Earlier, Australia and New Zealand Banking Group (ANZ) teamed up with crypto custodian Fireblocks to mint a stablecoin pegged to the Australian dollar. [Read more at CoinDesk]

Thailand Issues New Regulations on Custodied Cryptocurrencies

Thailand’s Securities and Exchange Commission (SEC) issued new regulations on custodied crypto-assets. Companies offering crypto custody services are now required to “establish a digital wallet management system to accommodate efficient custody of digital assets and keys and ensure safety of clients’ assets.” [Read more at the SEC]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

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 Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

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]