Kiffmeister’s #Fintech Daily Digest (20230117)

I’m pleased to announce that I have joined the SODA (Sovereign Official Digital Association) team as its Research Director. SODA works with central banks, international organizations and financial institutions to provide real life use cases for public digital money. Central bank digital currency (CBDC), stablecoins and tokenized digital assets will become part of the financial landscape in the 2020s; SODA offers technology agnostic tools and resources to move from discussion to action and begin to explore the future of a more financially inclusive world. [Learn more about SODA here]

Also, Tokyo Fintech published a video of a presentation I gave on retail CBDC for your viewing enjoyment. [Watch it here]

Eurogroup statement on the digital euro project

The Council of the European Union (Eurogroup) reaffirmed its support for the continued efforts of all European and national institutions involved in the preparatory work for the potential issuance of a digital euro. It asserted that a digital euro should complement, and not replace cash, and should guarantee access to central bank money for euro area users in times of increased digitalization in payments.A risk-based approach could be followed to allow for more privacy in the case of less risky transactions, which could ensure a wider adoption of the digital euro among citizens with a stronger preference for privacy. The Council also supports the exploration of an offline functionality which would serve a wider range of use cases and also contribute to financial inclusion. [Read more at the Eurogroup]

Philippines central bank pushes through with wholesale CBDC plans to improve payments

The Bangko Sentral ng Pilipinas (BSP) has reportedly confirmed that it will not be exploring retail CBDC, instead focusing on wholesale CBDC to improve settlement times between banks. In April 2022 the BSP announced the start of its Project CBDCPh wholesale CBDC pilot program, with several leading financial institutions playing a part. On the retail payments front, the BSP has been focusing on drumming up support for private-sector digital payment rails, like they did with its recent “BSP Piso Caravan” program aimed at encouraging the public to replace their unfit banknotes and coins with digital cash. [Read more at the Philippine Star]

Iran and Russia are reportedly working on gold-backed stablecoin

Iran and Russia are reportedly looking to launch a new gold-backed stablecoin to be used for cross-border transactions in the place of the US dollar, the Iranian rial and the Russian ruble in the Persian Gulf region. The cryptocurrency would also specifically intended as a payment method in the Astrakhan area – an economic zone whose design helped Russia begin to receive cargo shipments from Iran. [Read more at Vedomosti]

2023 Crypto Crime Trends: Illicit Cryptocurrency Volumes Reach All-Time Highs Amid Surge in Sanctions Designations and Hacking

Chainalysis reports that, despite the market downturn, illicit crypto transaction volume rose for the second consecutive year, hitting an all-time high of $20.1 billion, likely a lower bound estimate. The measure of illicit transaction volume is sure to grow over time as new addresses associated with illicit activity are identified, and the figure doesn’t capture proceeds from non-crypto native crime (e.g. conventional drug trafficking involving cryptocurrency as a mode of payment). For example, in 2022 Chainalysis reported $14 billion in illicit activity in 2021, but that figure has now been raised to $18 billion, mostly due to the discovery of new crypto scams. [Read more at Chainalysis]

European Union Postpones MiCA Vote to April

The final vote on the European Union’s (EU’s) Markets in Crypto Assets Regulation (MiCA) legislation has been delayed until April 2023 due to translation issues. EU procedures require legal acts such as MiCA, which was negotiated in English, to be available in all the bloc’s 24 official languages. [Read more at CoinDesk]

ISO 20022 for dummies

SWIFT has published a comprehensive guide to the ISO 20022 messaging standard, outlining everything from the very basics, to why it matters, its impact and the benefits it offers. [Download the guide at SWIFT]

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]