Kiffmeister’s #Fintech Daily Digest (20230318)

Measurement and Use of Cash by Half the World’s Population

The IMF published a paper that analyzes cash usage in 14 advanced and emerging market economies, using two measures; currency in circulation (CIC) and the value of cash withdrawn from ATMs. It finds that, while the CIC metric continues to rise, ATM withdrawals are declining rapidly. The main reason for this is that CIC includes cash used for payments, hoarding, and illegal use while ATM cash is focused much more on the use of cash for payments alone. As well, CIC is not adjusted for the turnover of cash for payments while ATM cash already includes it. The 14 countries in our sample account for half of the world’s population and two-thirds of its GDP. [Read more at the IMF]

Monetary Policy Implications Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems

The IMF published a paper on the potential impacts of central bank digital currency (CBDC) on monetary policy, through their effects on money velocity, bank deposit disintermediation, volatility of bank reserves, currency substitution, and capital flows. Countries most vulnerable are those with banking systems dominated by small retail and demand deposits, low digital payments usage, and weak macro fundamentals. Caps on CBDC holdings and zero remuneration can moderate disintermediation risks, but they are not sufficient. Jurisdictions with Islamic banking systems could be more vulnerable to deposit disintermediation because of the predominance of unremunerated deposits and retail deposits in banks. The underdeveloped nature of Islamic financial markets and Sharia’h compliant liquidity management tools could also limit the central banks’ scope to respond to liquidity shocks. [Read more at the IMF]

Central Bank Digital Currency and Financial Inclusion

The IMF published a paper that models the financial inclusion implications of introducing a retail CBDC through two key channels. First, CBDC issuance can increase bank deposits from the previously unbanked by incentivizing the opening of bank accounts for access to CBDC wallets. Second, data from CBDC usage allows for the building of credit to reduce credit-risk information asymmetry in lending. We find that CBDC can increase overall lending if (1) bank deposit liquidity risk is low, (2) the size and relative wealth of the previously unbanked population is large, and (3) CBDC is valuable to households as a means of payment or for credit-building. Even when overall lending decreases, households benefit from the value of using CBDC for payments, plus CBDC provides an alternative “safe” savings vehicle, and it generates greater surplus in lending by reducing credit-risk information asymmetry. If non-banks are part of the “two-tier” CBDC distribution, fewer funds may flow into bank deposit accounts from the unbanked because a bank account is no longer needed for CBDC access. However, if CBDC data is shared with banks, those without bank accounts may still build credit and access lower interest rate loans. This is welfare optimal if the gains from greater access to CBDC outweigh any lending contraction. [Read more at the IMF]

Upcoming conferences, webinars and speaking engagements:

  • I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
  • I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
  • 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

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 (

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]