Swiss payments vision – an ecosystem for future-proof payments
The Swiss National Bank (SNB) plans to continue with the wholesale central bank digital currency (CBDC) securities settlement experimentation (Project Helvetia) that was concluded in January 2022. That had tested the issuance and settlement of tokenized securities with wholesale CBDC on the SIX Digital Exchange (SDX). In the next phase, the SNB will issue wholesale CBDC on SDX and test selected transactions with market participants. They will also test the use of “synthetic” wholesale CBDC (privately-issued stablecoins backed by SNB deposits) in a similar context.
The SNB will also experiment with the processing of tokenized securities in which the payment leg is synchronized via a link to the Swiss Interbank Clearing (SIC) real-time gross settlement (RTGS) system, which was also tested in the first phase of Project Helvetia. Such synchronization turned out to be technically possible but clunky compared to integrated processing, since the distributed ledger technology (DLT) functionalities had been restricted. The new project will try to minimize the clunkiness by making adjustments to the SIC system or to the link itself. [Read more at the SNB]
European Banking Federation vision on a digital euro ecosystem
The European Banking Federation (EBF), which represents the vast majority of the European banking sector, published a paper on a digital euro ecosystem. It argues that a retail digital euro could be envisaged in the mix of new tools and solutions to meet evolving payment needs, as long as it adds value to consumers, is appropriately designed, in close cooperation with the private sector, and mitigates ex ante the accompanying risks. a retail digital euro could – if properly designed – support the strategic autonomy of Europe and ensure a monetary anchor role of the euro. A wholesale digital euro based on DLT for the settlement of interbank transfers and related wholesale transactions in central bank reserves, would support the international role of the euro, enhance global cross-border payments and match the needs arising from digital finance. [Read more at the EBF]
Upcoming conferences, webinars and speaking engagements:
- 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]
I like that the EBF reiterates the need for “machine CBDC” in addition to retail CBDC.