BIS and Bank of England complete CBDC Project Rosalind
The Bank for International Settlements (BIS) published the results of its Project Rosalind joint work with the Bank of England. It explored how a universal and extensible application programming interface (API) layer could connect central bank and private sector infrastructures and facilitate retail central bank digital currency (CBDC) payments. It demonstrated that a well designed API layer could work with different private sector applications and central bank ledger designs and that a set of simple and standardized API functionalities could support a diverse range of use cases.
33 API functionalities and more than 30 retail CBDC use cases were explored , covering a broad range of domains for individuals and businesses, such as peer-to-peer transfers, retail payments for goods and services and small-value business transactions. A diverse range of payment options were tested, such as making retail CBDC payments online, in stores and offline, with the use of near-field communication and via interactions with point-of-sale, QR codes, mobile phones, smartcards, biometric devices and smart assistants. Some of the use cases also explored private sector programmability and micropayments. [Read more at the BIS]
OECD rolls out new tax standards for digital currencies and CBDCs
The Organization for Economic Cooperation and Development (OECD) has published a new taxation framework for the digital currency industry and central bank digital currency (CBDC). The new Crypto-Asset Reporting Framework (CARF) stems from a review of the 2014 Common Reporting Standard (CRS) to plug the loopholes associated with digital currency taxation among member countries. Under the new framework, tax information on digital currency transactions will be automatically exchanged uniformly in line with existing rules. [Read more at the OECD]
The power of choice: Options and trade-offs for digital remittances
Visa has published a paper that reports on the results of its remittance price modeling in 50 corridors, showing that private sector innovators provided a remittance option costing less than the 3% UN Sustainable Development Goal target in 40 of 50 corridors. This is also consistent with the 3.31% World Bank’s Global SmaRT Average—based on the average of the three lowest costs in each corridor—reflecting what savvy consumers pay. Both results make it clear that access to information really helps obtain a lower cost. [Read more at VISA]
Tether was once backed by Chinese commercial paper
Tether once backed its USDT stablecoin with commercial paper issued by Chinese firms, according to documents released by New York’s Attorney General (NYAG). However, Tether says that all of those securities were rated A2 or better, for what that’s worth. The NYAG released the documents in response to a freedom of information request from Bloomberg News, following an earlier unsuccessful request by CoinDesk. [The whole Bloomberg article is worth a read, as it details a number of other questionable USDT reserves management practices.]
BlackRock tries for spot-bitcoin ETF with fresh SEC filing
BlackRock has applied to become the first U.S. spot-Bitcoin exchange-traded fund (ETF), according to a filing with the U.S. Securities and Exchange Commission (SEC). Coinbase would act as custodian for the iShares Bitcoin Trust securities, and they would trade on NASDAQ exchange if approved. However, it will be a long shot, as the SEC has denied all previous similar applications, citing market concerns and a lack of investor protections, among other things. [Read more on Bloomberg]
*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.
Upcoming conferences, webinars and speaking engagements:
- I’ll be participating in Currency Research’s in-person Central Bank Payments Conference and Global Payments Summit in Cape Town from June 26 to 30. [Register here and here respectively]
- I’ll be lecturing at the Digital Euro Association (DEA) Digital Money Academy on July 27, 2023. [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]
