Month: June 2023

Kiffmeister’s #Fintech Daily Digest (20230607)*

~ kiffmeister

Principles for creating digital shekel acceptance and network effects

The Bank of Israel (BoI) published a paper on how to ensure that a potential central bank digital currency (CBDC) is broadly adopted. The characteristics that should increase digital shekel adoption and network effects among users include (i) making it possible to receive (make) payments from (to) the State, (ii) providing an efficient and convenient payment experience, and (iii) making it broadly useful  for payment between individuals (P2P) including offline. Also, costs to merchants should be less than existing alternatives, and should streamline their operational processes such as the payment of taxes. In addition, defining a digital shekel as “legal tender” will help provide the currency with the status that the public attributes to cash, and thereby support its broader acceptance. [Read more at the BoI]

Update on the Bahamas Sand Dollar

The Central Bank of The Bahamas  (CBOB) published a Sand Dollar update in late May. During April and May 2023 they continued with more accelerated outreach, and technical developments to extend proprietary wallet access to the Bahamas Automated Clearing House (ACH) via the Sand Dollar infrastructure were completed. Meanwhile, the first iteration of Wallet 2.0, which will permit user self-activation, progressed to beta testing, with a general release targeted for the middle of the summer of 2023. [Read more at the CBOB]

The current Philippine digital landscape

Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla provided an update to the central bank’s digital payments transformation roadmap in which he underscored the lack of interest in issuing retail CBDC. He was particularly concerned about the potential loss of payments privacy (“of course, [retail CBDC] saves a lot of money in printing [but] the government will actually know more about you than your wife. In my case, that is not dangerous; there is nothing to know about me. But for many people, that is a bit of a concern. So, all of those things have to be addressed.”) [Read more at the BSP]

*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:

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 (202306)*

~ kiffmeister

SEC sues Coinbase on unregistered securities exchange allegations

The U.S. Securities and Exchange Commission (SEC) sued Coinbase on allegations of violating federal securities law, a day after filling a similar suit against Binance. According to the SEC, Coinbase has operated as an unregistered broker, exchange and clearing agency simultaneously, arguing that it solicited customers, handled orders, allowed for bids and acted as an intermediary all at once. “The Coinbase Platform merges three functions that are typically separated in traditional securities markets – those of brokers, exchanges, and clearing agencies… Yet, Coinbase has never registered with the SEC as a broker, national securities exchange, or clearing agency, thus evading the disclosure regime that Congress has established for our securities markets.” [Read more at the SEC]

Japanese megabank MUFG to deploy stablecoins on public blockchains

Mitsubishi UFJ Financial Group (MUFG) plans to deploy and distribute bank-backed stablecoins on different public blockchains. The Japanese bank has partnered with Datachain, a blockchain interoperability company, and Toki, a cross-chain bridge, to allow the interoperation of these licensed stablecoins along several blockchains using its Progmat Coin protocol. The announcement comes after Japan’s revised funds’ settlement law passed in 2022 came into take effect to allow financial institutions to issue stablecoins. Stablecoin issuance on public blockchains doesn’t seem to be explicitly covered in the legislation as summarized in a slide deck from Japan’s Financial Services Agency (FSA) and this document, although a white paper published by the country’s Liberal Democratic Party implies that clarity on this issue would be forthcoming, which I suppose has arrived and is silent on the matter. [Read more at Bitcoin.com]

*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:

 

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 (20230605)*

~ kiffmeister

SEC sues Binance in US District Court for unregistered securities operations

The U.S. Securities and Exchange Commission (SEC) filed suit against Binance, its U.S. platform and CEO Changpeng Zhao (CZ) in the District Court for the District of Columbia. There were 13 charges, including unregistered offers and sales of the BNB and BUSD tokens, the Simple Earn and BNB Vault products and its staking program. In addition, the SEC alleges in the suit that Binance failed to register its Binance.com platform as an exchange or a broker-dealer clearing agency. CZ was sued as a “controlling person.” [Read more at the SEC]

National Bank of Kazakhstan digital tenge project update

Binur Zhalenov, CEO of the Kazakhstan Interbank Settlement Center of the National Bank of Kazakhstan, provided an update on the three-year digital tenge project. The plan in 2023 is to deliver a production-grade central bank digital currency (CBDC). Pilots will test various specific use cases, starting with building a scalable platform for social aid distribution for the central bank’s government partners. The project aims to  provide a scheme that provides business value across the value chain, and there will be several minimum viable products (MVPs) to optimize cross-border payments, wholesale transactions, and distributed ledger technology (DLT) integration. [Read more on LinkedIn]

Project Leap proves the viability of a quantum-safe financial system

The BIS Innovation Hub published a report on Project Leap, a joint project with the Banque de France and Deutsche Bundesbank that addresses the threat that future quantum computers represent to today’s cryptographic algorithms, and thereby to the confidentiality of financial data. The report presents a comprehensive overview of the experiments conducted and the initial technical findings, including the successful set up a quantum-safe communication channel between the project participants that shields financial data. [Read more at the BIS]

*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:

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 (20230604)*

~ kiffmeister

Only 16% of Americans Support the Government Issuing a Central Bank Digital Currency

Despite the mangled headline (only a “central bank” can issue *central bank* digital currency (CBDC)) this Cato survey contains some interesting statistical nuggets. It found that, while only 16% of Americans polled support a digital dollar, 49% haven’t even formed an opinion, and 34% oppose it. A majority opposes a digital dollar that would allow the government to monitor their spending (68%) or control how they spend (74%). On fears that the government could potentially do either of these things, 76% of those polled said that the government should forbid the Fed from issuing a digital dollar. There are interesting differences between CBDC opinions of those who identify as Republicans (right leaning) and Democrats (left leaning) with the former being more wary of CBDC across all of the permutations and combinations of questions. [Read more at Cato]

CBDC Manifesto (https://cbdcmanifesto.com)

Fears of government spending controls and monitoring may be assuaged if CBDC enabling legislation reflects the first three of the five tenets of the CBDC Manifesto:

1. A retail central bank digital currency (CBDC) should have a strong value proposition (SVP) and tangible benefits for citizens. The decision process should start with identifying the problem(s) to be solved with CBDC and evaluating all alternative solutions. The CBDC option should be chosen only if it has a compelling value proposition relative to the best alternatives. If the CBDC option is chosen, SVPs to other digital forms of money are essential. To drive adoption, it is not sufficient to offer a new means of payment that has the same features as today’s means of payment.

Potential SVPs of CBDCs for users are high privacy guarantees, both online and offline capabilities with no need for later third-party approval or validation, low risk as a digital form of default-resistant central bank money, and CBDC value units as part of an independent, sovereign, and sanction-resistant payment infrastructure to ensure monetary sovereignty in uncertain times. For merchants, the SVPs are lower fees than for currently-existing means of payments and instant settlement. For companies/industry features for programmable payments and the use of smart contracts are SVPs.

2. A CBDC should provide the highest degree of privacy. In this context, a CBDC should supply technically guaranteed privacy by design and by default, without the need to trust the central bank to preserve privacy. The CBDC can be utilized, ideally, by anonymous payments for small- and medium-sized transactions.

3. A CBDC should not be designed in a way to do harm to society, e.g., via very negative interest rates, or via so-called programmable money that restricts the use of money for specific types of expenditures (e.g., special food and beverages, computer games etc.) or that expires after a certain amount of time. A CBDC should be based on principles of self-determination and freedom.

4. The development of a CBDC should follow a collaborative approach involving all stakeholders (central banks, financial institutions, associations, end-users, companies, researchers, etc.) and have a well-defined governance system. The design and development processes should be transparent, public, and open. Ideally, a CBDC should be open-source and use open-source technology to increase transparency.

5. The CBDC should exhibit technical, regulatory and usage interoperability, both locally and globally.

*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:

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 (20230603)*

~ kiffmeister

Bank of Mauritius launches public survey on a digital rupee

The Bank of Mauritius (BoM) released a consultation paper on the issuance of a digital rupee central bank digital currency (CBDC). The BoM is envisaging the rolling out of a digital rupee pilot phase following a sandboxing exercise and finalization of design attributes in November 2023. Meanwhile, the BoM launched an online survey to get public views and suggestions, and will shortly invite members of the public to be part of the pilot. [Read more at the BoM]

Strategic complementarities in a dynamic model of technology adoption: P2P digital payments

The NBER published a paper develops a dynamic model of technology adoption featuring strategic complementarities: the benefits of usage increase with the number of adopters. It studies the diffusion of new means of payments, where such complementarities are pervasive. It shows that complementarities give rise to multiple equilibria, suboptimal allocations, and study the planner’s problem. The model generates gradualism in adoption, as individuals optimally wait for others to adopt before doing so. It applies the theory to the adoption of SINPE, an electronic peer-to-peer (P2P) payment app developed by the Central Bank of Costa Rica. A calibrated version of the model shows that the optimal subsidy pushes the economy to universal adoption. [Read more at the NBER]

*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:

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 (20230602)*

~ kiffmeister

I’ve updated my tabulation of wholesale central bank digital currency (CBDC) explorers. [Read more at Kiffmeister.com]  

Kenya central bank says digital currency not a ‘compelling priority’

The Central Bank of Kenya (CBK) does not consider the issuance of a CBDC a “compelling priority in the short to medium term” but it will continue monitoring developments in the area to inform future assessments of the need for CBDC in Kenya . In February 2022, the CBK issued a consultative paper on CBDC and the comments have been compiled into a new discussion paper. It also provides an update on key global CBDC developments since February 2022, concluding that “the allure of CBDCs is fading”. [Read more at the CBK]

Empowering central bank money for a digital future

The Société Universitaire Européenne de Recherches Financières (SUERF) published a paper that suggests that central banks and policymakers start with trigger solutions when considering wholesale CBDC (wCBDC). Trigger solutions connect the distributed ledger technology (DLT) world with conventional settlement systems and enable the settlement of tokenized assets in central bank money. By connecting DLT networks with conventional payment systems, they combine the advantages of decentralized infrastructures with the reliability of the central bank. No new form of (tokenized) money needs to be introduced. The trigger solution can play a neutral role and is agnostic across three dimensions: use cases, payment systems and asset systems. Furthermore, trigger solutions are characterized by comparatively low technical and operational complexity, and are a convenient way to test the case for wCBDC and observe market adaptation. [Read more at SUERF]

*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:

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]