Bank of Korea publishes update on its CBDC experiments
The Bank of Korea (BOK) provided updates on its central bank digital currency (CBDC) proof-of-concept work in its 2022 Payment and Settlement Systems Report. This included investigating smart contracts, near-field communications (NFC) based offline payments and cross-border payments. Also, the BOK connected 14 banks with its simulated CBDC system to verify its functioning. It handled 2,000 transactions per second but slowed down as it reached capacity, so further improvements are needed. The bank also tested a zero-knowledge proof (ZKP) protocol to improve privacy, but it slowed the processing speed markedly. [Read more at the BOK]
The FedNow instant payments system is now live
The US Federal Reserve (FRB) announced that its new system for instant payments, the FedNow® Service, is now live. Banks and credit unions can sign up and use this tool to instantly transfer money 24/7 for their customers. To start, 35 early-adopting banks and credit unions, as well as the U.S. Department of the Treasury’s Bureau of the Fiscal Service, are ready with instant payments capabilities via the FedNow Service. In addition, 16 service providers are ready to support payment processing for banks and credit unions. [Read more at the FRB]
China’s digital yuan transactions seeing strong momentum
Transactions using China’s digital yuan hit 1.8 trillion yuan ($250 billion) at end-June, according to People’s Bank of China (PBOC) Governor Yi Gang, marking a jump from over 100 billion yuan as of August last year. However, e-CNY in circulation accounted for only 0.16% of China’s M0 money supply, or cash in circulation, Yi pointed out that, although the balance is small, its transaction velocity is higher and more efficient than cash. [See video on LinkedIn]
*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 lecturing at the Digital Euro Association (DEA) Digital Money Academy on July 27, 2023. [Register here]
Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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]