Kiffmeister’s #Fintech Daily Digest (20230912)*

BIS and Israel and HK central banks examine security, privacy and accessibility in CBDC design

Project Sela, a joint experiment conducted by the Bank for International Settlements (BIS) and the Israeli and Hong Kong central banks, showed that a retail central bank digital currency (CBDC) ecosystem can combine accessibility, competition and preventative cyber security, while retaining key advantages of physical cash. In Sela, the retail CBDC ledger is operated by the central bank without compromising end user privacy as personal identifiers are obfuscated. Retail payments are therefore settled directly on the central bank’s balance sheet in a privacy-preserving manner, meaning instant finality for transactions. [Read more at the BIS]

PayPal introduces on and off ramps for Web3 payments

U.S.-based PayPal users can now seamlessly convert their crypto into USD with its new off-ramp service. The company had already been operating an on-ramp service for its customers, allowing them to purchase crypto-assets. Currently, the new service is available to decentralized applications (dApps), wallets, and non-fungible token (NFT) marketplaces and is also available to users on MetaMask. Also Web3 merchants can integrate the new off-ramp service and connect to robust security controls and tools for fraud management, disputes, and chargebacks. [Read more at PayPal]

There are now two types of PayPal dollars, and one is better than the other

Interestingly, JP Koning shows that of the two types of US dollar digital currencies now offered by Pay Pal, its PayPal USD (PYUSD) stablecoins are actually safer than its the traditional account offering. Better quality assets back PYUSD, they are ranked more senior to other creditors if PayPal goes kaput in most states, and they are disclosed more transparently. Notably, PayPal’s regular accounts are regulated piecemeal under each U.S. states’ own peculiar version of a money transmitter license, that can almost always be legally backed by riskier assets, and typically do not require that they be held in trust solely for the benefit of customers. [Read more at Moneyness and the Cornell Law Review]

NIST stablecoin report highlights security and stability concerns

The US National Institute of Standards and Technology (NIST) published a report on stablecoin security considerations. These include unauthorized or arbitrary minting; vulnerability in smart contract codes leading to the theft of the stablecoin’s on-blockchain reserves, the malicious hacking or updating of smart contract codes, denial-of-service attacks on the data oracles that provide the smart contracts with off-blockchain information, and attacks on the underlying blockchain. The stability and trust issues the report identifies vary based upon the stablecoin use case, as well as the kind of marketplace that the stablecoins are traded upon. [Read more at NIST]

*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:

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

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]