Bank of Canada: Central banks will face unfamiliar challenges to achieve CBDC inclusivity
The Bank of Canada published a paper that explores quantitative and qualitative information about Canadians who face barriers to making digital payments, and implications for a potential central bank digital currency (CBDC). It identified three types of inclusion necessary for a universally accessible payment method: financial inclusion, digital inclusion and practical accessibility. The challenge is in the delivery of services rather than product design, and private financial institutions may not be incentivized to address the needs of those who are underserved. However, overcoming those challenges will require central banks to face problems that would otherwise be considered far from their scope of interest. [Read more at the Bank of Canada]
Project Mandala: shaping the future of cross-border payments compliance
The Bank for International Settlements (BIS) and the central banks of Australia, Korea, Malaysia and Singapore launched Project Mandala, which explores the feasibility of encoding policy and regulatory requirements into a common protocol for cross-border use cases such as foreign direct investment, borrowing and payments. It aims to ease the policy and regulatory compliance burden by automating compliance procedures, providing real-time transaction monitoring and increasing transparency and visibility around country-specific policies. [Read more at the BIS]
Hong Kong Stock Exchange launches settlement platform powered by smart contracts
Hong Kong Exchanges and Clearing Limited (HKEX) is launching “Synapse,” a platform that will utilize smart contracts to streamline post-trade flows and enhance operational efficiencies. It will be deployed on Stock Connect, an HKEX channel that enables international investors to access more than 1,000 mainland Chinese stocks through routing in Hong Kong. HKEX will be linked to Hong Kong’s Depository Trust and Clearing Corporation through its Institutional Trade Processing service, allowing for the central matching of cross-border transactions. Settlement instructions are then automatically generated and sent back to the Synapse platform, thus enhancing the trade confirmation workflow. [Read more at Coin Telegraph]
Project Atlas: mapping the world of decentralized finance
The BIS Innovation Hub, De Nederlandsche Bank and the Deutsche Bundesbank jointly launched Project Atlas, which creates a data platform that sheds light on the macroeconomic relevance of crypto-asset markets and decentralized finance (DeFi). A first proof of concept of Project Atlas was developed focusing on international flows of crypto-assets. The initial findings indicate that, although relatively small compared with total on-chain network traffic, identified flows between crypto exchanges are significant and substantial economically. Attributing geographical areas to exchanges (where possible) lays out the structure of cross-border flows. Thus, Project Atlas provides a starting point for structural analysis across jurisdictions. [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.
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]
