CBDC implementation trade-offs (Version 2)
Rob Durscki and I updated our evolving LinkedIn article on retail central bank digital currency (CBDC) implementation trade-offs based on comments we received on the first draft. We hope this sparks more interest and discussion on CBDCs, their goals, and their design choices. We would again love to hear your thoughts on this updated post. [Read more on LinkedIn]
ECB launches technical talks on secure exchange of payer-payee digital euro data
The European Central Bank (ECB) is inviting payments experts to participate in technical talks on options for the secure exchange of payment-related data between payer and payee for digital euro transactions. The talks will center around the latest retail payment market innovations that can ensure the secure exchange of end-user data between payment initiation and payment acceptance devices, and the key considerations for a secure exchange of front-end data for the envisaged digital euro use cases, form factors and core and optional services. [Read more at the ECB]
Introduction of the Zimbabwe gold-backed digital token (Zig) as a means of payment
The Zimbabwe Gold (ZiG) digital asset backed by a physical gold held in the Reserve Bank of Zimbabwe’s (RBZ’s) reserves officially launched as a payment method. The RBZ first started issuing Mosi-oa-Tunya physical gold-backed tokens in 2022, and the ZiG was introduced in April 2023. The digital tokens can be stored in either e-gold wallets or e-gold cards and are tradeable for peer-to-peer and business transactions. [Read more on the RBZ’s X page]
Central Bank of Nigeria defends eNaira CBDC
The Central Bank of Nigeria (CBN) reasserted its confidence in its central bank digital currency (CBDC), in reaction to claims that an eNaira CBDC would pose a threat to Nigeria’s financial stability. These false claims were based on misinterpretations of papers in a 300-page book published by the CBN in September 2023 that detailed the financial implications of adopting a CBDC. [Read more at the CBN]
ECB paper on the economics of central bank digital currency
The ECB published a revised version of a paper that provides a structured overview of the literature on the economics of CBDC. It documents the economic forces that shape the rise of digital money and reviews motives for the issuance of CBDC. It then studies the implications for the financial system and discusses a number of policy issues and challenges. While the academic literature broadly echoes policy makers’ concerns about bank disintermediation and financial stability risks, it also provides conditions under which such adverse effects may not materialize. The paper also points to several knowledge gaps that merit further work, including data privacy and the study of end‐user preferences for attributes of digital payment methods. [Read more at SSRN]
*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).
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