The Committee on Payments and Market Infrastructures (CPMI) published a report on considerations and challenges regarding the use of stablecoin arrangements in cross-border payments. The paper acknowledges it’s possible that stablecoins might cut costs, speed up payments, encourage competition and improve transparency, no stablecoin arrangements yet exist that are deemed to be properly designed and regulated and fully compliant with all relevant regulatory requirements. Further, even if such stablecoin arrangements did exist and could help to address specific cross-border payment frictions, they might not necessarily positively impact cross-border payments as the drawbacks could outweigh any potential benefits. [Read more at the Bank for International Settlements]
The Bank of Korea and Korea Exchange signed an agreement to collaborate in exploring distributed ledger technology (DLT) and central bank digital currency (CBDC) for carbon trading. Simulated trials will take place in the third and fourth quarters of 2024. Both organizations already have related programs. The Korea Exchange is currently conducting simulated DLT experiments and plans to support listed security tokens next year. The central bank said this trial would form part of its CBDC usability tests. However, both the exchange and central bank emphasized this is just a test. It will not impact the functioning of current carbon credit markets. [Read more at Ledger Insights and the Bank of Korea]
The U.K. HM Treasury published an update on its legislative approach for bringing fiat-backed stablecoins into the U.K. regulatory perimeter for financial services. It will inform development of the Financial Conduct Authority and Bank of England’s approaches for regulating stablecoin issuers and custodians, and systemic digital settlement asset payments systems and service providers respectively. [Read more at HM Treasury]
FYI here are some of my upcoming speaking engagements:
Central Bank Digital Currencies: Perspectives on a Digital Canadian Dollar (Online on November 2 at 4:00 Eastern Time) [Register here]
Currency Research Americas Cash Cycle & Payments Seminar (Orlando Florida on November 27-30)[Register here]
Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]
*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 email@example.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 (firstname.lastname@example.org).
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