CBDCTracker.org has updated its open-source central bank digital currency (CBDC) project database. [More details can be found in the LinkedIn post by Atakan Kavuklu]
Report of the Japan Ministry of Finance Expert Panel on CBDC
Japan’s Ministry of Finance (MOF) has published an English translation of the Report of the Expert Panel on CBDC. The Panel asks MOF to coordinate with relevant ministries and Bank of Japan (BOJ) on design, and to clearly explain the rationale behind CBDC to the public. The Panel also recommends that the government and BOJ maintain their commitment to supplying cash as long as there is demand from the public, and it found no strong reason for offline functions to be introduced at the outset considering risks of double spending and counterfeiting. Also, remuneration is not recommended for the time being as it could undermine the convertibility with cash at par. [Read more at the MOF]
S&P Global Ratings launches stablecoin stability assessment
S&P Global unveiled ratings for eight stablecoins. On a grading scale of one (very strong) to five (very weak) USDC, Pax Dollar (USDP) and Gemini Dollar (GUSD) scored all scored two strong), while Tether’s USDT scored a four (constrained). USDT was penalized for its lack of transparency and for holding some higher risk assets. The ratings are based on an assessment of asset quality risks, including credit, market value, and custody risks, the degree of any risk mitigants like overcollateralization requirements and liquidation mechanisms, governance, legal and regulatory framework, redeemability and liquidity, technology and third-party dependencies, and track record. [Read more at S&P Global]
JCB, IDEMIA extend offline digital currency project
Japanese card payments network JCB, identity firm IDEMIA and Malaysia’s Soft Space are exploring offline digital currency functionality. A first phase of the project demonstrated connectivity between existing card and payment infrastructures, and a potential [central bank?] digital currency, showing that current point of sale solutions don’t need adaptation. The new phase will test using mobile wallets to transfer digital currency between them without an internet connection using near field communications (NFC). Another scenario will test the offline use of stored value payment cards that transfer digital currency via mobile phones using NFC to transfer funds. [Read more at IDEMIA]
FASB confirms ‘fair value’ approach for corporate crypto holdings
The U.S. Financial Accounting Standards Board (FASB) published a standards update that will let corporations recognize “fair value” changes in crypto holdings. The move will benefit companies with crypto on their balance sheets, like MicroStrategy. Under the existing rulebook, companies have to report a loss if the crypto they hold is worth less than the purchase price, even if they haven’t sold the assets, but they couldn’t report gains when the crypto holdings are worth more. Under the new rules, both losses and gains on crypto holdings are to be recognized in net income. [Read more at FASB]
Coinbase Project Diamond platform for creating digitally native assets
“Project Diamond, a smart contract-powered platform designed by seasoned asset managers for institutions to seamlessly create, buy, and sell digitally native assets, has launched with the execution of the first debt instrument on the platform, in preparation to enter the Abu Dhabi Global Market (“ADGM”) RegLab sandbox. The platform leverages the Coinbase technology stack and Base to deliver secure, compliant, capital market activity that will continue to unlock institutional adoption of the global cryptoeconomy.” [Read more at Coinbase]
FYI here are some of my upcoming speaking engagements:
– 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 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]
