Kiffmeister’s #Fintech Daily Digest (20240220)*

Digital euro: Debunking banks’ fears about losing deposits

In parallel to yesterday’s VoxEU article, the European Central Bank (ECB) posted an article by the same three senior officials that debunked fears that a commercial bank customers might withdraw deposits to hold digital euro. [Read more at the ECB]

Banks are barking up the wrong tree when they rely on studies that overlook the outlined design features of a digital euro. In doing so, they ignore the many other challenges they need to address to ensure stable funding through deposits. Banks need to offer attractive products and services that incentivize customers to hold their deposits with them instead of migrating to new and powerful private competitors.

Bank of England and HM Treasury RFI on digital pound privacy

The Bank of England (BOE) and HM Treasury published a digital pound request for information on privacy, meaning the protection of users’ personal and transaction data, and ensuring they have control and visibility over who can process their data and for what purposes. However, the digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime, but the BOE and government will not access users’ personal data in a digital pound ecosystem. In that regard, the BOE is exploring technological solutions to prevent it from being able to access personal data via the core ledger. The deadline for responding is March 12, 2024. [Read more at the BOE]

EU Parliamentary Committee votes in favor of digital euro

The European Parliament’s Committee on Civil Liberties and Justice has reportedly voted to endorse the latest digital euro report backing the ECB’s proposed digital euro. The draft central bank digital currency (CBDC) legislation was passed by 48 in favor of, with six against, and seven abstentions. It is likely a full European Parliament vote on the digital euro will not happen until after European Union election in June 2024. [Read more at Coingeek]

I say “reportedly” above because I can’t find any evidence of this vote on the European Parliament’s website. If anyone has that link, please share it!

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here and get a 20% discount with the Kiffmeister20 code]

*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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