DC Summit: Generative Artificial Intelligence & Finance
The Washington DC Summit on Generative AI and Finance will be held on April 20 during the week of the IMF/World Bank Spring Meetings at George Washington University’s Jack Morton Auditorium. It will start with a set of lectures in the morning, and be followed by a series of panels in the afternoon. Plus there will be food and drinks, and networking opportunities. To register, go to DCSummit.org where you will also see the draft agenda, list of speakers and schedule.
CBDC and other digital payments in Sub-Saharan Africa: A regional survey
The IMF published a Fintech Note on key findings from the Sub-Saharan Africa CBDC and Digital Payments Survey, shedding light on the motivations, benefits, and challenges of CBDC adoption, as well as the developments of digital private money and crypto assets in sub-Saharan Africa. More than 75% of the 33 central banks surveyed are engaged in—or are planning to engage in—CBDC research or pilot activities. Of these, roughly two-thirds are in the research phase, and slightly over one-third are planning to conclude their CBDC pilot programs within the next two years. More than a quarter are actively preparing to launch a CBDC by 2028, although legal challenges pose major hurdles to getting to that point. Financial inclusion, efficiency in domestic payments and facilitating remittances’ are the most dominant motivations for CBDC adoption. Fast payment systems and e-Money (such as mobile money) are considered as quick wins in sub-Saharan Africa, and about two-thirds of countries are in the process of implementing or considering fast payment systems that are mostly accessible through mobile phones or the internet. [Read more at the IMF]
A macroeconomic model of central bank digital currency
A paper by a couple of San Francisco Federal Reserve Bank staff (Pascal Paul and Mauricio Ulate) published a paper that uses a New Keynesian DSGE model to study the introduction of a remunerated retail central bank digital currency (CBDC). At the heart of the model are monopolistic banks with market power in deposit and loan markets. When a remunerated retail CBDC is introduced, households benefit from an expansion of liquidity services and higher deposit rates as bank deposit market power is curtailed. However, even though deposits also flow out of the banking system and bank lending contracts, the paper finds substantial welfare gains as long as the CBDC interest rate doesn’t exceed the policy rate minus 1%. [Read more on Pascal Paul’s blog]
Connectedness between CBDC, financial stability and digital assets
The Journal of International Financial Markets, Institutions and Money (JIFMIM) published a paper that examines the interconnectedness CBDC development and adoption levels, digital asset returns and financial stability. (CBDC development and adoption was measured with a news media coverage based “CBDC Uncertainty Index” developed by Wang et al (2022).) The paper finds a significant level of connectedness between CBDCs, digital assets and financial stability, but only a weak positive connectedness between CBDCs and returns on digital assets. Furthermore, the study finds bidirectional connectedness between CBDCs and other financial stability measures, suggesting that changes in CBDC performance can influence the overall stability of the financial system, and vice versa. [Read more at the JIFMIM]
*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]
