Bank of Israel considering remunerated CBDC
Andrew Abir, Deputy Governor of the Bank of Israel (BOI), floated the idea of a remunerated digital shekel, as a way to push banks to up their games. “We could consider that the digital shekel, which will be built to be able to pay interest directly on the public’s holdings, would actually do that. Of course, we will need to think about this carefully – for example, by setting it at a lower level than the Bank of Israel policy interest rate, and/or by limiting the types of users who will be eligible for it and the maximum amount on which interest would be paid.” [Read more at the BOI]
Finternet: the financial system for the future
The Bank for International Settlements (BIS) published its vision for a “Finternet” of multiple financial ecosystems interconnected with each other, much like the internet. The envisioned system leverages tokenization and unified ledgers, underpinned by a robust economic and regulatory framework, to dramatically expand the range and quality of financial services. The paper provides a blueprint for how key technical characteristics like interoperability, verifiability, programmability, immutability, finality, evolvability, modularity, scalability, security and privacy can be incorporated, and how varied governance norms can be embedded. [Read more at the BIS]
UK Finance announces new RLN experimentation phase
UK Finance announced work on a new UK Regulated Liability Network (RLN) experimentation phase with eleven of its members. The UK RLN is envisaged as a common “platform for innovation” across multiple forms of money, including existing commercial bank deposits and a shared ledger for tokenized commercial bank deposits. It will focus on three use cases; payment-upon-delivery for a physical product, the process of buying a home, and digital bond settlement. The experimentation phase will run until summer 2024 and will cover customer and business benefits, technical feasibility via proofs of concept in a technology sandbox, and the legal framework. [Read more at UK Finance]
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 john@kiffmeister.com.
