Month: May 2024

Kiffmeister’s #Fintech Daily Digest (20240531)

~ kiffmeister

India’s wholesale and retail CBDC pilots show tiny figures

According to the latest Reserve Bank of India (RBI) data, there was just 800,000 rupees (less than $10,000) wholesale central bank digital currency (CBDC) outstanding at end-March 2024. The RBI has been piloting wholesale CBDC since November 2022, including for settling government bond secondary market transactions, and interbank lending in call money markets. However, the small numbers could be attributable to banks converting CBDC to central bank reserves to earn interest, or the central bank may be automatically converting them at the end of the day, which is what the Swiss National Bank (SNB) did in the earlier phases of its Project Helvetia experiments. [Read more at Ledger Insights]

The digital rupee retail CBDC isn’t catching fire either, with only 2.34 billion rupees ($28 million) outstanding at end-March 2024, versus 34,778.05 billion rupees of banknotes in circulation. [Read more at the RBI]

Next generation correspondent banking

The Bank for International Settlements (BIS) published a paper that explores how tokenization through the application of the unified ledger concept could enhance the functioning of correspondent banking by harnessing new technology to address key pain points in cross-border payment chains. It could unlock streamlined pre-screening and atomic settlement, and pave the way for superior customer verification and anti-money laundering (AML) procedures. Also, tokenization could substantially reduce duplication and miscoordination, thereby revitalizing cross-border payments by fostering a robust network of correspondents and corridors. [Read more at the BIS]

BNPL surges in usage amongst US consumers

According to Nerdwallet’s “2024 State of Consumer Credit Report” buy now, pay later (BNPL) plans are the second-most used form of credit payment among US consumers, with nearly 25% recently using it. BNPL allows people to enter payment agreements at the point of sale, generally without the credit requirements of a credit card or traditional loan, and most often without interest. Among the 2,061 US adults polled in April 2024, 37% of parents of minor children have used BNPL in the past 12 months, compared with 20% of nonparents of minors. And 40% of Gen Z (ages 18-27) and 36% of millennials (ages 28-43) have used BNPL during that time, compared with just 20% of Gen X (ages 44-59) and 12% of baby boomers (ages 60-78). [Read more at Nerd Wallet]

How do SEC-approved ETH ETFs impact staking

CoinMetrics has published an analysis of the potential Ethereum (ETH) network impact of the U.S. Securities & Exchange Commission (SEC) May 23, 2024 approval of spot ETH exchange traded funds (ETFs). An important condition of the approval was that such ETFs will not be able to stake the tokens, which could shrink circulating supply, and improve the health of Ethereum’s consensus layer and the staking ecosystem as a whole. [Read more at CoinMetrics]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240530)

~ kiffmeister

Spain’s central bank launches second wholesale CBDC trial

Banco de España has launched a second wholesale central bank digital currency (CBDC) trial, this time to test the settlement of natively digital bond transactions, and make coupon and redemption payments. The first trial, announced in January, included developing a tokenized deposit solution for interbank payments, and settling tokenized securities (i.e., not natively digital) transactions. [Read more on the Spanish government’s Boletín Oficial del Estado]

CBDC initiatives of the Bank of Japan (7th CBDC Forum)

The Bank of Japan (BOJ) held its seventh “CBDC Forum” and published the secretariat’s presentation, which Norbert Gehrke kindly summarized in English. The presentation outlines the BOJ’s stance on CBDC, delves into the specifics of the proof-of-concept work currently underway, and elaborates on the structure and activities of the CBDC Forum, which involves private sector stakeholders. [View the presentation at the BOJ and read Norbert’s summary on Medium]

The day prior (May 28, 2024) the Japanese Ministry of Finance (MOF) hosted the ninth meeting of its CBDC Experts working group, at which BOJ staff gave the same presentation they gave at their CBDC Forum. Also discussed at the MOF meeting was a presentation by MOF staff on the status of CBDC-related discussions with relevant government ministries and agencies. [View the presentation at the MOF]

PayPal’s new stablecoin on Solana will offer ‘confidential transfers’

PayPal’s PYUSD stablecoin, which previously had only been available on Ethereum, has been deployed on Solana which offers “confidential transfers” as an optional feature. When enabled, it would allow merchants to provide confidentiality for transaction amounts to their consumers while maintaining visibility for regulatory purposes. According to PayPal, it chose the Solana blockchain for its high speeds with extremely low costs. [Read more at PayPal and Solana]

Telegram Wallet enforces new KYC rules, switches provider

Wallet, a third-party cryptocurrency wallet app on Telegram, will impose stricter know your customer (KYC) rules to access all features. Before the update, users did not need to complete any KYC, but they will have to provide their name, birthdate and phone number for “basic” transaction limit levels (see below). “Extended” access will require the user’s national identification, and providing the residential address remove all transfer limits. [Read more at Wallet]

Cambodia digital payments to nurture local currency

According to National Bank of Cambodia Governor Chea Serey, cross-border QR code payments made through Cambodia’s Bakong digital payment system are set to boost the use of the nation’s riel currency. Bakong can already be used for QR code-based payments between Cambodia, Thailand, Laos and Vietnam, and those involving China’s UnionPay. These cross-border payments can only be carried out in riel, so Cambodian citizens need to have a riel Bakong account to make payments in Thailand, for example, while Thai tourists can only make QR code transactions in Cambodia if the place where they are shopping accepts riel. The central bank plans to enable cross-border payments using Bakong with India as early as June and is also working with Japan. [Read more at Nikkei Asia]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240528)

~ kiffmeister

Bank of Israel launches the Digital Shekel Challenge

The Bank of Israel (BOI) is inviting anyone (from Israel or abroad) interested in studying or experimenting with the use of a digital shekel to submit a request to join the Digital Shekel Challenge. Preference will be given to uses with innovative characteristics in the payments market, whether they are improvements to existing applications, or completely new applications. Contestants will be asked to technologically develop various use cases for the digital shekel, by using the application programming interface (API) layer at the center of the proposed two-tier central bank digital currency (CBDC) model. The API layer provides functionalities that enable service providers to connect to the digital shekel system and offer end users among the public a wide and innovative range of services, while maintaining end users’ privacy and the security and reliability of the payment system. [Read more at the BOI]

The effect of DLT settlement latency on market liquidity

The World Federation of Exchanges (WFE) published a paper on the causal relationship between distributed ledger technology (DLT) settlement latency and market quality in the cryptocurrency domain. Focusing solely on public permissionless DLT networks, it finds that settlement latency significantly lowers liquidity and increases transaction costs. In addition, through the Huang and Stoll (1997) spread decomposition, we document that DLT settlement latency reduces the adverse selection costs and increases the inventory management costs faced by liquidity suppliers. Moreover, these effects are more pronounced in smaller trading venues and for the native cryptocurrency of the settlement blockchain. More broadly, this paper highlights the balance between decentralized, near-instantaneous settlement cycles offered by DLT and the potential adverse impacts on market quality. [Read more at the WFE]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240527)

~ kiffmeister

Brazil’s Drex testing extended to new second phase

Banco Central do Brasil has extended the Drex project timeline into 2025 because the technological solutions tested in the first phase “did not present the necessary maturity to guarantee compliance with all requirements legal issues related to the preservation of citizens’ privacy”. The BCB decided that it would be inappropriate to advance testing to a pilot phase (where real users are involved) until there is “certainty about the ability to meet privacy requirements”. The next phase will seek to incorporate new functionalities, such as the implementation of smart contracts within the platform, so that the private institutions participating in the project will be able to create services and business models on the network, without being limited to those designed by the BCB itself. [Read more at the BCB]

Drex will be a wholesale central bank digital currency (CBDC), transacted exclusively between the BCB and commercial banks banks to support the provision of retail financial services settled through tokenized bank deposits. [Read more at the Bank for International Settlements]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240525)

~ kiffmeister

Central bank digital currency and monetary policy

The IMF’s Dong He published an update on ongoing work being undertaken by the IMF’s Monetary and Capital Markets Department on the implications of central bank digital currency (CBDC) for monetary policy. He argued that universally convertible and interoperable CBDC could bolster the role of central bank money as both the ultimate settlement asset and the unit of account, and preserve the central bank’s capacity to implement monetary policy effectively in the digital age. An important challenge will be to figure out how the demand for reserves would be affected by the introduction of CBDC. The operational framework may need to be reconfigured to deal with increased volatility in the demand for reserves, and central bank capital buffers may also need to be revisited if balance sheet materially increases in size and in financial risks because of CBDC adoption. An interest-bearing CBDC could amplify the passthrough from policy interest rates to broader monetary conditions, albeit at the risk of disintermediating banks if the interest rate is set too high. But even a non-interest-bearing CBDC could enhance the channels of monetary policy transmission, although the magnitude of this effect is anticipated to be modest and heavily reliant on country characteristics, such as the capacity of CBDC to advance financial inclusion or diminish the appeal of currency substitution. [Read more at ResearchGate]

CPMI work program includes tokenization, CBDC

The Committee on Payments and Market Infrastructures (CPMI) published its work program and strategic priorities for its 2024/25. The program’s key themes include the enhancement of cross-border payments, with a particular emphasis on the interlinking of fast payment systems, and digital innovations in payments, clearing and settlement. The latter will include tokenization in the context of money and payments, functionality of cross-border central bank digital currencies and central bank collaboration, and multicurrency and asset-linked stablecoin arrangements. [Read more at the Bank for International Settlements]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240524)

~ kiffmeister

Spot ETH ETFs receive official approval from the SEC

The U.S. Securities and Exchange Commission (SEC) Division of Trading and Markets has approved the spot Ethereum (ETH) exchange-traded fund (ETF) 19b-4 filings from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise. This will allow the spot ETH ETFs to be listed and traded on their respective exchanges, but the SEC still needs to sign off on their corresponding S-1 registration statements for trading to officially begin, and this could take months. This process differs from that followed in the January 2024 spot Bitcoin (BTC) ETF approval process in which both the 19b-4 and S-1 filings were approved almost simultaneously. [Read more at the SEC]

A key aspect of the SEC spot ETH ETF approval is that it considers each ETF to be a “Commodity-Based Trust Share”. Several years ago the SEC classified ETH as a commodity, but when ETH migrated to the Proof of Stake (POS) protocol, the SEC reclassified ETH as a security. [Read more at Ledger Insights]

IMF calls Zimbabwe switch to ZiG unit an “important” step

A spokesperson for the IMF said that “the introduction of [the gold-backed] ZiG represents an important policy action accompanied by several complementary policy changes — including monetary, exchange rate, and fiscal policy measures,” in an emailed response to questions from the Bloomberg news service. The Reserve Bank of Zimbabwe (RBZ) launched “Zimbabwe Gold” (ZiG), anchored to a weighted value of the central bank’s precious metal (mainly gold) and foreign currency reserves, in April 2024. The RBZ also explicitly pledged not to finance government spending by printing money, which undermined past versions of the local currency. [Read more at Bloomberg]

House passes bill barring Federal Reserve from issuing digital dollar

The U.S. House of Representatives passed the CBDC Anti-Surveillance State Act (H.R. 5403) that requires the Federal Reserve to obtain congressional approval before issuing a central bank digital currency (CBDC). The bill seeks to amend the Federal Reserve Act, barring the Fed from providing direct consumer services or leveraging CBDCs for monetary policy (i.e., remunerating a CBDC) without Congress’s explicit consent. As pointed out by Ledger Insights, the drafting is very sloppy, particularly by blurring the lines between retail and wholesale CBDC, and full enactment could have unintended consequences. For example, the sloppy drafting could prohibit the current practice of using remuneration on commercial bank reserves held at the Fed as a policy tool. [Read bill at GovInfo.gov]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240523)

~ kiffmeister

Ether ETF applicants drop staking provisions in amended SEC filings

Almost all of the firms that have submitted spot Ethereum (ETH) exchange-traded fund (ETF) applications with the U.S. Securities and Exchange Commission (SEC) have amended the applications to remove the possibility of staking. Staking allows ETH holders to earn yield on their holdings, a feature of proof-of-stake (POS) cryptocurrencies. ETH holders need to lock in their holdings for a set period to support the blockchain operations in exchange for the reward. However, the SEC sees staking as an illegal offering by crypto platforms, as it can be seen as the offering of unregistered securities. This is fueling optimism that the SEC will soon approve most of the applications. [Read more at Finance Magnates]

CFPB to treat buy now, pay later lenders as credit card providers

The U.S. Consumer Financial Protection Bureau (CFPB) issued an interpretive rule that confirms that buy now, pay later (BNPL) lenders are credit card providers. Accordingly, BNPL lenders must provide consumers some key legal protections and rights that apply to conventional credit cards. These include a right to dispute charges and demand a refund from the lender after returning a product purchased with a BNPL loan. (BNPL allows customers to spread out payments into equal installments over time, and tends to be interest free. Unlike credit cards, however, consumers don’t need a certain credit score to use BNPL.) [Read more at the CFPB]

US House passes FIT21 but uncertain future awaits in Senate, White House

The U.S. House of Representatives voted 279-136 in favor of the Financial Innovation and Technology for the 21st Century Act (H.R. 4763), which aims to clarify which government agencies will have responsibility for overseeing specific tokens and digital asset platforms. FIT21 will significantly boost the oversight role of the Commodity Futures Trading Commission (CFTC) while significantly hobbling the Securities and Exchange Commission (SEC). FIT21 will now go to the Senate, and even if it did pass that hurdle, it would likely be by a margin sufficient to ward off a possible Biden veto of the bill as currently written. [Read more at Coingeek]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240522)

~ kiffmeister

ISDA tokenized collateral guidance note

The International Swaps and Derivatives Association (ISDA) published a jurisdiction-agnostic guidance note to inform how counsel may approach a legal opinion on the enforceability of collateral arrangements entered into under certain ISDA collateral documentation where the relevant collateral arrangement comprises tokenized securities and/or stablecoins. This guidance note sets forth (i) a basic taxonomy of common tokenization structures and (ii) a non-exhaustive list of key issues to consider when analyzing the enforceability of collateral arrangements involving tokenized collateral. [Read more at ISDA]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240520)

~ kiffmeister

Impact of Retail CBDC on Digital Payments and Bank Deposits: Evidence from India

The U.S. National Bureau of Economic Research (NBER) published an empirical analysis utilizing detailed transaction data from India’s digital rupee pilot to explore the dynamics between central bank digital currency (CBDC) and existing digital payment methods, as well as the implications of increased CBDC usage on traditional bank deposits. It found that the April 2023 introduction of merchant fees on certain Unified Payments Interface (UPI) person-to-merchant (P2M) payments catalyzed a substitution effect into digital rupees. Furthermore, it found that an uptick in CBDC usage was associated with a notable decline in bank, cash, and savings deposits. [Read more at the NBER]

Nothing to hide? Gender and age differences in the willingness to share data

The Bank for International Settlements (BIS) published a paper that, based on a representative survey of about 1,300 US consumers, found that women are less willing than men to share their financial transaction data in exchange for better offers on financial services. Differences in attitudes across groups, such as the willingness to take financial risks, concerns that data will become publicly available and concerns around personal safety, explain part of these gaps. The analysis also shows that older individuals are also less willing to share their data, perhaps as a matter of principle. This could result in biased samples and outcomes that are not in the interest of the underrepresented groups, e.g. in lending decisions, financial advice, and health applications. [Read more at the BIS]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.

Kiffmeister’s #Fintech Daily Digest (20240517)

~ kiffmeister

Expanding the cross-boundary e-CNY pilot in Hong Kong

The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) are expanding the scope of the e-CNY pilot in Hong Kong to facilitate the set up and the use of e-CNY wallets by Hong Kong residents, as well as the top-up of e-CNY wallets through the Faster Payment System (FPS). This marks the world’s first linkage of a faster payment system with a central bank digital currency (CBDC) system. Users can now set up e-CNY personal wallets in Hong Kong, which requires only their Hong Kong mobile phone numbers. The e-CNY wallets can then be used for cross-boundary payments to merchants, but not person-to-person (P2P) transfers. [Read more at the HKMA]

Bank of Ghana completes first Project DESFT proof of concept

The Bank of Ghana (BOG) has reportedly completed the second phase of Project Digital Economy Semi-Fungible Token (DESFT), a joint project with the Monetary Authority of Singapore (MAS) and the United Nations Development Programme (UNDP). The first phase saw the development of the blockchain-based Universal Trusted Credentials (UTC) system that enables micro, small and medium enterprises (MSMEs) to efficiently verify authenticity of key information, such as basic credentials, licenses, certificates, and trade records across borders. In the second phase, a cross-border payment was made using UTCs, the eCedi CBDC and a Singapore dollar stablecoin, using the Purpose-Bound Money (PBM) protocol. [Read more at Ghana Business News]

Bank of England digital pound point-of-sale proof of concept

The Bank of England (BOE) has assessed the technical feasibility of using existing point-of-sale (POS) hardware, as currently used in the UK, to initiate digital pound payments. This involved a proof of concept (POC) that used EMV standards to send payment instructions from smart cards to POS devices, and then to an application programming interface (API). It demonstrated that, while existing POS terminals may not need to be modified to make online digital pound payments, they might need to be modified for offline payments. [Read more at the BoE]

Basel Committee publishes report on the digitalization of finance

The Basel Committee on Banking Supervision published a report that considers the implications of the ongoing digitalization of finance on banks and supervision, including application programming interfaces (APIs), artificial intelligence and machine learning, distributed ledger technology (DLT) and cloud computing. It also considers the role of big techs, fintechs and third-party service providers, and new business models. [Read more at the Bank for International Settlements]

U.S. Senate votes to overturn SEC crypto custody rule

The U.S. Senate voted for a bipartisan resolution to overturn the Securities and Exchange Commission’s (SEC) SAB 121, the staff accounting bulletin that requires listed firms, including banks to include assets under custody as both an asset and liability on their balance sheets. Usually, as common sense would suggest, these such assets don’t go on the balance sheet because they belong to the client. The House of Representatives has already passed a similar bill, but the White House has said that it will veto the bill. [Read more at Ledger Insights]

Digital Euro project governance and stakeholder management

And this just popped up on the European Central Bank (ECB) website:

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • Digital Currency Conference, London, September 23-24. The conference will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. And enter the KiffmeisterDCC code at registration to get a 20% discount! [Find out more and register here]

And 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.