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.