Month: July 2024

Kiffmeister’s #Fintech Daily Digest (20240720)

~ kiffmeister

Relevance and risks of issuing a CBDC in Colombia

Banco de la República de Colombia (BRC) published a report outlining its cautious stance on issuing a central bank digital currency (CBDC). It underscores the BRC’s concerns over potential financial risks and policy challenges associated with CBDC adoption, and potential financial stability threats and monetary policy transmission channel disruptions. Hence, the BRC does not see reasons for CBDC issuance in the short term, but it will continue investigating the possible advantages, risks and costs of its issuance in the future. [Read more at the BRC (in Spanish)]

Kazakhstan pays for rail line to China using programmable CBDC (CoinTelegraph)

The National Bank of Kazakhstan (NBK) launched a pilot project to use its digital tenge CBDC to pay for the construction of a rail line to China. The project uses programmable digital tenge to see that allocated funds reach the intended recipients at the right time. The money allocated to finance the project was “marked” so it is paid only to organizations that have fully fulfilled the required obligations. The marked CBDC was used to enlarge the rail line between Moyynty in central Kazakhstan and Dostyk on the Chinese border across from Xinjiang. [Read more at the NBK]

Putin wants to speed up deployment of Russia’s CBDC (Ledger Insights)

Russian President Vladimir Putin expressed an interest in accelerating the Bank of Russia’s digital ruble CBDC pilots. At a meeting on economic issues on July 17, 2024, he called for a “broader, full-scale implementation of the digital ruble in the economy, in economic activity and in the field of finance”. The pilot, which launched in August 2023, involved 12 banks, 600 individuals and 22 trade and service enterprises from 11 cities. As of July 1, 2024, 27,000 transfers and over 7,000 payments for goods and services have been done, which “the digital ruble platform showed its performance and functionality” and justifying taking the next step to “full implementation”. [Read more at the Kremlin 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.

Kiffmeister’s #Fintech Daily Digest (20240719)

~ kiffmeister

The CBDCTracker.org database has been updated, now counting a total of 102 jurisdictions and/or currency unions engaged in central bank digital currency (CBDC) research. Note that the Euro area, the Eastern Caribbean Economic and Currency Union and Economic and Monetary Community of Central Africa are currency unions and only count as one. For more information, please read Atakan Kavuklu’s summary of recent developments [here] and visit the CBDCTracker.org website.

Preventing financial crime in crypto-assets: Identifying evolving criminal behavior

Elliptic published its 2024 typologies report on the nexus between crypto-assets and financial crime. This year’s report is designed to equip compliance teams and law enforcement with the practical insights needed to continue to detect new financial crime risks with success. The report includes case studies and insights on the convergence of AI and crypto-assets and how it is impacting criminal activity, the increasing use of stablecoins in financial crime typologies including pig butchering scams and sanctions evasion activity, and major law enforcement and regulatory actions with additional case studies. [Read more at Elliptic]

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 (20240718)

~ kiffmeister

Basel Committee final disclosure framework for banks’ cryptoasset exposures

The Basel Committee on Banking Supervision published its final disclosure framework for banks’ crypto-asset exposures and targeted amendments to its crypto-asset standard published in December 2022. The disclosure framework includes a set of standardized tables and templates covering banks’ crypto-asset exposures to enhance information availability and support market discipline. The targeted amendments include clarified criteria for stablecoins to receive a preferential regulatory treatment. [Read more at the Bank for International Settlements]

[Ledger Insights provides a summary of the key points regarding the criteria for stablecoin preferential treatment here.]

HKMA proposes rules for ‘fiat-referenced’ stablecoins (Decrypt)

The Hong Kong Monetary Authority (HKMA) is looking to roll out a comprehensive regulatory framework for fiat-referenced stablecoin (FRS) issuers. This comes alongside a proposal for legislation. The new regime would require foreign FRS issuers to establish a physical presence in Hong Kong, require that issuers custody reserves at Hong Kong banks, and prohibit issuers from paying interest to holders. [Read more at the HKMA]

State Street planning tokenized deposits and stablecoin (Ledger Insights)

State Street is reportedly exploring creating its own stablecoin and deposit token. The bank is already an investor in Fnality, the interbank distributed ledger technology (DLT) synthetic wholesale central bank digital currency (CBDC) payment solution backed by 20 institutions. [Read more at Bloomberg]

Oxbridge Re raises $2.88m for EpsilonCat Re tokenized reinsurance sidecar securities (Artemis.bm)

Oxbridge Re Ltd., the Cayman Islands based reinsurance company, through its SurancePlus digital securities subsidiary, completed a private placement of 287,705 Participation Shares represented by the digital tokens, EpsilonCat Re, under a 3-year Participation Share Investment Contract to raise roughly $2.88 million. [Read more at Artemis.bm]

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 (20240716)

~ kiffmeister

FSB consults on cross-border payment legal, supervisory and regulatory frictions

The Financial Stability Board (FSB) published its proposed recommendations to promote greater alignment in data frameworks related to cross-border payments and consistency in the regulation and supervision of bank and non-bank payment service providers. They take forward priority actions under the G20 Roadmap to address legal, supervisory and regulatory frictions in cross-border payments to help achieve the quantitative targets in 2027. Proposals include the establishment of a forum for cross-sectoral collaboration on data issues related to cross-border payments to ensure that the recommendations are taken forward in a coordinated manner. [Read more at the FSB]

Palau developing DLT government bond issuance solution (Ledger Insights)

Palau has contracted with Soramitsu Labs to build a distributed ledger technology (DLT) based government bond issuance platform. Soramitsu was the developer of Cambodia’s Bakong DLT-based national payment system, and is also working with Laos, the Philippines and Vietnam on central bank digital currency (CBDC) projects, and with the Asian Development Bank on a proof of concept for the cross border settlement of bond transactions. The 100 million yen cost of the Palau project will be covered by Japan’s Ministry of Economy, Trade and Industry, and the Japanese foreign and finance ministries will provide advice on strategy and project management. [Read more at Ledger Insights]

E-CNY transactions show 630% growth in 2023 (Ledger Insights)

Cumulative e-CNY transaction volumes reached RMB 6.6 trillion ($910 billion) through to May 2024 (7.3 times year-over-year growth). [Read more at Ledger Insights]

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 (20240712)

~ kiffmeister

House fails to override Biden’s veto on nullifying SEC crypto rule (Coin Telegraph)

The U.S. House of Representatives could not gather enough support to override President Joe Biden’s veto of a resolution affecting a Securities and Exchange Commission (SEC) rule on banks recording cryptocurrency held in custody for customers as a liability on their balance sheets. In a July 11 vote, 228 House members voted to override President Biden’s veto of H.J.Res. 109, overturning SEC Staff Accounting Bulletin (SAB) No. 121 — 60 votes short of the two-thirds majority required. However, Rep. Maxine Waters (D-Calif.) said the SEC has been negotiating with banking industry representatives about “targeted modifications” to the policy and “may be close to reaching an agreement.” [Read more at Coin Telegraph]

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 (20240711)

~ kiffmeister

The role of public money in the digital age

The Bank of Canada (BOC) published a paper that argues that there is now and will continue to be a fundamental need for a relevant retail public money (cash or central bank digital currency (CBDC)) as part of a well-functioning monetary system in which public and private money coexist and complement each other while trading at par, allowing money to move back and forth safely and efficiently. The paper posits that increasing demand for digital payments and the declining use of cash could lead to a loss of the uniformity of money, adoption of alternative units of account and exclusion of some segments of the population. This could lead to frictions and potential abuse of market power by private money providers that could reduce the efficiency of the economy. Also, to perform its interlinking function, retail public money needs to be a viable payment option and a practical mechanism to transfer between private forms of money. The paper argues that a properly designed CBDC would help fill the gap and maintain the relevance of a retail public money in the economy. [Read more at the BOC]

Taiwan to test CBDC prototype via digital voucher system (The Block)

Taiwan’s Central Bank of the Republic of China (CBC) reportedly may start testing a CBDC prototype in collaboration with the Ministry of Digital Affairs “digital voucher” system at the end of 2024 or early 2025. The Taiwanese government has previously issued stimulus vouchers to boost consumption. In the planned pilot, the Ministry would oversee voucher distribution, while the central bank would manage the subsequent payment and settlement operations after users spend the digital vouchers from their wallets. A local media source said that the digital voucher system could commence testing in August and go live in October. The CBDC prototype would not employ blockchain or smart contracts. [Read more at The Block and view the reported CBC briefing here]

The ecology of automated market makers (Bank of Canada)

The Bank of Canada (BOC) published a paper that describes the ecology of automated market makers (AMMs) used for the pricing and trading of crypto assets within decentralized finance (DeFi). It uses blockchain data to identify trends in user adoption and trading volumes of AMMs. Given the range of AMMs available and the diversity of their designs, the paper performs case studies on four platforms—Uniswap, Curve, Sushiswap and Balancer—to represent the AMM market. It describes the designs of these four AMMs in terms of their products or services, governance, incentives for participation and risks. Finally, the paper describes the characteristics of AMMs that require considerations with respect to the application of a regulatory framework to AMMs. [Read more at the BOC]

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 (20240710)

~ kiffmeister

Digital shekel launch unlikely ahead of other advanced economy countries

The Bank of Israel (BOI) remains committed to plans for a digital shekel currency to improve Israel’s payments system and foster innovation, but is unlikely to launch one ahead of other advanced economies, according to Deputy Governor Andrew Abir. He wants an eventual central bank digital currency (CBDC) to pay interest to create competition with bank deposits and provide an incentive for the public to hold it. It will operate in a two-tier model, with a wide range of participants providing services on the digital shekel platform, including banks, plus other payment companies, fintech or bigtech companies, consumer clubs, and retail entities. Participants will support regular payment use cases, plus advanced and innovative use cases. [Read more at the BOI and Reuters]

Mobile device ownership and mobile payments in Canada

The Bank of Canada (BOC) published a paper that presents empirical findings regarding the adoption of mobile payments and digital wallets, based on a survey of Canadian adult consumers. It found that five out of six use a smartphone regularly, but they have not started to use mobile payments at the same rate as other payment innovations such as contactless cards. This is possibly because current mobile payment technology may not justify the costs of switching for consumers. However, according to the empirical evidence, providing access to payments with features similar to mobile payments to those without a mobile phone would result in usage rates exceeding the current use among mobile phone owners. Therefore, people who are unable to acquire or choose not to own a mobile device might have unmet payment needs. [Read more at the BOC]

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 (20240709)

~ kiffmeister

Potential climate impact of retail CBDC models

Sveriges Riksbank published a paper that analyses central bank digital currency (CBDC) electricity consumption compared to existing retail payment services. Findings indicate that the energy use per transaction of an e-krona is comparable to that of card payments. However, there are significant differences depending on whether the design of the infrastructure for the e-krona is centralized or decentralized, where a centralized solution tend to be less energy consuming than a decentralized solution. Algorand’s proof-of-stake public-permissioned network was chosen to represent the decentralized platform, and Hedera’s private-permissioned network the centralized platform, and the transactions volumes were assumed to be similar to that of cash-based transactions. [Read more at the Riskbank]

Visa showcases tokenized deposits with HSBC, Hang Seng Bank (Ledger Insights)

Visa published a report on its tokenized deposit trial with HSBC and Hang Seng Bank, which involved (i) settling high value real estate transaction and (ii) settling Visa card payments. In Hong Kong there are restrictions on faster payment amounts, so the real estate transaction supported a high value instant payment with tokenized deposits. With tokenized deposits, when a payee transfers money to a recipient, the sending bank burns the tokens and the recipient bank mints them so they appear in the recipient’s wallet. Instant settlement is facilitated by wholesale CBDC, with the token and CBDC exchanges happening simultaneously, so there’s no settlement risk. [Read more at Visa]

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 (20240708)

~ kiffmeister

Taiwan central bank says no rush for CBDC launch (Cointelegraph)

The President of the Central Bank of the Republic of China (CBC), Yang Chin-long, said that developing a central bank digital currency (CBDC) is not a competition and that the central bank is focused on steady progress over speed. Yang said the central bank is conducting experiments in three scenarios to enhance domestic payment efficiency and innovation, retail and wholesale CBDC and the application of tokenization technology to digitally transform wholesale CBDC and commercial bank currency, supporting various asset tokens. The CBRC is also conducting proofs-of-concept and collaborating with participating banks to build a common platform for tokenization. [Read more at the CBC]

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 (20240707)

~ kiffmeister

Global Layer 1 (GL1) Whitepaper

The Monetary Authority of Singapore (MAS) published a paper that introduces the Global Layer One (GL1) initiative, a multi-purpose, shared ledger infrastructure based on distributed ledger technology (DLT) and governed by common technological standards, principles and practices, on which regulated financial institutions across jurisdictions could deploy tokenized assets. It is envisaged that the architecture of GL1 could be described as the base layer in a four-layered conceptual model for digital asset platforms introduced in MAS “Project Guardian: Enabling Open and Interoperable Networks” and IMF “ASAP: A Conceptual Model for Digital Asset Platforms” papers. [Read more at the MAS]

DBS, JP Morgan, Mizuho test FX PvP DLT solution on Partior

Partior completed a proof of concept for FX payment versus payment (PvP) settlement using its blockchain network, with JP Morgan, DBS Bank and Mizuho. The trial showcased the effectiveness of Partior’s FX PvP solution in eliminating FX settlement risk across both emerging market and advanced economy currencies, and same-day-value trades, with 24×7 real-time and atomic settlement. It also highlighted the solution’s capability to provide just-in-time liquidity across these currencies as well as real-time visibility and status throughout the transaction life cycles for participants. [Read more on Ledger Insights and Partior’s LinkedIn page]

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.