Month: September 2024

Kiffmeister’s #Fintech Daily Digest (20240930)

~ kiffmeister

Anchoring UK retail digital money (Barclays)

arXiv published a paper by Barclays staff that questions the need for a digital pound to preserve the singleness of money. It makes the case that singleness can be achieved by combining (i) on-demand interoperability between issuers and forms of private money, (ii) settlement finality in wholesale central bank money, and (iii) robust prudent regulations and effective supervision by the Bank of England and the UK Government. The paper concludes that the anchoring of private UK retail digital money is already well supported by all three of the above. [Read more at arXiv]

FinCEN withdraws KYC rule for non-custodial crypto wallets (JDSupra)

On August 19, the U.S. Treasury Department withdrew a contentious 2020 Financial Crimes Enforcement Network (FinCEN) proposal that would have required banks and money service businesses to submit reports and verify the identity of customers in transactions involving convertible virtual currency or digital assets held by crypto wallet software. These wallets are managed directly by individuals without third-party intermediaries. The proposal faced widespread opposition from the U.S. crypto industry, which argued that the rule was unfeasible. [Read more at JDSupra]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240927)

~ kiffmeister

ADB looking to implement digital currency platform (ADB)

The Asian Development Bank (ADB) is looking for a service partner to implement a digital currency platform with both online and offline capabilities. This platform will support financial inclusion in remote areas with limited internet access and offer an alternative payment method for various users. The project will focus on deploying a modular, “token-based” architecture with programmable infrastructure to facilitate peer-to-peer transactions, strengthen financial resilience, and promote innovation across sectors. The outcome of this project will be an ADB-owned digital asset that can be utilized across its member countries. [Read more at the ADB]

Do price changes affect crypto ownership? (Philadelphia Fed)

The Federal Reserve Bank of Philadelphia published an article that uses U.S. survey data to explore links between crypto prices and hodlings. It found a disconnect between market prices and ownership over the last two years. While it found a clear decrease in ownership and interest in purchasing during the crypto winter of 2022, recent growth in the market has not been accompanied by an increase in ownership in the survey population. [Read more at the Philadelphia Fed]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240925)

~ kiffmeister

First Abu Dhabi Bank pilots JPM Coin for programmable payments (Ledger Insights)

First Abu Dhabi Bank (FAB) has become the first financial institution to pilot JPM Coin programmable payment functionality. FAB’s trials included initiating payments based on time triggers and balance thresholds, for example, the transfer of funds out of an account if the balance is too high, or into the account if it’s too low, or a planned payment is only sent out depending on its impact on the account balance. [Read more at FAB]

Cybersecurity “issue” behind several-day MoneyGram outage (CoinTelegraph)

International money transfer firm MoneyGram has been down for at least five days due to a “cybersecurity issue,” and it is working to restore its services with some success. Users have reported that its services went down on September 20, 2024. The U.S.-based firm said it was working with law enforcement and “leading external cybersecurity experts” to mitigate the issue, and once its systems are back online, pending user transactions would be available. [Read more on X]

Consumer demand for CBDC as a means of payment (ECB)

The European Central Bank (ECB) published an article analyzes payment survey data to arrive at a framework for understanding the role of adoption frictions and design strategies in shaping central bank digital currency (CBDC) demand. The survey spanned 17 euro area countries with over 40,000 respondents. It included a payment diary, together with a questionnaire asking respondents to rank different payment instruments according to their most important attributes. The analytic results show that, while consumers may initially prefer to use more traditional payment methods, a design tailored to their specific needs could significantly increase CBDC uptake. Raising awareness and capitalising on network effects could also boost demand for CBDC. [Read more at the ECB]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240924)

~ kiffmeister

Eurosystem’s exploratory work on DLT platforms progressing (ECB)

The Eurosystem’s work to explore how wholesale financial transactions recorded on distributed ledger technology (DLT) platforms could be settled in central bank money is progressing well. A total value of €532 million has been successfully settled in more than 50 transactions involving 15 different financial firms and central banks since May 2024. In total, 60 financial firms from nine euro area countries and the European Central Bank (ECB) and three national central banks are participating. The trials – transactions including actual settlement in central bank money – have covered nine use cases, with a particular focus on the primary distribution of bonds to investors on a delivery-versus-payment (DVP) basis. Trials and experiments will continue until the end of November 2024. [Read more at the ECB]

Digital Asset and DTCC test collateral and margin optimization via tokenization (PR News)

Digital Asset published the results of its U.S. Treasury (UST) Collateral Network Pilot that focused on leveraging DLT applications to support market connectivity across the collateral management lifecycle to enhance mobility, liquidity and transactional efficiency of tokenized assets. The tests involved four investors, four banks, two central counterparties, three custodians/collateral agents, and a central securities depository operating fourteen Canton Network nodes, that connected four types of cross-application transactions through ten distributed applications, leveraging DTCC’s LedgerScan solution to support dynamic tracking and governance of the assets involved in the pilot transactions. Participants successfully executed 100 transactions. [Read more at Canton]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240922)

~ kiffmeister

HKMA commences Phase 2 of e-HKD pilot programme (HKMA)

The Hong Kong Monetary Authority (HKMA) commenced Phase 2 of the e-HKD pilot programme to delve deeper into innovative use cases and commercial feasibility for new forms of digital money, including e-HKD and tokenized deposits, that can potentially be used by individuals and corporates, within a real-world setting. Eleven groups of firms will test the settlement of tokenized assets, programmability and offline payments. [Read more at the HKMA]

Malaysian scaled down its retail CBDC project (BNM)

In a June 11, 2024 speech, Bank Negara Malaysia (BNM) Deputy Governor Jessica Chew announced the scaling down of its retail CBDC project. “Given the highly efficient domestic retail payment systems operating today,” the central bank is prioritizing enhancing the cross-border interoperability of fast payment systems, plus wholesale CBDC work. (Many thanks to the BNM’s Doulos Lee for bringing this to my attention!) [Read more at the BNM]

Upcoming Speaking Engagements:

  • Digital Currency Conference, London, September 23-24. The conference is bringing 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]
  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240921)

~ kiffmeister

Regarding the news I posted earlier this week about the Bank of Canada “reportedly” downshifting its retail central bank digital currency (CBDC) project, we now have confirmation on the Bank’s website: “the Bank is scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development… The body of knowledge built over recent years will be invaluable if, at some point in the future, Canadians, through their elected representatives, decide they want or need a digital Canadian dollar… The Bank will continue to monitor global retail CBDC developments and publish some related research, but the focus will be on preparing for the evolution of payments both in Canada and around the world, through policy research and analysis.” [Read more at the Bank of Canada]

CBDC adoption: inclusive strategies for intermediaries and users (IMF)

The IMF published a paper that argues that successful CBDC adoption hinges not only on technical readiness and operational robustness, but also on strategic policy and design choices that target end-user and intermediary involvement from the outset. Central banks cannot take it for granted that CBDC, once launched, will be adopted and scaled up easily. The paper proposes a “REDI” framework that central banks can use to prepare for CBDC adoption comprised of (i) regulatory strategies, (ii) education and communication initiatives, (iii) design and deployment choices, and (iv) incentive mechanisms. The paper [read more here] also makes several concrete recommendations including:

  • Early engagement with end-users focusing on identifying their needs and pain points, as well as social and cultural factors that influence their financial behavior.
  • Monetary and non-monetary incentives to encourage intermediary participation, including exclusivity agreements, subsidies for setup costs, and allowing for CBDC data monetization or charging for value-added services.
  • End-user incentives including sign-up bonuses, airdrops or lotteries upon onboarding, and once onboarded, usage incentives, such as cash-back offers and discounts on CBDC transactions. Incentives targeted specifically to merchants could include subsidies for setup costs, reduced transaction fees, tax exemptions, or volume-based rewards.
  • Implementing selected use cases (such as P2P, G2P or B2P payments) may help generate initial momentum (see also SODA’s “test and deploy” implementation framework).

Tokenized deposits to hit Korean supermarkets in December (Korea Times)

Starting in December 2024, selected participants will reportedly be able to use tokenized deposits to make payments at domestic supermarkets and convenience stores. This initiative is part of a comprehensive usability test for a wholesale central bank digital currency (CBDC), conducted by the Bank of Korea (BOK) in collaboration with six major commercial banks. Basically, the BOK will issue CBDC to banks, which will then convert it into deposit tokens for use by consumers at designated retail locations. 100,000 individuals have been selected for the pilot, and participating banks are forming partnerships with retail outlets and developing dedicated digital platforms. [Read more at The Korean Times]

Upcoming Speaking Engagements:

  • 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]
  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240919)

~ kiffmeister

Bank of Canada reportedly shelves idea for digital loonie (CBDC)

The Canadian Broadcasting Corporation (CBC) reported that the Bank of Canada has shifted its focus away from the idea of introducing a retail central bank digital currency (CBDC). This was based on an email sent by the Bank to the public broadcaster, which outlined its “significant research towards understanding the implications of a retail central bank digital currency” and that going forward its focus will be on preparing for the ongoing evolution of payments both in Canada and around the world, through policy research and analysis. Other than a steady stream of research papers on the topic, the last time the Bank released anything official on its retail CBDC project was in November 2023. That was a report on public consultations that said that the “likelihood of a digital loonie being needed is still uncertain, and the ultimate decision whether to go ahead with one depends on the Parliament”. [Read more at the CBDC]

BTW I don’t know how much we should read into this, but Walt Engert, Senior Policy Advisor and Research Consultant at the Bank of Canada, posted without comment the above-referenced CBC article…

Upcoming Speaking Engagements:

  • 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]
  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240918)

~ kiffmeister

Joint RBA and Treasury paper on CBDC and the future of digital money in Australia (RBA)

The Reserve Bank of Australia (RBA) and the Australian Treasury published a report summarizing their research to date on central bank digital currency (CBDC) and their current assessment of CBDC issues in Australia. It concludes that a clear public interest case to issue a retail CBDC has yet to emerge, as Australians are generally well served by the capabilities and resilience of the current retail payments system. However, the report highlights the role that wholesale CBDC, alongside other forms of digital money and infrastructure upgrades, could play in enhancing the functioning of wholesale markets. Hence, the report also sets out a three-year roadmap for future work on digital money in Australia, including Project Acacia, which will explore opportunities to uplift the efficiency, transparency and resilience of wholesale markets through tokenization and new settlement infrastructure. [Read more at the RBA]

Notes: ESA = exchange settlement account; DFCRC = Digital Finance Cooperative Research Centre

OMFIF Digital Assets 2024 Report: The Long-Awaited Revolution (OMFIF)

The Official Monetary and Financial Institutions Forum (OMFIF) published its annual survey-based digital assets report. 26 survey respondents comprised of bond issuers, banks and investors, the majority of which were public sector bond issuers, indicated a slow but steady gathering of momentum behind the adoption of blockchain and distributed ledger technology (DLT). About 38% said they are looking at adopting them in debt issuance. CBDC was chosen by 59% of respondents as the preferred cash settlement for tokenized assets, with only 23% favoring “bank-issued stablecoins”. [Read more at OMFIF]

The OMFIF results regarding settlement assets differ greatly from those of a recent, more private-sector focused, Citibank survey, which found that 65% plan to use non-CBDC options, versus 15% who plan to use CBDCs. CBDCs were the preferred form of digital money at 52% in the previous year’s survey. However, the Citibank survey respondents were comprised of 494 industry participants, 43% of which were banks, 15% custodians, 14% asset managers, 11% broker-dealers, and 10% institutional investors. [Read more at Citibank]

Upcoming Speaking Engagements:

  • 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]
  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. Order your tickets before September 30 and get a 34% discount plus an additional 20% off by using the Kiffmeister20 code! [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 (20240917)

~ kiffmeister

Don’t forget about next week’s Currency Research Digital Currency Conference (DCC), London, September 23-24. It will bring together policymakers, regulators, and technology and innovation experts to network and discuss all aspects of digital currencies. I will be moderating a panel on lessons learned from central bank digital currency (CBDC) launches, pilots and research around the world. Daily Digest readers can get a 20% discount on the entry fee by entering the KiffmeisterDCC code at registration! [Find out more and register here]

And while you’re in London for the DCC you can attend the Currency Research’s inaugural Central Bank AI Conference. It will focus on central banker perspectives on future applications of artificial intelligence (AI), be it at the central bank or at institutions under the central bank’s regulatory purview. You can save 20% on fees by registering for both events. [Find out more and register here]

UK Regulated Liability Network (RLN) experimentation phase concludes (Ledger Updates)

UK Finance released the results of the experimentation phase of the Regulated Liability Network (RLN) which explored the potential for tokenized deposits and programmability among eleven major financial institutions. The overall conclusion was the RLN provides a viable innovation platform, and the next step is to engage with regulators. Five use cases were trialed, ranging from buying a home to the settlement of a tokenized bond, finding significant benefits and exploring various revenue models. It found 40 specific business benefits grouped into five higher level ones; (i) greater settlement efficiency, (ii) the ability to address authorized push payment fraud, (iii) simplifying customer journeys, (iv) reducing the cost of failed payments and (v) greater payment efficiencies. [Read more at the UK Finance]

Digital euro design for the European payments market (ECB)

Thanks to Amnon Samid for calling my attention to the September 9, 2024 European Central Bank (ECB) virtual focus session on digital euro design. It was aimed at payment service providers and professionals from the financial sector with an interest in the design of the digital euro and its impact on the European payments market. It includes an update on the decisions taken so far and an overview of key questions being addressed, the potential impact of the introduction of a digital euro on the financial industry, and progress on the digital euro scheme rulebook that defines the rules, standards and procedures for digital euro payments across the euro area that European payment service providers (PSPs) must follow when distributing a digital euro to consumers and businesses. [Watch the session at the ECB]

Hats off to the openness and collaborative spirit of the ECB’s exploratory process! I wish more central banks would follow suit (hint, hint)!

Upcoming Speaking Engagements:

  • 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 (20240916)

~ kiffmeister

Design options for interoperability and funds locking across digital pounds and central bank money (arXiv)

arXiv published a paper by Barclays staff that analyzes the design options for supporting “functional consistency” across digital pounds and commercial bank money. It focuses on three key capabilities: communication between digital pound ecosystem participants, funds locking, and interoperability across digital pounds and commercial bank money. It explores them via three payments use cases: person-to-person push payment, merchant-initiated request to pay, and lock funds and pay on physical delivery. It then presents and evaluates the suitability of design options to provide the specific capabilities for each use case and draw initial insights. The paper concludes that a financial market infrastructure (FMI) providing specific capabilities could simplify the experience of ecosystem participants, simplify the operating platforms for both the Bank of England and digital pound payment interface providers (PIPs), and facilitate the creation of innovative services. [Read more at arXiv]

41 institutions join BIS tokenized cross border payment Project Agorá (Ledger Insights)

The Institute of International Finance (IIF) released the names of 41 firms selected to participate in the Bank for International Settlements (BIS) Project Agorá, aimed at modernizing correspondent banking using a unified ledger, tokenized deposits and wholesale central bank digital currency (CBDC) from seven central banks. The seven central banks are the Banque de France, Banxico, New York Fed, Swiss National Bank, Bank of England, Bank of Japan, and Bank of Korea. Thirty five of the selected institutions are banks representing the seven jurisdictions. The others are Visa, Mastercard and SWIFT, Eurex Clearing, Euroclear and the SIX Digital Exchange. [Read more at the IIF]

Sweden’s central bank calls for new bank regulations to protect access to cash (Riksbank)

Sveriges Riksbank has called for regulations to ensure that Swedish companies and public authorities, who are legally obliged to accept cash, have access to functioning services for daily takings and petty cash. With banks having largely stopped providing cash services to businesses, only cash-in-transit company Loomis AB is offering these services and almost exclusively by the and entirely on a commercial basis. Banks have chosen to fulfil their obligations by providing deposit machines with limits that are too low for many businesses, and have limited access to petty cash by closing down manual services. The Riksbank also underscored that access to cash is necessary to strengthen civil preparedness regarding payments. [Read more at the Riksbank]

Hedera contributes entire codebase to Linux Foundation (Cointelegraph)

Hedera has become a founding premier member of the Linux Foundation’s newly launched decentralized trust initiative, and contributed its entire source code, including its hashgraph consensus algorithm and all core services, tools and libraries, to the Foundation. The contribution, which forms the new project “Hiero,” aims to allow developers to collaborate on decentralized trust technologies globally under an open-source framework. [Read more at Hedera]

Upcoming Speaking Engagements:

  • 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.