Norges Bank on track to deliver CBDC recommendation in 2025 (Bloomberg)

Norges Bank Deputy Governor Pal Longva says that the central bank remains on track to finalize a recommendation in 2025 on whether it should introduce a central bank digital currency (CBDC). He said there’s “no urgency” to accelerate the decision-making process, which is looking at both retail and wholesale versions, with increasing weight being put on the latter. Longva’s remarks come less than a month before a November 15, 2024 deadline for a government task force to submit a report on ensuring safe and simple payments. [Read more at Bloomberg]

The Bank of Japan’s third CBDC Forum Plenary meeting (Medium)

Medium published an English language summary by Norbert Gehrke of the October 17, 2024 meeting of the Bank of Japan’s (BOJ’s) CBDC Forum Plenary. There have been three such meetings, the last one being in January 2024. The BOJ is conducting proof-of-concept (PoC) experiments in stages to verify the technical feasibility of CBDC. Currently, the BOJ’s experiments are focusing on performance, scalability, and privacy considerations. The system is designed to avoid handling personal information within the ledger management section, to ensure that user information and transaction details remain confidential. [Read more at Medium]

Global payments in 2024: simpler interfaces, complex reality (McKinsey)

McKinsey published its 2024 Global Payments Report which documents the continuing displacement of cash and checks by instant payments, especially in developing markets with low credit and debit card penetration. Despite the underwhelming uptake of retail central bank digital currencies (CBDCs) where they have been launched or piloted, McKinsey foresees them setting the minimum base level of functionality, cost, and services that users can expect from a digital currency, providing an alternative to help keep the price of commercial offerings in check, and serving as an alternative to large private-sector stablecoins. [Read more at McKinsey]

Guidelines on ART and EMT redemption plans under the MiCAR (EBA)

The European Banking Authority (EBA) published its final Guidelines on the orderly redemption of token holders in case of crisis of the issuer. The Guidelines, which are addressed to competent authorities designated under the Markets in Crypto-Assets Regulation (MiCAR), cover issuers of asset-referenced tokens (ARTs) and of e-money tokens (EMTs). The Guidelines specify the content of the redemption plan to be developed in going concern, including the liquidation strategies of the reserve of assets, the mapping of critical activities, the content of the redemption claims, the main steps of the redemption process, and the elements that may lead to the trigger of the plan. [Read more at the EBA]

Occasional paper on decentralized finance (Banco de Portugal)

Banco de Portugal published a paper that provides an overview of the underlying components of the decentralized finance (DeFi) ecosystem, as well as its associated risks from the perspective of a financial supervisory authority. While DeFi inherits the risks present in traditional finance, some of these risks could be amplified due to the lack of a clear regulatory framework and the intrinsic features of the DeFi space. Therefore, this paper also takes a closer look at the regulatory challenges involved, including the promise of self-regulation, and explores potential avenues for addressing these challenges without stifling the innovation that DeFi can foster. [Read more at Banco de Portugal]

Avalanche launches the Avalanche VISA card (Avalanche)

Avalanche is launching a Visa Card that will allow cardholders to spend their digital assets directly from their wallets without the need to convert the assets into fiat currencies. The card will allow owners to complete payments using digital assets in any location or jurisdiction accepting Visa. It will come in the form of a self-custody wallet with a unique address per asset, in come in both physical (card) and virtual (app) form factors. The Avalanche Card will initially be available only to individuals that are residents of countries in Latin America and the Caribbean, except residents or citizens of Cuba, Nicaragua and Venezuela. Citizens of Russia, North Korea, Syria, Iran, along with the regions of Crimea, Luhansk and Donetsk are not eligible to sign up. [Read more at Avalanche]

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. When you register, get 20% off the regular ticket price 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.