Month: October 2024

Kiffmeister’s #Fintech Daily Digest (20241004)

~ kiffmeister

Brazil tests DeFi elements, compatibility in Drex CBDC pilot (Cointelegraph)

Banco Central do Brasil (BCB) is incorporating decentralized finance (DeFi) principles into ongoing experiments toward developing ecosystems that use “synthetic” central bank digital currency (CBDC) as payment instruments. Digital asset transactions would be settled in “Drex” wholesale CBDC issued by the BCB within the distributed ledger technology (DLT) Drex Platform. The BCB also plans to speed up its Open Finance tokenization efforts and bring decentralized finance (DeFi) into the regulatory perimeter. [Read more at the BCB and hear more on YouTube]

BoE wants to ensure tokenized wholesale transactions use central bank money (Ledger Insights)

Bank of England (BoE) Executive Director of Financial Market Infrastructure Sasha Mills outlined the need for tokenized wholesale transactions to be settled in central bank money. “If central bank money is unable to interact with new technologies, there could be a risk of high value wholesale settlement activity moving away from central bank money to private settlement assets, weakening financial stability.” Options include the use of the BoE’s omnibus account facility, extending real-time gross settlement (RTGS) system hours, and wholesale CBDC. [Read more at the BoE]

Visa introduces the Visa tokenized asset platform (Visa)

Visa launched its Tokenized Asset Platform ( VTAP), a business-to-business (B2B) solution designed to enable banks to bring fiat currencies on chain in a safe, seamless, and efficient manner. VTAP provides a platform for banks to mint, burn and transfer fiat-backed tokens, such as tokenized deposits and stablecoins, and experiment with use cases. VTAP is also designed to enable banks to use their fiat-backed tokens within smart contracts. In addition, Visa’s vision is to enable interoperability across different blockchains for banks utilizing the VTAP platform. [Read more at Visa]

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.

Kiffmeister’s #Fintech Daily Digest (20241003)

~ kiffmeister

ECCB DCash pilot closed in January 2024 (ECCB)

In late 2023 I had reported that the Eastern Caribbean Central Bank (ECCB) DCash pilot was being upgraded from version “1.0” to “2.0” and in December 2023 that the ECCB had issued a request for vendor information for that upgrade. However, it turns out that the pilot was completely shut down on January 12, 2024 while preparations for “2.0” move forward. Stay tuned while I try to chase down more information on this. [Read more at DCash] and on pages 18-19 of the ECCB 2023 Annual Report]

Positioning CBDC in the payments landscape (IMF)

The IMF published a paper that proposes a framework for comparing retail central bank digital currency (CBDC) with fast payment and e-money systems from a payments perspective. A jurisdiction’s evaluation will be dependent on the distinct features and capacity of its current, and emerging, financial landscape. A landscape review is an important tool for central banks when assessing how policy objectives are being achieved today, and if necessary pre-conditions for new systems are in place, or could be established in future. Authorities’ capacity and capability to not only implement but supervise and regulate any system will be important. Any new system will have non-negligible costs, and different systems will potentially have different implications for the distribution of costs between the public and private sectors. Furthermore, a jurisdiction’s mandate and ability to apply their powers around payments may ultimately determine how well any system can fulfill its objectives. Given the early stage of CBDC development, no singular strategy exists in the context of the questions put forward. While central banks will make choices unique to their circumstances, it remains important for central banks to establish a strategy that allows them at minimum to monitor trends and core benefits of multiple solutions as developments occur to allow them to plan, adapt, and drive developments in their payments landscape. [Read more at the IMF]

SEC files appeal in Ripple lawsuit (Cointelegraph)

The U.S Securities and Exchange Commission (SEC) filed a notice of appeal in the Ripple lawsuit seeking to overturn a ruling by Judge Analisa Torres that sales of Ripple’s XRP didn’t constitute securities sales. She ruled that Ripple’s XRP was not a security in and of itself because the digital assets failed to satisfy all the conditions listed in the SEC’s Howey test to classify a financial asset as an investment contract. [Read more at Cointelegraph]

Payala offline digital currency platform (Payala)

Payala is a digital payment technology smartcard-based digital payments ecosystem that provides users with a multi-currency digital wallet that is resilient highly resistant to cyberattack and operates when offline for business-to-customer, government-to-populace, and peer-to-peer transactions. The platform has been successfully field-tested and utilized in the Pacific region in an austere, low infrastructure environment. [Read more at Payala]

SWIFT to start live trials of digital transactions in 2025 (SWIFT)

Starting in 2025 banks across North America, Europe, and Asia will embark on live trials of digital assets and currency transactions over the SWIFT network. These trials aim to address the rise of disconnected digital platforms, or ‘digital islands’, that could hinder more widespread adoption and ease of use for new forms of value. The live trials will leverage SWIFT’s existing global network to interlink various digital and traditional currency platforms, providing a single system for banks to transact across borders with digital and fiat currencies. [Read more at SWIFT]

Use of BlackRock tokens as collateral moves closer to mainstream (Bloomberg)

Bloomberg reported that a subcommittee of the Commodity Futures Trading Commission (CFTC) Global Markets Advisory Committee voted to pass its recommendations to allow use of tokenized shares of money-market funds as collateral in trading to the full committee. “These recommendations would apply existing policies and procedures to support the use of blockchain for non-cash collateral in a manner consistent with the margin requirements of the CFTC, other US regulators and derivatives clearing organizations… The full committee is expected to vote on the recommendations later in 2024.” [Read more at Bloomberg]

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.

Kiffmeister’s #Fintech Daily Digest (20241002)

~ kiffmeister

Boerse Stuttgart tests tokenized security settlement in ECB wholesale DLT trials (Ledger Insights)

As part of the European Central Bank’s (ECB) explorations, Boerse Stuttgart and six German banks tested the settlement of exchange transactions with blockchain-based securities against central bank money for the first time. The settlement solution was linked to the Deutsche Bundesbank (BuBa) trigger solution (see below) and thus to the traditional euro payment system. The tests showed that the settlement processes can be mapped automatically, step by step and directly between the trading participants – efficiently, securely and without counterparty risk. The settlement time was reduced from two days to just a few minutes. [Read more at Bourse Stuttgart]

The BuBa trigger solution links DLT platforms operated by the market with the traditional Eurosystem payment system (TARGET), thus enabling the direct settlement of DLT-based wholesale transactions on participants’ existing RTGS accounts in central bank money. [The BuBa maintains a continuously updated list of such exploration’s here].

Digital Asset completes a successful pilot to tokenize Gilts, Eurobonds and gold (Canton)

Digital Asset completed a pilot to tokenize U.K. Gilts, Eurobonds and gold on the distributed ledger technology (DLT) based Canton Network, which provided interoperability between separate DLT networks that have deployed Digital Asset’s technology. The aim was to demonstrate how tokenized assets on a blockchain can enhance collateral mobility, improve liquidity, and increase transactional efficiency. The pilot involved Euroclear, the World Gold Council and 27 market participants. Five types of cross-application transactions were connected using eleven distributed applications, including six registry apps and five margin apps, with 500 transactions completed. [Read more at Canton]

Global crypto regulation landscape: 2024 review (Elliptic)

Elliptic published the 2024 edition of its global crypto regulation landscape review, highlighting key trends and regional developments that are shaping the future of regulatory compliance. Significant developments have emerged across three key areas: the EU’s Markets in Crypto-assets (MiCA) regulation, the expansion of the “travel rule” to crypto transactions, and stablecoin regulation. Authorities are now emphasizing consumer protection, financial stability, and preventing illicit activities, aided by the entry of mature institutional players, contributing to a structured and transparent market. [Download the report at Elliptic]

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.

Jurisdictions Where Retail CBDC Is Being Explored

~ kiffmeister

105 central banks have recently launched, piloted, experimented with and/or researched retail central bank digital currency (CBDC) not including two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). Keep in mind that I don’t count all of the individual national central banks that are part of currency unions (e.g., the European or Eastern Caribbean Currency Unions). If I did the tally that way, my count would be around the oft-quoted 130+ central banks. Also, the table was compiled from publicly available sources, including the media and central bank websites, and not verified through official channels. If I’m missing anything, or you find mistakes in the tabulation, please let me know in the comments! (See the notes below the table for more information on how it was compiled.)

Notes: The difference between a “pilot” and “proof of concept” (POC) is that a pilot involves actual users, whereas a POC does not, even though some POCs may involve central bank staff. Also, because the tabulation is based only on publicly-available information, it is likely that there is some POC activity in the “research” category, but no announcements have been made. Finally, entries that are crossed through indicate that the projects have been shut down. Also, the ones that are crossed out, are where the central bank has considered issuing CBDC but then decided to cancel the research or put it on hold (“watchful waiting”).

RCBDC Explorer Tabulation (20241001)Download