Bank Indonesia completes digital rupiah PoC (BI)

Bank Indonesia (BI) completed its Project Garuda proof of concept (PoC) for a distributed ledger technology (DLT) based digital rupiah wholesale cash ledger. The testing confirmed that the solution can meet the business and technical needs requirements (transaction security, interoperability with existing payment systems and financial infrastructure). Two DLT-based platforms were tested; Corda (R3) and Hyperledger Besu (Kaleido). Both were able to meet all testing scenarios and address all key questions. Project Garuda will proceed with a broader exploration of securities ledger, including exploring liquidity management and privacy technology. [Read more at BI]

Macau pataca prototype system development completed (AMCM)

The Monetary Authority of Macau (AMCM) has completed the development of a prototype digital Macau pataca (e-MOP) which will soon undergo sandbox and public testing. There is also a chance it will be linked to China’s e-CNY and Hong Kong’s e-HKD in the future. The People’s Bank of China (PBOC) provided technical support, and the Hong Kong Monetary Authority (HKMA) is responsible for supervising and managing e-MOP issuance, cancellation and circulation. The AMCM will set up self-service money exchangers to allow holders to accept e-MOP or other foreign currencies for cash reloading by exchanging money. [Read the e-MOP white paper at the AMCM]

AXA IM in two ECB wholesale CBDC trials (Ledger Insights)

AXA Investment Managers (AXA IM) executed two transactions using the Banque de France’s pilot distributed ledger technology (DLT) based wholesale central bank digital currency (CBDC), as part of the Eurosystem wholesale DLT settlement trials. The first was a €3 million investment by AXA IM, on behalf of AXA France, into a digital sovereign bond issued by the Republic of Slovenia. The transaction was executed on BNP Paribas’ “Neobonds” tokenization platform with T+1 settlement on T+1 using the Banque de France’s DL3S platform. The second experiment executed a fund share subscription of €1 million from Generali into AXA Court Terme with instant settlement process using digital CeBM via the IZNES blockchain platform. [Read more at AXA IM]

SocGen completes repo transaction on public blockchain with the Banque de France (SocGen)

Societe Generale (SocGen) completed a collateralized market transaction fully executed on blockchain through its SG-FORGE subsidiary. This is the first sale and repurchase agreement (repo) transaction in digital securities with a Eurosystem central bank. SocGen deposited as collateral with the Banque de France some bonds issued in 2020 on the public Ethereum blockchain in exchange for pilot central bank digital currency (CBDC) issued by the Banque de France on its DL3S blockchain. [Read more at SocGen]

HQLAᵡ and market participants collaborate on collateral mobility initiative (DerivSource)
HQLAᵡ successfully concluded a feasibility initiative to address pain points in triparty collateral mobility. It uses its platform to transfer securities collateral to – or between – multiple triparty agents without triggering cross-custodian settlements. The HQLAᵡ platform uses distributed ledger technology (DLT) to validate the ownership of the securities at any given point in time. [Read more at DerivSource]

EBA assesses potential benefits and challenges of tokenized deposits (EBA)

The European Banking Authority (EBA) published a report to facilitate awareness of tokenized deposits, as well as assess their potential benefits and challenges. The report also aims to promote convergence in the classification of tokenized deposits in contrast with electronic money tokens (EMTs) issued by credit institutions under the Markets in Crypto-Assets Regulation (MiCAR). [Read more at the EBA]

ESAs provide guidelines to facilitate crypto-asset classification consistency (EBA)

Three European Supervisory Authorities (ESAs) published joint guidelines intended to facilitate consistency in the regulatory classification of crypto-assets under MiCAR. The guidelines include a standardized test to promote a common approach to classification as well as templates market participants should use when communicating to supervisors the regulatory classification of crypto-assets. [Read more at the EBA]

Recommendations related to cross-border payment data flows and regulation (FSB)

The Financial Stability Board (FSB) published 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. These recommendations advance key actions from the G20 Roadmap to address legal, supervisory, and regulatory issues in cross-border payments. [Read more at the FSB]

Exploring wholesale central bank digital currencies (CCAF)

The Cambridge Centre for Alternative Finance (CCAF) published a report that reviews the case for a wholesale CBDC, the various approaches in how it can be delivered, and an assessment of the pilots and experiments undertaken by the industry and central banks. It finds that buy- and sell-side firms are progressing with tokenization initiatives, driving a need for digital money for the cash leg. which may increasingly be delivered through tokenized bank deposits or stablecoins. Meanwhile, central banks are raising concerns on the risks of using such private settlement assets for settlement, facilitating experiments demonstrating how central bank money can be used instead, but with no clear indication yet on how and when this may be delivered in practice. [Read more at the CCAF]

Digital tool sheds light on stablecoin flows and regulation (CCAF)

Also, the CCAF updated its Cambridge Digital Money Dashboard (CDMD), offering new insights into the geographical flows of stablecoins, as well as regulatory overviews for a wider set of jurisdictions. This new update was made possible through a joint work with Chainalysis, a blockchain data platform specializing in on-chain data analytics for investigations and compliance. [Read more at the CCAF]

ICMA publishes DLT bonds reference guide (ICMA)

The International Capital Market Association (ICMA) published a reference guidance for DLT-based debt securities. The guide highlights considerations for the end-to-end lifecycle of DLT-based debt securities. It is designed for market practitioners as well as a broader audience of market stakeholders. It comprises over 50 practical questions and serves as a reference point across the lifecycle of a DLT-based debt security. [Read more at ICMA]

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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.