Banco Central do Brasil Drex pilot update (BCB)
Banco Central do Brasil (BCB) published a technical report on the first phase of the Drex wholesale central bank digital currency (CBDC) pilot that focused on testing the use of tokenized deposits. The platform used was a private, permissioned version of the Ethereum blockchain. The pilot involved the participation of 16 financial institutions, which were selected from a pool of 36 candidates. The pilot tested a range of use cases, including the issuance and transfer of tokenized deposits, as well as the settlement of transactions involving tokenized government bonds. The BCB found a tough “trilemma” between privacy, programmability, and oversight. Advanced cryptography (like zero-knowledge proofs) can hide transaction details to protect user privacy, but this also makes it hard for regulators to monitor illicit activity, or even for the system to run complex smart contracts. The next phase of the pilot program, which started in November 2024, is focusing on advancing privacy while allowing pilot participants to suggest more use cases. [Read more at the BCB]
Bank of Russia to postpone digital ruble launch (Bank of Russia)
The Central Bank of the Russia has postponed the launch of the digital ruble from July 2025 to a later date to be determined. According to Governor Elvira Nabiullina the central bank needs more time to work out all the details in the pilot and hold all consultations with banks on the economic model that is most attractive to customers. 15 banks, 1,700 citizens and about 30 companies have taken part in the pilot that started in August 2023. [Read more at the Bank of Russia]
Embedded supervision in the context of decentralized finance (BMA)
The Bermuda Monetary Authority (BMA) is inviting proposals for a collaborative pilot project aimed at testing embedded supervision practices within the context of decentralized finance (DeFi). Embedded supervision refers to the direct integration of regulatory oversight, compliance checks, and automated reporting into the technological foundation of a financial platform—particularly within its smart contracts, protocols, or data layers—so that supervisory requirements are inherently enforced in real-time with limited or delayed human intervention. [Read more at the BMA]
Upcoming Speaking Engagements:
- The Crypto Assets Conference (Frankfurt, March 26) will delve into the advancements in digital assets, tokenization, crypto assets, web3, and more, through insightful talks, interactive debates, and presentations by industry experts, founders, investors, and representatives from public institutions. [Register here and get a 10% discount]
- The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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.
