Category: DeFi

Kiffmeister’s #Fintech Daily Digest (20251213)

~ kiffmeister

OCC Announces Conditional Approvals for Five National Trust Bank Charter Applications (OCC)

The U.S. Office of the Comptroller of the Currency (OCC) conditionally approved national trust bank charter applications from five major crypto-asset companies. Circle (First National Digital Currency Bank) and Ripple National Trust Bank received de novo charters. BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company were converted from state trust companies to national trust banks. These firms will now be able to offer regulated crypto-asset services nationwide without navigating complex state-by-state licensing. “The OCC will continue to provide a path for both traditional and innovative approaches to financial services to ensure the federal banking system keeps pace with the evolution of finance and supports a modern economy.” [Source: OCC]

DTCC Authorized to Offer New Tokenization Service (DTCC)

Depository Trust Company (DTC) received a No-Action Letter from the U.S. Securities and Exchange Commission (SEC), authorizing it to offer a tokenization service for real-world, DTC-custodied assets in a controlled production environment, with rollout expected in the second half of 2026. The three-year authorization covers highly liquid assets including Russell 1000 stocks, major index ETFs, and U.S. Treasury securities, allowing DTC to create digital versions with the same entitlements and protections as traditional assets. This milestone aims to enable 24/7 trading access, collateral mobility, and programmable assets while maintaining the same level of security and regulatory oversight, ultimately bridging traditional finance (TradFi) and decentralized finance (DeFi) ecosystems through DTCC’s ComposerX platform suite. [Source: DTCC]

Upcoming Speaking Engagements:

The Digital Euro Conference 2026 (Frankfurt, March 26) will explore the future of money with a focus on CBDCs, stablecoins, and commercial bank tokens. This hybrid event offers the perfect platform to understand the future of digital money! [Register here and get 20% off the regular ticket price by using the Kiffmeister20 code!]

I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20250515)

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Project Pine: Central Bank Open Market Operations with Smart Contracts (BIS)

The Federal Reserve Bank of New York and the Bank for International Settlements (BIS) published a joint research study that explored if and how central banks could continue to implement monetary policy operations in hypothetical tokenized wholesale financial markets. Project Pine found that central banks could customize and deploy policy implementation tools using programmable smart contracts in a potential future state where commercial banks and other private sector financial institutions have widely adopted tokenization for wholesale payments and securities settlement. The project generated the prototype of a generic monetary policy implementation tokenized toolkit for potential further research and development by central banks across jurisdictions and currencies. The prototype was designed to be technically modifiable for different central banks’ monetary policy frameworks and calibrated to conduct standard or emergency market operations. [Read more at the BIS]

Project Pine is not intended to advance any specific policy outcomes, nor does it represent any work by the Federal Reserve to establish, issue or promote any central bank digital currency within the United States or abroad.

Towards Verifiability of Total Value Locked in Decentralized Finance (BIS)

The Bank for International Settlements (BIS) published a paper that examines how total value locked (TVL) in decentralized finance (DeFi) is computed, identifies key challenges that hinder its verifiability, and proposes solutions to improve its computation. Its findings indicate limits to verifiability and transparency, and introduces a “verifiable Total Value Locked” (vTVL) metric measuring the TVL that can be verified relying solely on on-chain data and standard balance queries. A case study on 400 protocols shows that its estimations align with published figures for 46.5% of protocols, pointing to the potential for further TVL standardization. [Read more at the BIS]

Scaling DLT Capital Markets – Enabling Central Bank Money Settlement and Collateral Eligibility for DLT-based Securities (AFME)

The Association for Financial Markets in Europe (AFME) published a paper outlining two critical steps needed to scale distributed ledger technology (DLT) in capital markets in the European Union. First is the urgent need for a settlement solution for tokenized assets using central bank money. Secondly, AFME wants to see tokenized securities being considered eligible as collateral when banks borrow money from their central bank. [Read more at the AFME]

Upcoming Speaking Engagements:

The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]

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 (20250417)

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Belarus to introduce digital ruble in H2 2026 (Interfax)

The National Bank of Belarus (NBB) reportedly plans to launch a digital ruble in the second half of 2026, starting with “economic agents” and expanding to government agencies and individuals in 2027. The central bank is cooperating very closely with Russian central bank and its central bank digital currency (CBDC) efforts to facilitate digital ruble cross-border transactions. Also, the NBB is working closely with government authorities to ensure that CBDC transactions can be tracked along the entire chain. [Read more at Interfax]

Kyrgyz central bank granted right to issue digital som (24.KG)

Kyrgyz Republic President Sadyr Japarov signed the constitutional law that will enable the National Bank of the Kyrgyz Republic (NBK) to launch a digital som pilot project and create a legal basis for the CBDC. The law was adopted by the Parliament on March 20, 2025. The law defines the digital som as the national currency of the Kyrgyz Republic in digital form, which is legal tender in the country. The central bank is granted the exclusive right to issue the digital som, and will establish the procedure for its issue and circulation, as well as organize and ensure functioning of the digital som platform. [Read more at 24.KG]


On November 20, 2024 the NBK had convened a meeting with the relevant ministries and agencies of the Kyrgyz Republic to discuss Phase II of the project for testing the prototype of the Digital Som platform in the context of state and social payments. During the meeting, the National Bank presented a draft architecture for the implementation of the “Balaga Suyunchu” (a one-time payment upon the birth of a child) project on the Digital Som platform. An agreement was reached to continue joint implementation of the project with technical specialists. [Read more at the NBK]

Crypto-assets and decentralized finance: functions and financial stability implications (BIS)

The Bank for International Settlements (BIS) published a paper on the financial stability aspects of crypto-assets and decentralized finance (DeFi), including smart contracts, decentralized exchanges (DEXs), stablecoins and new forms of central bank money. The paper’s findings suggest that, while the underlying economic drivers are not different than in TradFi, DeFi poses significant challenges, including new forms of information asymmetries, market inefficiencies and the risk of cryptoization in emerging markets. It proposes tailored regulatory interventions, such as embedding rules within smart contracts and strengthening the oversight of stablecoins, to manage financial stability risks. The paper also provides a framework for prudential regulation that can mitigate risks while fostering innovation. [Read more at the BIS]

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 (20250227)

~ kiffmeister

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.

Kiffmeister’s #Fintech Daily Digest (20250107)

~ kiffmeister

FDIC releases redacted operation Choke Point 2.0 letters (Bitcoin.com)

The U.S. Federal Deposit Insurance Corporation (FDIC) published minimally redacted letters sent to banks requesting information about their crypto activities and in most cases asking them to pause activities pending feedback. The FDIC was forced by a June 2024 court order filed by Coinbase (through its contractor History Associates), to release the letters after initially turning down the exchange’s Freedom of Information Act (FOIA) request. According to Coinbase Chief Legal Officer Paul Grewal, “they show a coordinated effort to stop a wide variety of crypto activity“. [Read more at Bitcoin.com, Ledger Insights and the FDIC]

CPMI takes further steps to promote ISO 20022 harmonization (BIS)

The Bank for International Settlements (BIS) Committee on Payments and Market Infrastructures (CPMI) announced further steps to promote the adoption of its harmonized ISO 20022 data requirements for more efficient processing of cross-border payments. First, a panel of global ISO 20022 market practice groups will be established in early 2025 to support the regular maintenance of the data requirements. Second, the CPMI is encouraging industry to develop global ISO 20022 market practice guidelines for fast payments based on the harmonized data requirements. Third, the CPMI will continue to engage with payment system operators and payment service providers to encourage them to implement the harmonized data requirements by end-2027. [Read more at the BIS]

Ripple partners with Chainlink to boost RLUSD stablecoin in DeFi markets (CoinTelegraph)

Ripple has partnered with Chainlink, a decentralized oracle network, to improve the adoption and utility of its Ripple USD (RLUSD) stablecoin in decentralized finance (DeFi) applications. The collaboration will provide price feeds for RLUSD on Ethereum and the XRP Ledger, which aim to support cost-effective transactions and DeFi use cases for the enterprise-grade stablecoin. [Read more on Ripple]

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Upcoming Speaking Engagements:

  • The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. [register here]
  • The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. [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. 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 (20241121)

~ kiffmeister

Decentralized dealers? Examining DEX liquidity provision (BIS)

The Bank for International Settlements (BIS) published a paper that explores the role of participants in providing liquidity on decentralized exchanges (DEXs). DEXes allow participants to buy and sell assets without the need for intermediaries, in theory democratizing liquidity provision. However, using data from the largest DEX (Uniswap V3), it shows that liquidity provision, rather than being the purview of a diffused set of market participants, is confined predominantly to a small group of sophisticated ones. These participants submit orders that mimic bids and asks and are able to extract significantly higher profits compared to their unsophisticated counterparts. They also exhibit considerable skill, extracting higher profits during periods of high volatility by capturing a higher share of trading without incurring additional adverse selection. [Read more at the BIS]

The proof-of-stake protocol and run risk (OFR)

The U.S. Treasury Office of Financial Research (OFR) published a paper that examines the scenarios that can increase run risk of crypto-assets, such as Ethereum (ETH), that use proof-of-stake (POW) protocols to validate transactions. It finds that while proof-of-work (POW) protocols are more energy intensive and less scalable, POS requires more capital, and a significant drop in a POS-based crypto-asset price may cause validators to exit their investments. Their exit may impair the tradability of the crypto asset, which in turn may cause more validators to exit, resembling a bank run. In the case of Ethereum, such an event would disrupt activity relying on the Ethereum network, including many crypto firms and DeFi networks. The authors also show that the use of margin only exacerbates this run risk during price declines. If a price decline is steep enough to cause a margin call for investors, those investors must either post additional collateral or sell crypto assets, which could further depress prices. [Read more at the OFR]

Retail fast payment systems as a catalyst for digital finance (BIS)

The BIS published a paper that sheds light on how fast payment systems (FPSs) influence the diffusion of digital finance apps, based on a rich dataset on app downloads and use for 86,163 apps in 95 countries over 2012–22. It identifies various mechanisms through which FPS drive finance app adoption, like stimulating competition and innovation in payments, fostering digital finance adoption via learning effects and expanding access to financial services, particularly in emerging market and developing economies (EMDEs) and low income countries (LICs). This effect is particularly evident for apps by technological disrupters, such as fintechs or big techs, relative to those of incumbent financial institutions. Finally, we identify some characteristics of FPS that further amplify digital finance adoption such as the active role of the central bank, open membership and real-time settlement. [Read more at the BIS]

Sponsored Content:

Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.

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 (20241103)

~ kiffmeister

The Digital Shekel Challenge – La Finale (Bank of Israel)

The Bank of Israel (BOI) concluded its Digital Shekel Challenge with presentations by the 14 entities selected to develop innovative use cases for the digital shekel. The use cases presented demonstrated the potential of the digital shekel to help create advanced payment solutions and lead innovation in Israel’s payment system. First place was awarded to Siara for a platform for returning debtors to an economic growth path, second went to Paypal for a smart payroll payments system, third to IDEMIA for an offline payments solution, and the “People’s Choice” to QEDIT for a platform that enhances trust for digital transactions using advanced cryptography. [Read more at the BOI]

Digital money and finance: a critical review of terminology (LinkedIn)

A couple of European Central Bank (ECB) staffers, including Director General of Market Infrastructures and Payments Ulrich Bindseil, posted a paper that proposes a new approach to clarifying the essence of new payment technologies. It puts forward an etymology of key concepts and reviews terminology and definitions, in the hope of facilitating ongoing discussions about the eventual merits of, and use cases for, such technology. On the basis of the analysis, the paper identifies a number of issues with the emerging key digital payments and decentralized financed (DeFi) vocabulary, including central bank digital currency (CBDC), crypto-assets, smart contracts, stablecoins, tokenization, and wholesale (as used in the CBDC context). [Download the paper on SSRN]

Sponsored Content:

Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.

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 (20241023)

~ kiffmeister

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.

Kiffmeister’s #Fintech Daily Digest (20240711)

~ kiffmeister

The role of public money in the digital age

The Bank of Canada (BOC) published a paper that argues that there is now and will continue to be a fundamental need for a relevant retail public money (cash or central bank digital currency (CBDC)) as part of a well-functioning monetary system in which public and private money coexist and complement each other while trading at par, allowing money to move back and forth safely and efficiently. The paper posits that increasing demand for digital payments and the declining use of cash could lead to a loss of the uniformity of money, adoption of alternative units of account and exclusion of some segments of the population. This could lead to frictions and potential abuse of market power by private money providers that could reduce the efficiency of the economy. Also, to perform its interlinking function, retail public money needs to be a viable payment option and a practical mechanism to transfer between private forms of money. The paper argues that a properly designed CBDC would help fill the gap and maintain the relevance of a retail public money in the economy. [Read more at the BOC]

Taiwan to test CBDC prototype via digital voucher system (The Block)

Taiwan’s Central Bank of the Republic of China (CBC) reportedly may start testing a CBDC prototype in collaboration with the Ministry of Digital Affairs “digital voucher” system at the end of 2024 or early 2025. The Taiwanese government has previously issued stimulus vouchers to boost consumption. In the planned pilot, the Ministry would oversee voucher distribution, while the central bank would manage the subsequent payment and settlement operations after users spend the digital vouchers from their wallets. A local media source said that the digital voucher system could commence testing in August and go live in October. The CBDC prototype would not employ blockchain or smart contracts. [Read more at The Block and view the reported CBC briefing here]

The ecology of automated market makers (Bank of Canada)

The Bank of Canada (BOC) published a paper that describes the ecology of automated market makers (AMMs) used for the pricing and trading of crypto assets within decentralized finance (DeFi). It uses blockchain data to identify trends in user adoption and trading volumes of AMMs. Given the range of AMMs available and the diversity of their designs, the paper performs case studies on four platforms—Uniswap, Curve, Sushiswap and Balancer—to represent the AMM market. It describes the designs of these four AMMs in terms of their products or services, governance, incentives for participation and risks. Finally, the paper describes the characteristics of AMMs that require considerations with respect to the application of a regulatory framework to AMMs. [Read more at the BOC]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here][Central bank delegates may be eligible for free registration (email registration@cbdc-conference.com to find out more)]
  • 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 (20240503)

~ kiffmeister

Bank of Namibia launches instant payment project

Bank of Namibia (BON) launched its Instant Payment Project, with a targeted launch year of 2025. It will focus on enhancing financial services in rural areas and the informal sector, thereby reducing cash dependency, and increasing transactional efficiency. Designed for inclusivity, the platform will be accessible on any device, including non-smartphones, ensuring that everyone can use it effortlessly. According to Finextra, BON will partner with National Payments Corporation of India (NPCI), the firm behind India’s Unified Payments Interface (UPI). [Read more at BON]

Why DeFi lending? Evidence from Aave V2

The Bank for International Settlements (BIS) published a paper that uses granular, transaction-level data from Aave, a leading player in the distributed finance (DeFi) lending market, to study investor motivations. The theoretical and empirical findings reveal that the search for yield predominantly drives liquidity provision in DeFi lending pools, whereas borrowing activity is mainly influenced by speculative and, to some extent, governance motives. Both retail- and large investors seek potential high returns through market movements and price speculation, however the latter engage in DeFi borrowing relatively more than the former also to influence protocol decisions and accrue more significant governance rights. [Read more at the BIS]

Upcoming Speaking Engagements:

  • CBDC Conference, Istanbul, September 10-12. The conference will offer representatives of central banks, commercial banks, technology providers, policy makers and academics the perfect platform to learn about the latest CBDC developments, exchange ideas with experts and peers. [Find out more and register here]
  • 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.