Category: DLT

Kiffmeister’s #Fintech Daily Digest (20241205)

~ kiffmeister

Bangko Sentral ng Pilipinas completes Project Agila WCBDC testing (BSP)

Bangko Sentral ng Pilipinas and participating financial institutions (FIs) have completed proof-of-concept work on Project Agila. Agila allow FIs to transfer funds to each other even during off-business hours, including evenings, weekends, and holidays, using wholesale central bank digital currency (CBDC). The evaluation with FIs covered functional, performance, security, exploratory, end-to-end and programmability testing. [Read more at the BSP]

Eurosystem completes tests using DLT for central bank money settlement (ECB)

The European Central Bank (ECB) concluded its tests of the use of distributed ledger technology (DLT) for wholesale settlement in central bank money. Between May and November 2024, the Eurosystem processed over 200 transactions and a total value of €1.59 billion. In total, 64 participants comprising central banks, financial market participants and DLT operators completed over 40 trials and experiments. Trials included actual settlement in central bank money, while experiments were tests with mock settlement. In January 2025, participants involved in the exploratory work will be invited to discuss lessons learned from the trials and experiments. The outcome of the analysis will inform the Eurosystem’s decision on its next steps. [Read more at the ECB]

Goldman Sachs, Clearstream, HQLAᵡ in live DLT intraday repo transaction (Ledger Insights)

As part of the ECB wholesale DLT settlement trials using central bank money, HQLAᵡ was involved in an intraday repo transaction where Goldman Sachs borrowed cash from Clearstream in exchange for collateral held on the HQLAᵡ DLT platform. HQLAᵡ is a collateral mobility solution in which assets held by custodians are locked and digitized in the HQLAᵡ digital collateral registry, with the legal agreements enabling collateral to transfer instantly using DLT. In this case, the cash leg of the transaction used the Bundesbank’s Trigger solution. The trades were agreed via the Eurex Repo F7 trading system, and Deutsche Börse’s Clearstream D7 digital securities platform was used as the market system operator. [Read more at Ledger Insights]

CBDCs and fast payment systems: rivals or partners? (BIS)

The Bank for International Settlements (BIS) published a paper that analyzes how retail CBDC and fast payment systems (FPSs) compare with each other and why some jurisdictions have opted for a retail CBDC, while others have chosen to introduce an FPS or both. Interviews with central banks in 14 jurisdictions around the world show that some see a case for both to fulfil different policy goals and complement one another. The paper’s key conclusion is that the choice between a retail CBDC or an FPS, or both, is very contextual and will depend on the market features, ecosystem and degree of maturity and innovation of existing payment infrastructures in a country. [Read more at the BIS]

CBDCs, banknotes and bank deposits: the financial stability nexus (Banco de España)

Banco de España published a paper that explores the financial stability nexus within a monetary ecosystem that has been expanded to include a CBDC. It highlights the importance of partially adapting the two-tier system of money by implementing certain limits, as envisaged in CBDC plans. The endogenous mitigation of the risks through improved bank competition often attributed to CBDCs is uncertain and may be insufficient from a systemic risk perspective. The introduction of exogenous mitigants, like CBDC holding limits calibrated on the basis of a robust methodology, seems instrumental to ensure the consistency of a monetary ecosystem that includes a CBDC. Hence, the paper addresses some fundamental methodological issues related to these limits, such as the rationale for alternative targets for the limits, the influence of disintermediation speed, the time horizons involved in the limitation and adaptation process, and the role of regulatory and market frictions. [Read more at Banco de España]

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 (20241127)

~ kiffmeister

Retail CBDC legal and system design considerations (BIS)

The Bank for International Settlements (BIS) published reports on retail central bank digital currency (CBDC) system design and legal considerations. They were written by a group comprised of the BIS and seven central banks (Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Board of Governors of the Federal Reserve System, Sveriges Riksbank and the Swiss National Bank). The system design paper provides perspectives on overall system design and four key issues: privacy, cyber security (including quantum computing), offline functionality and point of sale considerations. The legal paper examines key legal questions, focusing on four areas: the legal classification of retail CBDC; the obligations and liabilities of participants in the retail CBDC ecosystem; privacy and financial crime and cross-border issues. [Read more at the BIS]

Russian ministry urges 2-year transition period for CBDC (Crypto.News)

The Russian Ministry of Industry and Trade has called for a two-year transition period before making merchant acceptance of digital ruble payments mandatory, citing concerns over unprepared infrastructure. The draft law that would make digital ruble payments mandatory for large retailers by July 2025, which could create serious challenges for those businesses. The Ministry particularly emphasized the need for clear operational guidelines, and additional time to finalize software, update information systems, conduct testing, and train staff. [Read more at Izvestia]

Automated fund administration and transfer agency using smart contracts (Chainlink)

As part of the Monetary Authority of Singapore (MAS) Project Guardian, SBI Digital Markets, UBS Asset Management, and Chainlink completed the implementation of a tokenized fund. They showed how tokenization, smart contracts, and Chainlink infrastructure can automate the fund management process for fund administrators and transfer agents. The pilot demonstrated the possibility for a tokenized fund to maintain its share register on one blockchain while using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to enable the processing of intensive fund lifecycle activities on another blockchain with different underlying security, cost, and efficiency properties. [Read more at PR Newswire]

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 (20241122)

~ kiffmeister

CFTC advisory subcommittee recommends tokenized margin collateral (Ledger Insights)

The Commodity Futures Trading Commission (CFTC) Global Markets Advisory Committee (GMAC), made up of industry participants, voted in favor (27-0) of three recommendations to adopt distributed ledger technology (DLT) and tokenized assets as collateral for margin. Committee members concluded that no changes to regulations, policies and procedures would be required. The proposals would need to be adopted by the full GMAC Committee and it’s up to the CFTC to decide whether it proceeds. [Read more at the CFTC]

CBOE to launch cash-settled bitcoin ETF options (Cboe)

Cboe Global Markets will launch cash-settled spot bitcoin (BTC) index options on December 2, 2024. Regulated by the U.S. Securities and Exchange Commission (SEC), they will be based on the Cboe Bitcoin U.S. ETF Index (CBTX), which tracks a basket of U.S.-listed spot BTC exchange-traded funds (ETFs). The options will be cash-settled, so that positions are closed in cash at expiration, removing the complexities of physical ETF delivery. Also, they will be exercisable only on the expiration date (“European style”) to eliminate early assignment risk. This follows the November 18 NASDAQ announcement of plans to list options on BlackRock’s BTC ETF, after the CFTC cleared the Options Clearing Corporation to oversee the market a few days earlier. [Read more at the Cboe]

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 (20241120)

~ kiffmeister

Paxos to Buy Finland’s Membrane Finance to gain EU access (CoinDesk)

Stablecoin issuer Paxos will gain access to the European Union (EU), by agreeing to buy Finland-based electronic money institution (EMI) Membrane Finance. “The acquisition is subject to regulatory approval [but] upon completion of the acquisition, Paxos will be a fully licensed EMI in Finland and the EU.” Membrane’s digital assets are regulated by Finland’s Fin-FSA and fully compliant with the EU’s Markets in Crypto-Assets Regulation (MiCA). This follows Tether’s recent investment in Quantoz Payments to support the latter’s launch of its EURQ and USDQ MiCA-compliant stablecoins. In July 2024, USDC and EURC issuer Circle claimed that it became MiCA compliant when it attained an EMI license from the French Autorité de Contrôle Prudentiel et de Résolution (ACPR). [Read more at Paxos]

Deutsche Bank, UBS settle tokenized deposit payments in Bundesbank Trigger solution experiment (Ledger Insights)

UBS and Deutsche Bank have reportedly simulated tokenized deposit payments between the banks as part of the European Central Bank (ECB) wholesale distributed ledger technology (DLT) settlement trials. The Bundesbank’s Trigger solution, that enables blockchain based systems to link to the Trigger Chain, which in turn initiates a payment on the Target2 payment system in central bank money, was used. Adhara, the technology partner of Fnality, provided the orchestration layer that ensures that all the separate settlement legs of the transaction happen atomically. One of the two trails simulated transactions between Deutsche Bank London and UBS in Switzerland involving pounds and Swiss francs, which were settled using euros. [Read more at Ledger Insights]

Brazil’s central bank selects consortium to support Drex trade finance use case experiments (Chainlink)

Banco Central do Brasil has reportedly selected Banco Inter alongside Microsoft Brazil, 7COMm and Chainlink to build a trade finance solution as part of the 2nd phase of Brazil’s DREX central bank digital currency (CBDC) experimentation. The solution leverages blockchain technology and oracles to automate supply chain management and improve trade finance processes. The goal of the pilot is to demonstrate the automated settlement of agricultural commodity transactions across borders, across platforms, and via different currencies. [Read more at PR Newswire]

The Swedish retail payment infrastructure needs to be modernized (Sveriges Riksbank)

Sveriges Riksbank called for the modernization of its retail payments infrastructure and the creation of processes for secure, efficient and accessible retail payments. More specifically, the central bank argued that the infrastructure for clearing (compilation and processing of payment orders) and settlement (finalization) of retail payments in Swedish kronor needs modernization. It presented its view of the way forward over the next five years. Interestingly, no mention was made of an e-kronor retail central bank digital currency (CBDC). [Read more at the Riksbank]

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 (20241115)

~ kiffmeister

UK to trial blockchain-based Gilts within two years (Ledger Insights)

On November 14, 2024, the U.K. Chancellor of the Exchequer announced that HM Treasury plans to launch a distributed ledger technology (DLT) based Digital Gilt Instrument (DIGIT) pilot. No details were provided, but according to an earlier Bloomberg story, it could launch within two years. Also on November 14, UK Finance, a trade association for the U.K. banking and financial services sector, published a paper that it submitted in April 2024 to HM Treasury and the Debt Management Office, with options for such a pilot. These was an “evolutionary” approach to be deployed in three phases over 18 months, and a “big bang” approach that could be deployed in 12 to 18 months. [Read more at Gov.UK]

U.K. government confirms ongoing digital pound design phase (HM Treasury)

The U.K. HM Treasury published its National Payments Vision, in which it committed to continue the design phase for a retail central bank digital currency (CBDC) in partnership with the Bank of England. It reconfirmed that no decision has been taken on whether to implement a digital pound, but any decision to proceed would be accompanied by the introduction of primary legislation, ensuring full Parliamentary scrutiny by both Houses of Parliament, before any launch. Legislation would be preceded by a further public consultation and would guarantee users’ privacy and control of their money. “Irrespective of the final decision, by partnering with the private sector on proofs of concept and experiments, the work will support private innovation in digital currency technologies [and] deepen the retail payments expertise of the UK public authorities. [Read more at HM Treasury]

Norway can wait with CBDC, government task force says (Bloomberg)

A Norwegian government-sponsored task force concluded that there’s no rush for the central bank to launch an e-kroner. However, work should be started “on the necessary regulatory changes” for a possible introduction of a CBDC that may become relevant in future. “The committee doesn’t currently see a need to introduce digital central bank money for reasons of financial inclusion, privacy or emergency preparedness, but doesn’t rule out that a central bank digital currency may in the future be a relevant instrument for safeguarding these considerations.” [Read more on the Norwegian government website]

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 (20241112)

~ kiffmeister

CDC issues €100m digital bond settled with pilot wCBDC (Ledger Insights)

Caisse des Dépôts et Consignations (CDC) issued a €100 million digital bond settled using the Banque de France’s DL3S distributed ledger technology (DLT) platform using its pilot wholesale central bank digital currency (CBDC). The transaction formed part of the European Central Bank’s wholesale distributed ledger technology (DLT) settlement trials. The Banque de France avoids using the term wholesale CBDC, instead referring to it as a tokenized representation of central bank money. For the CDC issuance, it required synchronizing the issuance of the digitally native note (DNN) on Euroclear’s D-FMI platform with the settlement on the central bank’s DL3S. [Read more at Ledger Insights]

Use of DLT and tokenization in financial markets (AFME)

The Association for Financial Markets in Europe (AFME) published a response to a call for submissions from the European Commission (EC) Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) on any issues and opportunities relating to the deployment of DLT based infrastructure and services in the European Union (EU) that may merit the EC’s attention. AFME’s overarching view is that a transformative potential of DLT is that can enable companies and individuals to access a shared, peer-validated database as a single-source-of-truth, without the need to centralize data and transaction processing with a single actor. This increases accessibility by participants, data security and immutability, and data transparency in the real economy. Innovation in finance plays a key role in this vision, which will only begin in earnest with the updating of capital markets infrastructure. [Download the response at the AFME]

JPMorgan renames Onyx blockchain platform to Kinexys (CoinDesk)

JPMorgan (JPM) rebranded its blockchain platform, formerly Onyx, as Kinexys, and its JPM Coin System has been renamed “Kinexys Digital Payments”. The bank also said it plans to introduce on-chain foreign exchange capabilities to the platform as early as the first quarter of 2025, paving the way for the “automation of 24/7, near real-time multicurrency clearing and settlement.” The service will first be available for the U.S. dollar and euro with plans to expand to other currencies. [Read more at JPM]

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 (20241111)

~ kiffmeister

Intesa Sanpaolo issues tokenized CP as part of ECB DLT settlement trials (Ledger Insights)

Intesa Sanpaolo issued €10 million in commercial paper (CP) using Clearstream’s D7 tokenization platform, using the Bank of Italy’s TIPS Hashlink solution for settlement. TIPS Hashlink is one of three payment options that are part of the European Central Bank’s (ECB’s) distributed ledger technology (DLT) based wholesale settlement trials. Rather than use the on-chain central bank money (i.e., central bank digital currency) being used in the other two trails, the Hashlink interoperability mechanism is used to settle the transaction using the ECB-run Trans-European Automated Real-time Gross settlement Express Transfer (TARGET) Instant Payment Settlement (TIPS) system. This is apparently only the second test of this platform, the other being a €25 million Cassa Depositi e Prestiti (CDP) digital bond issue in July 2024. [Read more at Ledger Insights]

ABN AMRO settles repo pilot trades in Eurosystem wCBDC test (ABN AMRO)

ABN AMRO executed four repo pilot trades with DLT-based wholesale central bank digital currency (CBDC) utilizing tokenized commercial paper (CP) as collateral in late October 2024. This served to test one of three payment options (in this case the one being led by the Banque de France) that are part of the ECB’s DLT-based wholesale settlement trials. ABN AMRO issued €1.1 million of the tokenized CP that was used as collateral in the latest transaction, which involved four reverse repo transactions between ABN AMRO Bank, ABN AMRO Clearing, and Rabobank, cleared by Eurex Clearing. In a repo Repo (repurchase) transaction one party (e.g., Bank A) sells securities to another party (e.g., Bank B) and agrees to buy them back later at a slightly higher price. ABN AMRO Bank’s Treasury regularly uses repos for balance sheet management. [Read more at ABN AMRO]

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 (20241031)

~ kiffmeister

BIS hands over mBridge CBDC payment system (Ledger Insights)

The Bank for International Settlements (BIS) has handed the mBridge central bank digital currency (CBDC) based cross-border payments platform over to the central banks of China, Hong Kong, Saudi Arabia, Thailand and the United Arab Emirates (UAE). According to BIS General Manager Agustín Carstens, this was not because of “political considerations” but because after the project’s four years it is “at a level where the partners can carry it on by themselves”. This has happened already with other projects such as the Swiss National Bank’s Project Helvetia. By “political considerations”, Mr. Carstens was referring to stories that during discussions among central bankers and finance chiefs at the October 2024 International Monetary Fund and World Bank Annual Meetings, concerns were expressed about the fact that China is supplying the platform’s key technological backbone, and that China and the UAE are BRICS members. (In that regard it is notable that the U.S. Federal Reserve has not joined the project.) [Read more at the BIS]

ECB looking for innovation partnerships for the digital euro (ECB)

The European Central Bank (ECB) has established a digital euro innovation platform to collaborate with stakeholders. The main goal is to (i) demonstrate how conditional payments could be implemented on a technical level, (ii) provide the opportunity for participants to interact with simulated digital euro interfaces, and (iii) explore additional use cases, ideas and visions that stakeholders may have for the digital euro. The ECB is encouraging all interested stakeholders to contribute, and it will carefully consider all applications before making selections in early January 2025. Selected “visionaries” will be invited to half-day workshops to present their idea to the ECB, and will be asked to provide a summarizing outcome report. [Read more at the ECB]

Finding the “just right” level of decentralization (NIM)

The Nuremberg Institute for Market Decisions (NIM) published an article on the challenges of finding the “just right” level of decentralization in the digital platform economy. Blockchain platforms rely on a predefined, algorithmically encoded and publicly visible protocol that enables a network of peers to maintain the platform jointly, rather one central party consolidating all decision authority and control over the platform. However, complete decentralization is no panacea for reducing the power of intermediaries. It comprises several trade-offs, and many challenges are as yet unsolved. Although promising solutions are looming on the horizon, the article proposes that reintroducing some level of centralization might be a more reliable and available solution in the short run. [Read more at NIM]

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 (20241028)

~ kiffmeister

HKMA partners with Banco Central do Brasil and Bank of Thailand on tokenization initiatives (HKMA)

The Hong Kong Monetary Authority (HKMA) has established new cross-border partnerships with Banco Central do Brasil (BCB) and the Bank of Thailand (BOT) to explore cross-border payment-versus-payment (PvP) and delivery-versus-payment (DvP) settlement use cases in areas such as trade finance payments and carbon credits. In the HKMA-BCB case the HKMA will link its Project Ensemble central bank digital currency (CBDC) sandbox to the BCB Drex CBDC pilot platform. In the HKMA-BOT case, the HKMA will link the Ensemble sandbox to the BOT’s Project San experimental tokenization platform, and test linking the two platforms with distributed ledger technology (DLT) based financial market infrastructures (FMIs). The BOT’s Project San, an internal initiative started in June 2024, aims to build and test a prototype for the tokenisation ecosystem. This includes a wholesale settlement engine, EVM-compatible ledgers supporting tokenised private money and assets, and interoperability mechanisms. [Read more at the HKMA here (on the HKMA-BCB part) and here (HKMA-BOT)]

HKMA provides updates on its fintech-related initiatives (HKMA)

Along with the aforementioned Project Ensemble collaborations, the HKMA provided updates on its other initiatives to spearhead fintech development in Hong Kong. The HKMA will collaborate with other members of the Linux Foundation Decentralized Trust on interoperability aspects of DLT-based FMIs in the Ensemble Sandbox. Also, the HKMA has completed the initial phase of six tokenization use cases across four main themes under Project Ensemble and will publish a report detailing the results of the experimentation in 2025. The HKMA is working closely with the People’s Bank of China to establish a cross-boundary linkage between Hong Kong’s Faster Payment System (FPS) and the Mainland’s Internet Banking Payment System (IBPS). This linkage will support 24/7, instant, small-value, cross-boundary remittances using account proxies like mobile numbers. A pilot launch is expected to be around mid-2025 tentatively. [Read more about these and other initiatives at the HKMA]

Project Mandala proves viability of upfront compliance for digital asset transactions (Ledger Insights)

The Bank for International Settlements Innovation Hub (BISIH) has completed the Project Mandala proof of concept (PoC), which aims to bring efficiencies to anti money laundering (AML), sanctions and capital flow management (CFM) compliance. It uses a compliance by design approach to streamline cross-border compliance processes for financial institutions and explores real-time policy and regulatory compliance monitoring for central banks and other regulators. The project preserves the existing regulatory framework whereby it encodes existing jurisdiction-specific regulatory requirements measures into the system, and maintains the current model, in which financial institutions are responsible for interpreting and applying official regulatory measures. [Read more at the BISIH]

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.