Category: Blockchain

Kiffmeister’s #Fintech Daily Digest (20240730)

~ kiffmeister

Bank of England seeks feedback for wholesale CBDC trials (Ledger Insights)

The Bank of England (BOE) published a discussion paper on innovation in money and payments. While it covers payments across the board, it aims to gather feedback for planned wholesale central bank digital currency (CBDC) trials. These will include a synchronization (“trigger”) solution that settles transactions involving assets that are tokenized on distributed ledger technology (DLT) platforms using the real time gross settlement (RTGS) system. The BOE also wants to trial a digital securities transaction in which an end user makes a tokenized deposit payment. Finally, it will test interoperability with global initiatives like the Bank for International Settlements (BIS) Project Agorá for cross-border payments. Comments are due by October 31, 2024. [Read more at the BOE]

Qatar Central Bank launches ‘Request to Pay’ service through Fawran (The Peninsula)

Qatar Central Bank (QCB) launched a “Request to Pay” option through Fawran instant payment service that was launched in March 2024. Request to Pay allows customers to send a payment request from the payee to the payer. The payer will then receive the request, including the payee’s name, the required amount to be transferred and the option to accept or reject the request. In case of acceptance, the required amount will be transferred instantly to the payee’s account. The participating banks are Doha Bank, Qatar Islamic Bank, Commercial Bank, Masraf Al Rayan and Qatar International Islamic Bank. [Read more on the QCB’s X page]

E-Rupee retail CBDC pilot customers grow 285% year-over-year (Business Standard)

The Reserve Bank of India (RBI) published its annual report on currency and Finance in which it reported that as of June 2024, 5 million users (versus 1.3 million a year earlier) and 0.4 million merchants (versus 0.3 million) were participating in e-Rupee CBDC retail pilot. [Read the full report at the RBI]

Byzantine fault tolerant consensus with confidential quorum certificate for a central bank DLT (Banca D’Italia)

Banca d’Italia published a paper on the FROSTed Byzantine Fault Tolerance (FBFT) protocol, an approach to DLT proof of authority (PoA) validation meant to strengthen the security of the ledger, its tolerance to faults or attacks, and the confidentiality of validators. It combines the practical byzantine fault tolerance (PBFT) algorithm with the flexible round-optimized Schnorr threshold (FROST) signature scheme. The resulting system is an alternative platform for a distributed, resilient transactional system. Operated by a set of trusted actors, distributed at geographic scale, it holds potential for mission-critical applications, such as wholesale and retail CBDC, and asset tokenization schemes. [Read more at Banca d’Italia]

Upcoming Speaking Engagements:

  • Intertribal Foreign Affairs Council Forum 2024, Yidindji, August 30-31. The conference will bring together indigenous nations to showcase the excellence of their governance practices and generate new ideas for the future. I’ll be on a panel focused on the future of money and indigenous financial inclusion. [Find out more and register here]
  • 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 (20240726)

~ kiffmeister

ERPB technical session on the digital euro (ECB)

The European Central Bank (ECB) published two documents discussed at the June 28, 2024 meeting of the European Retail Payments Board (ERPB) technical session of the digital euro [agenda here]. One was a summary of inputs on the methodology for calibrating holding limits [download here], and the other was on the strategies for conducting euro user research and engaging with market participants (payment service providers and merchants)[download here].

Thailand distributing stimulus payments in digital currency (CoinTelegraph)

Thailand’s finance ministry is going ahead with a plan to pay a social benefit in digital currency. Up to 45 million Thais will be eligible to receive 10,000 baht (about $280) in digital money on August 1, 2024, about two-thirds of the average monthly income in the country. There are numerous restrictions on usage, including know your customer (KYC) verification that will exclude prisoners and people and businesses with records of economic abuse. There are also restrictions on the items that can be purchased with the digital currency. [Read more at CoinTelegraph]

German banks share tokenized deposit trial results (Ledger Insights)

The German Banking Industry Committee (GBIC) published the results of a proof of concept (POC) for its distributed ledger technology (DLT) based commercial bank money token (CBMT) project. CBMT is focused on serving large corporates, especially industrial companies, allowing them to hold tokens from multiple banks and to make P2P (B2B) transactions 24/7/365. Results confirmed that the CBMT is viable and offers considerable potential, enabling the realization of a variety of use cases across corporate functions. Results also showed that the CBMT works across a variety of DLT platforms, has the potential to scale and should present no barrier to integration into existing systems via application programming interfaces (APIs). [Read more at the GBIC]

Payment behavior in Germany in 2023 (Deutsche Bundesbank)

The Deutsche Bundesbank (BuBa) published an analysis of how people pay in Germany, based on approximately 5,700 randomly selected members of the public aged 18 and over between September and November 2023. Of payment volumes, debit cards accounted for 32%, cash for 26%, transfers and direct debits 20%, credit cards 10%, and mobile payments 6%. In general, 44% of respondents prefer to pay with electronic payment methods, but 24% still prefer cash, and 94% of merchants accept cash at point of sale. The perceived benefits of cash include privacy preservation (63%), immediate and reliable settlement of payments (47%), and easy expense overview (41%). [Read more at BuBa]

CBDC and transmission of monetary policy (Bank of Canada)

The Bank of Canada (BOC) published a paper on how a central bank digital currency (CBDC) changes monetary policy transmission in a general equilibrium model with nominal rigidities, liquidity frictions, and a banking sector where commercial banks face a leverage constraint. It finds that the effects of a shock to the Taylor rule that governs interest on central bank reserves, is magnified with the introduction of a fixed-interest-rate CBDC. More generally, whether CBDC magnifies or abates the response of the economy depends on the type of shock (e.g., interest rate or quantity of reserves shock). The paper also finds that the response of the economy depends on the monetary policy framework—whether the central bank implements monetary policy through reserves or through CBDC—as well as central bank balance sheet rules that govern the quantity of CBDC and reserves. [Read more at the BOC]

Jordanian government launches national blockchain network (Jordan News)

Jordan’s Ministry of Digital Economy and Entrepreneurship (MODEE) launched a national blockchain technology network, MODEE DLT, to enhance trust and transparency in government services. MODEE DLT has been integrated with the Sanad system to provide a decentralized and verifiable digital record of all Sanad transactions. Sanad is a government portal through which residents can access their government digital documents and personal records, apply for government services, digitally sign documents, and make bill payments. [Read more at MODEE]

Qatar Central Bank issues DLT guidelines (Qatar Central Bank)

The Qatar Central Bank (QCB) published its guidelines for the oversight of distributed ledger technology applications or systems provision and usage by QCB-regulated entities to ensure that their usage is safe, secure and efficient. [Read more at the QCB]

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 (20240725)

~ kiffmeister

BSP wholesale CBDC proof-of-concept nearing completion (Fintech Philippines)

The Bangko Sentral ng Pilipinas (BSP) is reportedly progressing quickly towards issuing wholesale central bank digital currency (CBDC), codenamed Project Agila, sooner than anticipated, with the proof-of-concept (POC) phase expected to conclude by the end of 2024. Deputy Governor Mamerto E. Tangonan confirmed that the CBDC could likely be launched in the earlier part of BSP Governor Eli M. Remolona Jr.’s six-year term, which runs from 2023 until 2029. Three uses cases mentioned; interbank settlement on weekends and holidays, securities settlement and cross border payments. With regards to the latter, the BSP is an observer of Project mBridge involving the BIS Innovation Hub and the central banks of China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia. [Read more at Fintech Philippines]

Simulating the adoption of a retail CBDC (FNA)

Jahrbücher für Nationalökonomie und Statistik (JNS) published a paper by two Financial Network Analytics (FNA) staff that uses agent-based modelling to simulate retail central bank digital currency (CBDC) adoption, calibrated to Spain’s retail payment ecosystem. Results suggest that the distribution of government subsidies via CBDC creates incentives to reduce the use of cash. Also, reverse waterfall functionality (automatic transfer of funds from bank deposits to CBDC wallets) and a positive remuneration spread to bank deposits are effective in fostering adoption. However, the model did not model banks as adaptive decision makers that would include their ability to counter CBDC remuneration. [Read more at the JNS]

A minimum viable offline CBDC using Groth-Sahai proofs (arXiv)

arXiv posted a paper that proposes a design and a first implementation for an offline-first digital euro. The protocol offers complete privacy during transactions using zero-knowledge proofs. Furthermore, transactions can be executed offline without third parties and retroactive double-spending detection is facilitated. To protect the users’ privacy, but also guard against money laundering, bank and trusted third parties for law enforcement must collaborate to decrypt transactions, revealing the digital pseudonym used in the transaction. The transaction can be decrypted without decrypting prior transactions attached to the digital euro. The protocol has a working initial implementation showcasing its usability and demonstrating functionality. [Read more at arXiv]

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 (20240724)

~ kiffmeister

Central Bank of Papua New Guinea launches CBDC proof-of-concept (Soramitsu)

The Central Bank of Papua New Guinea (CBPNG) is working with Soramitsu on a central bank digital currency (CBDC) proof-of-concept (POC) aimed at building a common payment platform across the Pacific Island region. Also, some areas of Papua New Guinea are plagued by instability, violence, and frequent occurrences of robberies and muggings, so the POC will explore digital technologies that will allow recovery of funds after such incidents. The project is being funded by the Government of Japan’s Ministry of Economy, Trade and Industry’s 2023 supplementary budget “Subsidy for Global South Future-Oriented Co-Creation Projects (Indirect Subsidy Project Related to the Survey on the Overseas Deployment of Infrastructure by Japanese Companies).” [Read more at Soramitsu]

Bank of Israel selects 14 teams to present use cases for digital shekel (Finextra)

The Bank of Israel (BOI) has chosen 14 teams from the private and public sectors, and academia to study potential digital shekel use cases selected by the BOI. They deal with a variety of functions: connectivity between the digital shekel, other payment systems, and cash; use of the advanced functionalities offered by the digital shekel, such as subwallets, conditional payments, and split payments; and the implementation of various technologies while using the digital shekel as a means of payment. Participant proposals will be tested in a digital sandbox in August 2024, with products developed to be showcased at a concluding conference at the end of October 2024. [Read more at the BOI]

FCA finalizes access to cash rules (Finextra)

Under new rules from the U.K. Financial Conduct Authority (FCA), banks and building societies will need to weigh up if local communities lack access to cash services, like branches and ATMs, and plug significant gaps. Under the new rules banks will need to respond to local residents and community organizations when closing branches and ATMs and provide an assessment of whether there are gaps in local cash access. Where significant gaps are found, banks will be obliged to retain branches and ATMs until alternative solutions are found. [Read more at the FCA]

UAE central bank introduces new stablecoin regulations (Coin Journal)

The UAE Central Bank (CBUAE) approved a framework for stablecoin regulation on June 14, 2024, which allows only dirham-backed stablecoins to be used for payments. Other crypto-assets will be restricted to trading, investment, and corporate treasury purposes while foreign stablecoins will only be permitted for purchasing specific virtual assets like non-fungible tokens (NFTs). The new law mandates that no entity can issue a payment token without submitting a white paper to the central bank for approval. Banks are not directly permitted to issue payment tokens but can do so through subsidiaries or affiliates, provided they meet licensing and regulatory requirements. The new framework is set to commence in June 2025. [Read more at the CBUAE]

UEMOA launches interoperable instant payment system pilot (BCEAO)

The Central Bank of the States of West Africa (BCEAO) has launched the pilot phase of the interoperable instant payment system (IPS) of the West African Economic and Monetary Union (UEMOA). 25 financial institutions across four countries met the criteria required to participate. A second group will join on August 12, 2024.The new interoperable 24/7 IPS infrastructure is capable of processing transactions of any kind, regardless of the account type. [Read more at the BCEAO]

Philippines hits target of digitalizing 50 percent of retail payments (BSP)

The share of digital payment transactions to total monthly retail payments in the Philippines grew from 42.1% in 2022 to 52.8% in 2023, according to the Bangko Sentral ng Pilipinas (BSP). This indicates that the central bank has surpassed its target of digitalizing 50% of digital payments volume in the country under its Digital Payments Transformation Roadmap 2018-2023. In terms of value, the latest e-payments measurement also showed that the share of monthly digital payments to total transactions increased to 55.3% in 2023 from 40.1% in 2022. The main contributors to the rise in e-payments were merchant payments which accounted for 64.9% of monthly digital payments volume, person-to-person transfers at 19.3%, and business-to-business supplier payments at 6.1%. [Read more at the BSP]

Reserve Bank of India joins Project Nexus (RBI)

The Reserve Bank of India (RBI) joined Project Nexus, a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic fast payment systems (FPSs). Nexus, conceptualized by the BIS Innovation Hub aims to connect the FPSs of four ASEAN countries (Malaysia, Philippines, Singapore, and Thailand); and now India. Indonesia, which has been involved from the early stages, continues to be involved as a special observer. The platform is expected to go live by 2026. Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost effective. [Read more at the RBI]

    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 (20240718)

    ~ kiffmeister

    Basel Committee final disclosure framework for banks’ cryptoasset exposures

    The Basel Committee on Banking Supervision published its final disclosure framework for banks’ crypto-asset exposures and targeted amendments to its crypto-asset standard published in December 2022. The disclosure framework includes a set of standardized tables and templates covering banks’ crypto-asset exposures to enhance information availability and support market discipline. The targeted amendments include clarified criteria for stablecoins to receive a preferential regulatory treatment. [Read more at the Bank for International Settlements]

    [Ledger Insights provides a summary of the key points regarding the criteria for stablecoin preferential treatment here.]

    HKMA proposes rules for ‘fiat-referenced’ stablecoins (Decrypt)

    The Hong Kong Monetary Authority (HKMA) is looking to roll out a comprehensive regulatory framework for fiat-referenced stablecoin (FRS) issuers. This comes alongside a proposal for legislation. The new regime would require foreign FRS issuers to establish a physical presence in Hong Kong, require that issuers custody reserves at Hong Kong banks, and prohibit issuers from paying interest to holders. [Read more at the HKMA]

    State Street planning tokenized deposits and stablecoin (Ledger Insights)

    State Street is reportedly exploring creating its own stablecoin and deposit token. The bank is already an investor in Fnality, the interbank distributed ledger technology (DLT) synthetic wholesale central bank digital currency (CBDC) payment solution backed by 20 institutions. [Read more at Bloomberg]

    Oxbridge Re raises $2.88m for EpsilonCat Re tokenized reinsurance sidecar securities (Artemis.bm)

    Oxbridge Re Ltd., the Cayman Islands based reinsurance company, through its SurancePlus digital securities subsidiary, completed a private placement of 287,705 Participation Shares represented by the digital tokens, EpsilonCat Re, under a 3-year Participation Share Investment Contract to raise roughly $2.88 million. [Read more at Artemis.bm]

    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 (20240716)

    ~ kiffmeister

    FSB consults on cross-border payment legal, supervisory and regulatory frictions

    The Financial Stability Board (FSB) published its proposed 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. They take forward priority actions under the G20 Roadmap to address legal, supervisory and regulatory frictions in cross-border payments to help achieve the quantitative targets in 2027. Proposals include the establishment of a forum for cross-sectoral collaboration on data issues related to cross-border payments to ensure that the recommendations are taken forward in a coordinated manner. [Read more at the FSB]

    Palau developing DLT government bond issuance solution (Ledger Insights)

    Palau has contracted with Soramitsu Labs to build a distributed ledger technology (DLT) based government bond issuance platform. Soramitsu was the developer of Cambodia’s Bakong DLT-based national payment system, and is also working with Laos, the Philippines and Vietnam on central bank digital currency (CBDC) projects, and with the Asian Development Bank on a proof of concept for the cross border settlement of bond transactions. The 100 million yen cost of the Palau project will be covered by Japan’s Ministry of Economy, Trade and Industry, and the Japanese foreign and finance ministries will provide advice on strategy and project management. [Read more at Ledger Insights]

    E-CNY transactions show 630% growth in 2023 (Ledger Insights)

    Cumulative e-CNY transaction volumes reached RMB 6.6 trillion ($910 billion) through to May 2024 (7.3 times year-over-year growth). [Read more at Ledger Insights]

    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 (20240709)

    ~ kiffmeister

    Potential climate impact of retail CBDC models

    Sveriges Riksbank published a paper that analyses central bank digital currency (CBDC) electricity consumption compared to existing retail payment services. Findings indicate that the energy use per transaction of an e-krona is comparable to that of card payments. However, there are significant differences depending on whether the design of the infrastructure for the e-krona is centralized or decentralized, where a centralized solution tend to be less energy consuming than a decentralized solution. Algorand’s proof-of-stake public-permissioned network was chosen to represent the decentralized platform, and Hedera’s private-permissioned network the centralized platform, and the transactions volumes were assumed to be similar to that of cash-based transactions. [Read more at the Riskbank]

    Visa showcases tokenized deposits with HSBC, Hang Seng Bank (Ledger Insights)

    Visa published a report on its tokenized deposit trial with HSBC and Hang Seng Bank, which involved (i) settling high value real estate transaction and (ii) settling Visa card payments. In Hong Kong there are restrictions on faster payment amounts, so the real estate transaction supported a high value instant payment with tokenized deposits. With tokenized deposits, when a payee transfers money to a recipient, the sending bank burns the tokens and the recipient bank mints them so they appear in the recipient’s wallet. Instant settlement is facilitated by wholesale CBDC, with the token and CBDC exchanges happening simultaneously, so there’s no settlement risk. [Read more at Visa]

    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 (20240707)

    ~ kiffmeister

    Global Layer 1 (GL1) Whitepaper

    The Monetary Authority of Singapore (MAS) published a paper that introduces the Global Layer One (GL1) initiative, a multi-purpose, shared ledger infrastructure based on distributed ledger technology (DLT) and governed by common technological standards, principles and practices, on which regulated financial institutions across jurisdictions could deploy tokenized assets. It is envisaged that the architecture of GL1 could be described as the base layer in a four-layered conceptual model for digital asset platforms introduced in MAS “Project Guardian: Enabling Open and Interoperable Networks” and IMF “ASAP: A Conceptual Model for Digital Asset Platforms” papers. [Read more at the MAS]

    DBS, JP Morgan, Mizuho test FX PvP DLT solution on Partior

    Partior completed a proof of concept for FX payment versus payment (PvP) settlement using its blockchain network, with JP Morgan, DBS Bank and Mizuho. The trial showcased the effectiveness of Partior’s FX PvP solution in eliminating FX settlement risk across both emerging market and advanced economy currencies, and same-day-value trades, with 24×7 real-time and atomic settlement. It also highlighted the solution’s capability to provide just-in-time liquidity across these currencies as well as real-time visibility and status throughout the transaction life cycles for participants. [Read more on Ledger Insights and Partior’s LinkedIn page]

    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 (20240705)

    ~ kiffmeister

    MiCAR’s influence on stablecoins: Industry insights and implications

    The Digital Euro Association (DEA) published a paper that dissects the Markets in Crypto-Assets Regulation (MiCAR) and its transformative impact on the stablecoin landscape. It explores the diverse regulatory approaches to stablecoins across major jurisdictions and how MiCAR might serve as a model for global regulation. The paper discusses the potential market opportunities MiCAR offers for stablecoin issuers, including enhanced consumer trust, clearer regulatory guidance, and increased access to the European market. Also, it covers the significant challenges stablecoin issuers face under MiCAR, from stringent compliance requirements to operational and technological strains, and how these hurdles might impact smaller issuers and market dynamics. [Read more at the DEA]

    Schroders Capital & Hannover Re collaborate on tokenized ILS pilot

    Germany reinsurer Hannover Re has collaborated with Schroders Capital on a pilot tokenization project, designed to enhance the way insurance-linked securities (ILS) are invested and managed. On an internal-only basis, Schroders successfully enabled reinsurance contracts to be tokenized and traded on a public blockchain platform using smart contracts. This allowed a number of time-consuming processes to be automated. For example, by integrating key catastrophe insurance data sources into the smart contracts payments to appropriate recipients could be automatically triggered if qualifying natural disaster events occurred. [Read more at Artemis.bm]

    Monetary devolution and the political economy of central bank digital currencies

    According to a paper by Leonidas Zelmanovitz and Bruno Meyerhof Salama, retail central bank digital currency (CBDC) can be considered a form of “monetary devolution,” that shifts the power, at least in part, from commercial banks to central banks. They discuss the institutional incentives of digital currencies in general and monetary devolution in the United States in particular. Next they outline an alternative that incorporates the technological edge provided by CBDCs. This alternative would be the creation of wholesale CBDCs to serve as the monetary base for settling retail payments with stablecoins. Designed as such, CBDCs could preserve the current balance between private and public money. [Read more at SSRN]

    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 (20240701)

    ~ kiffmeister

    Project Nexus advances instant cross-border payments blueprint

    The Bank for International Settlements (BIS) announced that phase three of Project Nexus, which is aimed at enhancing cross-border payments by connecting multiple domestic instant payment systems (IPS) globally, is now complete. The next phase will see Bank Negara Malaysia, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore, the Bank of Thailand and domestic IPS operators – who worked together in phase three – joined by the Reserve Bank of India, expanding the potential user base to India’s Unified Payments Interface (UPI), the world’s largest IPS. Bank Indonesia will continue its association with the project with special observer status. Nexus is designed to standardize the way domestic IPS connect to one another. Rather than an IPS operator building custom connections for every new country to which it connects, the operator only needs to make one connection to Nexus. This single connection would allow the IPS to reach all other countries in the network. [Read more at the BIS]

    First trials with the Trigger Solution successfully settled

    As part of the Eurosystem exploratory work, the first two trials with the Deutsche Bundesbank’s Trigger Solution were successfully settled. The use case comprised the issuance and primary distribution of a commercial paper with the use case team Clearstream as a market distributed ledger technology (DLT) operator, and two market participants (DekaBank and DZ Bank). The exploration was conducted as a trial in the participants’ production systems and ultimately resulted in real and final bookings in TARGET, the Eurosystem’s payment system, by using the Trigger Solution. The 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 in central bank money on participants’ existing RTGS accounts. [Read more at the Bundesbank]

    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.