An article in China’s Sina news service claims that eCNY uptake may be lagging because of a lack of merchant point-of-sale (POS) terminals that can process eCNY transactions. It’s not because of transaction fees, because they are zero on eCNY transactions, and not for a lack of equipment, because existing POS terminals can be adapted to process eCNY transactions. The problem is supposedly that the POS equipment manufacturers get a cut of the transaction fees, so there’s no incentive for them to adapt existing POS equipment. However, the People’s Bank of China (PBOC) reportedly said that it actively offers free upgrades to POS equipment or free equipment. [Read more at Sina]
“Circle has introduced a new standard to streamline the process of launching its USDC stablecoin. The new “bridged USDC standard” allows developers to launch the token through a two-phase process. In the first phase, the third-party developer has control of the token contracts, and the token on the new network is backed by a native version on another network. In the second phase, Circle takes control of the contracts, and the token becomes backed directly by Circle’s reserves. The second phase may not occur with all deployments.” [Read more at Circle]
The European Central Bank (ECB) published a paper that analyzes the drivers of Bitcoin transactions against 44 fiat currencies in the largest peer-to-peer crypto exchanges. The empirical results reinforce the hypothesis that Bitcoin trading is driven by speculative motives. However, Bitcoin seems to offer transactional benefits, in particular in emerging market and developing economy (EMDE) countries. The depreciation of the domestic currency of EMDEs – notably not of the currencies of AEs – induces more Bitcoin trading. This suggests that Bitcoin, despite its wide price fluctuations, might have been appreciated also as a store of value or medium of exchange in countries which experienced a loss in the the purchasing power of their domestic currency. [Read more at the ECB]
Sustainable Futures published an article that delves into the benefits and risks of CBDC and examines social adaptation, and education using expert interviews and conference insights. Vital findings stress the need for targeted educational efforts to facilitate CBDC adoption. The research also emphasizes best practices, engaging external experts, and a phased introduction strategy for safe and efficient implementation. Highlighting key stages, it underscores addressing genuine market needs for successful CBDC introduction. Overall, prudent risk management, strategic education, and well-planned phased deployment are crucial for successful CBDC implementation. [Read more at Sustainable Futures]
FYI here are some of my upcoming speaking engagements:
– Currency Research Americas Cash Cycle & Payments Seminar (Orlando Florida on November 27-30)[Register here]
– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]
*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.
Kiffmeister’s central bank digital currency monthly monitor
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 email@example.com
The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (firstname.lastname@example.org).
Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]
WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]