Tag: Quantum

Kiffmeister’s #Fintech Daily Digest (20251105)

~ kiffmeister

Canada Moves to Regulate Stablecoins in New Budget (Decrypt)

The Canadian government will introduce legislation to regulate the issuance of fiat-backed stablecoins in Canada. Under this framework, issuers will be required to maintain and manage adequate asset reserves, establish clear redemption policies, and implement robust risk management systems to protect consumers. The legislation ensures privacy safeguards for Canadians’ sensitive information and includes national security provisions to strengthen trust in the system, making stablecoins safe and secure for individuals and businesses. The Bank of Canada will administer these regulations, retaining $10 million over two years and subsequently $5 million annually, with costs offset by regulated stablecoin issuers. Additionally, the Retail Payment Activities Act will be amended to allow for the regulation of payment service providers conducting payment functions with stablecoins, reinforcing oversight and consumer protection in digital payments.​ [Source: Government of Canada]

Amazon Sues to Stop Perplexity From Using AI Tool to Buy Stuff (Bloomberg)

Amazon has filed a lawsuit against Perplexity AI, demanding that the startup stop allowing its AI browser agent, Comet, to make purchases for users on Amazon’s platform. Amazon alleges that Perplexity violated its terms of service and committed computer fraud by failing to disclose when the AI agent was shopping on behalf of a real person. The dispute, which follows a cease-and-desist letter, highlights the growing tension over the use of agentic AI tools to automate complex online tasks such as shopping, and raises important questions about transparency, competition, and user choice in the evolving landscape of AI-powered web interactions. Perplexity responded by accusing Amazon of using bullying tactics to limit consumer choice and defend its own advertising business, arguing that third-party agents should be allowed to operate on equal footing with human users. [Source: Bloomberg]

Anonymous Quantum Tokens with Classical Verification (arXiv)

Some Google researchers posted a paper on arXiv on the concept of single-use quantum tokens designed for secure, unforgeable, anonymous transactions with classical verification. Leveraging the quantum no-cloning theorem, which states that it is physically impossible to make an exact copy of an unknown quantum state, the authors develop tokens that are identically minted and provide strong privacy guarantees, including the ability of users to verify whether the issuing bank is tracking them through an audit process. The scheme theoretically supports classical verification, which means that all steps to prove the quantum token’s validity require only regular (non-quantum) memory and communication. However, given current technology limitations, only the issuer can check the validity of a token, in contrast to public key schemes, where any user can efficiently verify the tokens. [Source: arXiv]

Upcoming Speaking Engagements:

The Cedi@60 Anniversary Currency Conference (Accra, Ghana, November 17-20) hosted by the Bank of Ghana, in partnership with Currency Research, will celebrate 60 years of the Ghanaian Cedi, bringing together leaders from across Africa and beyond to reflect on the currency’s legacy and chart its digital future. Learn about Ghana’s eCedi pilot and the future of sovereign digital currencies in Africa, and engage with innovators driving mobile money, QR code payments, and financial inclusion across the region. [Register here and get 15% off by using the Kiffmeister15 code!]

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 (20240614)

~ kiffmeister ~ 1 Comment

2023 BIS survey on central bank digital currencies and crypto

94% of the 86 central banks surveyed (between October 2023 and January 2024) by the Bank for International Settlements (BIS) are exploring central bank digital currency (CBDC). 54% are experimenting with proofs of concept and 31% are running a pilot. Around 30% of central banks focus on retail CBDCs only and 2% are working on wholesale CBDCs only, and it is more likely that central banks will issue a wholesale CBDC within the next six years than retail CBDC. More emerging market and developing economy (EMDE) central banks are likely to issue a retail CBDC on a distributed ledger than advanced economy (AE) central banks, perhaps reflecting a willingness to leapfrog moving from legacy systems to cutting-edge technologies. Also, this year the survey also provides insight into the use of stablecoins for payments and regulatory approaches to crypto-assets across the globe. [Read more at the BIS]

European Central Bank on making the digital euro truly private

The European Central Bank (ECB) published a blog post that explains what degrees of payments privacy future users of a digital euro can expect. It claims that it will promise better privacy and data protection than other current electronic means of payment, but not the same degree of privacy as cash although paying with an “offline digital euro” comes pretty close. Online digital euro payments will not be so private, because the commercial banks that run the user-facing parts of the platform will have full access to user identity and transaction information, just like they currently do on their own platforms. However, digital euro holder identities will be separated from the payment data, and the banks will pseudonymize user data so they are not visible to the Eurosystem. [Read more at the ECB]

Bank of Thailand to test programmable payments in enhanced sandbox

The Bank of Thailand (BoT) will test programmable payments in its Enhanced Regulatory Sandbox. Programmable payments automate transaction with predefined conditions for the payment of goods and services. This project will demonstrate the potential for applying technology to a wide variety of financial services, accompanied by appropriate risk management processes. The BOT will work in collaboration with the Securities and Exchange Commission, the Office of Insurance Commission, and the Fiscal Policy Office, Ministry of Finance, to evaluate the benefits and risks of financial innovations and to establish potential and suitable supervisory policies. [Read more at the BOT]

Are CBDCs quantum safe?

BitMint CEO Amnon Samid argues that CBDCs that rely on blockchain or distributed-ledger tech (DLT) will soon be cryptographically compromised by the power of quantum computers and artificial intelligence. Amnon argues that central banks should secure digital cash as token- or value-based digital representations, instead of designing systems that rely on traditional accounts as used by the commercial banking system. [Podcast on DigFin]

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 (20240123)*

~ kiffmeister

BIS Innovation Hub announces first six projects for 2024

The Bank for International Settlements (BIS) announced the first batch of six new projects in its 2024 Innovation Hub work program including experimentations on digital payments cyber security and central bank digital currencies (CBDCs). Project Leap starts its phase II, aiming to “quantum-proof” payment systems, after successfully establishing a quantum-safe communication channel between the central banks of France and Germany in its first phase. Project Aurum enters a new phase in which it will study the privacy of payments in retail CBDCs. The recently started Project Promissa tests the feasibility of tokenizing promissory notes, financial instruments that help fund multilateral development banks and other international financial institutions. All these new initiatives will be added to existing projects that various Innovation Hub Centres will continue to develop this year:  FuSSE, Gaia, Mandala, mBridge phase III, Nexus phase III, Pyxtrial, Rio and Viridis. [Read more at the Markets Media]

CBDC and banks: Disintermediating fast and slow

A paper by Rhys Bidder, Timothy Jackson and the Deutsche Bundesbank’s Matthias Rottner examined the impact of CBDC on banks and the broader economy drawing the Bundesbank’s Survey on Consumer Expectations using a structural macroeconomic model with endogenous bank runs. Based on the survey, they show that a substantial share of German households would include CBDCs in their portfolio in normal times – replacing, in part, commercial bank deposits. That is, there is hypothetical evidence of “slow” disintermediation of the banking system. In addition, during periods of banking distress, their willingness to shift to CBDC is even larger, implying a risk of “fast” disintermediation. They map the model to Euro area data under the status quo and in a hypothetical situation where CBDC is introduced. The model implies that slow disintermediation shrinks a banking system that is prone to runs with positive welfare effects. However, CBDC promotes fast disintermediation, and for reasonable calibrations, the second effect dominates and the introduction of CBDC decreases financial stability and welfare. However, complementing CBDC with a holding limit or pegging remuneration to policy rates can reverse these results, implying that CBDC is welfare improving. Such policies retain the gains of increased stability arising from slow disintermediation, but limit the downside of fast disintermediation. [Read more on Github]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here and get a 20% discount with the Kiffmeister20 code]

*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 chronicles@kiffmeister.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 (chris@sodapublicmoney.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]

Kiffmeister’s #Fintech Daily Digest (20231129)*

~ kiffmeister

Project Tourbillon explores cyber resiliency, scalability and privacy in a prototype CBDC

The Bank for International Settlements (BIS) published an update on Project Tourbillon, which explores privacy, security and scalability for retail central bank digital currency (CBDC). The experiment proposes a concept of payer anonymity, providing cash-like anonymity to the payer, combining proven technologies such as blind signatures and mix networks with the latest research on cryptography and CBDC design suggested by David Chaum and Thomas Moser’s eCash 2.0 platform. Project Tourbillon explored not only current, but also quantum-safe blind signatures, an important cryptography used in both designs to guarantee privacy and future security. Tourbillon also demonstrated that implementing quantum-safe cryptography is possible, but it severely limits performance. [Read more at the BIS]

Bank of Canada publishes report on digital dollar consultations

The Bank of Canada published a report on the feedback it has received to date about a potential digital Canadian dollar. It confirmed that Canadians place a high value on central bank-backed cash and want to maintain access to bank notes. Also, Canadians value their right to privacy and many expressed concerns that a digital dollar could compromise that right. In addition, they don’t want a digital dollar that will add to financial stability risks. The Bank reconfirmed that likelihood of a digital loonie being needed is still uncertain, and the ultimate decision whether to go ahead with one depends on the Parliament. [Read more at the Bank of Canada]

IMF, World Bank and BIS in first ‘tokenisation’ collaboration

The BIS, IMF, World Bank, and Swiss National Bank have launched a project aimed at applying tokenization to the paper-based processes used when richer countries donate into some of the World Bank’s funds to support poorer parts of the world. The idea is to tokenize the original paper-based “promissory notes” to make it easier to transfer when required. [Read more at the BIS]

Central Bank of Solomon Islands to start CBDC proof of concept

The Central Bank of Solomon Islands (CBSI) started a retail CBDC (“Bokolo Cash”) proof-of-concept (PoC) on November 1, 2023. The CBSI has been testing the Soramitsu-provided system for domestic and foreign payments, including simulated international remittances. Within the PoC, users will be able to seamlessly scan a QR code with their Bokolo Cash wallet to send instant cash payments to selected merchants or make peer-to-peer transfers. [Read more at Finextra]

Rwanda’s CBDC development process still underway

The National Bank of Rwanda (NBR) reportedly has determined that a retail CBDC is needed in the country. However, the central bank is still in the early stages of its CBDC research, and it will take about two years before it would ready for launch. [Read more at allAfrica.com]

Retail CBDC implications for banking and financial stability

The U.S. Federal Reserve (Fed) published a review of the literature that examines the risks to the banking sector associated with retail CBDC introduction. These include the possibility of bank disintermediation and associated contraction in bank credit, as well as potential adverse effects on financial stability. The recycling of the new CBDC liability through asset purchases or lending by the central bank plays an important role in determining the economic consequences of the introduction of a CBDC. Ultimately, the effects of a CBDC depend critically on its design features, of which remuneration is the one discussed most often in the literature. [Read more at the Fed]

FYI here are some of my upcoming speaking engagements:

– Currency Research Americas Cash Cycle & Payments Seminar (Orlando Florida on November 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 chronicles@kiffmeister.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 (chris@sodapublicmoney.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]

Kiffmeister’s #Fintech Daily Digest (20230906)*

~ kiffmeister

Blockchain privacy and regulatory compliance: towards a practical equilibrium

Ethereum’s Vitalik Buterin has co-authored a paper on a smart contract-based protocol designed to reconcile financial privacy with regulatory compliance. The core idea is to allow users to publish a zero-knowledge proof, demonstrating that their funds (do not) originate from known (un-)lawful sources, without publicly revealing their entire transaction transaction history. This is achieved by proving membership in custom association sets (“privacy pools”) that satisfy certain properties, required by regulation or social consensus.  [Read more on SSRN]

Bank of Canada explores impact of quantum computing on CBDCs

The Bank of Canada has engaged evolutionQ for a research project involving quantum-safe cybersecurity technologies for greenfield digital currencies. The Bank of Canada is exploring technologies and technical ecosystems that may inform decisions relating to the development of a potential digital loonie. The evolutionQ research will explore the impact of integrating quantum-safe encryption methods and crypto-agility as design goals for central bank digital currency (CBDC). The code developed during the research will be released as open source to give developers and researchers the opportunity to explore the new cryptographic methods.  [Read more at evolutionQ]

*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 chronicles@kiffmeister.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 (chris@sodapublicmoney.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]

Kiffmeister’s #Fintech Daily Digest (20230605)*

~ kiffmeister

SEC sues Binance in US District Court for unregistered securities operations

The U.S. Securities and Exchange Commission (SEC) filed suit against Binance, its U.S. platform and CEO Changpeng Zhao (CZ) in the District Court for the District of Columbia. There were 13 charges, including unregistered offers and sales of the BNB and BUSD tokens, the Simple Earn and BNB Vault products and its staking program. In addition, the SEC alleges in the suit that Binance failed to register its Binance.com platform as an exchange or a broker-dealer clearing agency. CZ was sued as a “controlling person.” [Read more at the SEC]

National Bank of Kazakhstan digital tenge project update

Binur Zhalenov, CEO of the Kazakhstan Interbank Settlement Center of the National Bank of Kazakhstan, provided an update on the three-year digital tenge project. The plan in 2023 is to deliver a production-grade central bank digital currency (CBDC). Pilots will test various specific use cases, starting with building a scalable platform for social aid distribution for the central bank’s government partners. The project aims to  provide a scheme that provides business value across the value chain, and there will be several minimum viable products (MVPs) to optimize cross-border payments, wholesale transactions, and distributed ledger technology (DLT) integration. [Read more on LinkedIn]

Project Leap proves the viability of a quantum-safe financial system

The BIS Innovation Hub published a report on Project Leap, a joint project with the Banque de France and Deutsche Bundesbank that addresses the threat that future quantum computers represent to today’s cryptographic algorithms, and thereby to the confidentiality of financial data. The report presents a comprehensive overview of the experiments conducted and the initial technical findings, including the successful set up a quantum-safe communication channel between the project participants that shields financial data. [Read more at the BIS]

*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.

Upcoming conferences, webinars and speaking engagements:

Kiffmeister’s global 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 for any of you out there who work for a central bank, ministry of finance or international financial institution 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 chronicles@kiffmeister.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 (chris@sodapublicmoney.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]

Kiffmeister’s #Fintech Daily Digest (20230104)

~ kiffmeister

I’ve updated my tabulation of retail central bank digital currency (#CBDC) explorers. Mostly just updated links. There are still 91 central banks that have recently issued, piloted, experimented with and/or researched retail CBDC. (Note that I don’t pump up my count by separately count national central banks that are members of currency unions.) [Check out the tabulation here]

US agencies issue joint statement on crypto-asset risks to banking organizations

US federal bank regulatory agencies issued a statement highlighting key risks for banking organizations associated with crypto-assets and the crypto-asset sector and describing the agencies’ approaches to supervision in this area. Banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation. However, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector.[Read more at the Federal Reserve Board]

Coinbase reaches $100 million settlement with New York regulator over compliance programs

The New York Department of Financial Services (NYDFS) reached a $100 million settlement with Coinbase over issues regarding the company’s compliance programs. Coinbase will be required to pay $50 million as a penalty and invest an additional $50 million to bolster its abilities to comply with financial regulations. The department said it found “significant failures” in Coinbase’s compliance program that violated virtual currency regulations regarding, know-your-customer (KYC) due diligence, transaction monitoring, and suspicious activity reporting. [Read more at the NYDFS]

Breaking RSA with a Quantum Computer

A group of Chinese researchers have published a paper claiming that they can—although they have not yet done so—break 2048-bit RSA. Bruce Schneier says this is something to take seriously – it might not be correct, but it’s not obviously wrong. One of the issues with the algorithm is that it relies on a recent factoring paper by Peter Schnorr. It’s a controversial paper; and despite the “this destroys the RSA cryptosystem” claim in the abstract, it does nothing of the sort. Schnorr’s algorithm works well with smaller moduli—around the same order as ones the Chinese group has tested—but falls apart at larger sizes. At this point, nobody understands why. If that’s true, the techniques in this Chinese paper won’t scale either. [Read more at Schneier Security]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

Kiffmeister’s global 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 for any of you out there who work for a central bank, ministry of finance or international financial institution 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 chronicles@kiffmeister.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 (chris@sodapublicmoney.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]

Kiffmeister’s #Fintech Daily Digest (20220416)

~ kiffmeister

European Commission receives more than 10,000 public comments amid digital euro consultation

The European Commission (EC) has received about 10,000 public comments so far on its call for evidence regarding a digital euro, which is to run from April 5 to June 14 and is aimed at getting feedback for the possible establishment and regulation of a digital currency as a new form of central bank money. During a similar period, the EC is also conducting a consultation targeted at relevant authorities and experts, to help policymakers consider issues including users’ needs and expectations for a digital euro, a digital euro’s role for the EU’s retail payments and digital economy, the application of money-laundering rules, privacy and data protection aspects and international payments. [Read more]

Monetary policy and financial stability implications of central bank digital currencies

This article, written by European Central Bank (ECB) staff, is a nice summary of recent research on the possible implications for financial stability and monetary policy of retail central bank digital currency (CBDC). It concludes that careful design will be crucial in maximizing the benefits of CBDCs while managing any unintended consequences. The article also identifies avenues for further research that could usefully inform future policy decisions on such currencies. [Read more]

Is Quantum Computing a Threat to Bitcoin?

The functional reality of a quantum computer cracking encrypted systems may only be five years away. The main threat is not whether quantum computers can ‘open up’ private key information… it’s more about the power of a quantum computer to replicate a private key without you knowing, undercutting trust in the entire signature process. Imperial College researchers have suggested a soft fork of the Bitcoin blockchain that would allow the “secure transition of funds to quantum-resistant wallets.” Others have proposed increasing the size of Bitcoin keys.  [Read more]

Circle Will Apply for US Bank Charter Soon, CEO Confirms

Circle, the issuer of USD stablecoin, is pushing forward with its plans to submit an application to operate as a U.S. crypto bank, CEO Jeremy Allaire told Bloomberg. If approved, the startup would be the fourth federally chartered crypto bank in the U.S. Allaire added that his company and the U.S. Office of the Comptroller of the Currency, which facilitates bank charters, have been talking about Circle’s digital asset banking prospects among other related topics such as the interoperability between blockchains. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting several webinars over the next month:

Satoshi Capital Advisors is hosting a virtual workshop on wholesale CBDC, stablecoins and digital capital markets on May 24 (starting at 08:00 EST). [Register here with the passcode: CBDC]