Kiffmeister’s #Fintech Daily Digest (20221006)

Central Bank Digital Currency (CBDC): identifying appropriate policy goals and design for Nepal

Nepal Rastra Bank (NRB) published a concept report on central bank digital currency (CBDC) for public consultation. The report recommends that the NRB move forward in with CBDC issuance plans, with design focusing on four policy goals; improving access to payments, enhancing payment system resilience, reducing currency management costs, and promoting financial inclusion. It suggests that a retail, intermediated, semi-centralized infrastructure-based CBDC that is interoperable with other domestic payment systems, is most suitable for Nepal. Also, it should be unremunerated, available 24/7 hours, quantity restrictive, and programmable for broader usage options. The next steps is to set up a cross-functional dedicated team, to carry out the exhaustive and rigorous next steps. [Read more at the NRB]

Archetypes for a retail central bank digital currency

The Bank of Canada published a paper that proposes a common framework to analyze and compare the different possible CBDC designs, independent of vendor, platform and technology. It is based on five archetypes—common patterns that recur in system designs—and discuss their trade-offs from the perspective of privacy, compliance, visibility, scalability, resilience, extensibility, online and offline payments. The five archetypes are centralized, leaderless, macro-partitioned (money service businesses (MSBs) own and operate partitions), micro-partitioned (users maintain the different partitions) and direct (users directly provide their own oversight). The analysis suggests that a design based on a single archetype is unlikely to achieve all policy goals. [Read more at the Bank of Canada]

Europe finalizes landmark crypto rules

The Council of the European Union Permanent Representatives Committee approved the legal text for its  Markets in Crypto Asset Regulation (MiCA), marking a significant step in the journey towards a fully authorized and regulated crypto-asset market in Europe. The European Parliament’s Committee on Economic and Monetary Affairs will now vote to pass the final text on October 10, before a date is decided for the implementation of the regulation. [Read more at the Council of the European Union]

IMF releases the 2022 financial access survey results

The International Monetary Fund released the results of the 13th annual Financial Access Survey which presents the 2021 data and highlights the continued expansion in the use of digital financial services—considerably higher than pre-pandemic levels. The usage of digital financial services has also increased, with the value of mobile money transactions growing from about 40% of GDP to 70% in low-income countries, and the value of mobile and internet banking transactions increasing from 225% of GDP to 324% in middle-income countries between 2019 to 2021. [Read more at the IMF]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20221003)

Tether Increases US Treasury Portfolio, Cuts Commercial Paper Holdings to Below $50M

Tether has cut its commercial paper holding to less than $50 million, as of September 30, and increased its holding of U.S. Treasuries to 58.1% of its total portfolio from 43.5% of its total portfolio as of June 30, according to a Tweet by its Chief Technology Officer, Paolo Ardoino. [Read more at CoinDesk]

Bigtech regulation: in search of a new framework

The Bank for International Settlements (BIS) published a paper on two potential Bigtech regulatory models. The first is segregation, which is a structural approach that seeks to minimize risks arising from group interdependencies between financial and non-financial activities by imposing specific ring-fencing rules. The second is inclusion, that creates a new regulatory category for Bigtech groups with significant financial activities. The paper concludes that the inclusion approach provides for a more tailored option to address specific risks associated with Bigtech business models. [Read more at the BIS]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220930)

Towards CBDCs in Asia and the Pacific: Results of a Regional Survey

The IMF published a Fintech Note that, drawing on survey responses from 34 Asian economies and country case studies, takes stock of recent developments related to central bank digital currencies (CBDCs) and crypto-assets in Asia. The survey finds that there is significant heterogeneity in terms of stage of development, but the emergence of private crypto assets has created an impetus to consider CBDCs. While most countries are engaged in research and development, with some at advanced stages of testing and pilots, very few countries are likely to issue CBDCs in the near-to-medium term, reflecting the still considerable uncertainties. Still, country experiences so far provide some key insights for others in their journey in this area. [Download at the IMF]

Importantly for my CBDC tracking, the IMF report confirmed that Laos, Fiji, Vanuatu, Solomon Islands and Tonga are conducting CBDS feasibility studies with Soramitsu, a Japan-based private-sector technology platform provider. Here are the specifics:

Banks’ Crypto Asset Holdings May Be Just 0.01% of Total Risk Exposure, Basel Study Finds

The world’s largest banks are exposed to about 9.4 billion euros of crypto-assets, a study by the Basel Committee on Banking Supervision (BCBS) found. The exposure, mainly client services involving bitcoin (BTC) and ether (ETH), represents 0.14% of the total exposure to risk from the 19 banks who sent in data. Exposures are distributed unevenly across reporting banks, with two banks making up 53% of overall crypto-asset exposures, and four more making up 39% of the remaining exposures. [Read more at the BIS]

The “CBDC Design Trilemma

The Digital Euro Association [DEA] published a blog on a CBDC design trilemma. The “Blockchain Trilemma”, is a term used to describe the challenge of increasing performance, security, and decentralization at the same time. Current enterprise blockchains are not truly decentralised. They may be structurally decentralised, but are operationally centralised. By reversing this, having structurally centralised, but operationally decentralised architecture, a CBDC can achieve a high-performance blockchain. However, any blockchain-based CBDC should not only solve the blockchain trilemma, but also the CBDC design trilemma, which notes that identity, privacy, and programmability cannot be easily enhanced at the same time. A CBDC cannot ignore privacy for the sake of achieving legal compliance and implementing programmable money. From an expertise point of view, the answer to this trilemma is the use of a decentralized identity system such as self-sovereign identity (SSID) to find the perfect equilibrium for the CBDC design trilemma. Self-sovereign identity is very popular for its advanced privacy protection. By having an SSID-based blockchain system, a CBDC can incorporate both privacy and transparency into the blockchain-based CBDC system. Additionally, a use of zero-knowledge encryption to protect the transaction privacy of blockchain data is highly recommended for any CBDC implementation. [Read more at the DEA]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220928)

Project Icebreaker: Central banks of Israel, Norway and Sweden team up with the BIS to explore retail CBDC for international payments

The Bank for International Settlements (BIS) and the central banks of Israel, Norway and Sweden are launching Project Icebreaker, a joint exploration of how central bank digital currencies (CBDCs) can be used for international retail and remittance payments. using a hub-and-spoke model. The project will run through the end of the year, with a final report expected in the first quarter of 2023. [Read more at the BIS]

CBDC pilots and research, lessons for the digital euro

The Digital Euro Association published a very nice summary of the current state of play in the CBDC space. It’s part of a series of articles, this first one providing a general overview of global CBDC projects, motivations, with a particular focus on the Bahamas, China, Eastern Caribbean Union, Nigeria and Russia. Subsequent articles in this series will provide a deeper understanding of CBDC research and development in countries with different challenges and policy objectives. The articles will highlight that there is no one-size-fits-all approach to CBDC, but that CBDC solutions must be based on the needs and challenges of each country. [Read more at the DEA]

ESMA not planning blockchain securities rule changes before DLT pilot regime starts

The European Securities and Markets Authority (ESMA) says there is no need for new regulatory technical standards before the start of the European Union’s distributed ledger technology (DLT) pilot regime in March 2023. The regime aims to reduce the regulatory burden to enable blockchain-based securities trading and settlement to be trialed at scale and provide legal certainty. Tokenized stocks, bonds and investment funds fall within the DLT Pilot regime and have monetary limits. [Read more at Ledger Insights]

FCA green lights Revolut, making no UK crypto firms operating under temporary status

The UK Financial Conduct Authority (FCA) has added crypto-friendly payments app Revolut to its list of companies authorized to offer crypto products and services in the country. Revolut was among a small number of entities granted an extension to the FCA’s temporary cryptocurrency licensing program in March 2022. It was the last company on this list as other applicants withdrew their requests, were refused registration, or had their licenses granted before the end of June. [Read more at CoinTelegraph]

France’s CBDC Projects to Manage DeFi Liquidity, Settle Tokenized Assets

The Banque de France announced two new wholesale CBDC projects. The first will look at improving CBDC market liquidity management in decentralized finance (DeFi), such as via automated market makers. The second will focus on issuing and distributing tokenized bonds on a blockchain. [Read more at the Banque de France]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220816)

US Fed Opens Pathway for Crypto Banks to Tap Central Banking System

The U.S. Federal Reserve published its final guidance for novel financial institutions to access its master accounts. It seemingly moves the Fed one step closer to possibly allowing Wyoming special purpose depository institutions (SPDI), like Custodia (formerly Avanti) and Kraken Bank, access to these accounts so they would not need intermediary banks. The guidance will create a multi-tiered system allowing the Fed to adapt its evaluation process for granting access depending on what kind of financial institution is applying. Each tier corresponds to a respectively more stringent review process. [Read more at the FRB]

How the Crypto Industry is Writing its Own State Laws

This Tech Transparency Project report details the recent experience in three states: Wyoming, Colorado and New Hampshire. While the details differ, the result is largely the same: The states have effectively delegated the task of regulating the crypto sector to those with the greatest financial stake in its success, with little regard for those who may stand to lose. [Read more at the Technology Transparency Project]

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.

Upcoming events I’m affiliated with:

The CBDC Think Tank, in partnership with the International Monetary Fund and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC. The sessions are designed as instructional deep dives with full presentations and Q&A components.  [Register here]

The CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

Kiffmeister’s #Fintech Daily Digest (20220917)

Ether’s New ‘Staking’ Model Could Draw SEC Attention

U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler reportedly has said that staked crypto-assets may be subject to federal securities regulations, in the wake of Ethereum’s transition from a proof-of-work (PoW) to proof-of-stake (PoS) protocol. He reportedly said that PoS crypto-assets pass the Howey test under which an asset is considered an “investment contract” if investors pledge their money to a common enterprise with an expectation of a profit to be derived from the efforts of others. Adam Levitin runs through the Howey test logic that would deem Ethereum to now be a security for SEC purposes. [Read more at the WSJ]

Some U.S. banks pause crypto custody because of SEC approach to custody accounting

In April 2022, the U.S. SEC published guidance about how corporations should account for the custody of crypto-assets on behalf of clients. The SEC says these crypto-assets should appear as both an asset and a liability, whereas the custody of conventional assets does not touch a balance sheet. Although the Basel Framework considers custody outside its scope, if banking regulators concur with the SEC’s position, crypto custody could become expensive for banks. In fact, Reuters is now reporting that some U.S. banks are rethinking plans to offer crypto custody services. [Read more at Ledger Insights]

Thai SEC Proposes Banning Crypto Businesses From Staking and Lending Activities

The Thai Securities and Exchange Commission is seeking public comments on a proposal to prohibit businesses from crypto staking and lending activities. More specifically, businesses cannot accept “deposits of digital assets from the customers and lend, invest, stake or employ such digital assets.” Moreover, they are prohibited from “providing support to third parties that undertake crypto saving and lending services, including marketing.” [Read more at Bitcoin.com]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220914)

Securitize KKR Health Care Growth II Tokenized Fund

Through a partnership with Securitize Capital, investors can gain tokenized exposure to investment firm KKR’s latest health care focused growth equity fund, with lower investment minimums and greater potential for liquidity. It marks the first time exposure to one of KKR’s alternative investment strategies has been offered in a digital format in the United States. The fund is tokenized on the eco-friendly Avalanche public blockchain-based smart contract platform. [Read more at Securitize Capital]

OpenNode Is Testing Bitcoin Payments With The Central Bank Of Bahrain

The Central Bank of Bahrain (CBB) has authorized OpenNode to test its bitcoin payment processing and payouts solution in the central bank’s regulatory sandbox. The sandbox is a virtual space for CBB-licensed financial institutions and other start-ups and FinTech firms to test their technology-based innovative solutions/services relevant to FinTech before scaling up their operations in Bahrain and across the region. [Read more at  PR Newswire]

Discounted tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220902)

A conversation on CBDCs, with Jamiel Sheikh, of the CBDC Think Tank

Forbes published an interview focused on central bank digital currency (CBDC) with Jamiel Sheikh , CEO of the CBDC Think Tank (CBDCTT). The CBDCTT delivers education, the CBDC Summit in Washington D.C in collaboration with the IMF,  and is expanding into advisory with a number of key clients and central banks.  A key interview takeaway for me was the stressing of the importance of central banks building internal CBDC competencies instead of relying on vendors. [Read more at Forbes]

Central Bank of Nigeria announces eNaira’s Integration with NIBSS

The Nigerian Central Bank (CBN) has declared the eNaira to be completely implemented into the Nigeria Inter-Bank Settlement System (NIBSS) Customers can now transfer money from their eNaira wallet to any Nigerian bank account of their choice thanks to the integration with NIBBS Instant Payments (NIP), the country’s main payment system. NIP is a virtual real-time Inter-Bank payment method based on account numbers. [Read more on the CBN Twitter feed]

The Perverse Impacts of the Anti-Money-Laundering System

In theory, anti-money laundering (AML) measures are meant to identify and stop the global movement of funds either earned through criminal activity or intended to fund bad actors. However, Matt Collin, a global development specialist who works with the Brookings Institution and the World Bank, says he is unaware of a single economic study clearly showing a reduction of crime following new AML rules (though he admits such a study might be difficult to design). [Read more on CoinDesk]

Reimagining Money in the Age of Crypto and Central Bank Digital Currency

The future of money is undoubtedly digital, and in the latest issue of the IMF’s Finance & Development some of the world’s leading experts explore what it will look like? It includes my article about offline central bank digital currency (CBDC). [Read more at the IMF]

Discounted tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the International Monetary Fund and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Ticket prices are as low as $99 and you can save 30% by entering KIFFMEISTER where the registration page asks for a discount code. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220828)

More Than Half Of All Bitcoin Trades Are Fake

One of the most common criticisms of bitcoin is pervasive wash trading (a form of fake volume) and poor surveillance across exchanges. According to research by Forbes, more than half of all reported trading volume across 157 crypto exchanges studied is likely to be fake or non-economic. For example, global daily bitcoin volume was $128 billion on June 14, 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources. [Read more at Forbes]

SEC delays VanEck’s third Bitcoin spot ETF application

The U.S. Securities and Exchange Commission (SEC) has pushed back a decision on the third and latest application for VanEck’s Bitcoin spot exchange-traded fund (ETF) from August 27, 2022 to October 11. VanEck’s first application lodged with the SEC in 2017, which was eventually denied. VanEck is now arguing that American investors were gaining exposure to Bitcoin through Canadian Bitcoin spot ETFs. [Read more at Coin Telegraph]

Post-Quantum Cryptography Scheme Is Cracked on a Laptop

On July 5, 2022, the U.S. government’s National Institute of Standards and Technology (NIST) selected four protocols that, with some revision, will be deployed as a cryptographic quantum shield, plus four additional candidates still under consideration. However, almost immediately, a pair of researchers broke one of those candidates in an hour on a laptop. [Read more at Quanta]

Cash, COVID-19 and the Prospects for a Canadian Digital Dollar

The Bank of Canada published a paper that provides an analysis of cash trends in Canada before and during the COVID-19 pandemic. It finds that cash demand has been strong pre-pandemic and increased sharply during the pandemic. While cash use fell initially due to the decreased number of in-person shopping opportunities, it recovered as containment measures eased. The paper concludes that the long-term trend away from cash use as a method of payment could lead to a decline of merchant acceptance over time and erode the broader demand for cash more generally, which could warrant the Bank of Canada issuing a digital dollar. [Read more at the Bank of Canada]

Discounted tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the International Monetary Fund and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Ticket prices are as low as $99 and you can save 30% by entering KIFFMEISTER where the registration page asks for a discount code. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

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.

Kiffmeister’s #Fintech Daily Digest (20220809)

Retail Central Bank Digital Currency: Current Landscape

I often get asked to share what I know about which central banks are doing what in the retail central bank digital currency (CBDC) space, so I’ve posted an abbreviated version of my retail CBDC presentation slides here.

Reserve Bank of Australia to Explore Use Cases for CBDC

The Reserve Bank of Australia (RBA) has launched a research project to explore use cases for a CBDC in Australia. It is expected to take about a year to complete, and will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time. Interested industry participants will be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses. The Bank and the DFCRC will then select a range of different use cases to participate in the pilot, based on their potential to provide insights into the possible benefits of a CBDC. [Read more at the RBA]

Chainalysis says $2 billion stolen in cross-chain bridge hacks this year, more expected

Chainalysis says cross-chain bridges that allow transfer of assets between independent blockchains are among the highest risk protocols in the blockchain industry for scams and bad actors. Chainalysis in a new report estimates that $2 billion worth of cryptocurrency has been stolen from cross-chain bridges across 13 attacks so far this year, accounting for 69% of all stolen funds during that time. Cross-chain bridges were once considered the solution to interoperability between blockchains in the crypto industry, but as the protocols continue to seem vulnerable to hacks and attacks that view is beginning to change. [Read more at Chainalysis]

U.S. Treasury Sanctions Virtual Currency Mixer Tornado Cash

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, a crypto-asset mixer that mixes potentially identifiable or “tainted” cryptocurrency funds with others, so as to obscure the trail back to the fund’s original source. OFAC claims that Tornado Cash has been used to launder more than $7 billion worth of virtual currency since its creation in 2019. The sanctions mean U.S. crypto investors can no longer use Tornado Cash. 38 ETH addresses and 6 USDC addresses were added to OFAC’s Specially Designated Nationals (SDN) list. Circle, the issuer of the USDC stablecoin, reportedly froze over $75,000 worth of USDC funds linked to those 6 USDC addresses. Several leading figures in the crypto industry expressed their concerns about the sanctions. [Read more at Finance Magnates]

Survey on potential CBDC use cases in the Asia-Pacific region

Deborah Healey and Heng Wang of the University of New South Wales have launched a study of the impact of retail central bank digital currency (CBDC) on stakeholders and consumers across the Asia-Pacific region. In that regard they are inviting such stakeholders and consumers in the region to take part in a survey on the potential uses of retail CBDC in Asia. The survey should take 12-15 minutes to complete and will be active until midnight August 24, 2022 (AEST). Responses will be anonymous and not attributed to users or their organizations. If you have any questions, would like an invitation to the launch and a copy of the final report please email d.healey@unsw.edu.au. Also, please feel free to share this request with others in the region. [Click here to take the survey]

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.

Upcoming events I’m affiliated with:

The CBDC Think Tank, in partnership with the International Monetary Fund and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC. The sessions are designed as instructional deep dives with full presentations and Q&A components.  [Register here]

The CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]