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Banking and CBDC Weekend Roundup: The ECB issues a progress report on the digital euro, demand for the e-rupee sinks in India, while China integrates e-CNY in the insurance payment systems. Read our latest Roundup 👇 🔗 https://lnkd.in/dm_nyrUk

Glad to see Banco de México joining DLT. “The Bank for International Settlements (BIS) together with seven central banks today announced plans to join forces with the private sector to explore how tokenisation can enhance the functioning of the monetary system. Project Agorá (Greek for "marketplace") brings together seven central banks: Bank of France (representing the Eurosystem), Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England and the Federal Reserve Bank of New York. They will seek to work in partnership with a large group of private financial firms convened by the Institute of International Finance (IIF).” Hyperledger Foundation Hyperledger Latinoamerica Hyperledger Supply Chain & Trade Finance SIG Hyperledger Financial Markets Special Interest Group Hyperledger India Chapter Hyperledger Chapter Brasil Hyperledger Africa LACChain Ecosystem IDB Bank covadonga Fernández

"The ECB wholesale DLT trials involve three ways to use central bank money for settlement. Clearstream plans to use all of them to execute various delivery versus payment (DvP) use cases. The Banque de France will provide a wholesale central bank digital currency (CBDC). Germany’s Bundesbank has its Trigger solution linked to the TARGET2 central bank payment system. And the Bank of Italy has its Tips Hashlink offering. Clearstream is the only central securities depository (CSD) participating in the first wave of trials. That includes its German Clearstream Banking subsidiary, Luxembourg subsidiary LuxCSD, and Luxembourg-based international CSD, Clearstream Banking Luxembourg." by Ledger Insights read & learn more

Canada, Australia back away from CBDCs Central bank digital currencies have developed slowly in large economies with mature payment systems. In at least two countries, work has been dramatically scaled back if not halted altogether. The Bank of Canada this week said it would discontinue work on a CBDC and would increase research and development on cross-border payment projects with other central banks, along with other ongoing initiatives to improve the country's payment infrastructure. Canada has spent the past several years researching the potential structure and uses for a digital currency, focusing on a wholesale CBDC, a form that is primarily designed for large transactions between banks or other enterprises. "The Bank will continue to monitor global retail CBDC developments and publish some related research, but the focus will be on preparing for the evolution of payments both in Canada and around the world, through policy research and analysis," the Bank of Canada said in a release. Canada's central bank made its announcement shortly after Australia's central bank made a similar statement, saying research has found that there is not a clear need for a CBDC and that Australia's existing payments infrastructure is adequate to ensure resilience and grow the country's payments and financial services industries. There are dozens of CBDC projects underway globally, though in most large countries with mature banking systems there has not been formal approval to move forward. In the U.S., work on CBDCs has been mostly experimental, with the banking industry expressing concern that a digital dollar would result in consumers draining their bank accounts. —John Adams in American Banker

Singapore's central bank is set to collaborate with local financial service institutions to extend its cross-border CBDC trial domestically - interested to see the results and uptake of CBDC payments for purchases within the country. #CBDCs #PaymentsInnovation #DigitalCurrencies

🌐 The Future of Banking: Central Bank Digital Currencies (CBDCs) Have you ever considered how the banking system could change in the coming years? One fascinating development is the concept of Central Bank Digital Currencies (CBDCs). A CBDC is a digital form of a country’s currency, issued and regulated by the central bank. Unlike traditional cash, it exists only in digital form but functions similarly. CBDCs have the potential to revolutionize finance and the role of central banks. Here’s why this topic is so intriguing: 🚀 Key Highlights: 1️⃣ Transforming Banking Systems: CBDCs could allow individuals to have accounts directly with central banks, which might challenge the role of commercial banks in deposit-taking and lending. 2️⃣ Enhanced Monetary Policy Control: Central banks could implement more targeted monetary policies, such as direct cash transfers to citizens or variable interest rates on individual accounts. 3️⃣ Fighting Financial Crime: With all transactions recorded digitally, CBDCs could make it easier to combat money laundering and tax evasion, although they raise concerns about privacy. 4️⃣ Global Trade and Reserve Currency Implications: CBDCs could redefine international trade and challenge the dominance of currencies like the US Dollar or Euro. For example, China is actively testing the Digital Yuan (e-CNY). ⚡ The Risks: • Privacy Concerns: Greater transparency might come at the cost of individual privacy. • Technological Vulnerabilities: Cybersecurity risks and system failures could impact reliability. • Financial Stability: A shift to CBDCs might lead to deposit losses for commercial banks, impacting their lending capacity. 🌍 Global Efforts: • China is leading the way with its Digital Yuan pilots. • The European Union is exploring a Digital Euro. • India launched a Digital Rupee in 2022. • Nigeria introduced the eNaira, becoming one of the first countries to issue a CBDC. CBDCs represent a bold step toward modernizing the financial world, but they also come with challenges that demand careful attention. Could this be the biggest transformation in banking since the advent of the internet?

The World Bank Bank explores interoperability between CBDC and faster payment systems #cbdc #centralbank #digitalcurrency # https://lnkd.in/dhh_BZB3 MIT Digital Currency Initiative (DCI) CBDC Atlantic Association of CBDCs Bank for International Settlements – BIS

Central Banking's Next Frontier: Navigating the complexities of cross-border payments with digital currencies Delve into the intricate world of CBDCs with the esteemed authors Reslow, Soderberg, and Tsuda in their comprehensive study on "Cross-Border Payments with Retail Central Bank Digital Currencies." This IMF Fintech Note provides a deep dive into the design and policy considerations essential for integrating digital currencies into the complex landscape of cross-border transactions. The authors meticulously examine five key elements—access, communication, currency conversion, compliance, and settlement—and their interconnected roles in shaping the future of cross-border payments. They address critical questions, such as the balance between broad access to CBDCs for non-residents and concerns about currency substitution and capital flight. By leveraging real-world experiments and theoretical models, this work offers tangible implications for the potential of CBDCs to enhance efficiency, reduce costs, and promote financial inclusion. The publication emphasizes the necessity for international cooperation and a meticulous approach to design that addresses technical and regulatory challenges. For those with a keen interest in the future of money and finance, this publication is not just recommended but essential reading. It reminds us that the transition to a digital currency landscape is complex yet holds the potential for innovation to transform how we think about money across borders.

In a June 7 report, Yang outlined the central bank’s plans for a digital New Taiwan dollar, aiming to improve domestic payment efficiency and innovation. Speaking to the Finance Committee of the Legislative Yuan on June 10, he emphasized ongoing experiments but noted no set timetable for issuing a CBDC. Efforts to enhance the payment system's processing efficiency and applications are in full swing. The central bank has developed a CBDC prototype platform for retail payments, capable of handling up to 20,000 transactions per second. Additionally, a proof-of-concept for a wholesale CBDC aims to combine CBDC with bank deposit tokens to build a future digital currency system, serving as a liquidation asset for asset tokenization and enhancing financial system efficiency. Taiwan’s central bank is embracing tokenization technology to digitally transform wholesale and commercial bank currency, supporting various asset tokens for a robust digital economy. Collaborating with participating banks, the central bank is testing a common platform in three scenarios: inter-bank transfer of bank deposit tokens, simultaneous delivery of asset tokens, and special-purpose digital money. These tests aim to ensure the platform's efficiency and reliability. Meanwhile, the Financial Supervisory Commission plans to propose new digital asset regulations by September 2024.

For those looking for an accessible medium-length read on central bank digital currencies (CBDCs) for folks familiar with macroeconomics but not a CBDC expert, highly recommend the below article from the Bank for International Settlements – BIS. Some of the key upshots: 1. Cash is on the way out; CBDCs are gaining the attention of central banks year by year 2. CBDCs, cryptocurrencies, and stablecoins are all extremely different concepts, and shouldn’t be confused 3. Current digital payment systems remain expensive 4. Many countries have privately operated digital payments systems; without public payment rails to compete, chances of failure could be systemic 5. CBDC design is extremely important and will vary across jurisdictions: information privacy, caps on holdings, and remuneration will be key policy design choices 6. The potential for cross-border payments is significant, and central banks are already getting ahead of capital flow volatility risks in their designs https://lnkd.in/eSKdtF2Y