Digital Currency News

Central Bank Digital Currencies (CBDCs) are moving to centre stage as increasing numbers of central banks study and work on them, even launch them. The term CBDC can mean different things to different people – wholesale, retail, general, synthetic etc. And how do they fit in with cash, faster payments, Real Time Gross Settlement, private money or crypto currencies? Part of the story is about policy, the ‘business case’, part legal and governance and part technical. With the rationale behind them unique to each country, the Bahamas has not launched its Sand Dollar for the same reason as China’s e-yuan project, and with developments moving so fast, this is not an easy area to understand or to keep up with.


This Week in DCN Weekly News

The CBDC conference took place 29-31st August in Frankfurt. Less for China virtually every country that has a live CBDC pilot spoke and there were 14 European central banks, five from Latin America and the Caribbean, two from the Middle East, eight from Africa, two from Asia and the US and Canada. Add in a wide range of technology suppliers and other interested parties, 185 people in total, and a fascinating three days ensued.

 

We will write up the CBDC conference in Cash & Payment/Currency News, but the big take away was that the financial inclusion user case is the major driver outside of the developed countries but the user case for developed countries remains a work in progress. Sovereignty is the underlying raison d’etre, but is that enough?

 

RBI Starts Talks with Partners for its CBDC Pilot

The Reserve Bank of India (RBI) is looking to work with the State Bank of India, Punjab National Bank, Union Bank of India and the Bank of Baroda on its CBDC pilot project. All of the banks are public sector banks. It is also talking to a number of fintech companies, including FIS, which is US based. FIS say areas they are discussing with the RBI include offline payments, programmable payments, new monetary policy toolkit, interest-bearing CBDC, fractional banking issues, financial inclusion, and cross-border CBDC payments.

 

DDP Technical Sandbox Launched

The Digital Dollar Project (DDP) was created to encourage research and public discussion on the potential advantages and challenges of a US CBDC — or a 'digital dollar'. It aims to provide the federal government, policymakers, and private sector organizations with a stronger, clearer picture of what implementing a CBDC in the US would look like, and to answering important questions of what a roll-out might entail across retail, wholesale, and international use cases. In that context it has just announced the launch of its Technical Sandbox Programme.

 

The Sandbox will be collaborative allowing DDP participants and financial service providers a neutral environment for the evaluation of technological, business, and policy approaches to CBDCs. The programme will consist of two phases: an education phase and a pilot phase. The education phase will develop a business and functional understanding of the technology and evaluate the differences in possible design choices. The pilot phase will identify and test specific CBDC use-case hypotheses with the aim of gathering data on business-level impacts.

 

Overview of CBDCs Worldwide

Based on the Atlantic Council’s Currency Tracker, this website turns the core data into a series of visualisations of who is doing what with CBDCs, including regional views. Not necessarily new but easy to understand.

 

Digital Yuan Wallets Get More Convenient

Digital Yuan wallets now have the capability to transfer funds from accounts to the wallets automatically based on a trigger level. This is now being trialled in 23 cities and regions in China. Nearly 20% of consumers have downloaded the digital yuan app in the six months after it was launched in January.

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