02 Oct: CBDCs, Stablecoins, and Central Banks

By theinspired | Inspiration | 1 Oct 2022


It appears that Central Banks across the globe are grappling with the idea and use of CBDCs and Stablecoins. I have curated the last month of news and might expand this to the last 3 months of news to get a better idea of where things are going as it relates to this nascent technology. Recently, CZ said: CBDCs are no threat to crypto (Cointelegraph)

Use Cases

  • Stimulus Checks
  • Welfare Programs
  • Cross Border Payments
  • Surveillance
  • Prevent Money Laundering 

Countries

In Use

  • China - e-CNY
  • Nigeria - eNaria

Successful Pilot (month-long test facilitating $22 million worth of cross-border transactions) - Multiple CBDC (mCBDC)

  • Hong Kong
  • Thailand
  • United Arab Emirates

Announced Pilot 

  • Australia [Reserve Bank of Australia] - eAUD (Ethereum Based Private/Permissioned)
  • Singapore
  • Malaysia
  • South Africa
  • Bank of Ghana - e-Cedi
  • Thailand
  • India - State Bank of India, Punjab National Bank, Union Bank of India, Bank of Baroda, ICIC Bank, HDFC Bank, Kotak Mahindra Bank, Yes Bank, and IDFC First Bank - e-rupee.
  • Japan - Japan’s central bank plans to proceed with its CBDC experiment for about two years and make a decision on whether to issue a digital currency by 2026
  • France
  • Luxembourg
  • Spain
  • Kazakhstan

Working on 

  • Saudi Arabia
  • France
  • Taiwan
  • Israel
  • Turkey
  • Kazakhstan
  • Canada
  • Ukraine
  • Indonesia - Digital Rupiah
  • Pakistan
  • Cambodia - Laotian central bank and the Soramitsu firm signed an MOU to launch the project to expand financial inclusivity and provide sellers with faster settlement. 

Giving up

  • Denmark
  • Ecuador
  • Finland

Organization

  • Digital Finance Cooperative Research Centre (DFCRC) - oversee the development and installation of the eAUD platform.
  • Fidelity National Information Services, Inc (FIS)  consulted RBI on their CBDC and launched CBDC Virtual Lab.
  • Digital Dollar Project Technical Sandbox Program

Key Players

  • Senator Andrew Bragg (Australia) -Digital Assets (Market Regulation) Bill 2022
  • Beju Shah - Head of Nordic Centre, BIS Innovation Hub at Bank for International Settlements – BIS
  • Daniel Eidan - Advisor and Solution Architect at Bank for International Settlements, Innovation Hub
  • Nirmala Sitharaman - Minister of Defence at Government of India
  • Carmelle Cadet - Founder & CEO at EMTECH
  • Nathalie Aufauvre - general director of financial stability and operations at Banc de France, the French central bank
  • Asad Umar - Finance Minister
  • Jameel Ahmad - Governor of SBP
  • Perry Warjiyo - Bank of Indonesia Governor 
  • Brad Jones - Assistant Governor Australian Central Bank (RBA)
  • Roman Prokhorov - the head of the board of the Financial Innovations Association (AFI)
  • Alexey Voylukov - Vice President of the Association of Banks of Russia

Vocal Opponents

  • Sam Callahan -Bitcoin Analyst at Swan Bitcoin
  • Natalie Smolenski - Head of Business Development, Hyland Innovation / Executive Director, Texas Bitcoin Foundation
  • Dan Held - Marketing Partner at Trust Machines
  • American Banking Association

Project Icebreaker (BIS Innovation Hub Nordic Centre): Israel, Norway, and Sweden are partners. Final report expected in Q1 2023. Aim to improve cross-border payments by reducing costs and increasing speed and transparency. This project concluded on 6 Mar 2023.

Project Inthanon-LionRock: a distributed ledger technology (DLT) CBDC cross-border payment project launched initially in September 2019 involving the Thai and Hong Kong central banks.

Project mBridge: The BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China and the Central Bank of the United Arab Emirates.

Project Ubin+: will look at testing the use of CBDCs for foreign exchange and liquidity management as well as the connectivity between CBDC and other digital asset networks. The bank will also explore how systems based on distributed ledger technology (DLT) could interact with non-ledger payment systems. Also participating in SWIFT’s CBDC Sandbox along with 17 other central banks and commercial banks to test cross-border interoperability. Partior is an independent company that arose from the Monetary Authority of Singapore-backed Project Ubin collaboration. It was founded by JPMorgan, DBS and Temasak in 2021.

Project Cedar: The inaugural project of the New York Innovation Center (NYIC). It is a multiphase research effort to develop a technical framework for a theoretical wholesale central bank digital currency (wCBDC) in the Federal Reserve context. Banking giants including BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo will be participating in the pilot by issuing tokens and settling transactions through simulated central bank reserves.

Venus Initiative: shows how digital assets can be issued, distributed and settled within the eurozone, in a single day" and "confirms that a well-designed CBDC can play a critical role in the development of a safe tokenised financial asset space in Europe."

Project Garuda: Will first examine potential use cases of a wholesale CBDC before expanding to include retail tests. 

Project Hamilton: The two-year project produced a white paper in February 2022; research results will continue to appear, with the Fed’s partner at MIT scheduled to make a research report in January 2023. 

Project Tourbillon: A cryptographic protocol that proves a CBDC can protect privacy, be censorship- and quantum-resistant, scalable and even compatible with decentralized finance (DeFi) blockchains.

Project Pyxtril: An experiment launched by the Innovation Hub’s London Centre to help central banks systemically monitor stablecoins and their balance sheets.

THE WEEDS

NOT A FAN

  • Natalie Smolenski | Dan Held: BPI's Whitepaper (CointelegraphBitcoinistBitcoinist
  • Charles Hoskinson: Cardano Creator Calls CBDCs the ‘Single Most Dangerous Innovation’(TDH | Cryptoglobe)
  • Nigerians Shun eNaira CBDC and Ruling Elite, Favoring ‘Real’ Crypto (BIC)
  • Some central banks have dropped out of the digital currency race (Cointelegraph)
  • Report outlines reasons why stakeholders are against CBDC (Cointelegraph)
  • Former Bank Of England Advisor Says CBDCs Are Not Worth The Risk (Bitcoinist | Cointelegraph)
  • Tanzania ‘cautious’ on CBDC adoption after initial research (Cointelegraph)
  • Why Nigerians Aren't Turning to the eNaira Despite Crippling Cash Shortages (Coindesk)
  • Hong Kong citizens not interested in digital yuan: Reports (Cointelegraph)
  • Naira redesign no more: President’s directive canned by Nigerian Supreme Court (Cointelegraph)
  • Nigerians’ Rejection of Their CBDC Is a Cautionary Tale for Other Countries (Coindesk)

IN USE

PILOTS

  • Australia's CBDC Pilot To Be Completed in 2023 (Coindesk | Cointelegraph | Bitcoinist | BIC)
  • Australian Senator Includes China’s Digital Yuan CBDC Requirements in New Digital Assets Bill (BIC | EWN | Coindesk)
  • Bank of Ghana to foster financial inclusion through CBDC project (Cointelegraph)
  • Reserve Bank of India preparing to trial a CBDC with public sector banks and fintechs (Cointelegraph)
  • Iran to begin ‘crypto rial’ CBDC trial despite possible lack of infrastructure: Report (Cointelegraph)
  • The Caribbean is pioneering CBDCs with mixed results amid banking difficulties (Cointelegraph)
  • Norwegian central bank uses Ethereum to build national digital currency (Cointelegraph)
  • China expands trial of its e-CNY CBDC to four new provinces: SCMP (TB | Cointelegraph)
  • Hong Kong unveils completed retail CBDC project that has a CBDC-backed stablecoin (Cointelegraph)
  • Foreign Exchange Transactions Take Center Stage in New BIS CBDC Report (Coindesk | Cointelegraph)
  • Thailand Central Bank to Launch CBDC Pilot, But Still Not Keen on Crypto (BIC)
  • Monetary Authority of Singapore Completes Phase 1 of CBDC Project, With More Trials to Come (Cointelegraph | Coindesk)
  • China Central Bank to Work With Hong Kong Monetary Authority on Digital Yuan (BIC)
  • Chinese central bank exec says digital yuan will offer ‘controllable anonymity’ (Cointelegraph)
  • One Year on, Has E-Naira Defeated the Private Crypto Adoption? Apparently Not (BIC)
  • Singapore's MAS Starts Wholesale CBDC Project Ubin+ for Cross-Border Payments (Coindesk)
  • FX spot settlement in 10 seconds: NY Fed releases results of wholesale CBDC research (Cointelegraph | Bitcoinist | NYFED | Coindesk)
  • NY Fed launches 12-week CBDC pilot program with major banks (Cointelegraph | UToday | BIC
  • The Reserve Bank of India to launch a retail CBDC pilot in December (Cointelegraph | BIC | Coindesk)
  • Bank of Japan to trial digital yen with three megabanks (Cointelegraph | Coindesk | BIC)
  • France, Luxembourg Test CBDC for 100M Euro Bond Issue (Coindesk)
  • Australian CBDC receives unexpected interest but could hurt banks: RBA (Cointelegraph)
  • Why Hong Kong Is Pushing for Its Own Central Bank Digital Currency (Coindesk)
  • Project Hamilton has concluded, weeks after legislators’ enquiry, according to Boston Fed (Cointelegraph)
  • Turkish Central Bank Runs First CBDC Tests (Coindesk)
  • Digital Yuan CBDC Pilot ‘Running Steadily,’ Affirms People’s Bank of China (BIC)
  • Hong Kong lawmaker wants to turn CBDC into stablecoin featuring DeFi (Cointelegraph)
  • Nigeria revisits its payments landscape amid sluggish eNaira adoption (Cointelegraph)
  • China’s Central Bank Expands Digital Yuan Pilots Across 17 More Provinces (BIC | Bitcoinist)
  • Unpacking India's CBDC Pilots as Country Prepares for Digital Rupee (Coindesk | Cointelegraph)
  • Indian retail chain Reliance Retail rolls out support for CBDC payments in stores (Cointelegraph | Coindesk)
  • Chinese city targets $300 billion in digital yuan transactions in 2023 (Finbold)
  • Kazakhstan’s digital currency in pilot stage, per Binance, National Bank joint report (Cointelegraph)
  • China doles out millions in digital yuan in bid to boost adoption in the year of the Rabbit: Report (Cointelegraph | BIC | Bitcoinist)
  • Digital Rupee Attracts 50,000 Users, India’s Central Bank Says (NewsBTC)
  • The Bank of Japan to launch its CBDC pilot before May (Cointelegraph | Coindesk | BIC | Bitcoinist)
  • Russia to roll out CBDC pilot with real consumers in April (Cointelegraph | Coindesk | Cryptoglobe)
  • Nigeria's Central Bank in Talks With Blockchain Platform R3 for CBDC Revamp: Bloomberg (Coindesk | Cointelegraph)
  • Hong Kong to Promote Digital Yuan and Hong Kong Dollars for Cross-Border Use (BIC)
  • Bank for International Settlements concludes CBDC project ‘Icebreaker’ (Finbold | TB | Coindesk | Cointelegraph)
  • Iran completes pre-pilot phase of central bank digital currency (Cointelegraph)
  • CBDC: Brazil Central Bank Kicks Off Digital Currency Pilot Test (Bitcoinist)

PREPARING

  • BIS Sets Up To Explore CBDC With The Central Banks Of Sweden, Israel And Norway (BitcoinistCoindesk | Cointelegraph)
  • BIS marks CBDC pilot as ‘successful’ with $22M transacted (Cointelegraph | NewsBTC)
  • Russia's Finance Ministry is working on stablecoin platforms to avoid cross-border dollar settlement: Tass (TB | Cointelegraph)
  • Russia aims to use CBDC for international settlements with China: Report (Cointelegraph | CryptoPotato | Bitcoinist)
  • Saudi Arabia Central Bank Hires Crypto & CBDC Expert (BIC)
  • European Central Bank preparing for broad digital currency adoption 'scenario' (TB | BIC)
  • Ripple adviser teases ’more CBDC announcements in the next few weeks’ (Cointelegraph)
  • Ripple Advisor Hints More CBDC Announcements To Come in Following Weeks (TDH)
  • XRP Network Will Play Central Role in Future CBDC System, Says Macro Expert Raoul Pal (TDH | Cryptoglobe)
  • Reserve Bank of India to reportedly launch digital rupee pilot in November (Cointelegraph | BIC)
  • Bank of International Settlement will test DeFi implementation in forex CBDC markets (Cointelegraph | Finbold)
  • Indonesia Wants to Counter ‘Shadow Central Banking’ With CBDC (Blockworks)
  • Pakistan launches new laws to expedite CBDC launch by 2025 (Cointelegraph)
  • Central bank plans to make CBDC 'only legal digital tender' in Indonesia, says gov (Cointelegraph)
  • Spain’s Central Bank Opens Call for Proposals for Wholesale CBDC Project (Coindesk | Cointelegraph)
  • Brazil could cement its status as an economic leader thanks to 2024 CBDC move (Cointelegraph | Coindesk)
  • Kazakhstan to Press On With CBDC Development Until 2025 (Coindesk)
  • Bank of England answers professionals’ questions about upcoming CBDC wallet (Cointelegraph)
  • Mexico's digital peso delayed, unclear launch date (Cointelegraph)
  • Saudi Central Bank Pushes CBDC Experiment Forward With Fintech Firms and Banks (BIC | Bitcoinist)
  • UK to Start Further Development Work on ‘Likely Needed’ Digital Pound (Cointelegraph)
  • CBDC Rises In The Emirates: Why The UAE Central Bank Is Interested In Issuing A Digital Currency (Bitcoinist)
  • Will Ripple Sign Singapore As Its Next CBDC Customer? This Is Why (Bitcoinist)
  • Australia’s Central Bank Selects CBDC Use Cases As It Prepares For Pilot Study (Bitcoinist | BIC | Cointelegraph | Coindesk)

ANALYZING

  • The Fed has 'not decided to proceed' with a digital dollar, says Powell (TB | CryptoPotato | TDH)
  • US Treasury report encourages instant payment, recommends more CBDC research (Cointelegraph)
  • Treasury Department Recommends More Research on U.S. CBDC To Develop Future System of Payments (TDH)
  • White House OSTP department analyzes 18 CBDC design choices for the US (Cointelegraph)
  • IMF Says Crypto and Central Banks Could Set the Stage for Rich and Diverse Monetary Ecosystem (TDH | Cointelegraph | CryptoPotato)
  • IMF Touts Programmable and Controllable CBDC for ‘Financial Inclusion’ (BIC)
  • Philippine Central Bank Thinks Stablecoins Could ‘Revolutionize’ the Payment System (CryptoPotato)
  • Central Bank of Turkey Plans to Launch a CBDC in 2023 (Coindesk)
  • Kazakhstan's central bank to test BNB Chain for its digital currency (TB | Cointelegraph | CryptoPotato)
  • Canada to examine crypto, stablecoins and CBDCs in new budget (Cointelegraph)
  • CBDCs are a declaration of war against the banking system claims economist (Cointelegraph)
  • A CBDC could protect euro dominance, say EU leaders (TB)
  • Ukraine Considering CBDC That Can Facilitate Crypto Trading (Coindesk)
  • Some Central Banks Reportedly Looking to Issue a CBDC Within 10 Years (Coindesk)
  • Bank of England opens bids for CBDC sample wallet proof of concept (TB | Cointelegraph)
  • Digital euro settlement, distribution options detailed in latest progress report (Cointelegraph)
  • The ‘godfather of crypto’ wants to create a privacy-focused CBDC (Cointelegraph)
  • Russia to begin work on CBDC settlement system in Q1 as sanctions endure: Report (Cointelegraph | BIC)
  • Caution Is Key as Tanzania Mulls Central Bank Digital Currency Launch (BIC)
  • UK's Bank of England launches digital pound project as 'new form' of money (TB | Coindesk | Coindesk | BM | BIC)
  • Laotian CBDC proof of concept project to launch using system pioneered in Cambodia (Cointelegraph)
  • Russia’s Gazprombank recommends slow CBDC rollout fearing loss of income (Cointelegraph)
  • IMF offers Jordan’s central bank recommendations for implementing retail CBDC (Cointelegraph)

STABLECOINS

  • United Kingdom Aims to Establish Regulatory Environment for Stablecoin Payments. (BIC)
  • Bermuda Digital Bank Jewel Issues ‘Fully-Backed’ Stablecoin (Coindesk)
  • Nigeria to create the stablecoins and ICOs legal framework (Cointelegraph)
  • Cosmos-based e-Money discontinues euro-backed stablecoin (TB)
  • UK ‘Fully Behind’ Stablecoin for Wholesale Settlements, Says Treasury Official (Coindesk | Cointelegraph | Bitcoinist)
  • Stablecoin Regulation Is Congress’ Top Priority, Says Bitwise General Counsel (Blockworks)
  • Bank of America says CBDCs and stablecoins could revolutionize money (Finbold | Decrypt)
  • Australian NAB Bank Launches AUD-Pegged Stablecoin on Ethereum Following Rival ANZ (BIC | Cointelegraph | TB | Bitcoinist)
  • Digital Euro Will Never Be Programmable, ECB’s Panetta Says (Coindesk)
  • ECB says it will leave digital euro privacy decisions to EU lawmakers.
  • Latin American Stablecoin adoption expected to grow amid high inflation.
  • China Unveils Ripple’s Competitor for Stablecoins and CBDC Payments (ZyCrypto)
  • Bank of International Settlements Plans Interoperable CBDC Tests ‘in Coming Weeks’ (BIC)
  • Montenegro's central bank teams up with Ripple on digital currency pilot project (Cointelegraph | TDH)
  • UK native stablecoin integrates into 18,000 ATMs nationwide (Cointelegraph)
  • Euro stablecoin launched in Finland, claims to be first approved in the EU (Cointelegraph)
  • Central Banks Are Working on a Monitoring System for Stablecoin Balance Sheets (Coindesk)
  • BIS Project 'Pyxtrial' Developing Tool to Monitor Stablecoin Reserves (Decrypt | Cointelegraph)
  • Digital pound could co-exist with private stablecoins — UK central bank (Cointelegraph)
  • Israel's Central Bank Proposes Rules for Stablecoins Including 100% Reserve Requirement (Coindesk)
  • Three Japanese Banks Start Stablecoin Experiment (Coindesk)

OTHER NEWS

  • Buying Bitcoin 'will quickly vanish' when CBDCs launch — Arthur Hayes (Cointelegraph | Cryptoglobe)
  • CBDCs May Need Global Regulation, EU Commissioner Says (Coindesk)
  • BIS report finds uneven progress, differing motivations in African CBDC adoption (Cointelegraph)
  • The Problem With CBDCs: Surrendering to Total Surveillance and Control (BIC)
  • ECB official urges CBDC development for the good of cryptocurrency and consumers (Cointelegraph)
  • BIS economists suggest improving TradFi with CBDC to attract users away from crypto (Cointelegraph | TDH)
  • Ukraine Deputy Prime Minister: I'll Take Salary in CBDC (Coindesk | BIC)
  • CBDCs Are the Future of Money, IBM Exec Says (Coindesk)
  • Amid crypto winter, central banks rethink in-house digital currencies (Cointelegraph)
  • UK Treasury Is Looking for CBDC Head as It Explores Digital Pound (Coindesk | Cointelegraph)
  • UK Bitcoin community reacts to incoming CBDC and digital pound rollout (Cointelegraph)
  • Will CBDCs Take Over the World? We Hope Not, Say Crypto Community (BIC)
  • Bank Of England Mentions Ripple In New CBDC Consultation Paper, Here’s Why (Bitcoinist)
  • Digital Dollar Proponent Lael Brainard to Take Over Economic Advisor Role (BIC)
  • UK think tank launches a crusade against 'surveillance' CBDCs (Cointelegraph)
  • 5 ways CBDCs could impact the global financial system (Cointelegraph)
  • BoE official says CBDCs ‘bring opportunities’ for financial institutions (Finbold | Bitcoinist)
  • Bank of England has no tech skills to issue CBDC yet: Deputy governor (Cointelegraph | Coindesk | TB)
  • BoE governor argues a digital pound could protect against bank runs (Finbold | BIC)
  • Ex-Biden Adviser Said Administration Was Pushing for Digital Dollar (Coindesk | TB)
  • United States CBDC would ‘crowd out’ crypto ecosystem: Ex-Biden adviser (Cointelegraph)
  • Top US Treasury Official Says Leaders ‘Actively Evaluating’ Digital Dollar Question (Coindesk)
  • Ripple Is In Dialogue With Over 20 Central Banks On CBDCs, Exec Reveals (Bitcoinist)
  • US lagging on CBDCs could spell ‘trouble’ — Crypto Council policy head (Cointelegraph)
  • US Treasury-led CBDC Working Group looking at technical issues, national interest (Cointelegraph | Bitcoin Magazine)
  • Russian bank issues first on-chain bank guarantee in Chinese yuan (Cointelegraph)

PODCASTS

  • Bitcoin Fundamentals - BTC097: Central Bank Digital Currencies Vs Bitcoin w/ Sam Callahan (Bitcoin Podcast)
  • Bitcoin Magazine:  Central Bank Digital Currencies and the United States w/ Natalie Smolenski
  • Decrypt Daily: Sept 21: CBDCs: The Inevitable Erosion of Privacy?
  • The Breakdown: Dan Held on Bitcoin and the Battle Against CBDCs 

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theinspired
theinspired

I've been aware of Bitcoin since 2011 and my desire is that you will be better informed about the digital asset industry by reading my daily post.


Inspiration
Inspiration

I've been exposed to the world of crypto since 2011. Now I use my knowledge to curate the most relevant news articles, podcast, videos, blogs and social media information to help you be in the know in Crypto!

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