Blueprint for the future monetary system: improving the old, enabling the new

A special chapter of the BIS’ Annual Economic Report 2023 lays out a blueprint for the future monetary system underpinned by central bank digital currency, thus opening up a new era in the joint development of the monetary system and the economy. Read more at https://www.bis.org/publ/arpdf/ar2023e3.htm

Project Rosalind: building API prototypes for retail CBDC ecosystem innovation

The BIS Project Rosalind develops a prototype application programming interface layer for retail CBDC systems and explores ecosystem innovation.

Could digital currencies put banks out of business?

Cryptocurrencies like Bitcoin have been billed as a major disruptor to finance. But digital currencies issued by governments might be even more radical—they may even threaten the future of traditional banking.

Project Polaris: Offline payments with CBDC

As part of Project Polaris, the BIS Innovation Hub Nordic Centre has published a comprehensive handbook exploring key aspects of how central bank digital currencies (CBDCs) could work for offline payments. 

Read the report at https://www.bis.org/publ/othp64.htm

Citadel Advantage News Digest

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In this edition -

• "CBDCs: a potential game-changer for treasurers"
• "Why Meta Dropped 70%"
• "Ex-FTX boss Bankman-Fried: 'I didn't try to commit fraud' "
• "Examining the revolution in mobile banking”

NEWS about World Affairs, Banking, Fintech, Payments, Business, Blockchain, Crypto, Money and more…

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ECB selects partners to help develop digital euro prototype

The European Central Bank (ECB) has picked five partners - including CaixaBank and Amazon - to help it develop a digital euro prototype.

The ECB received 54 expressions of interest after it put out a call for partners in April and has now settled on five partners.

Full details HERE.

The future monetary system - BIS Media Briefing

A burst of creative innovation is under way in money and payments, opening up vistas of a future digital monetary system that adapts continuously to serve the public interest.

Structural flaws make the crypto universe unsuitable as the basis for a monetary system: it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralisation narrative, crypto often relies on unregulated intermediaries that pose financial risks.

A system grounded in central bank money offers a sounder basis for innovation, ensuring that services are stable and interoperable, domestically and across borders. Such a system can sustain a virtuous circle of trust and adaptability through network effects.

New capabilities such as programability, composability and tokenisation are not the preserve of crypto, but can instead be built on top of central bank digital currencies (CBDCs), fast payment systems and associated data architectures.

Anonymous digital payments?

Is there a place for anonymous CBDC payments?

The Bank of Israel has been experimenting with technology that would allow some CBDC payments to be made anonymously.

Setting out the results from its first digital shekel technological experiments, the bank says that one of its main focuses has been on finding a balance between offering the privacy afforded by cash and ensuring a CBDC cannot be used for things such as tax avoidance and money laundering.

The experiment examined a model developed by VMware that would see citizens have a wallet that can hold “ordinary” digital shekels, the transfer of which is recorded in the ledger, and “private” digital shekels, the transfer details of which are not recorded openly, and where both sides to the transaction enjoy complete privacy as with cash payments.

Read more HERE.

Does safe DeFi require CBDCs?

A BIS conference, streamed live on 4 April 2022, aimed at establishing a common understanding on how DeFi-based markets might evolve from their current state, what role central banks might have, and the potential interaction with Central Bank Digital Currencies.