Bitcoin and Ether prices fall, Ripple XRP gains following launch of CBDC platform
Bitcoin and Ether experienced a drop in prices on Friday morning in Asia, with Litecoin also recording losses. However, XRP was the only cryptocurrency in the top 10 non-stablecoin category to see gains, following the launch of its new central bank digital currency platform by Ripple. U.S. equity futures rose after a strong rally in regular trading on Thursday, with positive earnings reports and debt ceiling talks playing a role. Despite the dip in Bitcoin's price, financial analyst Tone Vays believes that the halving cycle will cause Bitcoin to rise again.
NY Fed, Singapore Regulator Verify CBDC Interoperability, Payment Speeds in Latest Test
A new report by researchers from the New York Federal Reserve and Monetary Authority of Singapore (MAS) has found that Central bank digital currency (CBDC) systems operating on different types of networks can be used for cross-border and cross-currency payments. The report focused on studying technical issues related to interoperability and atomic settlement, and found that the respective teams were able to conduct cross-border transactions across different distributed ledger (DLT) and hashed timelock contract (HTLC) technology stacks, with near real-time settlement finality. The researchers used simulated CBDCs and hypothetical payments to test their interoperability hypotheses, and found that interoperability could be established across ledgers with different technical designs. The report highlights key opportunities for central bank innovation to play an important role in easing wholesale payment flows globally and improving settlement outcomes.
IMF Assesses Nigeria’s eNaira CBDC’s First Year, Suggests Improvements for Financial Inclusion and Remittances
The International Monetary Fund (IMF) has released a working paper assessing Nigeria's eNaira central bank digital currency (CBDC) on its first anniversary. While the IMF researchers praised the eNaira's performance, they also suggested improvements. The paper found that the eNaira's retail side was intermediated, but had no latency issues. However, it has yet to make a breakthrough beyond initial adopters, and only about 1.5% of wallets are active on any given week. The paper recommends boosting eNaira usage by incentivizing merchants and using it for social payments in conjunction with mobile money operators.
Hong Kong Launches Pilot Program for Central Bank Digital Currency (CBDC) E-HKD
The Hong Kong Monetary Authority (HKMA) has launched a pilot program for its central bank digital currency (CBDC), e-HKD, involving 16 banks and payment processors. The participants will test the effectiveness of the currency in various scenarios, including offline payments, tokenized deposits, settlement of blockchain transactions, and tokenized assets. The pilot project is expected to last for six months, with the findings to be released in November. The e-HKD is a digital solution for retail customers and will be accessible to all residents of Hong Kong as it is a digitized form of legal tender fully backed by the government and regulated by the HKMA.
Granting E-Money Institutions Access to Central Bank Accounts is Crucial for Payment Innovation and Financial Safety
The collapse of several banks in the US and Switzerland in March, followed by First Republic Bank in May, highlighted the significant risks that banks bear and their potential to affect other industries. Ironically, bank failures have become a critical stability risk to the crypto-asset industry, despite concerns about the risks that the sector could introduce to traditional finance.
Australia Conducts First Foreign Exchange Transaction Using eAUD in CBDC Pilot Program
Australia has conducted its first foreign exchange transaction using eAUD as part of a pilot program for the country's potential central bank digital currency (CBDC). The transaction was settled instantly and was deemed a success over traditional FX and remittance networks. The pilot program, launched by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), is exploring possible use cases for a CBDC, including tokenized FX settlements. The transaction was done on a decentralized app on Canvas' "Connect" using Ethereum layer 2 technology.
Bank of England's Carolyn Wilkins Outlines Three Design Principles for Central Bank Digital Currency at OMFIF Symposium
Carolyn Wilkins, an external member of the Bank of England's Financial Policy Committee, has outlined the three main design principles for a Central Bank Digital Currency (CBDC): focusing on core public policy objectives, mitigating financial stability risks, and setting high technology standards.
Minneapolis Fed President Neel Kashkari Gives Blunt Assessment of Central Bank Digital Currency
During a Q&A session at the Minnesota Transportation Conference & Expo, President of the Minneapolis Federal Reserve Bank, Neel Kashkari, expressed his skepticism towards central bank digital currency (CBDC). He stated that the Fed is studying it but believes that an act of Congress would be required to issue its own digital currency. Kashkari questioned the need for a CBDC, stating that Venmo can already send money instantly and asked what problem a CBDC would solve. He also expressed concerns about privacy and the potential for negative interest rates and direct taxation with a CBDC. Despite his skepticism, Kashkari is keeping an open mind and waiting for the results of studies.
G7 Committee Discusses Global Implications of CBDCs and Cryptocurrency Regulations in Niigata Meeting
The G7 committee recently met in Niigata, Japan to discuss the global financial implications of central bank digital currencies (CBDCs) and the transfer of cryptocurrency assets. The committee expressed support for the development of CBDCs but emphasized the need for transparency, rule of law, economic governance, cyber security, and data protection. The committee also discussed the controversial "travel rule" and expressed support for initiatives by the Financial Action Task Force (FATF) on virtual assets. The G7 committee comprises representatives from Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, with the European Union serving as a "non-enumerated" member.
Samsung Partners With South Korean Central Bank for CBDC Research on Offline Payments
Samsung Electronics has partnered with the Bank of Korea to research central bank digital currency (CBDC) for offline payments. The collaboration will focus on testing the potential of South Korea's CBDC to conduct remittance and payments using near-field communication (NFC) on Samsung mobile devices.
