Standard Chartered Bank completes e-HKD offline CBDC trial
Standard Chartered Bank (Hong Kong) has completed offline payment trials of the Hong Kong Monetary Authority's digital currency (CBDC). The experiment aimed to test the inclusiveness, security, and reliability of payments, especially for areas without stable internet connections. The pilot covers multiple areas, including public transportation, merchants on the campus of the University of Hong Kong, restaurants, and flea markets in offices. This enables Standard Chartered Bank to evaluate the effectiveness of offline electronic Hong Kong dollar payments in small, high-volume transaction environments.
Shanghai Oil, Gas Exchange Settles First Cross-Border Trade in E-Yuan
The Shanghai Petroleum and Natural Gas Exchange (SHPGX) has announced that the digital yuan has been used for the first time to settle an oil transaction, with PetroChina International purchasing 1 million barrels of crude on Oct. 19. The transaction was in response to a call by the Shanghai Municipal Party Committee and Municipal Government to apply the Chinese central bank digital currency (CBDC) to international trade. The crude oil deal marks a major step in the use of the yuan on the international market and in the global movement toward de-dollarization. In the first three quarters of 2023, use of the yuan in cross-border settlements was up 35% year-on-year, reaching $1.39 trillion, China Daily reported.
Analysis: Nigeria’s CBDC is used by less than 0.5% of the population
According to Nicholas Anthony's analysis, the Nigerian government is trying to promote the transition to a cashless economy by implementing a central bank digital currency (CBDC). However, restrictions on cash usage have sparked protests from the public, demanding the restoration of paper currency. Despite the government's efforts to promote the adoption of CBDC, such as lifting access restrictions and providing payment discounts, these measures have proven to be futile.
Furthermore, with cash withdrawal restrictions and currency redesign, the situation has worsened, leading to a cash shortage and escalating public dissatisfaction. Therefore, the adoption rate of the Nigerian CBDC remains low, with only less than 0.5% of the population using it, while over 50% have already accepted cryptocurrencies.
The Hong Kong Monetary Authority established a central bank digital currency expert group and cooperated with 5 local universities
Hong Kong Monetary Authority (HKMA) has established a central bank digital currency (CBDC) expert group today and signed a memorandum of understanding with five local universities. Scholars from the five universities will participate in the research work of the expert group, and members will participate in a personal capacity. The group also brings together experts from multiple fields related to HKMA's CBDC research, covering business, computer science, economics, finance, and law.
HKMA said that it hopes to promote cooperation and knowledge exchange with the academic community in CBDC research through the establishment of an expert group. The group will assist HKMA in researching major policy and technical issues related to CBDC, provide opinions and training on financial technology-related issues for HKMA, and hold seminars.
The five local universities participating in the expert group include Chinese University, City University, Polytechnic University, Science and Technology University, and the University of Hong Kong. HKMA said that it will consider inviting overseas university scholars to participate in the future. The expert group has begun writing two research papers, the first of which is related to the privacy issues of CBDC, and the second explores the interoperability of CBDC.
Lee Tat Chi, Deputy Chief Executive of HKMA, said that this cooperation will jointly explore the major policy and technical issues of CBDC at the wholesale and retail levels. The expert group will play an important role in assisting Hong Kong in consolidating its position in the field of CBDC research.
European Central Bank Begins Preparation Phase for Digital Euro Project
The European Central Bank (ECB) has announced that it will begin the preparation phase for the digital euro project, which will last for two years. The ECB plans to lay the foundation for the possible issuance of a central bank digital currency (CBDC) beginning on November 1, but the decision to issue a digital euro will only be considered by the Governing Council once the European Union's legislative process has been completed. The preparation phase will focus on finalizing rules for the digital currency and selecting possible issuers, followed by testing and experimentation in accordance with user feedback and requirements under the central bank. The rollout of any digital euro is likely to attract the attention of regulators and policymakers, who will have their election for the European Parliament in June 2024.
European Central Bank launches wholesale CBDC trial to participate in pre-solicitation activities
European Central Bank (ECB) has launched a survey for potential participants in its wholesale central bank digital currency (wholesale CBDC) experiment to measure interest in participation. The bank plans to hold an official conference call this quarter. Potential participants need to respond to the survey by the end of October. These experiments are not only for digital euros, but also for wholesale financial transactions using distributed ledger technology (DLT). The specific timetable is yet to be determined, but the first round of experiments is planned for the second quarter of 2024, and the second round will be conducted in the third quarter of 2024.
Former Taiwan Executive President: The government can set up an office in Taiwan on digital asset issues
Former Taiwan Premier and current Chairman of the New Generation Financial Foundation, Chen (Chong), has once again made suggestions regarding the development of digital currencies. Chen (Chong) stated that advanced countries have already started or are selectively laying out digital assets, and that the government can set up an office to address digital asset issues, quickly catching up with stablecoin plans in advanced countries, and then supplementing with CBDC if there is capacity. If other virtual assets can be resolved along the way, it would be a great accomplishment.
China's CBDCs Could Incorporate Deposits and Savings with Programmable Features, Says Regulator
China's foreign exchange regulator, Lu Lei, has suggested that programmable features in central bank digital currencies (CBDCs) could transform monetary policy. These features could elevate CBDCs from a mere cash in circulation to incorporating deposits and savings, potentially reshaping the global financial landscape. Lu Lei believes that the People's Bank of China (PBOC) will be at the forefront of exploring these programmable features, enabling the bank to manage the macroeconomy. China has already initiated practical steps in cross-border CBDC utilization, with transactions using China's e-CNY reaching a significant milestone of 1.8 trillion yuan.
China Opens Industrial Park for Digital Yuan Ecosystem Development
China has opened its first industrial park dedicated to the development of the digital yuan ecosystem in the Luohu district of Shenzhen. The park has nine residents and the district government has announced ten initiatives to boost the development of the digital yuan ecosystem, including payment solutions, smart contracts, hard wallets and digital yuan promotion. Incentives are being offered to residents, including up to three years' free rent, and commercial banks can receive up to 20 million yuan ($2.7 million) for settling there, while startups are eligible for up to 50 million yuan ($6.9 million).
Mastercard completes CBDC pilot with Reserve Bank of Australia and partners
Mastercard has successfully completed a pilot project with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre to test the use of central bank digital currencies (CBDCs) by authorized parties who have undergone know-your-customer protocols. The project also tested the ability of a holder to purchase an Ethereum-based NFT by locking the pilot CBDC and minting an equivalent amount of Ethereum-based wrapped coins. Mastercard's Australasia division president, Richard Wormald, said that the technology has the potential to drive more consumer choice and unlock new opportunities for collaboration between public and private networks in the digital currency space. The pilot was conducted in partnership with Australian financial services firm Cuscal and blockchain tech firm Mintable, and is part of Mastercard's ongoing CBDC ambitions, which include operating as a private-sector partner for CBDCs and forming a CBDC program with Ripple and Consensys.
