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Central bank digital currencies (CBDCs) have largely existed in the virtual realm, with transactions initiated primarily through web and mobile interfaces. However, a significant shift has occurred with the launch of Eurasia’s first CBDC cards in Kazakhstan, providing 20 million consumers with a new, tangible way to manage CBDC funds.
This PoC involved executing real-time cross-border test transactions between various Central Bank Digital Currency (CBDC) systems. The project tested the feasibility of conducting multilateral cross-currency transfers through the UDPN, involving both Distributed Ledger Technology (DLT) and non-DLT-based CBDC technologies.
While 134 countries and currency unions, representing 98 per cent of global GDP, are currently exploring a central bank digital currency (CBDC), the Bank of Canada has revealed it is officially putting efforts to introduce a digital version of the Canadian dollar on pause. Could a CBDC still be in Canada’s future?
On 28 August 2024, HKMA officially launched the Project Ensemble Sandbox, which will test a wide range of tokenisation usecases, including the settlement of tokenised real-world assets (such as green bonds, carbon credits, aircraft, electric vehicle charging stations, and treasury management).
The idea that digital assets are exclusively some form of currency has been slowly dispelled, as new usecases emerge and are rapidly adopted across the globe. The digital currency landscape in the MEA region is diverse, with a vast number of companies offering services to meet a variety of usecases and needs.
And there’ll be quite a bit of tinkering with the technology (especially the infrastructure) and the usecases to get there. As many as 80 percent of the 66 central banks polled by the Bank of International Settlements said they were at some stage of CBDC development. Digital dollars are a maybe – but if so, not for a while.
But: The bank is keeping an eye on the experiences and progress of other nations, and still is researching its own technological and “policy implications” of wholesale forms of CBDC. In at least some nod to the technicalities, back in January, the central bank envisioned that the digital currency might be issued via blockchain platform.
However, the idea that digital assets are exclusively some form of currency is slowly falling by the wayside as different usecases are emerging and being rapidly adopted. The potential usecases and benefits for users are hazy at best. This may mean that, initially, acceptance of the retail CBDC is gradual.
As part of those efforts, the lab is being used to explore “whether there is a role for a digital Australian dollar — that is, an Australian [central bank digital currency (CBDC)] — in the context of the bank’s responsibilities for issuing the currency and overseeing the payments system.”. The language is interesting — and noteworthy.
The experiments aim to examine a digital euro’s technical feasibility as well as its “programmability” as a coin separate from a central bank digital currency, (CBDC) according to CoinDesk. The European Central Bank has been a vocal supporter of a digital euro, advocating for a CBDC.
Through the new project, Hong Kong Monetary Authority will explore innovative financial market infrastructure (FMI) that will facilitate seamless interbank settlement of tokenised money through a wholesale CBDC. We welcome global talents and industry players to come to Hong Kong and be part of this very exciting tokenisation journey.”
Operating on Ethereum and other blockchain networks, XSGD boasts a market cap exceeding $18 million. Despite its smaller market cap of $124,960, XIDRs integration into Indonesias evolving blockchain infrastructure positions it for future growth.
Efforts were also made to advance digital assets, tokenization and central bank digital currency (CBDC) experimentation with initiatives such as Project Guardian and Project Orchid expanding to include more usecases and moving towards “live” pilots. 136), regtech (119) and investments and wealthtech (82).
While the potential is evident, practical applications for digital currencies and blockchain technology are still emerging. Upsurge of Blockchain and DLT Applications Originally brought into the spotlight by cryptocurrencies like Bitcoin, blockchain technology is now making significant inroads into traditional financial systems.
As noted in this space last week, about 80 percent of 66 central banks queried by the Bank of International Settlements (BIS) are working on central bank digital currencies (CBDC). He pointed to the concept of synthetic central bank digital currencies ( CBDC ).
“Today, authorities around the world are grappling with the rise of digital currencies and decentralized finance based on both emerging technologies — particularly various combinations of distributed ledger technology (DLT) and blockchain and advances in traditional centralized systems underpinning finance,” according to the report.
The session will shed light on the regulator’s drive towards innovation, transparency, and collaboration, highlighting initiatives like mBridge for cross-border CBDC payments and the successful real-time payments between PromptPay in Thailand and PayNow in Singapore. 7 CBDCs – The New Frontier of Money?
There are other downsides to central bank-issued digital currency (CBDC), he explained. CNBC said the move comes as at least some banking operations across the industry are transformed in part by blockchain , which might change the way everything from debt to cross-border payments gets done, and where speed is of the essence.
Kasikornbank, JP Morgan team up to improve cross-border payments Thailand’s Kasikornbank, in partnership with JP Morgan, introduced Project Carina, a new initiative aimed at accelerating cross-border payments, increasing transparency and cutting costs by leveraging blockchain technology.
The session will shed light on the regulator’s drive towards innovation, transparency, and collaboration, highlighting initiatives like mBridge for cross-border CBDC payments and the successful real-time payments between PromptPay in Thailand and PayNow in Singapore. 7 CBDCs – The New Frontier of Money?
The digital currency and payments market encapsulates various facets, including cryptocurrencies like Bitcoin and Ethereum, central bank digital currencies (CBDCs), stablecoins pegged to real-world assets, digital wallets , and blockchain-based payment networks.
How can we look to this rapidly growing business for new usecases for instant payments? The issuance and use of a CBDC for cross-border payments could potentially help simplify intermediation chains, increase speed and lower costs. What will this look like in the coming years?
In the past year, CBDCs also became a crucial component in broader financial digitisation efforts. GDF explains that, now, the focus should be on improving the infrastructure and ecosystem surrounding CBDC issuance. As the digital asset landscape matures, the spotlight shifts to the foundational role of custody services.
It operates on a blockchain network and is issued and backed by the central bank of the respective country. CBDCs exist only in digital form and can be stored using compatible electronic devices, unlike physical and paper-based cash. If CBDCs go mainstream, they can dominate the world of digital payments.
Unlike traditional currencies issued by governments and central banks, cryptocurrencies are typically based on blockchain technology, a distributed ledger that records all transactions across a network of computers. Each cryptocurrency operates on its own underlying technology and has unique features that may cater to different usecases.
As part of those efforts, the lab is being used to explore “whether there is a role for a digital Australian dollar — that is, an Australian [central bank digital currency (CBDC)] — in the context of the bank’s responsibilities for issuing the currency and overseeing the payments system.”. The language is interesting — and noteworthy.
Faster Payments Council (FPC) , a membership organization devoted to advancing safe, easy-to-use faster payments in the United States, today published its latest research report, titled The Practicalities of Cross-Border Payments in a Faster Payments World.
Thailand, under the guidance of the Bank of Thailand (BOT) , has been at the forefront of this movement, continuously studying and testing the feasibility of a Retail CBDC since 2018. The project evolved, incorporating enhanced functionalities, cross-border fund transfers, and a Corporate CBDC Pilot Program.
Continuing the second phase of piloting its central bank digital currency (CBDC), Drex, the Central Bank of Brazil (BCB) has selected Brazilian digital bank Banco Inter , Microsoft Brazil , blockchain platform Chainlink , and 7COMm , a decentralised finance-focused firm, to build a trade finance solution.
This partnership is set to empower African communities, governments, and businesses, and represents a significant step toward realising the shared goal of financial inclusion and economic advancement across Africa, with blockchain and decentralised finance at the forefront of this transformation.
Pioneering Technological Advancements One of the significant outcomes of the PoC was the demonstration of smart contractsself-executing codes embedded within the blockchain. Following the success of the Immediate State, the Intermediate State phase will expand digital asset usecases.
A survey conducted this year indicates that 85% of senior payment professionals identified fraud detection as the most significant usecase for AI , aligning with the banks’ focus on implementing generative AI for improved fraud detection and securing payment data.
Blockchain and crypto solutions company Ripple has teamed up with cross-border payments solutions provider for regulated institutions, Clear Junction. Cassie Craddock, Ripple’s Managing Director for Europe, praised Clear Junction’s ability to support all of Ripple’s usecases.
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