Venkatachalam Shunmugam’s Post

Hot off the press! Just a week ago, the Bank for International Settlements – BIS unveiled the results of their 2023 survey on CBDCs and crypto – here are the top 5 takeaways: 🌍 A remarkable 94% of the surveyed central banks are knee-deep in CBDC exploration, demonstrating a shift from theoretical research to real-life experiments. Over half of the central banks are crafting proofs of concept, with a third already running pilots. 🔊 The narrative seems to be shifting from retail to wholesale CBDCs, with a sharp rise in wholesale experiments. The likelihood of central banks issuing a wholesale CBDC within the next six years is now higher than for retail CBDCs. 🤝Central banks are increasingly engaging with a wide array of stakeholders to inform the design of potential CBDCs, with many features still being discussed. Interestingly, over half of central banks are considering a retail CBDC that is subject to holding limits, interoperable with existing payment systems, enables offline payments, and is non-interest-bearing. 🔑 Preserving the role of central bank money amidst rapid digitalization and the emergence of privately issued currencies is a key driver of CBDC work for many central banks. ⁉ As for stablecoins, the survey indicates that they are rarely used for payments outside the crypto ecosystem, with some niche use for remittances and retail payments. However, two-thirds of jurisdictions are working on a framework to regulate stablecoins and other crypto-assets. What's your take on these developments? Share your thoughts below! 🚀#CBDC #BIS #crypto #digitalcurrency #payments

A good read on findings from the 2023 BIS survey on central bank digital currencies (CBDCs) also highlighting differences in approaches with advanced economies more focused on wholesale CBDCs, while emerging economies more likely to issue retail CBDCs. -94% of central banks are exploring CBDCs -There’s a marked increase in experiments and pilots, especially with wholesale CBDCs -The likelihood of issuing a wholesale CBDC within the next six years is higher than for retail CBDCs

Not surprising that latest #BiS #CBDC survey shows vast majority of central banks engaged in some form of CBDC work. Notable to see shift towards more wholesale CBDC work (w a focus on interoperability and programmability) v earlier focus on retail CBDCs. Would be interesting to better understand to what extent this reflects learnings re the additionality of a CBDC to current forms of money and relative competencies of public and private sector in the delivery of money.

Embracing diversity, advancing together - results of the 2023 Bank for International Settlements – BIS survey on central bank digital currencies and crypto Ninety-four percent of surveyed central banks are exploring a central bank digital currency #CBDC. The survey suggests that central banks are proceeding at their own speed, taking diverse approaches and considering different design features. Over the course of 2023, there has been a sharp uptick in experiments and pilots with wholesale CBDCs – mainly in advanced economies (AEs), but various emerging market and developing economies (EMDE) also stepped up their wholesale CBDC work. Overall, the likelihood that central banks will issue a wholesale CBDC within the next six years now exceeds the likelihood that they will issue a retail CBDC. Central banks further enhanced their engagement with stakeholders to inform CBDC design. Many CBDC features are still undecided. Yet, #interoperability and #programmability are often considered for wholesale CBDCs. For retail CBDCs, more than half of central banks are considering holding #limits, #interoperability, #offline options and zero #remuneration. Differences exist between AEs and EMDEs, for example with respect to the potential use of a distributed ledger and transaction limits. On crypto, the survey indicates that, to date, #stablecoins are rarely used for #payments outside the crypto ecosystem. Moreover, about two out of three responding jurisdictions have or are working on a framework to regulate stablecoins and other #cryptoassets.

Global work on central bank digital currencies continued to advance in 2023, with 94% of central banks engaged in some form of CBDC work, according to our latest survey on CBDCs and crypto. The survey results suggest that central banks are proceeding at their own speed, taking diverse approaches and considering different design features. Over the course of 2023, there has been a sharp uptick in experiments and pilots in advanced economies, particularly on wholesale CBDCs. At the same time, more retail CBDCs are live or in the making in emerging market and developing economies than in advanced ones. Overall, it is now more likely that one or more central banks will issue a wholesale CBDC than a retail CBDC within the next six years. While already high in 2022, central banks’ engagement with stakeholders was enhanced further to inform CBDC design. Although many features are still undecided, and there are clear differences between advanced and developing economies, interoperability and programmability are among the common considerations for wholesale CBDCs. For retail CBDCs, more than half of central banks are considering holding limits, interoperability, offline options and zero remuneration. On crypto, the survey indicates that, to date, stablecoins are rarely used for payments outside the crypto ecosystem. Moreover, about two out of three responding jurisdictions have or are working on a framework to regulate stablecoins and cryptoassets. Read the full BIS Paper here: https://lnkd.in/eTm2BkYb #CBDC #FinTech #crypto #stablecoin

“ Trust and the evolution of future of money “ #Cash is still there, remain King and preferred choice in exchange of a service or a commodity and that won’t change anytime soon, but there is emerging demand for a public digital #currency & many central bank might be more concerned that the rapid shift away from cash in that country is reducing consumers’ access to a form of money directly backed by the central bank, something it is committed to preserving. Market regulators & billions of consumers believe in payment choice and that interoperability across the different ways of making payments is an essential component of a flourishing economy . Central banks have been exploring ways to issue their own #digitalcurrencies for years. Yet their efforts haven’t captured the public’s attention — for better or, more recently, for worse — like cryptocurrencies have. But central bank digital currencies, or CBDCs — essentially a digital version of fiat currency backed by a government and therefore far less speculative than crypto — are gaining momentum, with the potential to have an even bigger impact on our everyday lives. However there are many questions that central banks need to consider, This includes the role of the private sector in CBDC issuance, security, privacy and interoperability — such as how a CBDC works with other commonly used payment mechanisms etc . implementation of #CBDCs could be costly and complex, and there may be risks associated with the integration of CBDCs into existing payment systems , could have a negative impact on monetary policy & banking system may face increased competition from CBDCs, which could lead to a decline in their profits and a reduction in the availability of credit.

Just out – the results of the latest BIS survey of #CBDC and #crypto! ✅ 94% of the 86 surveyed central banks are exploring a CBDC. ✅ Central banks are proceeding at their own speed, taking diverse approaches and considering different design features. ✅ There has been a sharp uptick in experiments and pilots with wholesale CBDCs – mainly in advanced economies, but various emerging market and developing economies also stepped up their wholesale CBDC work. ✅ The likelihood of central banks issuing a CBDC within the next six years is now greater for wholesale than for retail CBDC. ✅ Interoperability and programmability are often considered for wholesale CBDCs. ✅ For retail CBDCs, more than half of central banks are considering holding limits, interoperability, offline options and zero remuneration. ✅ On crypto, the survey indicates that, to date, stablecoins are rarely used for payments outside the crypto ecosystem. ✅ About 2/3 of responding jurisdictions have or are working on a framework to regulate stablecoins and other cryptoassets. 📢 While decisions on CBDC and payments regulation are sovereign ones, global cooperation is key. Payment innovations offer opportunities and risks for all and that go beyond borders. The best way to navigate through these is to embrace the diversity and advance together! Read the full BIS Paper here: https://lnkd.in/eTm2BkYb Joint work with Alberto Di Iorio and Ilaria Mattei

Are CBDCs really the next big thing? Or just another headache? Central banks need to be sure that money continues to offer the unique advantages of safety, finality, liquidity, and integrity as it switches to digital. This report looks at what we've learned from actually trying out CBDCs, and how the BIS Innovation Hub is leading the way in making new banking tech. Here are my key takeaways: 🔶 Central banks are ramping up their efforts to get ready for CBDCs, with the BIS Innovation Hub leading the way on using digital money between different countries and shaping how it works within one country. 🔶 They've been testing out how to use digital money to trade stocks through projects like Helvetia. It seems possible, but there's still a lot to figure out. 🔶 Projects like Jura, Dunbar, and mBridge have shown that using one system for multiple digital currencies from different countries could work and make things easier. 🔶 Projects like Project Mariana show how digital money could make trading between countries faster and more efficient with new tech. 🔶 Projects like Icebreaker and Nexus give us a glimpse into the complexities of using digital money across borders, which signals the need for diverse solutions. 🔶 Real-life tests with sandboxes and pilot projects are important to see if CBDCs can handle the real world and scale up effectively. 🔶 Privacy, legal issues, and clear communication are big concerns that need addressing before CBDCs can become a reality. As central banks figure out this whole CBDC thing, they're gonna need to work together, get creative, and be ready to change things up. #CBDC #DigitalCurrency #Fintech

Bank for International Settlements – BIS, Alberto Di Iorio, Anneke Kosse and Ilaria Mattei, “Embracing diversity, advancing together – results of the 2023 BIS survey on central bank digital currencies and crypto" Preserving the role of central bank money amidst the rapid digitalisation and emergence of privately issued monies is an important driver of the CBDC work of many central banks. The survey showed that, to date, stablecoins are hardly used for payments outside the crypto ecosystem, apart from some use by niche groups for remittances and retail payments. When used at a larger scale and not properly regulated and supervised, stablecoins may compromise the safety and efficiency of payments and the financial system more broadly. The survey demonstrated that two thirds of respondent jurisdictions have or are working on a framework to regulate stablecoins and other cryptoassets. Clearly, each jurisdiction is unique in terms of economic and social conditions, payment markets and policy objectives. This influences decisions on whether and when to issue a CBDC and on whether and how to regulate stablecoins. Although decisions on CBDC and payments regulation are sovereign ones, jurisdictions must collaborate and coordinate in order to offer users a safe and efficient payment experience, both domestically and internationally.35 In the end, payment innovations offer opportunities and risks for all. The best way to navigate through these is to embrace the diversity and advance together. ——— #dataaccess #datainteroperability #FMI #globalsupplychain #crossboarderpayments #securefinancing #fraudprevention #tradefinance #openbanking #fintechdataplatform #tradematters #sustainability #digitaltrade #globaltrade #FinancialMarketInfrastructure #technology #LEI #digitalidentity #C4DTI #paperless #digitalidentities   #innovation  #digitalisation #paperlesstrade #digitaltransformation   #digitaltradechampion #digitaltradeevangelist #openfinance #internationaltrade #digital #crossbordertrade #smartdata #cbdc #regtech #suptech #payments #innovation #banks #digitalrevenueimpact #risk #regulations #digital #m2mi #cybersecurity #risk #banking #embeddedfinance #openbanking #sustainablefinance #iot #money #bankofengland #digitaleconomy #fintech #multicurrency #privacy #artificialintelligence