We also looked at the recently introduced REDI Framework and how the regulatory strategies, educational initiatives, design, and deployment choices it outlines help pave the way towards CBDC adoption. 

The session covered:

• The Regulatory frameworks that offer the best prospects for fostering innovation while ensuring user protection 
• The IMF’s CBDC Virtual Handbook and the potential implications on global CBDC Strategies
• The key opportunities and challenges that CBDCs present for cross-border transactions 
• The importance of public-private partnerships in supporting the successful implementation of CBDCs. 

| Arvinder Bharath (International Monetary Fund)
| Beju Shah (Bank for International Settlements)

Session #27 of FNA’s CBDC Broadcast delves into Project Polaris- a collaborative initiative focusing on the exploration and analysis of potential risk and mitigation strategies associated with tokenized securities and Central Bank Digital Currencies (CBDCs)

Guest Arvider Bharath (IMF) and Beju Shah (Bank for International Settlements) joined FNA to guide us through the project, which aims to provide a comprehensive understanding of how these emerging financial technologies can impact the stability of the financial system. We also discussed the role and importance of technologies like blockchain and international collaboration as guests shared case studies and lessons learned from the project.

• The key takeaways from Project Polaris
• Recommended risk mitigation strategies
• Case studies and lessons learned from Project Polaris

In this session of FNA’s 60-minute webinar series, The CBDC Broadcast, guests David Chaum and Animesh Ghosh join us to offer insight into Currency Network’s vATM solution.

We’ll hear how this innovative CBDC solution aims to break down the barriers to CBDC adoption by simplifying and reducing the cost of CBDC implementation as our guests discuss how the vATM solutions offer frictionless CBDC payments through the contactless PoS system while ensuring cash-like privacy by combining advanced cryptography with financial messaging.

The session covered:

• The key challenges hindering widespread CBDC adoption and how vATM aims to address these issues
• How the vATM solution simplifies the implementation of CBDC for Central Banks and Commercial Banks
• How the solution leverages existing merchant payment infrastructure to reduce the cost and complexity of CBDC rollout
• How the vATM solution offers cash-like transaction privacy for CBDC users
• The eCash 2.0 technology underpins the privacy capabilities of the vATM solution

| Thomas Moser (Alternate Member of the Governing Board, Swiss National Bank)

| David Newns (Head of SIX Digital Exchange)

Guests Thomas Moser and David Newns joined FNA to explore the third phase of Project Helvetia, in which the Swiss National Bank and SIX test the introduction of a live CHF wholesale CBDC on a distributed ledger technology (DLT)- based financial market infrastructure.

In this session, we focused on the liquidity management implications of settling tokenized assets in Central Bank money, assessing the impact on liquidity demands and liquidity fragmentation risk before considering the lessons learned from the pilot project so far.

This third phase of Project Helvetia continues pivotal work previously undertaken alongside the Bank for International Settlements. The multi-phase project is a significant endeavour aiming to understand how central banks could offer settlement in central bank money.

| Jannah Patchay (Executive Director, Policy Lead & Originating Member of the Digital Pound Foundation)
| Elise Soucie (Director of Global Policy and Regulatory Affairs, Global Digital Finance)

Guests Elise Soucie (Global Digital Finance) and Jannah Patchay (Digital Pound Foundation) joined the CBDC Broadcast to discuss what’s next for the Digital Pound as we asked how the Bank of England can build trust in the digital currency, what they can do to ensure appropriate safeguards are in place to maintain stability, and when we can expect to see a UK CBDC.

The session follows the Digital Pound Foundation’s submission to the Bank of England’s Discussion paper, outlining key considerations for developing a regulatory framework for digital forms of money, including stablecoins and CBDCs.

We’ll also look beyond the UK to explore what can be learned from other digital currency initiatives worldwide, to examine what advantages the UK has in pioneering this technology and the opportunity programmability brings for innovation and smart contracts.

The Session Covered:

• The Digital Pound and how it differs from stablecoins
• How the UK’s approach to CBDCs differs to other jurisdictions
• The use cases for a wholesale and retail CBDC
• The role of banks and other payment system providers in the Digital Pound Project
• How a UK CBDC that is seamlessly interchangeable with other forms of money would work in practice
• The UK and the digital financial and digital money landscape in 2024

| Joachim Samuelsson (CEO, Crunchfish)

| Sunil Karkera (Product Director, Digital Payments IDFC First Bank)

In today’s digital world, consumers expect seamless omnichannel banking and payment experiences, including the ability to make transactions offline. However, enabling secure approaches to offline payments presents many technological challenges. We aim to address some of these challenges in Session #22 of the CBDC Broadcast, with guests Joachim Samuelsson (Crunchfish) and Sunil Karkera (IDFC First Bank) joining FNA to explore cutting-edge approaches to offline payments and how partnerships between fintechs and banks can deliver innovative solutions.

Our guests shared insights into making offline payment systems scalable for mass adoption as we learned about the development and integration of such systems at an enterprise scale. Together, we also discussed considerations around consumer education and merchant onboarding when it comes to launching advanced payment technology.

The session covered:

• The use-cases and stability of offline payments
• Techniques for encrypting data and verifying transactions securely offline
• The technology behind offline transactions with the Digital Cash SKD to which IDFC First bank has access
• Feedback from pilot users and QR code technology for payments

Sharmyn Powell (ECCB) joined session #20 of The CBDC Broadcast to discuss the promise and perils of emerging digital currencies.

Drawing upon her deep expertise, Sharmyn shared her perspective on how digital currencies, from rCBDCs to stablecoins and tokenized deposits, are changing the payment ecosystem and offered insight into the Dcash rCBDC project.

The session covered:

• The main motivation for rolling out DCash and an update on DCash adoption
• The factors driving/curbing DCash adoption, including education, internet access and use cases
• Why digital monies like cryptocurrencies, stablecoins, and retail CBDCs have seen limited adoption so far
• The role of regulators and supervisors regarding digital currencies
• How digital currencies can foster innovation and benefit the public
• how can CBDCs and vehicles like DCash replicate the benefit cash offers at-risk groups

| Richard Dzina (The Clearing House)
| Stephen Wojciechowicz (Bank of New York Mellon)

In Session #11 of the Payment Systems Broadcast, guests Richard Dzina and Stephen Wojciechowicz join FNA as we examine whether CBDCs have the potential to transform liquidity management. The webinar will explore how retail and wholesale CBDCs could change how liquidity is exchanged and managed and evaluate the implications of CBDCs on Financial Market Infrastructures (FMIs) and Financial Institutions as we discuss the potential benefits, challenges and considerations associated with this potentially transformative shift.

The Session Covered:

• The simulation testing and scenario modelling FMIs should conduct to prepare for CBDC integration and rollout
• The CBDC design choices that impact integration with existing FMIs and infrastructures
• The role RLN models play in designing resilience, such as redundancy and distributed architectures
• Whether the integration of CBDC systems requires changes to treasury and liquidity risk management processes at FMIs
• New liquidity monitoring tools that may benefit the CBDC world
• How settlement finality risks could be managed if CBDC transactions are settled in real-time
• What embedded programmability in CBDC systems could mean for collateral management and interest payment
• How cross-border interoperability for CBDC systems could be achieved and the future role of FMIs as integrators.

| Beju Shah, Head of Nordic Centre, BIS Innovation Hub
| Dr Lars Hupel, CBDC Evangelist, Giesecke+Devrient

CBDC’s Offline capabilities is a crucial topic that holds significant implications for the future of digital payments and financial systems worldwide.

As digital transformation rapidly reshapes the way we conduct transactions, it is imperative that we ensure inclusivity, accessibility, and privacy for every individual and business. CBDCs have emerged as a powerful tool in this transformative landscape, revolutionizing the way we think about money.

However, we must address a critical question: How can we ensure that CBDC systems work for everyone in society, regardless of their location or connectivity? The answer lies in exploring and understanding the offline capabilities of CBDCs. The ability to conduct transactions offline not only provides a layer of resilience but also supports crucial objectives, such as financial inclusion, accessibility, and privacy.

To discuss the intricacies of CBDC offline capabilities, guests Beju Shah (BIS Innovation Hub) and Dr Lars Hupel (Giesecke+Devrient) joined FNA to explore the technologies, security threats and risks associated with offline payments and delve into the CBDC design criteria that enable privacy, inclusion and resilience.

| Catherine Gu, Visa
| Carmelle Cadet, Emtech

Digital money is not a new thing. It’s been around for decades in the form of reserves at the central bank and commercial bank money. But today, we have additional forms of digital money, such as rCBDCs. We also have what we call challenger forms of money with stablecoins as the main example. With the new entrants to the money ecosystem, we must ask: How will the different forms of money interact? Are they substitutes or complements? Is it competition or coexistence?

To answer these questions, FNA was joined by guests Catherine Gu (Visa) and Carmelle Cadet from EMTECH.

The session covered:

• How system providers are looking at rCBDCs as part of their business
• The key to CBDC success following weak adoption in Nigeria, Bahamas and China
• How new forms of money and challenger forms of money will reshape the payments ecosystem
• The roadblocks to the successful integration of rCBDCs with existing systems and infrastructure
• The use cases for consumers and merchants that could spur adoption without crowding the payments market
• Whether jurisdictions could blend digital currencies to address multiple use cases, including a central bank’s motivations.
• Whether the availability of stablecoins and cryptos is pushing some countries to preserve monetary sovereignty
• Short and long-term predictions about the impact and market share of rCBDC and Stablecoins

| Simon Chantry, Bitt
| John Kiff, Satoshi Capital Advisors

Many central banks are studying, designing, prototyping, or rolling out retail CBDCs. Motivations differ significantly across jurisdictions, but there is one potential advantage that could be common to all cases.

If central banks agree on some basic technological foundations, retail CBDCs could interoperate and become a solution to cross-border retail payments. Is this an overlooked potential benefit of retail CBDCs?

We asked guests Simon Chantry (Co-founder & CIO, Bitt) and John Kiff (Head of CBDC/ Digital Captial Markets Advisory, Satoshi Capital Advisors), who joined session #12 of the CBDC Broadcast, to discuss.

The session covered:

• Whether a CBDC could be a catalyst for responsible innovation in the digital economy and ensure interoperability with legacy and future payment solutions for cross-border payments
• The possibility of a CBDC crowding out other payment instruments
• Whether achieving full interoperability is likely if retail CBDCs are designed with local use in mind
• The factors determining if CBDCs could be interoperable
• How foreign exchanges issues typical of cross-border payments be solved via interoperable CBDCs
• The competitors of cross-border retail CBDCs- correspondent banking, stablecoins and cryptos or both
• Whether an FMI’s decision to provide interoperability between a CBDC with another form of money would be a commercial decision based on its business model
• Whether the type of CBDC issued to the market would impact the willingness of FMIs to provide interoperability
• The benefits cross-border retail CBDCs bring to the table

| Commissioner Hester M. Pierce, U.S. Securities and Exchange Commission
| Professor Patrick McCarty, Georgetown University Law Center

We are in the midst of studying and discussing the potential effects of a digital dollar, a digital liability issued by the Federal Reserve, available to everyone in the United States-in other words, a retail CBDC for the United States of America.

Theoretical benefits around the idea of a CBDC include greater efficiency and redundancy in the payments ecosystem, a field for innovation, greater financial inclusion, and the potential to lay the foundations for better cross-border transactions. But not only are those benefits still to be verified, but there are also risks as well in the form of financial instability, operational, reputational, surveillance, and money laundering risks. The devil is in the details, and CBDCs are not the exception, If a digital dollar is issued, its regulation and design will be particularly responsible for its success.

Having explored CBDC motivations and challenges from an Asia-pacific, Latin American, UK and Canadian perspective, we now turn our attention to the United States. In this session, guests Commissioner Hester M. Peirce from the U.S. Securities and Exchange Commission (SEC) and Professor Patrick McCarty, Adjunct Professor, Derivatives/ICOs and Cryptocurrencies at Georgetown University Law Center join FNA to offer an insight into CBDC deployment and its relationship with other digital forms of payment and benefits/implications of a national rollout from a U.S. perspective.

The session covered:

• The regulatory challenges and implications of issuing a digital dollar
• Whether a digital dollar poses a real risk of disintermediation of banks and financial stability and how CBDC design regulation could avoid this
• The role of the digital dollar in cross-border payments
• The advantage and impact of rolling out a digital dollar before other G7 nations
• Whether new forms of money, such as stablecoins and cryptocurrencies, compete with the digital and physical dollar
• Whether regulators and supervisors have the knowledge and skills to cope with the evolution of digital money and assets
• The regulation of stablecoins and cryptocurrencies
• The demand and readiness for a retail CBDC in the U.S

| Anneke Kosse, Bank for International Settlements
| Illaria Mattei, Bank for International Settlements

Today, 90 per cent of central banks are exploring Central bank digital currencies, with over half already developing digital currencies or conducting experiments.

In Session #10 of FNA’s 60-minute webinar series, The CBDC Broadcast, guests Anneke Kosse and Ilaria Mattei from the Bank for International Settlements joined FNA to discuss the recent report ‘Gaining Moment – Results of the 2021 BIS Survey on Central Bank Digital Currencies and the report “Options for access to and interoperability of CBDCs for cross-border payments.”

The session covered:

• The current state of CBDCs
• Emerging trends surrounding bank engagement, motivations and intentions
• The critical questions to address when developing a CBDC
• Common interoperability models and the likelihood they are to succeed
• Wholesale CBDCs and cross-border payments
• The cross-border frictions CBDCs could address
• The importance of international cooperation to the success of a CBDC

| John Velissarios, Accenture
| Raoul Herborg, Giesecke + Devrient

CBDC is a very particular product. An extremely successful rollout, with massive adoption, could affect financial stability as deposits could migrate to CBDCs. On the other hand, poor adoption could mean a reputational risk event for the central bank. Therefore, unlike most central bank products, it looks like CBDC design should be user-oriented, with consumers and merchants as the main users and commercial banks as distributors. This means that before CBDCs are rolled out, there has to be a design phase that studies under which design options the CBDC will be used will be convenient, as well as safe, reliable, and efficient.

Guests John Velissarios (Accenture/DEA/DDP) and Raoul Herborg (Giesecke + Devrient) joined FNA for session #9 of The CBDC Broadcast as we discussed how some design options could shape the rollout and adoption of CBDCs. The session played close attention to the particular balance CBDCs must achieve to be successful, that is, being effectively adopted without jeopardizing the stability of the financial system.

The session covered:

• How to achieve a digital version of cash to provide an instant and secure payment option for everyone, everywhere
• The obstacles in making CBDCs accessible to all groups of society and factors considered to ensure inclusivity during the design and pilot phases
• Whether central banks should develop global standards to ensure interoperability between jurisdictions
• CBDCs and offline payment capabilities
• Whether banked people with easy access to commercial bank money feel the need to hold and use a CBDC balance

| Masaki Bessho, Bank of Japan
| Dr Steven Hu, Standard Chartered Bank, Singapore

There are many motivations for rolling out a CBDC, from achieving higher financial inclusion and higher transactional efficiency to preserving monetary sovereignty by compensating for the declining use of cash and by countering the entrance of new private forms of digital currencies.

Each country has a different set of features and objectives that make the CBDC’s design and roll-out a tailor-made process.

In the seventh session of FNA’s CBDC Broadcast, we talked to two guest speakers from the Bank of Japan and Standard Chartered Bank Singapore, who offer an insight into CBDCs from an Asia-Pacific perspective.

The Session Covered

• An overview of CBDCs in Japan and Singapore
• The motivations and challenges, and expected outcomes of introducing a retail CBDC
• Whether there is a first-mover advantage when it comes to rolling out a CBDC
• Should CBDCs serve as a complement to or substitute for cash?
• The implications of introducing a CBDC on custodians like Standard Chartered and the securities services industry
• An insight into the Bank of Japan’s CBDC ledger design alternatives
• Can a central bank balance the delicate trade-off between the privacy of transactions and anti-money laundering considerations.
• How can central banks and relevant stakeholders assess the potential outcomes and effects that influence CBDC design choices?

Today, as new technologies and innovations continue to emerge with the potential to transform the financial system, such as CBDCs, we ask, what historical and modern lessons are shaping the future of CBDCs?

To answer this question guests John Kiff, Managing Director at the CBDC Think Tank and Harish Natarajan, Lead Financial Sector Specialist, Finance, Competitiveness & Innovation at The World Bank joined FNA for Session #6 of The CBDC Broadcast.

The session covered:

• The stability of the banking sector and consequences of instability
• Whether banks are likely to see declines in profits or increased funding costs when a new form of central bank currency arrives
• Why G7 economies are still in the Research & Development phase of their CBDC projects whereas small, emerging economies like The Bahamas, which seem to be leading the deployment of CBDCs
• Whether other nations will follow China in introducing a non-DLT-based retail CBDC
• What CBDCs promise and what they are likely to deliver

| Ludmilla Buteau Allien, Bank of the Republic of Haiti
| Dr Adolfo Sarmiento, Central Bank of Uruguay

There are many motivations for rolling out a CBDC, from achieving higher financial inclusion and higher transactional efficiency to preserving monetary sovereignty by compensating for the declining use of cash and by countering the entrance of new private forms of digital currencies.

Each country has a different set of features and objectives that make a CBDC’s design and roll-out a tailor-made process. Having heard about the challenge and motivation from a G7 perspective in Session #4 with the Bank of England and the Bank of Canada, we turn our attention to Latin America as we hear from Ludmilla Buteau Allien (Bank of the Republic of Haiti) and Dr Adolfo Sarmiento (Central Bank of Uruguay)

| Francisco Rivadeneyra, Bank of Canada
| Mehregan Ameri, Bank of England

There are many motivations for rolling out a CBDC, from achieving higher financial inclusion and higher transactional efficiency to preserving monetary sovereignty by compensating for the declining use of cash, and by countering the entrance of new private forms of digital currencies.

Each country has a different set of features and objectives that influence a CBDC’s design, making the roll-out a tailored process.

In this fourth session of FNA’s CBDC Broadcast, we talk to Dr Francisco Rivadeneyra from the Bank of Canada and Mehregan Ameri from the Bank of England to gain an insight into CBDCs from a G7 perspective

The first FNA Talk of the year focuses on one of the most prominent FinTech themes of 2021. Join Adam as he chats with with Moad Fahmi, Senior Advisor (Financial Technology) from the Bermuda Monetary Authority. Bermuda is one of the first jurisdictions with a regulatory framework designed specifically for digital asset businesses. We will be discussing the impacts and implications of digital currencies and crypto assets and highlight the new roles and responsibilities of central banks and financial authorities.

Index

00:00 - Introduction

01:24 - How is digital money changing the landscape of financial services including payments and settlements?

07:18 - What are the particularities of the digital assets regulation and sector in Bermuda?

12:14 - How do regulators and central banks need to change to be able to supervise and regulate the digital assets businesses?

18:20 - What are the key prerequisites for a successful regulation of digital currencies and digital assets on the cross-jurisdictional level?

23:46 - What are the potential implications of the digital money being issued by a variety of entities including the BigTechs?

Part 2 - Impact of Digital Currencies on the Use of Cash, Financial Stability and Monetary Policy

Today’s FNA Talk is dedicated to one of the most prominent FinTech themes of 2020. Together with Daniel Heller from Fnality International we discuss Digital Currencies and their impact and implications. In the second part of the episode, we focus on the Impact of Digital Currencies on the Use of Cash, Financial Stability and Monetary Policy.

Index

00:00 – Introduction

01:31 – What will digital currencies mean for the use of cash?

03:54 – Which traditional cash related risks can digital currencies help to solve?

06:33 – What will be the implications of digital currencies for financial stability?

09:14 – In what ways will the existing regulatory and supervisory procedures need to change?

10:38 - How will digital currencies impact formulation and implementation of monetary policy?

14:05 - Can the Libras (digital currencies issued by the BigTechs like Facebook) challenge central banks’ monopoly over monetary policy?

Part 1 - Taxonomy of Digital Currencies and the Impact on Payments and Settlements

Today’s FNA Talk is dedicated to one of the most prominent FinTech themes of 2020. Together with Daniel Heller from Fnality International, we discuss Digital Currencies and their impact and implications. In the first part of the episode, we focus on the Taxonomy of Digital Currencies and their Impact on Payment and Settlement Systems and Infrastructures.

Index

00:00 - Introduction

01:31 - Taxonomy: How to distinguish between various types of Digital Currencies?

05:55 - Central Banks' response to the non-bank providers of money

08:21 - How are digital currencies changing traditional payment and settlement systems and infrastructures?

11:57 - How to ensure that the benefits of Digital Currencies are not outweighed by their risks?