Group items tagged

"The following policy principles reflect Circle's real-world experience operating the world's leading regulated dollar digital currency, USD Coin (USDC), which stands at more than $54 billion in circulation. USDC has safely powered more than $5 trillion in on-chain transactions and is available through a global network of thousands of digital wallets, exchanges and other products and services in more than 190 countries, lowering the fundamental cost of payments and financial services and establishing dollar payments utility as a native feature of the internet.

"We propose an offline payment system (OPS) protocol for CBDC that allows a user to make digital payments to another user while both users are temporarily offline and unable to connect to payment intermediaries (or even the Internet). OPS can be used to instantly complete a transaction involving any form of digital currency over a point-to-point channel without communicating with any payment intermediary, achieving virtually unbounded throughput and real-time transaction latency. "

"This post describes a simple but foundational new cryptographic primitive - called LimitedUseKey or LUK - introduced in Android 12 (aka Android S, to be released later this year). This crypto primitive has far reaching implications on secure detection of decentralized double-spend in mobile devices. Hopefully this primitive and its variants enable new applications that are decentralized, peer-to-peer, faster and work offline (without Internet connectivity). Examples include digital ticketing, coupons, payments systems and Central Bank Digital Currencies (CBDCs)."

The IMF published a Fintech Note on key findings from the Sub-Saharan Africa CBDC and Digital Payments Survey, shedding light on the motivations, benefits, and challenges of CBDC adoption, as well as the developments of digital private money and crypto assets in sub-Saharan Africa. More than 75% of the 33 central banks surveyed are engaged in-or are planning to engage in-CBDC research or pilot activities. Of these, roughly two-thirds are in the research phase, and slightly over one-third are planning to conclude their CBDC pilot programs within the next two years. More than a quarter are actively preparing to launch a CBDC by 2028, although legal challenges pose major hurdles to getting to that point. Financial inclusion, efficiency in domestic payments and facilitating remittances are the most dominant motivations for CBDC adoption. Fast payment systems and e-Money (such as mobile money) are considered as quick wins in sub-Saharan Africa, and about two-thirds of countries are in the process of implementing or considering fast payment systems that are mostly accessible through mobile phones or the internet.

The IMF published a paper that introduces, and illustrates the use of, the ASAP (Access, Service, Asset, Platform) conceptual Digital Asset Platforms (DAP) model. Just as the utilization of a seven-layer TCP/IP model has been fundamental to the interoperability of the internet, it is anticipated that the four-layer ASAP DAP model will similarly promote cross-platform and cross-border interoperability. The model is illustrated through examples and use cases, such as asset tokenization and the concept of purpose bound money (PBM) being explored by the Monetary Authority of Singapore (MAS).

The Bank for International Settlements (BIS) published its vision for a "Finternet" of multiple financial ecosystems interconnected with each other, much like the internet. The envisioned system leverages tokenization and unified ledgers, underpinned by a robust economic and regulatory framework, to dramatically expand the range and quality of financial services. The paper provides a blueprint for how key technical characteristics like interoperability, verifiability, programmability, immutability, finality, evolvability, modularity, scalability, security and privacy can be incorporated, and how varied governance norms can be embedded.

The Reserve Bank of New Zealand (RBNZ) launched its second retail central bank digital currency (CBDC) consultation (the first one was in 2021). Based on feedback and preparation of a business case, a decision will be made on whether to proceed to a "preparation" phase. The consultation document advocates for "digital cash" accessible to everyone, including those that don't have a bank account, and should be usable when the power is out or the internet is down, and work via physical cards, and on devices like phones and or watches. https://consultations.rbnz.govt.nz/money-and-cash/digital-cash-in-new-zealand/

The Reserve Bank of India (RBI) plans to add programmability and offline payments to its central bank digital currency (CBDC) pilot. "Programmability will facilitate transactions for specific/targeted purposes, while offline functionality will enable these transactions in areas with poor or limited internet connectivity." It sounds like programmability will take the form of "purpose-bound money" that embeds ("bounds") programming logic denoting its use based on programmed conditions that becomes "unbounded" once those conditions are met. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=57277

The Korean Ministry of Science and Information and Communications Technology (MSIT) and the Korea Internet and Security Agency (KISA) launched an investment project to promote the domestic blockchain industry. It is committing Won 20 billion ($14.5 million) across 14 projects, divided into two public sector and the private sector parts. One of the public sector projects includes the development of a wholesale central bank digital currency (CBDC)-based digital voucher management platform by the Bank of Korea. This platform will allow various voucher programs to be used on mobile devices, improving the efficiency and accessibility of digital payments. https://www.msit.go.kr/bbs/view.do?sCode=user&mId=113&mPid=238&pageIndex=2&bbsSeqNo=94&nttSeqNo=3184609&searchOpt=ALL&searchTxt=

Central banks need to realise that it is impossible to prevent distribution of counterfeit coins that are transacted in an offline mode when a cryptographic dialogue is carried out between payer and payee. This vulnerability relates to most known secure elements/devices, stored-value cards, universal access devices and Tamper Resistant Elements (TRE), such as smart cards, SIM cards, embedded secure elements and so on, that are already being tested for offline clearing and final settlement capabilities. It derives from realizing that any cryptographic dialogue that convinces a payee offline may be emulated by a resourceful counterfeiter. If you wish to execute payments between two parties in offline mode when there is no internet connection, with no risk of counterfeit money to be distributed by adversaries, you need to have a physical procedure (not cryptographic) that enables a fast, instant, simple and secure (up to being quantum-safe) validation process and payment transaction, with finality of payment.

IDEMIA Secure Transactions (IST) demonstrated the first ever offline central bank digital currency (CBDC) payments incorporating enhanced security against quantum threats. Offline CBDC allows digital currency transactions without internet, ensuring cash-like secure and seamless payments in areas with limited connectivity. This offline CBDC payment transaction uses quantum-resistant public key cryptography endorsed by the National Institute of Standards and Technology (NIST). The offline transactions demonstrated as part of this quantum-safe solution are performed using two smartphones thanks to NFC. Money is stored inside a secure element fortified with quantum-safe cryptography to guarantee security and prevent the risks of double spending or unauthorized money creation.

Former Blackberry co-CEO Jim Balsillie has said it is time for the IMF to help co-ordinate global data rules and to forge a joint international strategy for dealing with the impact of technology.

The Monetary Authority of Singapore (MAS) is embarking on Project Orchid - to build the technology infrastructure and technical competencies necessary to issue a digital Singapore dollar should Singapore decide to do so in future. Managing Director Ravi Menon, said that while retail central bank digital currency (CBDC) has its upside, the case for it in Singapore is not urgent. However, he sees much promise in wholesale CBDC.

"A few months ago, the Linux Foundation (LF) announced its intent to launch the Open Wallet Foundation (OWF) in early 2023. The OWF aims to develop open source software, key building blocks, and best practices that anyone can use to build multi-platform, interoperable, secure, and privacy-protecting digital wallets that will support a wide variety of applications from identity credential to payments. "