BIS to Build Proof of Concept Network for Testing Cross-Border Payments Using CBDC’s

BIS to Build Proof of Concept Network for Testing Cross-Border Payments Using CBDC’s

The Bank of International Settlements’ Innovation Hub (BISIH) announced this week that one of its highest priorities is the continued research and testing of Central Bank Digital Currencies (CBDCs), along with five other areas of focus.

This news is according to this year’s annual work program, which lays out its intention to “explore the feasibility of faster and cheaper cross-border payments” using central bank digital currencies. The BISIH further added that it would dedicate its work this year to exploring prototypes in the creation of “tiered retail CBDC distribution architectures” along with “tokenized green bonds to retail investors.”

To drive these priorities forward, they will be headed up by the company’s Innovation Hub Centres in Hong Kong, Singapore, and Switzerland while also coordinating with local central banks. The BISIH’s Innovation Center in Singapore, for example, has its sights set on the development of an ‘International Settlement Platform’ where regulated banks and payment entities can conduct and settle transactions using a range of CBDCs.

Meanwhile, Hong Kong’s Innovation Center will be working on green bonds, specifically with the intent of tokenizing green bond assets for retail investors. Additionally, Hong Kong’s center will work on building a bridge to enable foreign exchange transactions of approved CBDCs, along with stablecoin issuance.

Switzerland’s BISIH Center is one of the furthest ahead in terms of development. It has already completed two functional proofs-of-concept for linking payment systems to test out payment settlements using tokenized assets and wholesale CBDC. This was done through its initiative dubbed ‘Project Helvtica.’ Discussing the details of BISIH’s work program, Innovation Hub’s Head, Benoit Coeure, said the following:

“This work programme shows our commitment to exploring in the most practical ways how best to harness technological change for the benefit of central banks and create public goods to support the global financial system.”

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Author: James Fox

Bitcoin Can ‘Definitely’ Become the World’s Main Currency; It’s Poetry: Jack Dorsey

  • “A global currency which is a native currency for the Internet is a very powerful concept” – Twitter co-founder and CEO
  • Bitcoin is “poetry” and the pseudo-anonymous launch of its whitepaper was a very “powerful statement,” he said

“I believe that the Internet deserves and requires a native currency and that’s why I’m such a huge believer in Bitcoin,” said the co-founder and CEO of Twitter Jack Dorsey.

Dorsey appeared on the AI Podcast with Lex Fridman, a research scientist at MIT working on human-centered artificial intelligence where he talks about the biggest problem they are facing as a company — which is not to be able to act as an Internet company.

The founder and CEO of Square said to enter a new market, they have to have a partnership with a local bank and pay attention to different regulatory onboarding environments.

“But a digital currency like Bitcoin takes that away and we can potentially launch a product in every single market around the world because they’re all using the same currency and we have a consistent understanding of regulation and onboarding.”

A Powerful Concept

Further talking about his interest in bitcoin, he shared,

“I think the most beautiful thing about it is there’s no one person setting the direction and there’s no one person on the other side that can stop. So, we have something that is pretty organic in nature and very principled in its original design.”

“The white paper of Bitcoin is one of the most seminal works of computer science in the last 20-30 years. It’s poetry.”

Also, the underlying principles behind it and releasing it under a pseudonym, according to him, was a very powerful statement. Its pseudo-anonymous launch was “profound” as there could be one person or multiple people representing Satoshi Nakamoto, which builds tangibility and empathy.

The timing of Bitcoin’s release was just as important, which was in the aftermath of the 2008 financial recession, “a total activist move.”

As for what it looks like in the next 10 or 20 year, “no one knows,” but what it means is every person that enters the ecosystem in any capacity “changes its direction in small and large ways.”

Just like the Internet, Bitcoin enables “everyone to be part of the story which is also really cool.”

“A global currency which is a native currency for the Internet is a very powerful concept and I don’t think any one person on this planet truly understands the ramifications of that. I think there’s a lot of positives to it and there are some negatives as well.”

Not Just Money

This kind of digital currency Jack Dorsey said could “definitely” become the main currency of the world to push the decentralization of control of money. But the bigger ramification is how it affects how society works and “there are many positive ramifications outside just money.”

Money is a foundational layer that enables much more. Talking about his recent trip to Africa, he shares how moving money across borders between nations on the continents remains a problem to be solved. He said,

“I think as we get a more durable resilient and global standard we see a lot more innovation everywhere and I think there’s no better case study for this than the various countries with and within Africa.”

Here is the full interview:

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Author: AnTy

Central Bank of Argentina to Test IOV Labs PoC Blockchain Clearance System Built on RSK

  • Blockchain Proof of Concept (PoC) by IOV labs backed by Argentinian Central Bank (BRCA) already undergoing tests seeking approval.
  • It is set to be onboarded by big players in the Argentinian financial realm including the central bank.

Reports have surfaced that IOV labs – the Blockchain solutions firm – has developed a proof of concept for a Blockchain supported clearing system. The project is now undergoing testing, which is being carried out by the Argentinian Central Bank (BCRA). The BCRA will need to approve this system before it’s to be used by the financial institutions.

The system was designed to streamline payments, rendering them more efficient, while increasing transaction traceability as it makes its way to the intended destination.

Diego Gutiérrez Zaldívar, CEO of IOV Labs, was confident that the incorporation of its cutting-edge tech, with the legacy financial systems, would put them in the big boys’ league.

He remarked especially now faced by a global pandemic there was a need to fill the gap with tech to better serve their people:

“We need now more than ever to use technology in order to optimize processes and provide better services to our citizens.”

Greenlighted By Industry Titans

Most notably, if the network is approved, it will be onboarded by industry titans like Santander and BBVA, the BCRA several clearinghouses and various financial institutions. Despite not being fully approved the BCRA cited that it could be used as an alternative meanwhile.

Blockchain for Non-Cryptocurrency uses

The BCRA has been at the forefront in adopting new tech including Blockchain and others beyond cryptocurrencies.

They were keen to dissuade their citizens from using cryptocurrencies as a source of value; citing fraud concerns in 2014. The scope of the project would also shed a light on other uses of Blockchain, zeroing in on smart contracts.

The project is similar to a previous one:

Gasnet, by the country’s national gas regulator, Gasnor smart contract-based certification platform. They supply gas to more than 2 million residents. Running on an enterprise model of the RSK smart contract, Gasnet was developed to bolster Argentina’s gas certification processes.

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Author: Lujan Odera