CBDC Report Released, Blockchain Settlement and Payment Initiatives Launched – Fin Tech

To print this article, all you need to do is be registered or log in to Mondaq.com.

This week, the New York branch of the U.S. central bank released a report on the results of Phase I of Project Cedar, “a multi-phase research effort to develop a technical framework for a theoretical wholesale digital currency of the central bank (wCBDC)”. According to a press release, it currently takes two days for most spot foreign exchange (FX) transactions to settle, exposing senders and receivers of payments to “settlement, counterparty and credit risk that , among other things, can hamper an institution’s ability to easily convert its assets into cash. In Phase I of Project Cedar, “the experiment simulated spot foreign exchange (FX) trading and introduced a prototype wholesale central bank digital currency to test whether using blockchain technology could improve the speed , cost and access to cross-border wholesale payments”. In this test environment, the experiment would have revealed three key results:

  • Faster payments: In the test environment, transactions on the blockchain-enabled system settled in less than 15 seconds on average.

  • Atomic regulation: The simulated ledger network enabled atomic settlement, meaning that both sides of the simulated transactions settled simultaneously or not at all, reducing exchange rate risks.

  • Safer and more accessible transactions: The design of the distributed ledger system enabled 24/7/365 payments and supported goals related to interoperability between financial institutions, including central banks and banks of the private sector.

Separately, this week, a major global bank issued a press release announcing “the world’s first digital bond that is publicly listed and settled on blockchain-based and traditional exchanges.” According to the press release, “[t]The CHF375 ​​million bond is digital only and will be issued on the blockchain-based platform of SIX Digital Exchange (SDX) while being dual listed and traded on SDX and SIX Swiss Exchange (SIX).

In a recent notable post, a major South African grocery chain reportedly announced plans to start allowing customers to pay for groceries with bitcoin at 39 stores in South Africa using any lightning-enabled app. bitcoins. According to reports, customers will scan a QR code from the app and accept the conversion rate on their smartphone at the time of the transaction.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


Comparative guide to virtual currencies

Bull Blockchain Law LLP

Comparative guide of virtual currencies for the jurisdiction of the United States, see our comparative guides section to compare between several countries

2022 NFT Litigation Roundup

Foley & Lardner

The emergence of non-fungible tokens (NFTs) has spawned new legal and regulatory considerations, covering intellectual property rights, the potential classification of NFTs as securities…

The “Blueprint for an AI Bill of Rights”

Arnold & Porter

Increasingly, artificial intelligence and other automated systems are making decisions that affect our lives and our economy. These systems are not widely regulated in the United States…

About Rodney Fletcher

Check Also

This pharmaceutical company is growing – Here’s how to invest

LLast week, Danish pharmaceutical company Novo Nordisk announced that its first quarter earnings beat estimates, …