![]() ![]() The US federal government has stepped into guarantee deposits, but SVB’s downfall continues to rattle the markets. Silicon Valley Bank (SVB) fell over with alarming speed on Friday (US time), sparking concerns about what it could mean for other small-to-medium-sized US banks. Video / NZ HeraldĪmerica’s banking woes have sent shock waves through the world’s interest rate markets, to the point where it may have an influence on monetary policy in the US and around the world. Plus, US inflation data could rock markets this week. We conclude with an in-depth description of three distinct CBDC approaches by the central banks of China, Sweden and Canada.Kiwi companies have at least NZ$162m caught up in the US Silicon Valley Bank Collapse. More and more central banks are considering retail CBDC architectures in which the CBDC is a direct cash-like claim on the central bank, but where the private sector handles all customer-facing activity. We next take stock of the technical design options. Work on retail CBDCs is more advanced where the informal economy is larger. Most projects are found in digitised economies with a high capacity for innovation. We set out a comprehensive database of technical approaches and policy stances on issuance, relying on central bank speeches and technical reports. We investigate the economic and institutional drivers of CBDC development and take stock of design efforts. Yet the motivations for issuance vary across countries, as do the policy approaches and technical designs. Most retail CBDC projects have a domestic focus.Ĭentral bank digital currencies (CBDCs) are receiving more attention than ever before. Access frameworks tend to be based on account identification rather than allowing for token-based anonymity. While central banks are considering various technical infrastructures, current proofs-of-concept tend to be based on distributed ledger technology rather than a conventional infrastructure. At present, no central bank reports that it is pursuing a "Synthetic" or "Indirect" CBDC design. Only a few jurisdictions are considering "Direct" designs, in which the central bank takes on some or all of the customer-facing side of payments. On the technical designs, we find that more and more central banks are considering "Hybrid" or "Intermediated" architectures, where the CBDC is a cash-like direct claim on the central bank but the private sector manages all customer-facing activity. None of the projects surveyed seeks to replace cash - all aim to offer a digital complement. Retail CBDC work is more advanced where the informal economy is larger. On the drivers for CBDC development, we find that most projects originate in digitised and innovative economies. Based on public reports and interviews with central bank experts, we set out the policy approaches behind three CBDC projects: China's Digital Currency Electronic Payments (DC/EP), Sweden's e-krona and the Bank of Canada's CBDC contingency plan. Next we look at the drivers of CBDC projects by relating development intensity to the economic and institutional differences between countries. We also take stock of actual development efforts, providing a taxonomy of technical designs from all relevant policy and analytical publications published by central banks worldwide. We assess the policy stance based on a database of more than 16,000 central bank speeches. We draw up a database of research and development work, technical approaches and policy stances for the issuance of CBDCs. This paper looks at the economic and institutional motives behind current CBDC projects and asks how they might shape the design of such currencies. But the reasons for issuing them vary between countries, as do the policy approaches and technical designs. Summary FocusĬentral bank digital currencies (CBDCs) are in the limelight. There are now pilots in 34 jurisdictions, covering both wholesale and retail CBDC. There are four live retail CBDCs in the world – in The Bahamas, the Eastern Caribbean, Nigeria and Jamaica. Updated dataset on CBDC projects around the world. ![]()
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