WEF Blockchain Report - Growing Central Bank Interest
April 09 2019 - 12:43PM
ADVFN Crypto NewsWire
Bitcoin Global News (BGN)
April 9, 2019 -- ADVFN Crypto NewsWire -- Published as a
contribution project in support of The World Economic Forum,
“Central Banks and Distributed Ledger Technology:How are Central
Banks Exploring Blockchain Today?” breaks down exactly what
is happening among global financial institutions in regards to
blockchain technology and digital currencies. The white paper is
expressly an exploration in the field, and does not represent the
particular views of the World Economic Forum, the entirety of its
Members, Partners or other stakeholders.
Who is
experimenting?
Central banks are certainly
conducting several research projects and pilots with blockchain
technology. But the degree of depth, progress and interest across
these efforts has extreme variation. Whereas the Bank of France has
already fully deployed blockchain technology, others are only doing
surface level research. Other examples:
-
Bank of Canada, Bank of England,
and Monetary Authority of Singapore (MAS) have published multiple
in-depth research reports and technology pilot projects with
DLT
-
Bank of England was the first
central bank to publish research on DLT in 2014 - “The economics of
digital currencies” and “Innovations in payments technologies and
the emergence of digital currencies”
-
Bank of Canada’s Project Jasper and
the MAS’s Project Ubin pilots both investigate CBDCs implications
on efficiency, performance and resilience in domestic interbank
payments
-
The three above mentioned central
banks published multilateral research - “Cross-border interbank
payments and settlements”
-
European Central Bank (ECB) and
Bank of Japan conducted a joint pilot in 2016 - Project Stella
explores domestic interbank payments and settlements and rapid
interbank trading and settlement of securities for cash via the
technology
What is the technology
working toward?
The white paper highlights 10 of
the most common and important financial areas that could be
improved by blockchain related technologies.
-
Retail central bank digital
currency (CBDC) – A central bank-issued digital currency that is
operated and settled in a peer-to-peer and decentralized manner,
which serves as a complement or substitute for physical cash and
traditional bank deposits.
-
Wholesale central bank digital
currency (CBDC) – Central bank-issued digital currency that is
available only for commercial banks and clearing houses for the
wholesale interbank market.
-
Interbank securities settlement –
Application of blockchain-based digital currency that allows rapid
interbank clearing and settlement of securities for cash. Allows
two parties trading an asset, such as a security for cash, to
conduct the payment for and delivery of the asset
simultaneously.
-
Payment system resiliency and
contingency – Used as a back-up domestic interbank payment and
settlement system from threats, including technical or network
failure, natural disaster, cybercrime, and other
threats.
-
Bond issuance and lifecycle
management – Digital bond auction, issuance, or other lifecycle
processes, where central banks or government regulators could be
“observer nodes.”
-
Know-your-customer and
anti-money-laundering – Digital KYC/AML processes that streamline
payments and identity across a myriad of platforms.
-
Information exchange and data
sharing – Alternative systems for information and data sharing
between or within related government or private sector
institutions.
-
Trade finance – Decentralized
database allowing customer information and transaction histories
are shared between participants in the decentralized database while
maintaining privacy and confidentiality where
needed.
-
Cash money supply chain – Issuing,
tracking and managing delivery and movement of cash from production
facilities to the central bank and commercial bank branches, along
with ordering, depositing or movement of funds.
-
Customer SEPA Creditor Identifier
(SCI) provisioning – Blockchain-based decentralized sharing
repository for SEPA credit identifiers managed by the central bank
and commercial banks in the SEPA debiting scheme.
By: BGN
Editorial Staff
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