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.
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