Digital Money News This Week ??
??Robinhood has joined Paxos’ new Global Dollar Network (GDN), a stablecoin ecosystem aiming to expand adoption by sharing revenue with partners. ???? Through GDN, financial platforms like Robinhood, Kraken, and Galaxy can distribute Paxos-backed stablecoins while benefiting from revenue sharing. Unlike Tether and USDC, which retain most reserve earnings, GDN’s model incentivizes partners, making it appealing for platforms focused on accessibility and inclusivity. ????
?? Paxos CEO Charles Cascarilla noted that GDN reimagines financial interactions with the US dollar, bridging web3 technology with mainstream financial services. The network, regulated in locations like New York and Singapore, could become a disruptor in stablecoins, gaining traction with Robinhood’s participation. ??
?? This model may challenge established stablecoin leaders by enhancing transparency and adoption incentives, potentially sparking a new growth phase in the stablecoin sector. ??
???? China has unveiled upgraded hardware wallets for its digital yuan (eCNY), enhancing accessibility for those without smartphones or reliable internet, such as the elderly and tourists. ??The new wallet, introduced by the Digital Currency Research Institute, has improved features, including Near Field Communication (NFC) for contactless payments and a dynamic QR code display for merchant scanning. The wallets now show payment amounts and balances in both English and Mandarin, making them more tourist-friendly. ??
?? With seven new designs, these updates support both NFC-enabled and non-terminal merchants, like street vendors, who can use smartphones to scan payments. China has also embedded the eCNY into Huawei’s mobile operating system, raising privacy discussions due to OS-level integration. Additionally, the International Air Transport Association (IATA) plans to incorporate the digital yuan into its settlement system, allowing travel agents to pay airlines directly. ??
?? Recent statistics highlight that one in eight people in China holds an eCNY wallet, illustrating China’s ongoing expansion of its digital currency ecosystem.
?? South Korea has launched a CBDC pilot, involving seven of the country’s largest banks: Kookmin Bank, Shinhan Bank, Woori Bank, KEB Hana Bank, Industrial Bank of Korea, BNK Busan Bank, and Nonghyup Bank. ???? Authorized by the Bank of Korea, this pilot aims to evaluate how a CBDC-based system can function within the nation’s existing financial infrastructure.
?? The initiative seeks to replace the current voucher-based digital payment system with CBDC technology, allowing citizens to experience and engage with a state-backed digital currency. The pilot will enable participants to use mobile devices to access CBDC-based tokens, introducing a new digital payment mechanism that complements South Korea’s advanced financial ecosystem. ??
This pilot aligns with South Korea’s objectives to foster innovation in digital finance by enabling banks to directly collaborate with the central bank on CBDC deployment. As the country continues exploring CBDCs, this trial will provide valuable insights into the practicalities of digital currency integration, helping shape the potential rollout of a full-scale CBDC in the future. ??
?? Amazon, in partnership with StraitsX and NTT Digital, has conducted a simulation to tokenize seller receivables and enable faster payments via stablecoins. ?? As part of this year's Singapore Fintech Festival, the experiment aimed to improve cash flow for Amazon Marketplace sellers, who typically wait up to 90 days for receivables.
?? In this pilot, Amazon tokenized sellers' receivables on a blockchain, which allowed lenders to purchase these receivables at a discount through an exchange. Sellers were then paid promptly in StraitsX’s XSGD stablecoin, wrapped in a unique form of digital currency known as Purpose Bound Money (PBM). PBM ensures that funds are used for specific transactions while adhering to regulatory requirements like KYC, adding a layer of security and compliance to the process. ??
?? While still experimental, Amazon’s approach showcases the potential for blockchain to enhance payment speed and liquidity for e-commerce sellers, especially in marketplaces with long payment cycles. The use of tokenized assets and stablecoins in such environments could set the stage for a new financial model in the e-commerce space, offering a faster, more efficient way for sellers to access funds.
That’s a wrap on this edition of the CBDC Chronicles. Share your thoughts and drop them in the comments section below or send me a direct message.
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See you in the next edition, until then, stay engaged and keep exploring! ????