?? Welcome to this week's edition of the CBDC Chronicles!

Welcome to your weekly digest for the most valuable content on Central Bank Digital Currencies (CBDC), blockchain technology, fintech innovations, and more! ?? Stay up-to-date with the latest news, trends, and insights in the rapidly evolving world of digital currencies and discover how they're shaping the future of finance.

?? Setting Boundaries - The Digital Pound ????

UK Finance, Britain’s leading financial services trade association, is singing a bit of a cautionary tune at the proposed high holding limits for the digital pound. The limits, currently envisioned between ￡10,000 and ￡20,000, are perceived to carry more risks than benefits ??. Their suggestion? Lower the limit to between ￡3,000 and ￡5,000 to keep the seas of financial stability smooth ?

UK Finance also urges the Bank of England to consider supporting commercial bank digital currencies (deposit tokens) as alternatives to CBDCs ??. The organization is hopeful for a future where digital pounds and 'upgraded' commercial bank money can coexist ??Variety is the spice of finance, friends ?? Read more about the developments here.

?? Breaking Boundaries: The Digital Real rollout on the horizon ????

Setting the stage for its CBDC journey, Brazil's Central Bank recently uploaded ??? CBDC files to GitHub, a platform where developers can collaborate on software, signaling a significant step forward in their CBDC pursuit ??. These documents encompass key details on the CBDC pilot's architecture, network connection issues, smart contracts, and sample smart contracts. However, the project's source code is not included ??.

The Brazilian pilot CBDC will utilize an open-source, Ethereum network-compatible permissioned blockchain called Hyperledger Besu to avoid licensing costs ??. Brazil's CBDC project differentiates itself by primarily focusing on benefits for businesses ?? rather than retail users ???. Several major financial players, including crypto-keen firms and neobanking unicorn Nubank, are collaborating with Brazil's Central Bank on the pilot. The bank has stated plans to launch the digital real by 2024 ???, but lawmakers say legislation must be updated before proceeding ??.

?? The Dragon Roars: China CBDC Integration with Social Security Cards ????

Chinese banks are actively cooperating with Beijing to fuse the digital yuan with social security cards, setting precedence for a fusion of financial services and government benefits. This trend offers an interesting perspective for digitized financial systems globally.

The digital yuan integration aims to cover the whole populace, including urban and rural areas, and benefit elderly and unbanked citizens. Li Xin, the Chief Business Manager of the Bank of China's Digital Currency Office, emphasizes its efficiency, convenience, and stability while being widely applicable ??.

Yet, I can't help but wonder, how much does this fusion open the door for increased surveillance, and government control, and the potential compromise of personal privacy ??? The future of finance may be knocking on our doors, but the importance of privacy and personal freedoms should never be forgotten ???

?? AI, the Compliance Conductor ??

In a recent discussion, Rav Hayer, Managing Director at Alvarez & Marsal, explored the potential of AI in assisting financial institutions with regulations and operational support. A world where AI not only ensures compliance with the ever-changing regulatory environment ?? but also efficiently manages finance functions ??

?Moreover, AI could provide invaluable assistance in maintaining balance sheets and give a much-needed boost to Anti-Money Laundering (AML) activities ??. It could also enhance the verification of information, bringing a level of precision and speed that is difficult to achieve manually ???.

Yet, it’s essential to remember that with great power comes great responsibility. Financial institutions face the challenge of navigating Intellectual Property concerns ??. Moreover, it's critical to maintain a 'human-in-the-loop' approach to avoid AI biases. After all, we're in the era of intelligent machines, but let's not forget the value of human insight ??.

Enjoy this insight right here ??

?? SandDollar Update - Feature Upgrades and Broadened Engagement

The Central Bank of The Bahamas released an update on the SandDollar digital currency. Let's take a look ...

New Features in the Upcoming Wallet Upgrade ?????

The SandDollar wallet is set for a revamp that will include several self-service tools and enhancements:

• ?? Self-Onboarding: Allows new users to independently create and manage their SandDollar accounts.
• ?? Secure Wallet Recovery: Offers streamlined wallet recovery options.
• ?? Optional Memo Field: Adds an extra field for transaction details, making reconciliation easier.
• ?? Frequent Contacts List: Features a list of frequent contacts for seamless transactions with regular recipients.
• ?? Public Release Date: The Central Bank anticipates a public release of the updated SandDollar wallet in September 2023.

Expanding Engagements ????

• ?? Rebate Program with Super Value Supermarkets: Wallet users can enjoy rebates when shopping at Super Value supermarkets, subject to approved transaction amounts and participating outlets. The rebate would be electronically processed and credited back to the wallet. How does the rebate program work? ?? Customers who spend $18 or more using SandDollars in-store receive an additional $5 top-up (rebate) upon their exit. ???? The top-up campaign, which rotates among various Super Value locations, continues through 30th July. ????
• ?? Comprehensive Rebate Campaign: Scheduled for August 2023, this campaign aims to expand the acceptance of SandDollar payments among large-scale merchants by offering them specific rebate incentives.

Conclusion ??

The upcoming wallet upgrade for SandDollar's digital currency promises to deliver more convenience and accessibility to its users. With the implementation of self-service tools and a targeted rebate campaign, the Central Bank takes a significant step towards the future of CBDC adoption in the Bahamas. For more details, you can read the full story here ??.

Publication Spotlight: Project Polaris: Guiding Light for CBDC Security ????

This week, we turn our spotlight to a recent (7 July 2023) publication by the Bank for International Settlements, titled "Project Polaris: a security and resilience framework for CBDC systems". It tackles an increasingly important topic in the era of CBDC cybersecurity. ?????

The BIS Innovation Hub Nordic Centre has taken the initiative to develop a robust security and resilience framework for CBDC systems - Project Polaris. The publication provides a seven-step model to guide the design, implementation, and operation of secure and resilient CBDC systems.

It underscores the importance of recognizing the complex cyber landscape, adopting modern enabling technologies, leveraging existing capabilities, and identifying areas that need maturity or implementation. ?????

The publication focuses on how financial systems must evolve to secure the emerging world of CBDCs better. Jump right into the full publication here. ????

That’s enough from me! ???? What do YOU think about these developments? Share your insights and ask your burning questions. The CBDC Chronicles community awaits your thoughts! #CBDC #Blockchain #Fintech