Thailand launches retail CBDC pilot with 2 banks and Singapore payment service

June 12, 2023 Coin Telegraph

CBDC

The project, delayed from last year, will enlist bank employees and nearby businesses for the pilot. Each payment provider has launched its own app.

The Bank of Thailand will launch a retail central bank digital currency (CBDC) pilot project in a regulatory sandbox this month. Three payment providers will take part, according to local media. The project will involve up to 10,000 users and run through August.

Bank of Ayudhya (Krungsri), Siam Commercial Bank and Singapore-based payments service provider 2C2P will partner with the Thai central bank on the project. Each of those organizations has made an app available to selected users that includes a wallet and a QR code scanner.

Krungsri will enlist up to 2,000 staff members to participate in the project, along with about 100 merchants located around the bank’s headquarters. It will expand the project to its Ploenchit branch as well. Krungsri Innovate managing director Sam Tanskul said:

“The bank needs to determine a strategy to differentiate retail CBDC from [its] PromptPay service.”

Siam Commercial Bank’s pilot will operate similarly to Krungsri’s, with staff and neighboring merchants participating.

The pilot was announced in August and was originally scheduled to launch in 2022. The Bank of Thailand has called the project a “pilot to learn” rather than a pilot launch. The central bank has no official plans to launch a CBDC.

Twenty commercial banks in #HongKong, #China, #UAE and #Thailand used #mBridge and #CBDC to conduct payment and foreign exchange payment-versus-payment transactions on behalf of their corporate clients. Read the full report https://t.co/PhTtmQ8Lj4 pic.twitter.com/TE6Dv0dszr
— Digital Pound Foundation (@digitalpoundfdn) October 27, 2022

The Bank of Thailand announced it was developing a wholesale CBDC in 2018. It participated in the Bank for International Settlements’ mBridge cross-border payment project and Project Inthanon-Lion Rock project with the Hong Kong Monetary Authority.

In March, the country waived corporate income tax and value-added tax for companies that issue investment tokens. A government spokesman said Thailand could lose about $1 billion in revenue, but it expected investment tokens to generate $3.7 billion over the next two years.

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CBDC ‘may not be a compelling priority,’ says Kenya’s central bank

June 2, 2023 Coin Telegraph

Africa

The central bank released its statement in response to comments on a CBDC discussion paper published in February 2022.

The Central Bank of Kenya received comments on a discussion paper on the potential issuance of a digital shilling and hasn’t reached a definitive conclusion.

In a June 2 announcement on Twitter, Kenya’s central bank said it received more than 100 comments from members of the public, commercial banks, tech firms and other participants across nine countries regarding the issuance of a central bank digital currency, or CBDC. The responses varied from highlighting potential benefits and risks, but the central bank said it would “continue to monitor developments” and take a “measured approach" to consider assessing the rollout of a digital shilling in the future.

“Implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term,” said the central bank. “Significantly, Kenya’s pain points in payment could potentially continue to be addressed by other innovative solutions around the existing ecosystem.”

Press Release - Issuance of Discussion Paper on Central Bank Digital Currency: Comments from the Public pic.twitter.com/dMlrUj2eD6
— Central Bank of Kenya (@CBKKenya) June 2, 2023

The statement followed the discussion paper Kenya’s central bank released in February 2022. The bank added that it had been collaborating with other central banks behind proofs-of-concept for CBDCs but noted “the allure of CBDCs is fading" on the global stage.

As one of the largest economies in Africa by gross domestic product, Kenya has grown its adoption of crypto and blockchain significantly in the last few years. Peer-to-peer platform Paxful is widely used among crypto enthusiasts in the African nation, and there are Bitcoin mining projects helping to provide power to rural communities.

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Standard Chartered, PwC make case for programmable CBDC in China Greater Bay Area

June 1, 2023 Coin Telegraph

CBDC

With 11 megalopolises and three currencies, Guangdong, Hong Kong and Macao make up a region that is ripe for CBDC research.

British multinational bank Standard Chartered and PwC China have teamed up to produce a white paper on applications for central bank digital currency (CBDC) in the so-called Greater Bay Area of China – Guangdong Province, Hong Kong and Macao. Programmability will make all the difference, they concluded.

The Greater Bay Area (GBA) presented an interesting test case because of the multiple currencies used in multiple jurisdictions. Macao uses the pataca, whereas Hong Kong uses the Hong Kong dollar and China the yuan. About 3.8 trillion yuan (US$535 billion) of cross-border trade was carried out in the region in 2021, according to the report.

Programmable CBDC has been under investigation in Hong Kong. It offers a range of advantages, the report said:

“The successful launch of programmable use cases in the GBA could provide a foundational framework for how other CBDCs could interact in cross-border commercial scenarios.”

“Widespread commercial adoption hinges on collective efforts between industry participants to better serve their customers,” the report added. CBDC smart contracts could be launched in the implementation of cross-border trade, in the supply chain for invoice settlement and added currency flexibility, and by retailers for streamlining service and loyalty programs by using a single multicurrency wallet.

The report looked at CBDC-based loyalty programs in detail. More user-friendly loyalty programs would benefit smaller retailers whose programs consumers would otherwise be less likely to enroll in. Payment service providers could also take advantage of smart contracts for Know Your Customer (KYC) processes, the report said.

#Shenzhen and #Guangzhou ranked third and fourth behind Beijing and Shanghai, while all 11 cities in the #Guangdong-Hong Kong-Macao Greater Bay Area made the 2022 Chinese Cities of Opportunity report released by world-leading consultancy @PwC. #GDupdates #GBAfocus [/IC] pic.twitter.com/6KF1fkOUcH
— Info Guangdong (@iGuangdong) September 6, 2022

The Hong Kong Monetary Authority recently launched an e-HKD CBDC pilot project that looks at a range of use cases, including tokenization.

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Microsoft’s CSO says AI will help humans flourish, cosigns doomsday letter anyway

May 31, 2023 Coin Telegraph

Eric Horvitz penned a blog post lauding the transformative nature of AI on the same day he cosigned a document warning it could threaten humanity’s very existence.

Microsoft’s chief scientific officer, Eric Horvitz, believes artificial intelligence (AI) will allow future humans to flourish, but he’s apparently hedging his bets.

Horvitz published a post entitled “Reflections on AI and the future of human flourishing” on the official Microsoft blog on May 30. The article discusses the future of artificial intelligence and announces a series of essays written by AI experts who were given early access to OpenAI’s GPT-4 before its public launch.

Per the blog post, Horvitz was surprised by the capabilities of OpenAI’s GPT-4 when he was given such access in 2022:

“I observed unexpected glimmers of intelligence beyond those seen in prior AI systems. When compared to its predecessor, GPT-3.5 — a model utilized by tens of millions as ChatGPT — I noticed a significant leap in capabilities.

Specifically, Horvitz touted GPT-4’s “ability to interpret my intentions and provide sophisticated answers to numerous prompts," which he said “felt like a ‘phase transition,’ evoking imagery of emergent phenomena that I had encountered in physics.”

Horvitz writes that, while testing GPT-4, it became “increasingly evident that the model and its successors […] hold tremendous potential to be transformative.”

Microsoft and OpenAI gave a litany of experts early access to GPT-4 and solicited essays from them in hopes of identifying the opportunities and challenges the technology posed across numerous industries.

On the same day that Horvitz published the announcement post, however, his name also appeared as a signatory for a document published by the Center for AI Safety.

The document, which contained only a preface and a single-sentence statement, was signed by a list of signatories representing a veritable who’s who of AI experts (with a handful of notable holdouts, including Meta’s Yann LeCun and Andrew Ng, co-founder of Google Brain).

The statement reads: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.”

The reception to the document has been somewhat split on social media, with numerous experts expanding on their reasons for signing and others concerned that worrying over undefined risks — such as future AI systems with capabilities that aren’t currently possible — distracts from more important issues.

It is amazing to see intellectuals and scientists embarking on this „ AI doomsday scenarios „ while ignoring the real devastation of climate change , rise of anti democratic forces and widening economic inequality which are unfolding in real time
— Ahmed El Hady (@zamakany) May 31, 2023

Horvitz does address the “challenges” involved in developing safe AI in his recent blog post as well as admitting his “anxiety” over the transformative nature of the technology. But there’s no mention of potential extinction.

Outside of AI, Microsoft is exploring other nascent technologies. The company was recently approved for participation in a central bank digital currency pilot project for the Central Bank of Brazil alongside Santander, Visa and several other applicants.

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ECB sums up digital euro prototyping exercise as it nears possible pilot launch

May 26, 2023 Coin Telegraph

CBDC

The European Central Bank exercise looked at a variety of use cases, most of which were quite satisfactory, as well as the use of self-custodied wallets.

The European Central Bank (ECB) has published a summary of the results of its digital euro central bank digital currency prototyping exercise. The exercise investigated offline use of a simulated digital euro and four other instances of interoperability with existing payments systems.

The project was part of the second phase of Eurosystem preparations for a potential pilot launch of a digital euro in the fall of this year. The exercise ran from July 2022 to February 2023.

Eurosystem developed a centralized settlement engine for the exercise called N€XT that used an unspent transaction output (UTXO) data model. Five prototype customer interfaces that represented differing use cases were provided by private companies. Self-custody wallets were also trialed.

The UXTO model preserved customer privacy using one-time UTXO addresses that did not reveal the wallets holding them. User experience was identical for custodied and non-custodied wallets.

The offline transactions use case was more problematic. Seeking to gain “more in-depth knowledge of how the combination of hardware and software protocol could avoid double spending and ensure settlement finality and non-repudiation,” the report concluded:

“Questions remain as to whether the existing technology is capable of delivering, in the short to medium term (five to seven years), a production-ready and secure offline solution.”

Nonetheless, the exercise showed that “online and offline digital euro prototypes can be interoperable even if based on different data models and technical designs.”

Simultaneously with the exercise summary, the ECB published a “Market Research Outcome Report” on the digital euro. It also found that offline “solutions compliant with the Eurosystem requirements would be novel and might create uncertainty when an offline solution might be ready.”

I’m honoured to have @EU_Commission President Ursula @vonderleyen with us here in Frankfurt as we mark the ECB’s first quarter of a century.
Let’s keep working together for a united and peaceful Europe. pic.twitter.com/6smP7soWxX
— Christine Lagarde (@Lagarde) May 24, 2023

Survey respondents favored near-field communication, Bluetooth interfaces or QR codes for offline transactions. The market research addressed 12 highly technical aspects of a potential digital euro rollout, such as proxy lookup and dedicated cash account management.

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