For all the key details of new Distributed Ledger Technology (DLT) projects in the banking world, real-world asset (RWA) tokenization, stablecoins, and central bank digital currency (CBDC) updates, the Observers 'Banking and CBDC Roundup' weekly has you covered.

CBDC Updates

What Trump Win Means for Digital Dollar

We begin with a quick note about the U.S. election, which could have significant ramifications for a digital dollar.

Republican politicians are generally wary about CBDCs amid fears they could erode privacy and be used as a tool for surveillance.

Donald Trump — who has vowed to block one from ever launching in the States — will make his way back to the White House in January. His party also has control of the Senate, and a good chance of dominating in the House of Representatives too.

The campaign group Stand With Crypto tracked key races across the country, and found newly elected candidates who support digital assets now vastly outweigh those who don't. Support for Bitcoin typically doesn't extend to CBDCs.

New Digital Yuan Hardware Released

Over in China, a new hard wallet for the digital yuan has been unveiled at a conference in the city of Shenzhen.

The card includes an electronic ink display where users can check their balances and transaction details.

Crucially, merchants don't need to update existing payments infrastructure to accept them.

The Global Times says the hard wallet could be especially useful for older consumers who may not have a smartphone.

S&P's Future Forecasts on Digital Yuan

Meanwhile, S&P Global has released a fascinating report looking at how the digital yuan may evolve in the years to come.

Noting this CBDC has made impressive progress so far, researchers predicted it could make international payments much easier for Chinese businesses, while affecting revenues for financial institutions. The authors went on to warn:

"We view e-CNY applications on the retail front as unlikely to replace popular consumer apps like Alipay and WeChat Pay for retail purposes, at least in the next few years. These so-called super apps are well-entrenched and will continue to compete with banks on the retail front."
Image: S&P Global

Going forward, S&P Global predicts that the digital yuan won't threaten "super apps" — instead, they may opt to integrate CBDCs as a payment method.

South Korea CBDC Pilot Updates

On 6 November, the South Korean Central Bank, Ministry of Science and Information and Communication Technology, inaugurated another phase of the national digital financial system based on the "CBDC and deposit token management platform". During it, the developers are planning to test the usability of the system by circulating deposit tokens with registered merchants. Seven selected domestic banks will issue deposit tokens in the form of paper vouchers with QR codes, promising to make them available in mobile apps later.

Previously, Bank of Korea announced that 100,000 citizens will participate in the CBDC pilot in 2025.

BIS Nexus Project Settles as an Entity in Singapore

The participants of the Nexus project have established a Nexus Scheme Organization (NSO) managing entity, which will manage the project in its live implementation stages.

Nexus is a project by the Bank of International Settlement (BIS) Innovation Hub, with the participation of the central banks of India, Malaysia, the Philippines, Singapore, and Thailand. The project explores how domestic Instant Payment Systems (IPS), such as India's UPI, can be linked together on a single platform, thus giving them a cross-border reach.

Digital Shekel Use Cases Announced

Israel concluded the digital shekel use case contest launched in June.

1st place - a Platform for Returning Debtors to Economic Growth Path by the Siara team

2nd place - an Automation for Smart Payroll Payments by the PayPal team,

3rd place - an Offline payments solution by IDEMIA team

Other participants included:

  • Shva team: Conversion between cash and digital shekel using ATMs
  • QEDIT team: Trust for Digital Transactions using Advanced Cryptography (awarded the "People's Choice")
  • Energy team: Transparent, Scalable Contract Automation for Construction and Every Industry
  • Kima team: Trading Securities using Digital Shekel
  • Credics Technologies team: Family Allowance Management Using Digital Shekel Wallets
  • Brinks, Committed team: Conversion of Cash to Digital Shekel in Thousands of Points of Sale
  • Bits of Gold team: Secure Crypto-to-Cash Exchange with Digital Shekel
  • 0xPay team: Managing IoT/non-human Device with Digital Shekel Wallets
  • COTI team: Decentralized Marketplace for Event Tickets
  • Fireblocks team: AI-Powered Digital Shekel Travel Payments
  • Open Finance team: Travel Insurance using Digital Shekel

Tokenization Updates

Singapore Steps Up Monetization Efforts

The top tokenization story this week comes from the Monetary Authority of Singapore, which plans to support the commercialization of asset tokenization.

The central bank already leads Project Guardian, which has seen dozens of financial institutions take part in trials centered on this technology.

MAS says it now aims to deepen the liquidity of tokenized assets, establish frameworks for their implementation, and work on a common settlement facility as part of a wider ecosystem of infrastructure. Deputy managing director Leong Sing Chiong added:

"MAS has seen strong interest in asset tokenisation in recent years, notably in fixed income, FX, and asset management. We are encouraged by the keen participation from financial institutions and fellow policymakers to co-create industry standards and risk management frameworks to facilitate commercial deployment of tokenised capital markets products, and scale tokenised markets on an industry wide basis."

Fascinating Use Case Emerges

Amazon is also involved in a cutting-edge trial that could deliver a compelling application for tokenization: enabling small businesses to get paid faster.

Entrepreneurs often face a waiting time of up to 90 days for funds to clear. But through a partnership with NTT Digital and StraitsX, they can tokenize accounts payable and trade them on an exchange. Once purchased by lenders, sellers are compensated early in the form of stablecoins — minus a fee.

While Amazon has no intent of utilizing this technology anytime soon, it's nonetheless an insight into what the future could look like.

SORA Economic Forum

We will be observing the 3rd SORA Economic Forum, to be held on 20 November.
The SORA Economic Forum is an annual gathering of experts, policymakers, and blockchain enthusiasts who discuss the vision for new, decentralized economic systems. Registration for the online sessions is currently open.

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