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Mr. Ghiath Shabsigh, Mr. Tanai Khiaonarong, and Mr. Harry Leinonen
Major transformations in payment and settlements have occurred in generations. The first generation was paper-based. Delivery times for payment instruments took several days domestically and weeks internationally. The second generation involved computerization with batch processing. Links between payment systems were made through manual or file-based interfaces. The change-over period between technologies was long and still some paper-based instruments like checks and cash remain in use. The third generation, which has been emerging, involves electronic and mobile payment schemes that enable integrated, immediate, and end-to-end payment and settlement transfers. For example, real-time gross settlement systems have been available in almost all countries. DLT has been viewed as a potential platform for the next generation of payment systems, enhancing the integration and the reconciliation of settlement accounts and their ledgers. So far, experiments with DLT experimentations point to the potential for financial infrastructures to move towards real-time settlement, flatter structures, continuous operations, and global reach. Testing in large-value payments and securities settlement systems have partly demonstrated the technical feasibility of DLT for this new environment. The projects examined analyzed issues associated with operational capacity, resiliency, liquidity savings, settlement finality, and privacy. DLT-based solutions can also facilitate delivery versus payment of securities, payment versus payment of foreign exchange transactions, and efficient cross-border payments.
Mr. Ghiath Shabsigh, Mr. Tanai Khiaonarong, and Mr. Harry Leinonen

that DLT could be viable for post-trade securities processing. All projects concluded that securities settlement is a highly suitable and feasible environment for DLT-based solutions. One of the projects (in Australia) even aimed for production implementation in 2021. Some prototypes focused on delivery-versus-payment (DvP) implementation within securities settlement systems, 7 and those concluded that DvP with finality is achievable within DLT-based systems. 8 The experiments showed that different DvP models can be implemented in DLT-based systems. DLT solutions

Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe, and Mr. German Villegas Bauer

key parameters of the network that comes with permissioned systems, such as the number or location of nodes, or other eligibility criteria. The potential of non-PoW permissioned crypto assets to reduce energy consumption relative to the existing payment system comes about from energy savings on both core processing architectures and user payment means. Novel non-DLT solutions can provide similar benefits. Third, central banks could design CBDCs with the explicit goal to be environmentally friendly. For example, central banks could select new platforms, hardware

Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe, and Mr. German Villegas Bauer
Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies. It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems and derives implications for the design of environmentally friendly CBDCs. For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm. While crypto assets like Bitcoin are wasteful in terms of resources, other designs could be more energy efficient than existing payment systems.
International Monetary Fund. Monetary and Capital Markets Department

. Particular considerations could be given to the adoption of DLT and ensure with reasonable certainty that DLT-based services have an appropriate legal underpinning where applicable . The inroad of DLT in payment and settlement results in a highly complex environment that comprises several service providers, including unregulated entities, from potentially multiple jurisdictions. The legal basis of such arrangements and procedures may not be clearly defined or enforced in all jurisdictions, as DLT solutions may rely on a decentralized and distributed structure across

International Monetary Fund. Monetary and Capital Markets Department
he Hong Kong Special Administrative Region (HKSAR) is among the world’s major fintech hubs, well positioned to develop fintech initiatives from its traditional strengths in financial services. Key factors enabling the HKSAR to emerge as a fintech hub include its presence as an international financial center, its free-flowing talent and capital, a highly developed information and technology communication (ITC) infrastructure, and its most unique trait, a geographical and strategic advantage by proximity to the market in Mainland China.
International Monetary Fund. Monetary and Capital Markets Department
This technical note examines the implications of fintech for the regulation and supervision of the Singaporean financial services sector. It provides an overview of the financial system with a focus on fintech developments. The note looks at not only fintech developments but also the institutional setup as well as Monetary Authority of Singapore’s (MAS) approach to fintech. The MAS has so far managed to strike the right balance between innovation and safety and soundness. MAS has responded quickly to the challenges of fintech. The impact of fintech on the financial services sector has largely been internalized by financial institutions (FI). FIs are swiftly digitizing and modernizing their systems, products and business models. Because of their market knowledge and higher investment capacities, incumbent FIs are getting better at providing services and products by adopting new technologies or improving existing ones. The note also recommends that it is imperative to develop a cyber network map that considers both financial linkages and Information and Communications Technology connections and use it for cyber risk surveillance.
International Monetary Fund. Monetary and Capital Markets Department

(without challenging the role of intermediaries), by reducing settlement times or improving the transparency of recordkeeping and reporting. Depending on the DLT solution, other benefits could include eliminating data duplication and reducing maintenance costs to support different databases. • AI/ML/data analytics . AI makes possible advanced analytical tools that, by leveraging the capability to process large volumes of data, support innovative solutions for business needs. This capability enables the development of multichannel customer access, increased self

International Monetary Fund. Monetary and Capital Markets Department

significant project to create a decentralized platform for Digital Financial Instruments, based on distributed-ledger technology (DLT). An overview of the main initiatives are described below: D7: A digital post-trade platform (using enterprise DLT solutions, and potentially CBDC and/or cryptocurrencies) for digital financial instruments capable of servicing multiple asset classes based on both centralized and decentralized networks. The development itself has been enabled by the Electronic Securities Act (eWpG) promulgated in late 2021. The Act provides a reliable