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International Monetary Fund. External Relations Dept.
This paper describes the World Bank’s mission in a changing world. Conditionality of the Bank is different in several ways as it operates over a longer timeframe and relates to the more comfortable issues of economic growth rather than financial stabilization. The longer timeframes of the Bank’s programs require reaching agreement with borrowing countries on the desirability of maintaining the course that’s being advocated for an extended period. Many developing countries are unduly sensitive about the possibility that they may have to exercise their sovereignty more forcefully in the future.
Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga
Central banks are increasingly pondering whether to issue their own digital currencies to the general public, so-called retail central bank digital currency (CBDC). The majority of IMF member countries are actively evaluating CBDCs, with only a few having issued CBDCs or undertaken extensive pilots or tests. This paper shines the spotlight on the handful of countries at the frontier in the hope of identifying and sharing insights, lessons, and open questions for the benefit of the many countries following in their footsteps. Clearly, what can be gleaned from these experiences does not necessarily apply elsewhere. The sample of countries remains small and country circumstances differ widely. However, the insights in this paper may inspire further investigation and allow countries to gain time by building on the experience of others. Importantly, the purpose of this paper is not to evaluate the courses taken by different jurisdictions, but to study and discuss their key experiences and lessons. The paper studies six advanced CBDC projects, drawing on collaboration and exchanges with the respective central banks to get insights beyond what has previously been published. Unless a specific published source is cited, all information stems from interviews and workshops with members of CBDC project teams in each jurisdiction.
Shidan Derakhshani

best meet the objectives of the parties. The factors are: • The locus of decision making and control; • The level of personal interaction in the transfer process; • The level of the supplier’s initial involvement; and • The stability of the relationship between the technology supplier and recipient. To illustrate, one may first consider a case where the technology supplier owns a large share of the equity in the recipient firm, and one would thus expect it to exert extensive control, with a good deal of interaction between the personnel of the two firms and

Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga

. Access to Payments C. Making Payments More Efficient D. Ensuring Resilience of Payments E. Reducing Illicit Use of Money F. Monetary Sovereignty G. Competition H. Summary of Policy Goals 3. Operating Model A. Central Bank and Private Sector Functions B. The Business Model of CBDC 4. Design Features A. Restrictions Aimed at Ensuring Financial Stability B. Anonymity C. Off-Line Capacity D. Cross-Border Payments Using CBDC E. Summary of Design Features 5. Technology A. Technology Suppliers B. Distributed Ledger Technology vs

Carl Dahlman and Larry E. Westphal

countries should have free (or cheap) access to developed countries’ technology. But free diffusion preempts markets that the creator might have served, and may thus remove the incentive to innovate. The patent system permits the diffusion of technology while attempting to protect the proprietary rights of the innovator. In exercising these rights, technology suppliers seek to restrict use of the technology so as to maximize their returns. Control over the supply, plus the buyer’s ignorance regarding the true value of technology, can lead to excessively high prices

Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga

processing transactions. One of the great difficulties is making decisions while much of the technology is still developing and remains relatively untested. Central banks must decide where to acquire technology, if they do not build it in-house, and which technology best suits their purposes. A. Technology Suppliers A central bank typically needs to acquire technology from or partner with external vendors to develop proprietary solutions. So far, there are two main approaches to the technology supply question. The first is to choose a main contractor that supplies

International Monetary Fund. Monetary and Capital Markets Department

(information technology supplier) and (iii) the Brazilian messaging system RSFN (see appendix II in the TN), mostly used instead of SWIFT in Brazil. With regard to the assessment methodology for the oversight expectations, the BCB has indicated that it plans to require FMIs to assess their critical service providers following the methodology and establish action plans to address eventual gaps. Analysis of Key Elements of the Risk Management Framework of BM&FBOVESPA Clearinghouse 34. CCPs have the potential to reduce significantly risks to participants through the

International Monetary Fund. Monetary and Capital Markets Department
Brazilian FMIs are among the top twenty worldwide. All together there are sixteen financial market infrastructures2 (FMIs) operating in the Brazilian payment system (SPB), out of which nine3 are systemically important and four belong to the top twenty FMIs in the world4. FMIs play an essential role in the Brazilian financial system and are highly relevant in terms of domestic financial stability. In terms of value of transactions, STR (Reserves Transfer System - Sistema de Transferência de Reservas), the Brazilian Real Time Gross Settlement system (RTGS) is the backbone of the SPB, and belongs to the top ten large value payment systems worldwide. SELIC is among the top ten central securities depository/securities settlement systems (CSD/SSSs), CETIP among the top twenty SSSs, and BM&FBOVESPA Clearinghouse, the largest central counterparty (CCP) in Latin America, belongs to the top ten. These infrastructures facilitate the clearing, settlement, and recording of monetary and other financial transactions, such as payments, securities, and derivatives contracts (including derivatives contracts for commodities). Brazilian post-trading services are integrated. The entities providing securities settlement services also provide other post-trade processing, acting both as a clearing house, and a CSD or as a trade repository (TR).
International Monetary Fund. External Relations Dept.
This paper highlights the sources of payments problems in less developed countries. Growth in the industrial countries has a direct impact on the current account of the developing countries through its influence on both the prices and volumes of their exports. An increase in the real effective exchange rate is clearly a fundamental determinant of a deteriorating current account since, other things being equal, it tends to raise domestic demand for imports and to reduce foreign demand for exports.