Finance is evolving and going digital. Tokenised real world assets are on the rise and Central Bank Digital Currencies (CBDCs) are becoming an increasingly important topic of discussion.
CBDCs are digital versions of traditional money that are issued and controlled by central banks. Think digital dollars equivalent to physical notes. Same product, new form factor.
We’re excited how CBDCs will play a role in the digital economy and have the potential to revolutionise the way we transact, make cross-border payments whilst supporting the stability of the financial system and enabling inclusion to unbanked populations
However, at CANVAS, we also recognize that the implementation of CBDCs should be done thoughtfully and carefully, with some principles in mind, such as:
- Privacy: The privacy and security of transactional data must be a top priority.
- Interoperability: CBDCs must be built on standards and interoperable with public networks, existing payment systems and other digital currencies. This will facilitate seamless cross-border payments and reduce friction in the financial system.
- Innovation: CBDCs should encourage innovation in the financial sector, fostering competition that ultimately benefits consumers and businesses.
- Collaboration: CBDCs should be developed through collaborative efforts between central banks, governments, and the private sector. This will ensure that CBDCs are designed to meet the needs of all stakeholders and are implemented in a way that is safe, secure, and efficient.
- Stability: CBDCs should be designed to ensure the stability of the financial system, with appropriate safeguards to prevent fraud, money laundering, and other illicit activities.
- Accessibility: CBDCs should be accessible to all, regardless of socioeconomic status or geographic location. The technology should be designed in a way that enables people without access to traditional banking services to participate in the digital economy.
We believe that CBDCs are fundamental building blocks of a digital economy and enable instant, secure and low cost transactions. But it is essential that they are developed and implemented with care and thought.
By working together and embracing innovation, we can create a more secure and efficient financial system for everyone.
WHO WE ARE AND WHY WE ARE WRITING THIS
On 2 March 2023, the Reserve Bank of Australia (RBA) announced that it had selected 14 entities from institutions to startups to participate in a pilot program to explore use cases for an eAUD, a Central Bank Digital Coin (CBDC).
CANVAS was one of the companies selected in this pilot for our proposed use case to demonstrate the benefits of tokenised FX trading between eAUD and Digital Currencies such as USDC. All use cases in the pilot are subject to regulatory approval.
The potential markets for CBDCs in Foreign Exchange (FX) trading and international remittances are significant. According to the Bank for International Settlements, the average daily turnover in traditional foreign exchange markets is $7.5 trillion. Remittances totalled US$23.5 trillion volume in Global Cross-Border Payments in 2020.
Currently however, cross-border payments are not supported 24×7/365 by traditional services like SWIFT. This restricts flexibility leading to delays and higher costs. Public blockchains such as Ethereum offer an alternative, but lack privacy, scalability, compliance and regulatory capabilities.
CANVAS has developed blockchain-based markets infrastructure that facilitates the instant trade & transfer of CBDCs and foreign currency stablecoins.
The process of experimentation and exploration is not new to us. For the past two decades, we have worked at the intersection of finance & technology.
Our previous global venture, Pure Commerce, specialised in SaaS based FX and multicurrency payment solutions for banks and financial institutions from around the world. Electronic Payments, Foreign Exchange & Global Reach is part of our DNA.
Now we’re focusing on Blockchain as the next horizon in payments, finance & markets. We believe Blockchain will underpin every financial instrument of the future.
Through our privacy focused Layer 2 network CANVAS Connect, we want the transaction of all digital assets to be private, instantaneous, low cost and easy to integrate. Whether they be digital securities, tokenised bank deposits or government-backed digital currencies.
CANVAS Connect is a confidentiality focused Layer 2 ZK-Rollup built for finance that enables the transfer, trade & investment of digital assets with assurances of privacy, confidentiality, instant transactions and low fees. With an API first architecture the platform is designed to support financial institutions as they integrate digital assets, currencies & CBDCs into their offerings and trade in the Digital Economy.
CANVAS was created in the belief that blockchain technologies, digital assets and tokenisation will radically transform financial and capital markets over the next decade with trillions of $ in securities and currencies to be tokenized and traded 24/7/365 in a globally connected digital economy.
To learn more about CANVAS visit:
- Website: https://www.canvas.co/
- Twitter : https://twitter.com/canvas_defi
- Linkedin : https://www.linkedin.com/company/canvasblockchaingroup
- Vimeo : https://vimeo.com/canvasdefi