Central bank digital currency, regtech and suptech

John Ho Hee Jung

Contents

Foreword

Preface

Preface

Introduction: Suptech/regtech defined: Payments, sandboxes and beyond

1.

The uncertain prudential treatment of cryptoassets

2.

US regulatory certainty versus uncertainty for crypto and blockchain

3.

Bermuda: Suptech and regtech supporting the risk-based approach

4.

Suptech: A new era of supervisory philosophy

5.

Cloud computing in the financial sector: A global perspective

6.

DeFi protocol risks: The paradox of cryptofinance

7.

IT transformation in the Prudential Authority of South Africa: A case study

8.

Making the vision a reality: Perspectives from the Monetary Authority of Singapore

9.

Lessons from Hong Kong through the lens of the HKMA

10.

Technological change: Is it different this time?

11.

The ECB’s suptech innovation house: Paving the way for digital transformation of banking supervision

12.

China’s financing opening up and regulatory convergence with the world

13.

Disclosures and market discipline: The promise of regtech

14.

Regtech and new derivatives developments

15.

Fintech and regtech: Leading the evolution and regulation of alternative investments

16.

The role of artificial intelligence and big data in investment management

17.

The promise and challenges of machine learning in finance

18.

Data privacy and alternative data

19.

Digital ID and financial inclusion

20.

Strategic technology: Regulation and innovation of CBDCs

21.

Regulatory sandboxes: Innovation and financial inclusion

22.

Technology and sandbox development innovation in a transitional market: A case study

23.

Developing the regulatory ecosystem: The evolution of stablecoin

24.

Central bank digital currency, regtech and suptech

25.

Digital dollar: Cryptocurrency for everyday commerce

26.

CFTC regtech implications for virtual currency trading

27.

Fintech, regtech, suptech and central bank decision making

Rapid advances in financial technology are reshaping finance, driving an evolution towards a cashless society and spurring new digital forms of money. The rise of digitalisation, including central bank digital currency (CBDC) and related payment systems enhancements, has aided the move to new forms of regulatory technology (regtech) and supervisory technology (suptech).

Digital payments volumes have soared since the onset of the Covid-19 pandemic, accelerating the trend towards digital payments. This was underscored in a keynote speech by Benoît Coueré, head of the Bank for International Settlements Innovation Hub (BISIH), in August 2020 where he noted that indeed, “We are in the middle of a revolution in payments” (Coueré, 2020).

Given the rise of the digital payments, it is increasingly important that we look to develop resilient and accessible central bank-operated payment infrastructures that can withstand a large range of shocks, including pandemics and cyber attacks (Coueré, 2020). This is especially important given that an expanded use of digital payments could fuel an increase in digital lending as companies accumulate consumer data and enhance credit analytics.

T

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