We’ve seen the failure of banks tied to crypto markets over the past week.
One by one the dominoes fell over Silvergate, Signature bank, and finally Silicon Valley
bank.
You know what this means?
Regulators especially in the US are going to use these failures to gaslight cryptocurrency
& attempt to usher in full control of crypto through a CBDC, central bank digital currency…their
attempt will be futile, but this narrative they will create will create opportunities
in the crypto markets…which coins will PUMP with news of CBDCs?
Find out in about ten minutes because it’s time for Chico Crypto!!
Yup under the cover of the implosion of the crypto markets, the United States FED has
been moving swiftly on a CBDC.
During the FTX collapse, in November of last year, the FED announced their plans.
Michelle Neal, Executive Vice President and Head of Markets of the Federal Reserve Bank
of New York, spoke at the Singapore Fintech Festival with a speech titled “Advances
in digital currency experimentation” and this is what she said.
“In the remainder of my remarks, I'd like to focus on an example of ongoing innovation
research that is currently underway at the Federal Reserve Bank of New York.
Project Cedar is the inaugural project of the NYIC and represents the first stage of
the NYIC's research efforts into CBDCs, the NYIC's biggest focus area in 2022.
A goal of the NYIC is to progress CBDC research with an objective of defining a technical
design for a CBDC addressing the wholesale market in the Federal Reserve context.
The NYIC developed a hypothesis that there is a distributed ledger technology solution
for wholesale FX settlement that results in instant and atomic settlement in which a wholesale
CBDC is the settlement asset.
NYIC then built a working prototype and tested it.
Results from the experiment indicated that settlement could occur in fewer than 10 seconds
on average and that horizontal scaling was possible.”
The New York Fed has even put out a full whitepaper on Project Cedar diving into the solution
concept and the results of their testing.
Now, this was just phase one of the pilot, in November they also announced plans for
phase 2 in November.
As we can see from this press release, phase 2 of project Cedar would be a collaboration
between the New York Fed and Singapore’s monetary authority.
From this press release Michelle Neal said this about the second phase “Building off
Phase I, the Project Cedar Phase II x Ubin+ collaboration will provide further visibility
into the functionality and interoperability of multi-currency ledger networks utilizing
their own unique designs.”
It’s about “interoperability” …aka the US’s CBDC working with Singapore’s
design, aka cross chain messaging.
Who could be helping provide this??
Well a proof of concept was announced also around this same time, members of the US banking
sector and the New York FED were aiming to test a digital asset settlement platform and
we can see from the article is an “interoperable digital money platform known as the regulated
liability network” Interoperability…and who was working on
this besides the big banks and the FED?
The article says “. The technology is being provided by SETL with Digital Asset, powered
by Amazon Web Services.
Swift, the global financial messaging service provider, is also participating in the initiative
to support interoperability across the international financial ecosystem.”
How is SWIFT going to get different blockchain ledgers to communicate with each other?
To be interoperable?
With Chainlink of course…it was announced in September of last year “SWIFT was partnering
With Crypto Data Provider Chainlink with their Cross-Chain Protocol” and the article states
“CCIP, chainlinks cross chain protocol, will enable SWIFT messages to instruct on-chain
token transfers, helping the interbank network to be able to communicate across all blockchain
environments.”
Now…going back to the article on the digital asset settlement platform created with SWIFT
and banks…we can see it was a proof of concept that would last 12 weeks, and the announcement
of the POC happened in early November…
That must mean the POC is close to ending right?
We should be getting details about the results….well you would be correct.
SWIFT posted this week about the successful testing.
The article states “We’ve now tested that solution in a sandbox environment with 18
central and commercial banks.
Participants expressed strong support for the solution’s continued development, noting
that it enabled seamless exchange of CBDCs, even those built on different platforms.
During the 12-week collaborative testing period, participants processed a total of 4,736 transactions
between the Quorum and Corda blockchain networks, and between Corda and a fiat currency.
Now why is this important??
Which blockchains and how many were used during this POC?
Well it will give us insight into which blockchain technologies were used.
Kaliedo, the blockchain development company posted this article “Kaleido Enables Swift’s
New CBDC Sandbox with Broad Industry Participation” and the article says “The live sandbox developed
for Swift by Kaleido hosts 18 central banks and commercial banks to help define the future
of CBDCs in cross-border payments.
The sandbox demonstrates that CBDC-initiated cross-border payments can plug into Swift’s
enhanced platform exactly as real-time gross settlement payments do.
This is facilitated using Swift's newly designed CBDC connector gateway.
In the sandbox, Kaleido facilitates two independent simulated national CBDC networks with a central
bank and commercial banks operating nodes on the network.”
Remember, SWIFT said they were using two blockchains, Quorum and Corda…Kaleido is facilitating
transactions between 2 CBDC networks…aka Kaleido is a key component of the development
of this for SWIFT and the banks.
Guess who is a key component of Kaleido and the enterprise solutions they’ve created…Chainlink!!
As we can see…all the way back in November of 2018, Kaliedo picked Chainlink to Provide
Oracle Services for their Blockchain Business Cloud
And Kaliedo has given a demo on using chainlink oracles for their blockchain environment they
can create…let’s watch now….
As we can see the 2 blockchain environments chainlink works with are corda…1 of the
2 used in the SWIFT POC, and Ethereum…but as we can see it’s a permissioned Ethereum…is
it Quorum the second one SWIFT is using?
Let's continue…
So my friends…this is basically proof Chainlink is being used in this SWIFT cbdc POC and sandbox.
If they are using Kaliedo, they are using Chainlink’s oracles for the smart contracts
to interoperate.
I think something may be in the pipeline for Chainlink, and very soon.
Founder of Chainlink Sergey Nazarov was on the ChainlinkGod Podcast just a couple days
ago…here’s what he said about this month, March…
Sergey is for some reason extremely excited about March, laughing…saying it just makes
sense for the “markets” to boom….hmmmmm!???
So my friends…an American CBDC from my research would likely use Ethereum technology and Chainlink
oracles, but if we got back to Project Cedar Phase 2 article…it was a collaboration between
2 countries….the USA and Singapore, through their Monetary Authority…
What could Singapore be working with?
Well in June of last 2021, the Monetary Authority announced a challenge to the public….a CBDC
solution challenge.
They were looking for design solutions for their own CBDC…
From this report on the challenge we can see over 300 proposals were submitted from all
around the world..and out of the finalists picked we get some insight into the best teams
building CBDCs across the globe who are in the crypto markets with a token…
One of their finalists was Soramitsu…the founders of the Sora Network, XOR.
From the profile on Sora they say “Soramitsu is the developer of the open source blockchain
Hyperledger Iroha.
Together with the National Bank of Cambodia, Soramitsu developed Bakong, a hyperledger
Iroha based payment infrastructure and digital currency live in the market since 2019.
Soramitsu has developed a full featured, two-tiered CBDC system based on Hyperledger Iroha, which
is production ready.
“
Ethereum, Chainlink, and Sora Network are the CBDC narrative coins.
I don’t like CBDCs I just call it like I see it.
Cheers I’ll see you next time!