Overseeing The Digital Future: Supervising Cbdcs & Market Infrastructure Training Course

Introduction

The advent of Central Bank Digital Currencies (CBDCs) marks a significant evolution in monetary systems, presenting unique supervisory considerations for central banks and financial regulators. This cutting-edge training course is specifically designed to equip professionals with the essential knowledge and frameworks for effectively supervising CBDCs and their related market infrastructure. Participants will gain a comprehensive understanding of the design principles, issuance models, distribution mechanisms, and the crucial interactions of CBDCs with existing payment and settlement systems. Mastering the supervision of CBDCs and related market infrastructure is paramount for ensuring monetary sovereignty, financial stability, and efficient payment systems in the digital age.

This intensive training course delves into the intricacies of CBDC ecosystems, exploring various design choices, including wholesale and retail models, account-based and token-based structures, and the implications for privacy and data security. We will examine the critical aspects of CBDC issuance and distribution, as well as the necessary adaptations and oversight of payment and settlement systems to accommodate CBDC transactions. Participants will learn about the unique supervisory challenges related to cybersecurity, interoperability, legal frameworks, and the potential impact of CBDCs on monetary policy implementation and financial intermediation. The training course emphasizes a forward-looking approach to ensure robust and effective supervision of this transformative financial innovation.

Target Audience

• Central Bank Officials
• Payment System Supervisors
• Monetary Policy Analysts
• Financial Stability Experts
• Regulatory Technology (RegTech) Specialists
• Legal Professionals
• Cybersecurity Professionals

Course Objectives

• Understand the fundamental concepts, motivations, and design considerations for Central Bank Digital Currencies (CBDCs).
• Identify the unique supervisory challenges and risks associated with the issuance, distribution, and operation of CBDCs.
• Learn about different models for CBDC issuance (e.g., direct, indirect, hybrid) and their supervisory implications.
• Understand the interaction of CBDCs with existing payment and settlement systems and the necessary supervisory adaptations.
• Explore the cybersecurity risks specific to CBDCs and the frameworks for effective supervision in this domain.
• Analyze the legal and regulatory considerations for CBDCs, including their legal tender status and data privacy.
• Understand the potential impact of CBDCs on monetary policy implementation and the supervisory considerations thereof.
• Learn about the implications of CBDCs for financial intermediation and the supervision of banks and other financial institutions.
• Explore the interoperability challenges and supervisory approaches for ensuring seamless interaction between CBDCs and other payment systems.
• Understand the role of technology, including blockchain and distributed ledger technology (DLT), in CBDC infrastructure and its supervisory implications.
• Learn about international efforts and collaborations in exploring and supervising CBDCs.
• Develop frameworks for overseeing the data governance and privacy aspects of CBDC systems.
• Understand the supervisory considerations for different tiers of CBDC distribution and participation.

Duration

10 Days

Course content

Module 1: Introduction to Central Bank Digital Currencies (CBDCs)

• Defining Central Bank Digital Currencies (CBDCs) and differentiating them from physical cash and commercial bank digital money for your module.
• Exploring the motivations for central banks to consider issuing CBDCs (e.g., financial inclusion, payment efficiency, monetary sovereignty).
• Understanding the different design choices for CBDCs: wholesale vs. retail, account-based vs. token-based, interest-bearing vs. non-interest-bearing.
• Analyzing the potential benefits and risks associated with CBDC issuance from a central bank perspective.
• Examining the current global landscape of CBDC research, pilot projects, and live implementations.

Module 2: Unique Supervisory Challenges and Risks of CBDCs

• Identifying the novel supervisory challenges posed by the unique characteristics of CBDCs, such as their digital nature and potential for disintermediation for your module.
• Analyzing the specific risks related to cybersecurity, operational resilience, and potential for illicit use.
• Exploring the challenges of ensuring privacy and data protection in CBDC systems while maintaining traceability for AML/CFT purposes.
• Understanding the potential impact of CBDCs on the stability and efficiency of existing payment and settlement systems.
• Addressing the supervisory implications of different CBDC design choices on risk profiles.

Module 3: Models for CBDC Issuance and Their Supervisory Implications

• Examining the direct issuance model where the central bank is directly liable to CBDC holders and its supervisory considerations for your module.
• Analyzing the indirect or two-tiered model involving commercial banks as intermediaries and the implications for central bank oversight of these intermediaries.
• Exploring hybrid models that combine elements of direct and indirect issuance and their unique supervisory challenges.
• Understanding the role of authorized participants and their supervision in CBDC distribution.
• Evaluating the implications of different issuance models for monetary policy implementation and financial stability.

Module 4: Interaction of CBDCs with Payment and Settlement Systems

• Understanding how CBDCs will interact with existing retail and wholesale payment systems for your module.
• Analyzing the necessary adaptations and upgrades to payment infrastructure to accommodate CBDC transactions.
• Exploring the supervisory considerations for ensuring the interoperability and efficiency of CBDC payments.
• Addressing the potential impact of CBDCs on settlement finality and risk management in payment systems.
• Examining the role of central bank oversight in ensuring the smooth and secure integration of CBDCs.

Module 5: Cybersecurity Risks and Supervision of CBDCs

• Identifying the specific cybersecurity threats targeting CBDC systems, including hacking, fraud, and data breaches for your module.
• Understanding the critical importance of robust cybersecurity frameworks and controls for CBDC infrastructure.
• Exploring best practices in cybersecurity supervision for digital assets and payment systems.
• Analyzing the role of encryption, authentication, and other security measures in CBDC design and operation.
• Examining the supervisory expectations for incident response and recovery in the event of a cyberattack on CBDC infrastructure.

Module 6: Legal and Regulatory Considerations for CBDCs

• Analyzing the legal tender status of CBDCs and its implications for their acceptance and use for your module.
• Exploring the legal frameworks governing data privacy, consumer protection, and dispute resolution in the context of CBDCs.
• Understanding the application of anti-money laundering (AML) and counter-terrorist financing (CFT) regulations to CBDC transactions.
• Examining the legal implications of different CBDC design choices and issuance models.
• Addressing the cross-border legal and regulatory challenges associated with CBDCs.

Module 7: Impact of CBDCs on Monetary Policy and its Supervision

• Understanding how the issuance of CBDCs could affect the implementation of monetary policy instruments for your module.
• Analyzing the potential impact on central bank balance sheets and reserve management.
• Exploring the implications for interest rate transmission mechanisms.
• Examining the supervisory considerations for ensuring the smooth interaction between CBDCs and monetary policy operations.
• Addressing the potential for CBDCs to influence the demand for central bank reserves and commercial bank deposits.

Module 8: Implications of CBDCs for Financial Intermediation and its Supervision

• Analyzing the potential impact of CBDCs on the role of commercial banks and other financial intermediaries for your module.
• Exploring the risk of disintermediation and its implications for bank funding models.
• Understanding the supervisory considerations for ensuring a level playing field and managing competition between CBDCs and private digital money.
• Examining the potential for CBDCs to foster financial innovation and new business models.
• Addressing the implications for deposit insurance schemes and financial stability frameworks.

Module 9: Interoperability of CBDCs with Other Payment Systems

• Understanding the importance of interoperability between CBDCs and existing payment systems (e.g., card networks, mobile money) for user adoption and efficiency for your module.
• Exploring different approaches to achieving interoperability, such as common standards and application programming interfaces (APIs).
• Analyzing the supervisory challenges in ensuring seamless and secure interaction between diverse payment platforms.
• Understanding the role of international cooperation in promoting cross-border CBDC interoperability.
• Examining the potential for CBDCs to foster greater competition and innovation in the payments landscape.

Module 10: Technology and Infrastructure for CBDCs and their Supervision

• Exploring the technological options for CBDC infrastructure, including traditional centralized databases and distributed ledger technology (DLT) for your module.
• Understanding the trade-offs between different technological choices in terms of scalability, security, and efficiency.
• Analyzing the supervisory implications of different technological architectures.
• Examining the role of smart contracts and other advanced features in CBDC functionality.
• Understanding the technological requirements for effective CBDC supervision and monitoring.

Module 11: International Efforts and Collaboration on CBDCs

• Examining the ongoing research, pilot projects, and discussions on CBDCs among international organizations (e.g., BIS, IMF) and central banks globally for your module.
• Understanding the different motivations and approaches being taken by various jurisdictions.
• Analyzing the potential for international cooperation and the development of common standards for CBDCs.
• Exploring the implications of cross-border CBDC usage and the need for international regulatory coordination.
• Learning about initiatives aimed at fostering dialogue and knowledge sharing on CBDC development and supervision.

Module 12: Data Governance and Privacy in CBDC Systems

• Understanding the critical importance of data governance and privacy considerations in the design and supervision of CBDC systems for your module.
• Analyzing different approaches to balancing privacy with the need for traceability for AML/CFT purposes.
• Exploring the role of cryptographic techniques and other privacy-enhancing technologies.
• Examining the legal and regulatory frameworks governing data protection in the context of CBDCs.
• Understanding the supervisory expectations for data security, access controls, and auditability in CBDC infrastructure.

Module 13: Supervision of Different Tiers of CBDC Distribution and Participation

• Analyzing the supervisory considerations for direct CBDC issuance to the public versus indirect models involving intermediaries for your module.
• Understanding the implications of different levels of access and participation in CBDC systems.
• Exploring the supervisory requirements for commercial banks and other entities involved in CBDC distribution and handling.
• Addressing the potential for tiered access to CBDCs and its impact on financial inclusion and risk management.
• Examining the supervisory approaches for managing the risks associated with different types of CBDC users and intermediaries.

Module 14: Case Studies in CBDC Development and Supervision

• Analyzing real-world examples of CBDC pilot projects and live implementations, examining their design choices and supervisory approaches for your module.
• Understanding the specific challenges and lessons learned from these experiences.
• Exploring the regulatory responses and supervisory frameworks being developed in different jurisdictions.
• Discussing the impact of cultural, economic, and legal factors on CBDC design and supervision.
• Fostering interactive discussions and knowledge sharing based on practical examples.

Module 15: The Future of CBDCs and Their Supervision

• Discussing emerging trends and potential future developments in CBDC design, functionality, and adoption for your module.
• Exploring the potential for CBDCs to interact with other digital assets and decentralized finance (DeFi) ecosystems.
• Analyzing the long-term implications of CBDCs for the structure of the financial system and the role of central banks.
• Considering the future of international cooperation and the potential for cross-border CBDC usage.
• Fostering strategic thinking about the evolving landscape of CBDCs and the future of their supervision.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.