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A collaborative initiative dubbed Project Sela sought to test and develop a central bank digital currency (CBDC) suited for mass retail use. 
The Bank for International Settlements (BIS), Hong Kong’s Monetary Authority (HKMA), and the Bank of Israel proved the feasibility of a secure retail central bank digital currency (rCBDC), according to an update shared on Sep. 12.&nbsp; 
A joint experiment coordinated by the BIS named “Project Sela” <a href="https://www.bis.org/about/bisih/topics/cbdc/sela.htm" target="_blank" rel="noopener noreferrer nofollow">reportedly</a> demonstrated an rCBDC capable of providing fiat currency advantages without jeopardizing cyber security, user privacy, and easy accessibility. 
Project Sela tapped the Israeli Central Bank’s ongoing work on a digital shekel and the HKMA’s case study on a possible e-Hong Kong dollar.&nbsp; 
Head of the BIS Innovation Hub Hong Kong Centre, Bénédicte Nolens, noted that the joint project introduced a new CBDC intermediary system called “Access Enabler.”&nbsp; 
According to Nolens, Access Enabler mitigates liquidity and settlement concerns by never holding users’ rCBDCs on its own balance sheet. Nolens also said the feature should slash the costs of running blockchain-based payment services. 
Howard Lee, deputy chief executive of the HKMA, said Project Sela could aid Hong Kong’s progress on its government-issued digital currency.&nbsp; 
Apex banks from other countries will leverage Sela’s findings in building their own CDBD infrastructure and ecosystem, Lee added. 
<blockquote class="wp-block-quote"> 
 …the project proved the feasibility of the model we had in mind. If central bank money is to go digital, cybersecurity is key, and the project provided an opportunity to discuss and study cybersecurity elements of CBDC with our partners. <cite>Andrew Abir, deputy governor of the Bank of Israel</cite> 
</blockquote> 
 You might also like: <a href="https://crypto.news/india-explores-new-features-for-cbdc-amid-weak-retail-activity/" rel="noopener noreferrer nofollow"> India explores new features for CBDC amid weak retail activity </a> 
<h2 class="wp-block-heading" id="cbdcs-worldwide">CBDCs worldwide </h2> 
CBDCs are digital representations of fiat currencies issued by sovereign governments or central banks.&nbsp;The concept dates back to around 1985 and was mentioned in a financial paper written by James Tobin. 
US policymakers like Republican representative French Hill remain strongly <a href="https://crypto.news/policymaker-us-doesnt-need-a-retail-cbdc/" rel="noopener noreferrer nofollow">opposed</a> to retail CBDCs, citing broad risks to the American financial system.&nbsp; 
Federal Reserve governor Michelle W. Bowman echoed similar remarks in April 2023 and said potential CBDC concerns <a href="https://crypto.news/federal-reserve-official-says-cbdc-risks-outweigh-benefits/" rel="noopener noreferrer nofollow">outweigh</a> the benefits. 
Countries like China, Jamaica, and Nigeria have <a href="https://crypto.news/bahamas-jamaica-and-nigeria-pioneer-cbdc-adoption/" rel="noopener noreferrer nofollow">launched</a> their respective CBDCs despite arguments that government-controlled virtual currencies defeat the purpose of crypto and decentralized finance (defi), which is to provide near-instant value exchange without the need for centralized oversight. 
 Read more: <a href="https://crypto.news/the-rise-of-cbdcs-is-inevitable-but-not-risk-free-opinion/" rel="noopener noreferrer nofollow"> The rise of CBDCs is inevitable but not risk-free | Opinion </a>

BIS, Hong Kong, Israeli Central Bank join forces to launch retail CBDC

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