Fintech Company Launches Platform to Assist in Central Bank Digital Currency Development

Fintech company EMTECH is launching a compliance platform that helps central banks tackle compliance issues or safely test their central bank digital currencies (CBDC) in partnership with Microsoft, the firm announced Monday. 

“It is a regulator-based solution that allows central banks to seamlessly introduce CBDCs,” Carmelle Cadet, EMTECH co-founder and CEO, told CoinDesk. 

According to Cadet, the goal of EMTECH’s Modern Central Bank Sandbox is to assist central banks in setting up a digital currency that is interoperable, meaning it can easily be converted to other cryptocurrencies and are compatible with payment devices and terminals across the world.  

With the government of China closing in on issuing its own digital yuan, a number of large economies around the world including South Korea and Sweden have begun working on their own CBDCs. But according to the Bank of International Settlements, emerging economies report stronger motivations for developing national digital currencies as they could help address systemic issues like financial exclusion and payments inefficiencies.    

Cadet said the firm is actively working with the Central Bank of Bahamas on the digital sand dollar, a project to issue a digital equivalent of the Bahamian dollar.  

U.S.-based EMTECH competed against other fintechs to work with the Bahamas’ digital currency, Cadet added. The Caribbean nation’s central bank piloted its CBDC late last year. The Bahamas launched the sand dollar in October 2020.  

The project appears to be in early stages, according to a spokesperson for the Central Bank of the Bahamas.

“EMTECH’s involvement in the project is limited to architecting our cross-border minimal viable product (MVP), which remains a work in progress,” a spokesperson for the Central Bank of the Bahamas told CoinDesk via an email. 

Cloud computing platform Microsoft Azure has partnered with EMTECH to deploy pilot programs as the firm continues to work on engaging central banks interested in issuing CBDCs, Cadet said. 

“We look forward to helping EMTECH on its global mission to enable accelerated central bank digital innovation, harnessed on Microsoft’s highly secure, compliant and scalable Azure platform,” said Chris Lwanga, principal director of software partnerships at Microsoft, in the announcement. 

Cadet explained her research has shown central banks are keen on introducing national digital currencies but they often work behind closed doors. 

“If they build it internally, not thinking about interoperability, is probably going to fail when it comes out,” Cadet said.

The EMTECH leadership team includes Diane R. Maurice, a finance industry regulator with an extensive portfolio of risk management duties and who served at the Federal Reserve, the U.S Treasury Department, and the Central Bank of Tunisia.