Future of Payments 2024: Many Paths, One Goal (OMFIF)

The Official Monetary and Financial Institutions Forum (OMFIF) Digital Monetary Institute (DMI) published its annual Future of Payments report, based on a survey of 34 central banks, 13 from advanced and 21 from emerging market economies. It found that platforms based on multi-currency central bank digital currencies (CBDCs) are emerging as alternatives to existing cross-border payments systems, with Project mBridge being the most advanced, although liquidity issues and governance concerns still pose limitations for widespread adoption. CBDC interoperability will be a key consideration for global payments going forward, with a hub-and-spoke model being favored by survey respondents. Standardization (e.g., migrating to ISO 20022 standards) is helping to reduce the costs and frictions in cross-border payments, but implementation is patchy. However, instant payments systems are rapidly growing in importance, with 47% of survey respondents selecting it as the most promising avenue for improving cross-border payments. [Read more at OMFIF]

Swedish payments infrastructure priorities in a rapidly changing payment landscape (Riksbank)

Sveriges Riksbank published an independent assessment of the Swedish payments system, aiming to gaps in available services and to suggest some possible directions/opportunities for the system’s evolution. It concluded that enabling a wider range of instant (or real-time) account-to-account payments should be a high priority for banks and the payments industry, in addition to the work underway to modernize Swedish bulk/batch payments. Also, the report recommends that, “although the case for a retail central bank digital currency (CBDC) is probably stronger in Sweden than in most other advanced economies”, the best strategy for the Riksbank is to step back but be ready to be a “fast follower” of a digital euro launch, “possibly either using the European Central Bank’s infrastructure or borrowing heavily from its design”. [Read more at the Riksbank]

Third meeting of the Bank of Japan CBDC Forum (BOJ)

The Bank of Japan (BOJ) published an English version of the slides presented at the October 17, 2024 meeting of its CBDC Forum. The BOJ provided an update on the development of the prototype system details of the system, and updates on progress made by different working groups. Since April 2023, the BOJ has been conducting technical evaluations not explored in the earlier proof of concept phase, while leveraging the skills and insights of private businesses. [Read more at the BOJ]

Norwegian krone added to Eurosystem’s TIPS instant payment service (ECB)

The European Central Bank (ECB) and Norges Bank signed an agreement for Norway to join the Eurosystem’s TARGET Instant Payment Settlement (TIPS) service. This will make the Norwegian krone the fourth currency available for settlement in TIPS, in addition to the euro, the Swedish krona and the Danish krone, which is scheduled to join in April 2025. The inclusion of the Norwegian krone in TIPS, which is part of the Eurosystem’s TARGET Services, is planned for the first half of 2028 and will enable market participants in Norway to settle payments instantly, around the clock and in central bank money. [Read more at the ECB]

European Digital Identity Framework implementing acts (EC)

The European Commission (EC) published for consultation the European Digital Identity Framework implementing acts, published in August 2024, which have now been adopted by the EC. The Framework seeks to give citizens and businesses a trusted and secure means of digital identification that works across all Member States via the means of European Union (EU) Digital Identity Wallets. It entered into force in May 2024. Each Member State will offer at least one version of the EU Digital Identity Wallet, built to the same common specifications, by 2026. [Read more at the EC]

Call for candidates to contribute to the digital euro brand rules (ECB)

The ECB is inviting leading experts in branding and communication with advanced knowledge of payments and digital money to contribute to the brand rules workstream. This workstream is the part of the Rulebook Development Group that is to develop a proposal for brand rules that participants in the digital euro scheme, i.e. supervised payment service providers (PSPs), will adopt for their end-user solutions. This excludes brand strategy, expression and the visual identity of the digital euro. [Read more at the ECB]

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Upcoming Speaking Engagements:

• Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.