The Reserve Bank of New Zealand (RBNZ) published the results of a public consultation on New Zealanders’ views on a potential central bank digital currency (CBDC). The vast majority of respondents expressed concern about the potential for government control, privacy, traceability, and autonomy. Many feared “Digital Cash” will be used to facilitate unacceptable intrusion into their privacy or social control, even if it is not originally designed to do so. In that regard, they want assurance that the RBNZ will continue to issue physical cash. In response, the RBNZ said that it remains committed to a privacy-centric design for Digital Cash subject to financial integrity considerations. [Read more at the RBNZ]
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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.
The Bank of England (BoE) published a joint report with MIT Digital Currency Initiative (DCI) on how privacy enhancing technologies (PETs) could be used to enhance the privacy of a potential digital pound. The paper focused on pseudonymization, zero-knowledge proofs, and secure multiparty computing. It found that these technologies present opportunities for a central bank digital currency (CBDC) to be at least as private as current forms of digital money and potentially even more private as they mature. While PETs, on their own, do not guarantee privacy, the approaches explored in this paper seek to safeguard consumers’ private information, enable compliance with existing regulations, and strengthen trust and confidence in a digital pound, should one be launched in the future. [Read more at the MIT DCI]
A paper co-written by a European Central Bank (ECB) staffer suggests required fungibility conditions for reserve asset-backed stablecoins issued by different issuers on different platforms. These include interoperable payment and settlement technologies, payment settlement finality, and seamless stablecoin convertibility into the quasi-ultimate means of payment (e.g., central bank money). Also, issuers should have sufficiently strong liquidity and capital positions to meet redemption obligations, including to cover potential variations in liquid off-chain asset price volatility. [Read more at SSRN]
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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.
The Securities Industry and Financial Markets Association (SIFMA) published the results of Regulated Settlement Network (RSN) proof-of-concept that explored the possibilities for shared ledger-based digital settlement using U.S. Treasury securities and tokenized cash. It found that multi-asset and cross-network settlement could be enhanced through a shared-ledger financial market infrastructure (FMI) that contains tokenized securities, central bank deposits, and commercial bank deposits where each institution operates its own partition. The network enabled a common settlement infrastructure that is 24/7, programmable, and offered precise settlement capabilities to allow financial institutions to optimize their collateral and liquidity positions. At the same time, the network alleviated challenges such as market fragmentation and uncertainty throughout the settlement process. [Read more at SIFMA]
Former FT Alphaville columnist Izabella Kaminska provided a brief and critical history of the Financial Action Task Force (FATF). She shows how, what began as a tool for financial integrity has morphed into unchecked economic control, undermining civil liberties and the principle of monetary neutrality, without any proof that it meaningfully reduces any of the criminal activity it was tasked to reduce. None of this is big news. See for example, Ronald Pol’s aptly titled “Anti-money laundering: The world’s least effective policy experiment?” [Read more at Threadreader]
The Bank for International Settlements (BIS) and its central bank partners demonstrated that regulatory compliance can be embedded in cross-border transaction protocols. Project Mandala, which has reached proof-of-concept stage, aims to automate compliance procedures, enhance transparency of country-specific policies and provide real-time reporting and monitoring for regulators and supervisors. This architecture integrates a peer-to-peer messaging system, rules engine and proof engine. It ensures that all necessary compliance checks have been completed before the payment instruction is initiated, after which the system automatically generates a compliance proof, which accompanies any digital settlement asset or payment instructions across borders. [Read more at the BIS]
A paper co-written by a Deutsche Bundesbank staffer conducts a quantitative analysis to calculate a potential digital euro holding limit. It draws on a detailed dataset including individual bank level as well as aggregated banking group data for the entire euro area. It uses data and a simulation approach on the number of accounts in individual institutions and on account balance distribution. To assess the De impact on banks, the analysis is conducted for two different points in time reflecting different monetary policy environments with accommodative and restrictive stance. The effects of the CBDC are considered in three holding limit scenarios. The calculations reveal a lower bound holding limit of around 1,000 euro that almost all banks can handle. The results show a strong heterogeneity between the various euro area banks, as many could offer significantly higher limits. For the implementation of holding limits, the paper therefore proposes a model that has a low mandatory limit which every institution must offer, while providers can decide for themselves whether they like to offer a higher limit depending on their individual situation and customer base, subject to an approval process. [Download the paper at SSRN]
Sponsored Content:
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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.
Bangko Sentral ng Pilipinas and participating financial institutions (FIs) have completed proof-of-concept work on Project Agila. Agila allow FIs to transfer funds to each other even during off-business hours, including evenings, weekends, and holidays, using wholesale central bank digital currency (CBDC). The evaluation with FIs covered functional, performance, security, exploratory, end-to-end and programmability testing. [Read more at the BSP]
The European Central Bank (ECB) concluded its tests of the use of distributed ledger technology (DLT) for wholesale settlement in central bank money. Between May and November 2024, the Eurosystem processed over 200 transactions and a total value of €1.59 billion. In total, 64 participants comprising central banks, financial market participants and DLT operators completed over 40 trials and experiments. Trials included actual settlement in central bank money, while experiments were tests with mock settlement. In January 2025, participants involved in the exploratory work will be invited to discuss lessons learned from the trials and experiments. The outcome of the analysis will inform the Eurosystem’s decision on its next steps. [Read more at the ECB]
As part of the ECB wholesale DLT settlement trials using central bank money, HQLAᵡ was involved in an intraday repo transaction where Goldman Sachs borrowed cash from Clearstream in exchange for collateral held on the HQLAᵡ DLT platform. HQLAᵡ is a collateral mobility solution in which assets held by custodians are locked and digitized in the HQLAᵡ digital collateral registry, with the legal agreements enabling collateral to transfer instantly using DLT. In this case, the cash leg of the transaction used the Bundesbank’s Trigger solution. The trades were agreed via the Eurex Repo F7 trading system, and Deutsche Börse’s Clearstream D7 digital securities platform was used as the market system operator. [Read more at Ledger Insights]
The Bank for International Settlements (BIS) published a paper that analyzes how retail CBDC and fast payment systems (FPSs) compare with each other and why some jurisdictions have opted for a retail CBDC, while others have chosen to introduce an FPS or both. Interviews with central banks in 14 jurisdictions around the world show that some see a case for both to fulfil different policy goals and complement one another. The paper’s key conclusion is that the choice between a retail CBDC or an FPS, or both, is very contextual and will depend on the market features, ecosystem and degree of maturity and innovation of existing payment infrastructures in a country. [Read more at the BIS]
Banco de España published a paper that explores the financial stability nexus within a monetary ecosystem that has been expanded to include a CBDC. It highlights the importance of partially adapting the two-tier system of money by implementing certain limits, as envisaged in CBDC plans. The endogenous mitigation of the risks through improved bank competition often attributed to CBDCs is uncertain and may be insufficient from a systemic risk perspective. The introduction of exogenous mitigants, like CBDC holding limits calibrated on the basis of a robust methodology, seems instrumental to ensure the consistency of a monetary ecosystem that includes a CBDC. Hence, the paper addresses some fundamental methodological issues related to these limits, such as the rationale for alternative targets for the limits, the influence of disintermediation speed, the time horizons involved in the limitation and adaptation process, and the role of regulatory and market frictions. [Read more at Banco de España]
Sponsored Content:
Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.
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.
At least 105 central banks have recently launched, piloted, experimented with and/or researched retail central bank digital currency (CBDC) not including two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). (I say “at least” because I only track on the basis of publicly-available information from reliable sources, ideally the central banks themselves.) This total is unchanged from the end of September 2024. Keep in mind that I don’t count all of the individual national central banks that are part of currency unions (e.g., the European or Eastern Caribbean Currency Unions). If I did the tally that way, my count would be around the oft-quoted 130+ central banks. Also, the table was compiled from publicly available sources, including the media and central bank websites, and not verified through official channels. If I’m missing anything, or you find mistakes in the tabulation, please let me know in the comments!
Notes: The difference between a “pilot” and “proof of concept” (POC) is that a pilot involves actual users, whereas a POC does not, even though some POCs may involve central bank staff. Also, because the tabulation is based only on publicly-available information, it is likely that there is some POC activity in the “research” category, but no announcements have been made. Finally, entries that are crossed through indicate that the projects have been shut down. Also, the ones that are crossed out, are where the central bank has considered issuing CBDC but then decided to cancel the research or put it on hold (“watchful waiting”).
Also, I’ve migrated a bunch of posts from the “Fintech Intelligencer” blog that Sonja Davidovic and I used to run, so there may be a bunch of very outdated material spewing out below (or maybe not). Please ignore them, as I have little control over what my Mailchimp robot picks up and mails out.
105 central banks have recently launched, piloted, experimented with and/or researched retail central bank digital currency (CBDC) not including two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). This total is unchanged from the end of September 2024. Keep in mind that I don’t count all of the individual national central banks that are part of currency unions (e.g., the European or Eastern Caribbean Currency Unions). If I did the tally that way, my count would be around the oft-quoted 130+ central banks. Also, the table was compiled from publicly available sources, including the media and central bank websites, and not verified through official channels. If I’m missing anything, or you find mistakes in the tabulation, please let me know in the comments!
Notes: The difference between a “pilot” and “proof of concept” (POC) is that a pilot involves actual users, whereas a POC does not, even though some POCs may involve central bank staff. Also, because the tabulation is based only on publicly-available information, it is likely that there is some POC activity in the “research” category, but no announcements have been made. Finally, entries that are crossed through indicate that the projects have been shut down. Also, the ones that are crossed out, are where the central bank has considered issuing CBDC but then decided to cancel the research or put it on hold (“watchful waiting”).
The European Central Bank (ECB) published its 2nd progress report on the preparation phase of a digital euro, which was launched on November 1, 2023. Since the publication of the 1st progress report, the ECB has updated its digital euro scheme rulebook, aimed at harmonizing digital euro payments across the euro area. Also, the ECB has concluded a call for applications for selecting potential providers of digital euro components and related services, and started user research and experimentation activities, to gather insights into users’ preferences and to inform design decision-making. In addition, along with with key stakeholders, the ECB will be exploring innovative use cases for the digital euro, including conditional payments. In parallel, the ECB is working with Eurosystem national central banks and other competent authorities to develop a methodology for setting digital euro holding limits. [Read more at the ECB]
Michael Salmony posted a paper that explores the challenges and opportunities related to the adoption of central bank digital currencies (CBDCs) with a particular focus on the Digital Euro. It critically addresses the often unclear problems CBDCs are intended to solve, and emphasizes the necessity of motivating key stakeholders, especially commercial banks, consumers, and merchants, to support and use them. It argues that simply mandating adoption is insufficient for success; instead, intrinsic motivation and clear business cases for each stakeholder group are essential. Additionally, the article proposes that an offline CBDC, resembling a modern form of cash, might offer a viable path forward, providing benefits such as increased financial inclusion and enhanced privacy. [Read more at ResearchGate]
David Marcus, the former head of Diem (formerly Libra) at Meta, posted the chain of events that led to the death of the Diem blockchain-based payment network that was announced in 2019. According to his timeline, after two years of negotiations with regulators, they got to the cusp of approval by the U.S. Federal Reserve (Fed) of a limited rollout. However, the Fed got “cold feet” about the project, allegedly on warnings from Treasury Secretary Janet Yellen that it would be “political suicide” to approve it. Shortly thereafter, letters went out from U.S. government authorities to all the regulated Diem’s partners to expect a high level of scrutiny on all payment activities. At that point, partners started to dropped their support and Diem eventually folded in 2022. Marcus’s statements come after allegations of tech founders being debanked as part of the U.S. authorities’ “Operation Chokepoint 2.0”. [Read more at X]
Sponsored Content:
Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.
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.
