Digital Pound Lab now accepting applicants (BOE)

The Bank of England (BOE) is now accepting applications to conduct hands-on experimentation to explore the feasibility of different digital pound (DP) use cases in a simulated environment (no real customers or real money payments will be involved). Its goals include assessing the viability of potential business models for payment interface providers (PIPs) and external service Interface providers (ESIPs), and assessing the requirements necessary for a DP to provide a platform for innovation. The Lab is expected to run from August 2025 to July 2026, during which there will be two phases (see below). Applications are open to all private and public sector companies and organisations from technology, payments, banking, retail and other relevant sectors. [Read more at the BOE]

Brazilian Drex support from external partners wanes (Valor Economico)

Valor Economico is reporting that some of the firms involved in the Banco Central do Brasil Drex (BCB) wholesale central bank digital currency (CBDC) project are reducing resource commitments to it. This is reportedly due to frustrations with the BCB’s privacy requirements to hide transaction data from all the banks involved except the one that is executing it, while allowing the BCB to see everything and be able to reverse transaction with a court order to that effect. All this must be achieved without harming the digital currency’s programmability and composability allowed by its distributed ledger technology (DLT) based platform. [Read more at Valor Economico]

Ripple and SEC file joint motion to pause appeals (CoinDesk)

Ripple and the U.S. Securities and Exchange Commission (SEC) have filed a joint motion to pause their appeals to finalize a potential settlement in their legal spat. It goes back to December 2020, when the SEC sued the company over an alleged $1.3 billion unregistered securities offering. In 2023 Federal district judge Analisa Torres ordered Ripple to pay a $125 million fine which was significantly less than the $2 billion sought by the SEC. Hence, on October 10, 2024 SEC filed a notice of appeal and a week later Ripple responded with its own cross-appeal. [Read more on X]

Latvian central bank opens payment system to nonbanks (Fintechnews Baltic)

xpate, an electronic money institution licensed in Latvia, has become the first non-ank payment service provider to join the Latvijas Banka Electronic Clearing System (EKS). This marks the first instance within the euro area where a central bank has enabled direct participation of non-bank payment service providers in a system it maintains. As of October 17, 2024, Latvijas Banka has opened access to the EKS for licensed payment and electronic money institutions, as well as credit unions. [Read more at Latvijas Banka]

Leveraging tokenization for payments and financial transactions (BIS)

The Bank for International Settlements (BIS) Consultative Group on Innovation and the Digital Economy (CGIDE) published a paper on theoretical and real-world use cases of tokenization, which include initiatives run by the Central Bank of Brazil and the Central Bank of Colombia, and private sector-led initiatives discussed within the CGIDE during 2023-24. In addition to use cases and progress to date, the report also explores some preconditions and other considerations for tokenization. [Read more at the BIS]

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.