Binur Zhalenov, Chief Digital Officer of the National Bank of Kazakhstan provided an update on the central bank’s digital tenge R3 Corda-based digital currency (CBDC) pilot project. The project centers on programmable public finance—enabling conditional, automated fund disbursement in government spending. In this model, allocated funds (such as those for infrastructure contracts) proceed through the payment chain only when predefined criteria are satisfied: supplier licensing, price compliance, and project plan alignment. Funds that fail verification are automatically blocked, while those reaching final recipients convert to unrestricted currency. The framework extends to social welfare payments, where beneficiary verification triggers direct payment to service providers, and to transaction types such as vehicle purchases. The team currently collaborates with the Ministry of Finance and Treasury on approximately 100 implementation projects applying these conditional “purpose-bound” payment mechanisms. [Source: LinkedIn]
Reserve Bank of India (RBI) Governor Shri Sanjay Malhotra announced that the central bank has conceptualised the Unified Markets Interface (UMI), as a next-generation financial market infrastructure. UMI will have the capability to tokenize financial assets and settlements using wholesale central bank’s digital currency (CBDC). He said that early results from the inaugural pilot on the issuance of certificates of deposit in improving market efficiency are encouraging. [Source: RBI]
G+D’s Lars Hupel posted a paper that explores the design and financial implications of offline payment functionality in the context of CBDCs and other payment systems, such as instant payment systems (IPS). The analysis is structured around three models: the classic CBDC (single central bank issuer), a multi-issuer system (commercial banks issue their own offline “digital cash”), and a single-issuer model operated by a private or non-central bank entity. The core argument is that while offline payments are desirable—and well understood for central bank-issued digital cash—adding offline capability to systems with multiple issuers introduces financial risks and complexities, primarily concerning the fungibility of liabilities and interbank settlement. Drawing on historical examples like Mondex, the paper suggests a single-issuer model is most practical, offering the advantages of offline payments without overburdening central banks or complicating risk management. The analysis is informed by the “money view,” which emphasizes the hierarchy of money and careful consideration of balance sheet mechanics for each model. [Source: LinkedIn]
Upcoming Speaking Engagements:
Stablecoin C-Suite Summit (New York City on November 14-15) will be the definitive conference for exploring the future of digital money and intelligent payments. The event brings together founders, C-level executives, investors, policymakers, and developers for two immersive days of talks, panels, and networking. This be the place to be if you’re building, backing, or regulating the next wave of programmable finance. [Register here]
The Digital Euro Conference 2026 (Frankfurt, March 26) will explore the future of money with a focus on CBDCs, stablecoins, and commercial bank tokens. This hybrid event offers the perfect platform to understand the future of digital money! When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [register here]
I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.
The European Central Bank (ECB) has selected service providers for five key components of the digital euro project, following a call for applications and tender process. However, the actual development of components will only proceed pending adoption of the Digital Euro Regulation and further ECB Governing Council decisions. No payments have been made yet, and the agreements include safeguards to adapt to possible legislative changes. Framework agreements have been signed for: (i) alias lookup (Sapient and Tremend Software Consulting), (ii) risk and fraud management (Feedzai), (iii) app and software development kit (SDK) development (Almaviva and Fabrick), (iv) offline payment solutions (Giesecke+Devrient), and (v) secure exchange of payment information (Senacor). Service requests will initially be directed to the above providers, but second-ranked providers may be approached if required (see press release for full list). [Source: ECB]
Upcoming Speaking Engagements:
Stablecoin C-Suite Summit (New York City on November 14-15) will be the definitive conference for exploring the future of digital money and intelligent payments. The event brings together founders, C-level executives, investors, policymakers, and developers for two immersive days of talks, panels, and networking. This be the place to be if you’re building, backing, or regulating the next wave of programmable finance. [Register here]
The Digital Euro Conference 2026 (Frankfurt, March 26) will explore the future of money with a focus on CBDCs, stablecoins, and commercial bank tokens. This hybrid event offers the perfect platform to understand the future of digital money! When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [register here]
I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.
This is a special sponsored edition of the Kiffmeister Chronicles. The note below presents the Crunchfish Digital Cash (CDC) Layer-2 (L2) solution as a viable augmentation to a central bank digital currency (CBDC) payment system with its novel packet-switched architecture delivered by a modular and cost-effective architecture. [Download the PDF version here]. Also, SODA’s Chris Ostrowski and Crunchfish’s Joachim Samuelsson discuss it in a podcast here.
The future of digital payments hinges on balancing cost, resilience, and seamless integration, bridging traditional infrastructure gaps while gearing solutions for next-generation financial landscapes. This note highlights Crunchfish Digital Cash (CDC) as a viable augmentation to a central bank digital currency (CBDC) payment system with its novel packet-switched architecture delivered by a modular and cost- effective architecture providing any underlying payment system with multiple desired design features.
Crunchfish is rethinking payments in all shapes and forms – online, offline, and even cash payments. This note briefly describes the Crunchfish Digital Cash (CDC) Layer-2 (L2) payment solution and how it augments CBDC Layer-1 (L1) systems with multiple desirable design features, such as resilience, privacy, security, scalability, interoperability, universality, seamlessness, and cost effectiveness.
Central banks are almost unanimous in their view that the ability of a CBDC to function offline is not merely a technical consideration but a key requirement. And that has spawned a growing literature on the topic from the official sector, the latest addition to which is a recently published IMF Fintech Note . However, like many other papers on offline payments, it focuses mainly on Wallet-to-Wallet considerations and gives only a light touch to the “plumbing” by which wallets interact and reconcile with online “core” ledgers. Although many vendors of offline payment solutions say that their platforms allow for indefinite operation offline, central banks are insisting that Wallets be regularly reconciled with the central ledger, to mitigate double spending risk and for financial integrity risk monitoring purposes. This note aims to rectify this omission, focusing on Crunchfish’s patented CDC L2 solution.[1]
Introducing CDC: Reserve, Pay, Settle
CDC uses a Reserve, Pay and Settle approach (RPS) that assigns a value to a Wallet, reserved on the central ledger, that limits the amount a user can pay offline. To initiate an offline payment, the payer generates and transmits a cryptographically signed digital IOU (“I owe you”) to the payee for an amount that accumulated, may not exceed the reserved value. The digital IOU can be validated by the payee in offline mode, and the digital credit amount may be used by the payee to make further offline payments, without synchronizing online. When either party goes online to synchronize their ledgers the digital IOUs are also validated in a Gateway before committing it on L1. This triggers a transfer of value on the central ledger from the payer’s reservation to the payee.
Recently, the Bank of Canada opined favorably on the MIT Digital Currency Initiative’s OpenCBDC two-phase commit (2PC) retail CBDC architecture. Like Crunchfish’s RPS approach, 2PC transaction processing involves a core system update (corresponding to the RPS L1) and a wallet-to-wallet transfer (L2), with a “sentinel” checking the integrity of wallet-to-wallet transactions before core system processing. CDC L2 generalizes 2PC by also supporting offline payments.. Crunchfish’s RPS approach has been trialled by the Swedish Riksbank, albeit on cards only, in the fourth and last phase of the e-krona project. In general, the payment industry should be no stranger to Crunchfish’s approach as it is a generalization of card payments and smart contracts.
CDC is agnostic as to whether the Wallet is implemented in a hardware secure element (HSE) or a software-based virtual secure element (VSE). The security and scalability implications of this choice was discussed in the IMF Fintech Note and summarized in Table 2 . It should be noted that HSE-based solutions are challenging to scale as no ecosystem exists to deploy and upgrade a trusted payment application across multiple mobile device models and multiple mobile network operators. This is contrasted by the easy deployment and upgrading of VSE-based trusted payment applications using standard app store ecosystems, plus the lower cost. Also, the security level for a VSE-based trusted payment application is homogeneous across mobile device models and only dependent on the isolating runtime layer provided by the integrated VSE, that mitigates double spending risks. CDC’s Wallets are therefore implemented currently using a VSE security foundation.
CDC is an approved offline payment solution by the Reserve Bank of India for regulated entities since 2023 and Crunchfish is working with the National Payments Corporation of India to introduce Terminals into their payment networks. Also, Crunchfish is participating in the European Central Bank’s digital euro innovation platform demonstrating three offline payment use cases with online settlement as an implementation of conditional payments, also known as smart contracts .
There are however many additional aspects that define how implementable a CBDC offline solution is in practice than just discussing the use of hardware vs. software-based secure elements. The rest of this note highlights such differences by contrasting Crunchfish’s CDC with CBDC L1 systems.
Beyond Wallets: CDC as a Holistic Solution
CDC is built with Wallets, Terminals, and Gateway components with the purpose of mitigating inherent vulnerabilities in underlying L1 payment systems. It is designed to respect the roles and responsibilities of payment networks and service providers. Whereas payment service providers equip users with Wallets to initiate and make payments, payment networks need Terminals and Gateways to receive and accept payments. This clear separation of an offline payment system allows for flexibility, scalability, and healthy market competition by ecosystem participants and protects the integrity of the CBDC payment system from Wallet transactions initiated off the central ledger.
CDC allows homogeneous handling of privacy for online and offline payments managed by the banks and intermediaries. It may also be configured to incorporate anonymity and privacy thresholds. Low-value offline transactions could be allowed to be completely anonymous, whereas higher-value online and offline payments may be private up to a threshold, and beyond such threshold system traceability is required. In addition, CDC provides cross-network and cross-border interoperability, universality and seamless online and offline operation. It augments the underlying CBDC L1 system as it works across devices, regardless of proximity interaction methods.
Crunchfish’s CDC ranks consistently on top when it comes to all design aspects, such as security, scalability, resilience, privacy, interoperability, universality, seamlessness, and cost. This makes it an ideal implementation companion to any CBDC L1 system. To learn more about Crunchfish and its offerings check out the homepage here, and more CDC L2 technical detail can be found here.
The Future of Payments: A Packet-Switched Architecture
CDC is based on a packet-switched architecture. This provides survivability in the face of failure on the application level, just as the internet provided resilience to digital communication. This is important to bring resilience and load balancing for online transactions. Crunchfish’s signature RPS approach implemented with its CDC L2 solution allows distributed processing for offline use cases and leverages core banking systems for reconciliation. There is simply no need for an adjunct offline payment system or adjunct centralized offline payment reconciliation system for that matter. What is required is a seamlessly integrated packet-switched L2 system that respects the roles and responsibilities in the payment ecosystem.
[1] Crunchfish foundational patent application with priority from January 2020 has been validated in 22 European countries, in the United States and Taiwan. It is patent pending in India and China. Crunchfish has also filed 14 additional patent applications on adjacent aspects, of which about half have already been granted and the others are pending being reviewed.
A team of central bankers posted a paper on SSRN that reviews the practical rollout and early experiences of retail central bank digital currencies (CBDCs) in The Bahamas (SandDollar), China (e-CNY), and Jamaica (JAM-DEX®) as of August 2025. It finds that while adoption has been gradual, there hasn’t been substantial movement of bank deposits to these CBDCs, largely because they function as payment instruments rather than savings vehicles. Each country’s approach reflects unique policy goals—such as financial inclusion and payments modernization—utilizing two-tiered, account-based structures with simple onboarding for the unbanked, and incentives to boost user and merchant uptake. The report highlights that robust communication, private sector participation, and overall adaptability are vital for success, and that while CBDCs still represent a small slice of total payments, they fill important gaps and offer valuable lessons for global policymakers. [Source: SSRN]
The Bank of Japan (BOJ) published a paper that examines non-ledger-based payment systems—specifically, cryptographic electronic cash that enables direct, peer-to-peer value transfer without a central ledger or always-online intermediary. It details the design, security, privacy, and usability of such systems, emphasizing their ability to facilitate offline payments much like physical cash. The study highlights advances such as the use of tamper-resistant devices, cryptographic mechanisms to mitigate double spending, and protocols to retain user privacy while allowing for traceability when necessary. By testing modern smartphones for real-world feasibility, the paper finds that technical barriers once faced by e-cash systems have largely been resolved. Ultimately, the study suggests that electronic cash could combine the best aspects of physical cash—privacy, resilience, and convenience—with the benefits of digital payments, positioning it as a viable option in the evolving landscape of cashless societies. [Source: BOJ]
Upcoming Speaking Engagements:
The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]
I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.
Technology Solutions to Support CBDC with Limited Connectivity: A Review of Existing Approaches (IMF)
SODA’s Chris Ostrowski and I were part of the team behind a Fintech Note that the IMF published that examines technology solutions for enabling central bank digital currency (CBDC) operations in environments with limited or no connectivity. The paper analyzes various technological approaches across a spectrum of connectivity scenarios, from complete offline functionality to SMS/USSD-based systems that work on basic cellular networks. Through interviews with payment platform providers, central banks, and industry experts, different form factors (smartphones, feature phones, stored-value cards, and custom devices) are evaluated against three key criteria: accessibility and usability, cybersecurity and operational risks, and privacy considerations. The research reveals that no single solution meets all requirements, necessitating tailored combinations of technologies based on local infrastructure and user needs. Key findings indicate that while fully secure offline solutions do not yet exist, effective risk mitigation strategies through transaction limits, secure elements, and staged reconciliation have been successfully tested in pilot environments. The paper concludes that successful offline CBDC deployment requires ongoing technological agility, diverse access channels, and proactive risk management over unattainable absolute security. [Read more at the IMF]
However, like many other papers that cover offline payments, the IMF Fintech Note focuses mainly on wallet-to-wallet considerations and gives only a light touch to the “plumbing” by which wallets interact and reconcile with online “core” ledgers. The rest of this blog rectifies this omission, focusing on the Crunchfish Digital Cash (CDC) L2 solution as a viable augmentation to a CBDC payment system with its novel packet-switched architecture delivered by a modular and cost-effective architecture. [See PDF version at the end of this post]
Rethinking CBDC Retail Payments with Crunchfish Digital Cash Layer-2 Architecture
A Practical Approach to Secure, Scalable, and Interoperable Digital Currency Transactions
The future of digital payments hinges on balancing cost, resilience, and seamless integration, bridging traditional infrastructure gaps while gearing solutions for next-generation financial landscapes. This note highlights Crunchfish Digital Cash (CDC) as a viable augmentation to a central bank digital currency (CBDC) payment system with its novel packet-switched architecture delivered by a modular and cost- effective architecture providing any underlying payment system with multiple desired design features.
Crunchfish is rethinking payments in all shapes and forms – online, offline, and even cash payments. This note briefly describes the Crunchfish Digital Cash (CDC) Layer-2 (L2) payment solution and how it augments CBDC Layer-1 (L1) systems with multiple desirable design features, such as resilience, privacy, security, scalability, interoperability, universality, seamlessness, and cost effectiveness.
Central banks are almost unanimous in their view that the ability of a CBDC to function offline is not merely a technical consideration but a key requirement. And that has spawned a growing literature on the topic from the official sector, the latest addition to which is a recently published IMF Fintech Note . However, like many other papers on offline payments, it focuses mainly on Wallet-to-Wallet considerations and gives only a light touch to the “plumbing” by which wallets interact and reconcile with online “core” ledgers. Although many vendors of offline payment solutions say that their platforms allow for indefinite operation offline, central banks are insisting that Wallets be regularly reconciled with the central ledger, to mitigate double spending risk and for financial integrity risk monitoring purposes. This note aims to rectify this omission, focusing on Crunchfish’s patented CDC L2 solution.[1]
Introducing CDC: Reserve, Pay, Settle
CDC uses a Reserve, Pay and Settle approach (RPS) that assigns a value to a Wallet, reserved on the central ledger, that limits the amount a user can pay offline. To initiate an offline payment, the payer generates and transmits a cryptographically signed digital IOU (“I owe you”) to the payee for an amount that accumulated, may not exceed the reserved value. The digital IOU can be validated by the payee in offline mode, and the digital credit amount may be used by the payee to make further offline payments, without synchronizing online. When either party goes online to synchronize their ledgers the digital IOUs are also validated in a Gateway before committing it on L1. This triggers a transfer of value on the central ledger from the payer’s reservation to the payee.
Recently, the Bank of Canada opined favorably on the MIT Digital Currency Initiative’s OpenCBDC two-phase commit (2PC) retail CBDC architecture. Like Crunchfish’s RPS approach, 2PC transaction processing involves a core system update (corresponding to the RPS L1) and a wallet-to-wallet transfer (L2), with a “sentinel” checking the integrity of wallet-to-wallet transactions before core system processing. CDC L2 generalizes 2PC by also supporting offline payments.. Crunchfish’s RPS approach has been trialled by the Swedish Riksbank, albeit on cards only, in the fourth and last phase of the e-krona project. In general, the payment industry should be no stranger to Crunchfish’s approach as it is a generalization of card payments and smart contracts.
CDC is agnostic as to whether the Wallet is implemented in a hardware secure element (HSE) or a software-based virtual secure element (VSE). The security and scalability implications of this choice was discussed in the IMF Fintech Note and summarized in Table 2 . It should be noted that HSE-based solutions are challenging to scale as no ecosystem exists to deploy and upgrade a trusted payment application across multiple mobile device models and multiple mobile network operators. This is contrasted by the easy deployment and upgrading of VSE-based trusted payment applications using standard app store ecosystems, plus the lower cost. Also, the security level for a VSE-based trusted payment application is homogeneous across mobile device models and only dependent on the isolating runtime layer provided by the integrated VSE, that mitigates double spending risks. CDC’s Wallets are therefore implemented currently using a VSE security foundation.
CDC is an approved offline payment solution by the Reserve Bank of India for regulated entities since 2023 and Crunchfish is working with the National Payments Corporation of India to introduce Terminals into their payment networks. Also, Crunchfish is participating in the European Central Bank’s digital euro innovation platform demonstrating three offline payment use cases with online settlement as an implementation of conditional payments, also known as smart contracts .
There are however many additional aspects that define how implementable a CBDC offline solution is in practice than just discussing the use of hardware vs. software-based secure elements. The rest of this note highlights such differences by contrasting Crunchfish’s CDC with CBDC L1 systems.
Beyond Wallets: CDC as a Holistic Solution
CDC is built with Wallets, Terminals, and Gateway components with the purpose of mitigating inherent vulnerabilities in underlying L1 payment systems. It is designed to respect the roles and responsibilities of payment networks and service providers. Whereas payment service providers equip users with Wallets to initiate and make payments, payment networks need Terminals and Gateways to receive and accept payments. This clear separation of an offline payment system allows for flexibility, scalability, and healthy market competition by ecosystem participants and protects the integrity of the CBDC payment system from Wallet transactions initiated off the central ledger.
CDC allows homogeneous handling of privacy for online and offline payments managed by the banks and intermediaries. It may also be configured to incorporate anonymity and privacy thresholds. Low-value offline transactions could be allowed to be completely anonymous, whereas higher-value online and offline payments may be private up to a threshold, and beyond such threshold system traceability is required. In addition, CDC provides cross-network and cross-border interoperability, universality and seamless online and offline operation. It augments the underlying CBDC L1 system as it works across devices, regardless of proximity interaction methods.
Crunchfish’s CDC ranks consistently on top when it comes to all design aspects, such as security, scalability, resilience, privacy, interoperability, universality, seamlessness, and cost. This makes it an ideal implementation companion to any CBDC L1 system. To learn more about Crunchfish and its offerings check out the homepage here, and more CDC L2 technical detail can be found here.
The Future of Payments: A Packet-Switched Architecture
CDC is based on a packet-switched architecture. This provides survivability in the face of failure on the application level, just as the internet provided resilience to digital communication. This is important to bring resilience and load balancing for online transactions. Crunchfish’s signature RPS approach implemented with its CDC L2 solution allows distributed processing for offline use cases and leverages core banking systems for reconciliation. There is simply no need for an adjunct offline payment system or adjunct centralized offline payment reconciliation system for that matter. What is required is a seamlessly integrated packet-switched L2 system that respects the roles and responsibilities in the payment ecosystem.
[1] Crunchfish foundational patent application with priority from January 2020 has been validated in 22 European countries, in the United States and Taiwan. It is patent pending in India and China. Crunchfish has also filed 14 additional patent applications on adjacent aspects, of which about half have already been granted and the others are pending being reviewed.
De Nederlandsche Bank (DNB) surveyed 2,000 Dutch consumers to find out whether they would be willing to use an offline-digital euro (D€) that was as private as cash (funds are stored locally and no third party involved in a payment). Participants were randomly allocated funds to allocate across cash, debit cards and D€ for household expenses over a month. Two-thirds used at least some of the D€, with 75% of non-users not seeing any added value in it, plus 55% expressing unfamiliarity with it, and 48% a lack of trust in it. 25% of non-users cited privacy concerns. Only 28% of users said that the extra privacy of an offline D€ was a reason for using the D€. Also, half the participants were told there was a 50% that their debit cards would be nonfunctional over the month. Those in this group chose to keep not only more cash but also more D€ in their wallets. Also, 42% of participants said they would prefer to keep their D€ on a payment card; 33% would prefer an app and 26% have no preference. [Read more at the DNB]
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 an an overview of its initial thinking and work on the potential roles and responsibilities of digital pound (DP) intermediaries and a preliminary conceptual framework for a DP rulebook (or similar document) aimed at facilitating the proper management of the DP were one to be launched. It includes five broad elements; (I) the key participants in the DP ecosystem, (ii) the governance and oversight of the DP payment system, (iii) intermediaries’ obligations and minimum standards, (iv) the core functions intermediaries are expected to support, and (v) the governance of intermediaries. [Read more at the BOE]
The BOE also published a report on their project aimed to assess whether it is technically feasible to implement an offline payment functionality for a digital pound. The project confirmed the technical feasibility, there are trade-offs, particularly around user experience and preventing double spending and counterfeiting, that make implementing it challenging. It showed that there are several technology choices that could be made for offline payments today, but those are dependent on policy choices, such as risk appetite, product proposition and liability, which impact the options available for mitigating security risks. [Read more at the BOE]
The European Central Bank (ECB) published the fourth update on the work of the digital euro Rulebook Development Group (RDG) in developing a draft digital euro scheme rulebook. The draft rulebook sections have been updated to reflect more than 2,000 comments received as part of the RDG’s interim review in 2024. The report also provides an update on the RDG workstreams since the last update published in September 2024. [Read more at the ECB]
The Journal of Cybersecurity published a paper that proposes a secure offline payment model utilizing a Trusted Platform Module (TPM) to enhance the security of digital currency transactions. Additionally, the monotonic counter, the basic component of the TPM, is integrated into this model to prevent double spending in a completely offline environment. The research presents a protocol model that combines these easily implementable technologies to facilitate the efficient processing of transactions entirely offline. However, it is crucial to acknowledge the security implications associated with the TPMs and near-field communications upon which this protocol relies. [Read more at the Multidisciplinary Digital Publishing Institute]
The U.S. Kansas City Federal Reserve Bank published a research briefing on the video game industry and its evolving revenue models. As more consumers play video games, companies have changed how they monetize and distribute games to their customers as well as adapted and evolved their payments infrastructure to support new revenue models. Meanwhile, regulators are monitoring the industry due to concerns related to consumer protection, data privacy, and financial crime. [Read more at the Kansas City Fed]
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 Israel’s Yoav Soffer provided an update on the digital shekel project, which he leads, in a couple of local media outlets. The project team want to finalize the plan by the end of 2026, after which they will present it to the Governor, who will decide whether to launch the digital shekel. The current thinking is that it would provide for an offline payment wallet by which it will be possible to set a certain amount in advance to be held by phone or prepaid card that can be used to make payments when there is no internet connection. It will also allow for anonymous payments up to a certain amount, both offline and online, in a way that will not even be accessible to payment service providers. The project team is also considering allowing the digital shekel to bear interest, which will create an incentive for banks to offer better interest rates on deposits, and push Bank of Israel policy rate changes out to the economy faster and more efficiently. [Read more in Davar HaYom and also Makor Rishon]
In a LinkedIn post, Yoav also discusses how the long-run plan for a prospective digital shekel would blur the distinction between retail and wholesale central bank digital currency (CBDC). Box 2 in the design paper published on March 3, 2025 rejects the notion that wholesale use cases (and users) and retail use cases (and users) cannot be served by one system. The proposed design offers the concept of a “multipurpose CBDC” – one reservoir of digital central bank money, available for all users and use cases in the economy – of course, with the adequate controls, risk management measures, and regulatory requirements attached to each type of user. [Read more on LinkedIn]
Upcoming Speaking Engagements:
The Crypto Assets Conference (Frankfurt, March 26) will delve into the advancements in digital assets, tokenization, crypto assets, web3, and more, through insightful talks, interactive debates, and presentations by industry experts, founders, investors, and representatives from public institutions. [Register here and get a 10% discount]
The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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 Riksbank considers it necessary to increase the possibility of making offline payments in the event of major disruptions in data communication. In that regard, the central bank wants, by July 1, 2026, for it to be possible for everyone over the age of 18 with a payment card with any Riksbank-regulated bank, to be able to make card payments offline for the purchase of essential goods in the event of disruptions lasting up to 7 days,. The Riksbank will collaborate with banks and other payment service providers, card network providers, card acquirers and retailers, to achieve this. The Riksbank considers the technical conditions already favorable, but issues need to be resolved around administrative processes, how abuse of offline payments can be curbed and who should bear the liquidity and credit risk arising from an offline payment. [Read more at the Riksbank]
This effort is not part of the e-krona central bank digital currency (CBDC) project that ended in 2023. However, one of the basic premises of the e-krona was that it should serve as a further payment option to contribute robustness and increased preparedness. In line with this, in the fourth stage of the project, the Riksbank tested an offline solution to strengthen the reliability of the payments system even in the event of internet connection interruptions. The conclusion was that, with the right regulatory framework and security measures, a secure, fit-for-purpose and user-friendly offline e-krona solution can be developed. Security risks could be addressed with technical solutions such as digital certificates and regular synchronization, and restrictions on amounts transacted and holdings. [Read more at the Riksbank]
The Bank of Korea will reportedly launch a three-month central bank digital currency (CBDC) pilot involving 100,000 consumers, as early as this month (March 2025). It will involve seven major commercial banks that will issue deposit tokens backed by CBDC, which consumers can use to make purchases at various participating merchants. The tokens, valued up to 1 million won per person, will be distributed through electronic wallets, allowing users to make payments by displaying QR codes. [Read more at Chosun Biz]
Upcoming Speaking Engagements:
The Crypto Assets Conference (Frankfurt, March 26) will delve into the advancements in digital assets, tokenization, crypto assets, web3, and more, through insightful talks, interactive debates, and presentations by industry experts, founders, investors, and representatives from public institutions. [Register here and get a 10% discount]
The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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.
FYI for the convenience of those following me for central bank digital currency (CBDC) news, I post a weekly compendium of all of my CBDC-related posts every Sunday at https://kiffmeistercbdcdigest.blogspot.com. If there is sufficient interest, I will start up a mailing list for it.
R3 is partnering with IDEMIA Secure Transactions (IST) to integrate offline payment capabilities into its digital currency platform. The collaboration aims to support the development of central bank digital currencies (CBDCs) by enabling secure transactions both online and offline on R3’s Corda blockchain-based system. According to R3, the integration allows users to maintain network control while ensuring interoperability across different digital financial networks. [Read more at R3]
Sponsored Content:
Upcoming Speaking Engagements:
The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. When you register get 15% off by using the Kiffmeister15 code. [register here]
The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. When you register get 15% off by using the Kiffmeister15 code. [register here]
The Crypto Assets Conference (Frankfurt, March 26) will explore the latest innovations and emerging industry trends in DLT, blockchain, and crypto assets, through insightful talks, interactive debates, and presentations by industry thought leaders. [Register here]
The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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.
