"This article discusses the rationale for the Eurosystem exploring central bank money settlement of transactions registered on DLT platforms, the results of its analysis so far and the envisaged next steps. Section 2 provides background on the role of central bank money in the settlement of wholesale financial transactions. Section 3 discusses market developments regarding the use of new technologies, such as DLT, for wholesale financial transactions. Section 4 discusses the implications of a potential market uptake of DLT for the Eurosystem’s wholesale central bank money settlement infrastructures. Section 5 outlines the Eurosystem’s plans to further explore how wholesale financial transactions recorded on DLT platforms could be settled in central bank money."

Sveriges Riksbank published a paper that analyses central bank digital currency (CBDC) electricity consumption compared to existing retail payment services. Findings indicate that the energy use per transaction of an e-krona is comparable to that of card payments. However, there are significant differences depending on whether the design of the infrastructure for the e-krona is centralized or decentralized, where a centralized solution tend to be less energy consuming than a decentralized solution. Algorand's proof-of-stake public-permissioned network was chosen to represent the decentralized platform, and Hedera's private-permissioned network the centralized platform, and the transactions volumes were assumed to be similar to that of cash-based transactions.

The Digital Euro Association (DEA) published a paper that dissects the Markets in Crypto-Assets Regulation (MiCAR) and its transformative impact on the stablecoin landscape. It explores the diverse regulatory approaches to stablecoins across major jurisdictions and how MiCAR might serve as a model for global regulation. The paper discusses the potential market opportunities MiCAR offers for stablecoin issuers, including enhanced consumer trust, clearer regulatory guidance, and increased access to the European market. Also, it covers the significant challenges stablecoin issuers face under MiCAR, from stringent compliance requirements to operational and technological strains, and how these hurdles might impact smaller issuers and market dynamics.

According to a paper by Leonidas Zelmanovitz and Bruno Meyerhof Salama, retail central bank digital currency (CBDC) can be considered a form of "monetary devolution," that shifts the power, at least in part, from commercial banks to central banks. They discuss the institutional incentives of digital currencies in general and monetary devolution in the United States in particular. Next they outline an alternative that incorporates the technological edge provided by CBDCs. This alternative would be the creation of wholesale CBDCs to serve as the monetary base for settling retail payments with stablecoins. Designed as such, CBDCs could preserve the current balance between private and public money.

The EU is saying if you want to use stablecoins to buy crypto and do DeFi stuff, have at it. But if you want to use stablecoins to pay for goods and services like your coffee or your rent, then you need to use Euro (or other EU currency) stablecoins. The limits are really about monetary sovereignty.

Paxos received full approval from the Monetary Authority of Singapore (MAS) for its Singapore entity to offer digital payment token services as a Major Payments Institution. The approval enables Paxos to issue stablecoins in line with MAS’s upcoming stablecoin framework. With the approval, Singapore becomes the third market, alongside the United States and United Arab Emirates, that Paxos and its related entities are authorized to issue stablecoins. Paxos has selected DBS Bank, Southeast Asia’s largest bank by assets, as its primary banking partner for cash management and custody of stablecoin reserves.

The Bahamas is reportedly preparing regulations that will require commercial banks to provide access to Sand Dollars in a bid to stimulate adoption. Governor John Rolle said with take-up of the central bank digital currency (CBDC) still limited, so commercial banks are being told of forthcoming regulations that will effectively force them to distribute it. Rolle said requiring commercial banks to embed the Sand Dollar in their systems should help usage but acknowledged the bigger problem was to get more merchants to accept it as a form of payment.

Circle, the issuer of USDC and EURC, has become the first global stablecoin issuer to achieve compliance with the European Union's Markets in Crypto-Assets (MiCA) regulatory framework. This was enabled by the company’s attainment of an Electronic Money Institution (EMI) license (’agrément en qualité d'établissement de monnaie électronique) from the Autorité de Contrôle Prudentiel et de Résolution (ACPR). Of the top 10 stablecoins by market capitalization, only USDC is currently MiCA-compliant.

True offline payments are possible. They rely on, among other measures, strong hardware security, which is well-established in the industry. What is new is that CBDC will enable additional use cases, for example when both payer and payee are offline. But the technology for that is already there.

As part of the Eurosystem exploratory work, the first two trials with the Deutsche Bundesbank's Trigger Solution were successfully settled. The use case comprised the issuance and primary distribution of a commercial paper with the use case team Clearstream as a market distributed ledger technology (DLT) operator, and two market participants (DekaBank and DZ Bank). The exploration was conducted as a trial in the participants' production systems and ultimately resulted in real and final bookings in TARGET, the Eurosystem's payment system, by using the Trigger Solution. The Trigger Solution links DLT platforms operated by the market with the traditional Eurosystem payment system (TARGET), thus enabling the direct settlement of DLT-based wholesale transactions in central bank money on participants' existing RTGS accounts.

"CBDC has brought a new thinking about the utility and functionality of money. It should be seen as an extension of existing payment systems but may be most effective for specific use cases only. CBDC is to equip financial systems with new functionality to address actual and future payment demands. It is to ensure central bank money can remain competitive... When being asked whether CBDC is a solution in search of a problem, I normally answer, that the question is referring only to problems we know. If we are looking to address the problems we know today, we are unlikely to be ready for the future."

Financial crime has become a growing risk for Sweden, with criminals taking 1.2 billion kronor in 2023 through scams, doubling from 2021. And law-enforcement agencies estimate that the size of Sweden’s criminal economy could amount to as high as 2.5% of the country’s gross domestic product. A Fortune article links these developments to switch from cash to electronic payments, and the pervasiveness of the BankID system that speeds such transactions up. It requires a six-digit code, a fingerprint or a face scan for authentication, but the system is being abused by fraudsters and scammers. Some are calling for banks to bear a bigger share of the burden when customers are defrauded, as will be the case in the United Kingdom, where, starting in October, banks will have to reimburse customers who have been conned into making transfers.

The Banque de France (BdF) and the Hong Kong Monetary Authority (HKMA) have launched a collaboration relating to wholesale central bank digital currency (CBDC). They will delve into the study of interoperability between their wholesale CBDC infrastructure, i.e. the BDF's DL3S and the HKMA's Project Ensemble Sandbox, with the main focus on real-time cross-border and cross-currency payments. The cross-border experiment aims to explore how to optimize settlement efficiency of cross-border transactions, and facilitate interoperability between financial market infrastructures in different jurisdictions.

On June 24, 2024 the European Central Bank (ECB) published its first progress report on the digital euro preparation phase, which was launched on November 1, 2023 with the aim of laying the foundations for the potential issuance of a digital euro. The report outlines the progress made on key digital euro design aspects and the envisaged next steps for the project.

Usage of India’s e-rupee, has slumped to just a tenth of the 1 million retail transactions per day peak hit in December 2023, according to a Reuters report. The transactions that are continuing are in part due to banks disbursing benefits to their employees via the e-rupee. This has helped to push up transactions to about 250,000 to 300,000 per day towards the end of each month. Apparently, the Reserve Bank of India (RBI) is not planning to rapidly expand the pilot and the current focus is on testing the technology and developing use cases for the digital currency.

The Boerse Stuttgart Group (BSG) will be part of the second wave of the European Central Bank (ECB) European Union-wide wholesale DLT trials for central bank money settlement. Commerzbank, Deutsche Bank, DZ Bank, LBBW, Bankhaus Metzler and V-Bank, who are directly connected to the Bourse’s new blockchain-based settlement solution, will act as trading and settlement participants to test the settlement of exchange transactions with tokenized securities against central bank money. The Deutsche Bundesbank is providing its trigger solution, which connects blockchain transactions with the traditional euro payment system, for the test.

The Banque de France (BdF) and Banque centrale du Luxembourg have published the results of Project Venus, a successful 2022 experiment demonstrating the use of distributed ledger technologies (DLTs) in digital bond issuance and settlement. On 29 November 2022, the European Investment Bank (EIB) successfully issued a euro‑denominated digital bond on a private blockchain using wholesale central bank digital currency (CBDC) for settlement. Goldman Sachs Bank Europe, Santander and Société Générale facilitated the subscription and distribution processes. While project Venus was considered a success, further experimentation and policy work will be required before the decision is made to issue issue a wholesale CBDC. Meanwhile, the Eurosystem is conducting additional experiments and trials, with conclusions expected by mid-2025.

Iran reportedly officially unveiled its CBDC on June 23, 2024 during a ceremony attended by Central Bank of Iran (CBI) Governor Mohammad Reza Farzin and chief executives of several major banks. A pilot project will commence in July on the island of Kish, involving two major Iranian banks, Mellat and Tejarat, and will focus on retail transactions. The digital rial’s introduction is part of Iran’s strategy to enhance its digital economy and payment infrastructure.

Ethereum cofounder Vitalik Buterin has warned much the same, saying that he once had "somewhat more hope, probably naively" that CBDCs could incorporate the transparency, verifiability, and privacy of cryptocurrencies. However, he noted that after CBDC systems are developed, the protections "all sort of fall away." "We get systems that are not actually much better than existing payment systems, because they just basically end up being different front ends for the existing banking system," Buterin said. "They end up being even less private and basically break down all of the existing barriers against both corporations and the government at the same time."

IDEMIA Secure Transactions (IST) demonstrated the first ever offline central bank digital currency (CBDC) payments incorporating enhanced security against quantum threats. Offline CBDC allows digital currency transactions without internet, ensuring cash-like secure and seamless payments in areas with limited connectivity. This offline CBDC payment transaction uses quantum-resistant public key cryptography endorsed by the National Institute of Standards and Technology (NIST). The offline transactions demonstrated as part of this quantum-safe solution are performed using two smartphones thanks to NFC. Money is stored inside a secure element fortified with quantum-safe cryptography to guarantee security and prevent the risks of double spending or unauthorized money creation.

In December 2023, EMTECH successfully delivered a CBDC Hackathon as a strategic pilot for the Bank of Ghana’s e-Cedi project. After receiving 88 applications, the Bank of Ghana ultimately selected 10 participants who onboarded a dedicated hackathon platform, and received Institutional Wallets and 1,000 BYDC-eCedi tokens from the central bank to prototype various solutions. They were then granted access to pre-built BYDC-eCedi APIs which eased the technical integration, as well as standardized how and who can create wallets for end users or how to transact with the tokens. All transactions were performed using Hedera’s token and public ledger services using an ERC-20 token standard. This delivered transparency in transactions, plus the benefit of protecting user information.