"We propose an offline payment system (OPS) protocol for CBDC that allows a user to make digital payments to another user while both users are temporarily offline and unable to connect to payment intermediaries (or even the Internet). OPS can be used to instantly complete a transaction involving any form of digital currency over a point-to-point channel without communicating with any payment intermediary, achieving virtually unbounded throughput and real-time transaction latency. "

"DigiTally is an overlay payment scheme for use on mobile phones, whose goals are to extend mobile phone payments to areas with poor connectivity and reduce transaction fees. DigiTally enables two people to do a payment transaction by simply copying short strings of numbers between their phones. This doesn't need either smartphones or a network connection. Either phone can upload the transaction later, once it gets a network connection. A short-term goal was a pilot project to explore the factors that affect payment service uptake."

"Although FedNow is not a CBDC, that’s not to say there is no reason to object to it. Faster payments are needed in the United States, but FedNow is not the only option. FedNow was announced in 2019, but that was two years after the Clearing House (TCH) introduced the Real‐​Time Payments (RTP) Network. In fact, while not offering instant payments, even just expanding the operating hours of Fedwire and the National Settlement Service (NSS) to run 24x7x365 would have improved the U.S. financial system. Yet, the Federal Reserve seems to have chosen to ignore the simpler option and walk over the private sector. Both choices are grounds for fair and longstanding objections to FedNow."

"Circle's Gordon Liao recently sketched out a new distinction between 'payment stablecoins' and 'trading stablecoins,' and then places Circle's stablecoin, USD Coin, in the former category, while confining competitors Tether, Dai, and Binance USD to the trading bucket. For the time being, I think that a payments stablecoin is a fable. Everyone wants to be in that category, but an actual payments stablecoin, one who's main use-case is remittances and POS payments, doesn't exist. Stablecoins remain primarily used for trading, gambling, and speculation."

The European Money abd Finance Forum (SUERF) published a paper that disputes the European Central Bank (ECB) two of the three "monetary anchor" digital euro issuance rationales. First, to be an anchor for commercial bank deposits, guaranteeing their convertibility into central bank money, the ECB would have to allow unlimited access to digital euros as a store of value, whereas the ECB envisages very limited CBDC holdings as a means of payment. Second, to be an anchor for maintaining the central bank’s control over the financial system, it is crucial that banks need central bank money as a means of payment and settlement. Thus, it is the holding of central bank money by banks, and not by non-banks, that is required as the ultimate monetary anchor for the financial system. Finally, the experience of several major central banks shows that the appropriate response to the declining use of cash in retail payments is not a CBDC, but the orchestration of competitive national retail payment systems.

The IMF reported that over 40 countries have approached with requests for CBDC capacity development assistance. Countries’ questions range from objectives and design choices to pilots and analysis of macro-financial implications. In the past two years, the IMF has started to engage with almost 30 countries. The IMF will also publish a Handbook that will be the basis for CBDC capacity development and help countries make well-informed decisions when taking the major step to design and issue their own CBDC. The Handbook chapters will provide mostly a framework for structuring CBDC exploration and cover five priority areas: (1) policy objectives and operational framework of CBDC; (2) foundational requirements and readiness to issue CBDC, such as legal considerations, cyber resilience, central bank governance, and regulation and supervision; (3) CBDC design processes, considerations, and choices; (4) project approaches and technology; and (5) potential macrofinancial impacts of CBDC. The initial wave of chapters, slated for publication around the 2023 Annual Meetings, will (1) provide a methodological framework for conducting CBDC exploration; (2) address the most common requests that IMF staff encounter in capacity development engagement; and (3) be based on relatively well-established knowledge and experiences. [

According to Island Pay's Jeffrey Beckles it is critical to increase the number of merchants embracing Sand Dollars as a means to settle transactions beyond the present 1,500 given that there were some 50,000 Business Licence applications submitted this year.

The Central Bank of the Bahamas (CBOB) published an update on the uptake of its Sand Dollar central bank digital currency (CBDC). At present, only about 100,000 Sand Dollar wallets have been downloaded usage remains low when compared to the overall size of the domestic payments system. In order to bump up usage, a new version of the wallet will be introduced that will allow digital payment providers to offer fee-based merchant services from within the core Sand Dollar platform. Financial institutions will be able to customize the appearance of the app to display their individual brand identities, including logos and branding color preferences. Also the CBOB will ramp up promotional activities at civic and cultural events, and it has has committed to a giveaway of $1 million in Sand Dollars to early adopters through 2024.

British banknote printer De La Rue has warned that its profits will miss full-year forecasts as demand for fresh cash fell to its weakest level in 20-years. It also said it was in discussions with its lenders to seek “an amendment to its banking covenants”. Last year, De La Rue found itself in a fight with its auditor after a “going concern warning” because of what EY said was a “severe but plausible downside scenario” where if the group lost key currency contracts, it would breach a debt covenant on the group’s credit facility.

The IMF published a paper that models the financial inclusion impact of introducing a retail CBDC in a developing country context.  It finds that CBDC issuance can increase bank deposits from the previously unbanked by incentivizing the opening of bank accounts for access to CBDC wallets (offsetting potential flows from deposits to CBDCs among those already banked). Second, data from CBDC usage allows for the building of credit to reduce credit-risk information asymmetry in lending. However, if non-bank payment system providers can distribute CBDC, fewer funds will flow into deposit accounts from the unbanked, but if CBDC data is shareable with banks, those without bank accounts can still build credit and access lower interest rate loans. This design is optimal for welfare if the gains from greater access to CBDC outweigh the contraction in lending.

"CBDC architecture provides central bank economists and regulators with a wealth of near real-time information on the CBDC balances of financial institutions, along with metadata that could tag which industry each CBDC is spent in, allowing real-time CPI measuring and even triangulated inflation fighting, while maintaining robust privacy of all transactions for all users. A central bank doesn’t need to wait for institutions to report its CBDC assets and liabilities; instead, central bank staff can query the CBDC balances directly."

The Bank for International Settlements (BIS) published a paper that compares the key characteristics of stablecoins ("private tokenized monies that circulate as bearer instruments") and tokenized commercial bank deposits. It claims that stablecoins violate the "singleness of money" principle because their relative exchange values can and do depart from parity. The problem could be solved by the introduction of clearing houses to support par exchange for the stablecoins issued by its members. However, according to the paper, this is a step backwards because the problem has already been solved by the existing two-tier monetary system. Also, tokenized deposit functionality can be expanded to allow for programmable ledgers, contingent execution and composability of transactions.

The Central Bank of Montenegro (CBCG) is working with Ripple to develop a strategy and pilot program to launch a national stablecoin, in a follow-up to Prime Minister Dritan Abazovic's related Tweet in January. The CBCG will work with Montenegro's government and academia to create a practical digital currency or secure currency solution to test blockchain functionality and potential. Montenegro uses the EUR, despite not being a member of the Eurozone, although it is a candidate country for European Union (EU) membership.

The Digital Currency Monetary Authority (DCMA) announced their official launch of an international central bank digital currency (CBDC) at the 2023 International Monetary Fund (IMF) Spring Meetings. The press release implies that their Universal Monetary Unit (UMU) algorithmic stablecoin has the IMF's blessing, including quoting IMF Financial Counselor Tobias Adrian from a November 2022 speech that implies nothing about DCMA engagement. Also,  the following quote from the DCMA's legal counsel appears designed to mislead:  "although the IMF has not officially endorsed UMU, in reviewing the DCMA's whitepaper and in weekly team discussions, the IMF has yet to state any objections to UMU's FX premium rates and its monetary sovereignty approach."

"Former senior officials at digital-asset exchange Gemini are rolling out a token backed by US Treasury Bills with around 5% yield in response to a gulf in returns between traditional finance and decentralized crypto lending. OpenEden, a DeFi platform, is offering the token known as TBILL against stablecoins, which will in turn be invested in short-term US Treasury Bills."

Caitlin Long had high hopes of bringing crypto into the mainstream financial system. Long’s Custodia Bank in Cheyenne, Wyoming, a state-charted special purpose depository institution, or SPDI, was spearheading those dreams for all of cryptocurrency. Those dreams crashed into the concrete bollard of reality on January 27, 2023, when the Federal Reserve Board denied Custodia’s application to be a Federal Reserve member bank, and the Federal Reserve Bank of Kansas City denied its application for a master account. The Board’s full 86-page order, made public on March 25, details how Custodia failed to address “the heightened risks associated with crypto activities, including its ability to mitigate money laundering and terrorism financing risks.” (The Kansas City Fed’s denial letter was not made public.)

The FedNow is an instant payments service provided by the U.S. Fed, launching in July 2023. It will be available to U.S. depository institutions, such as banks and credit unions, and will enable individuals and businesses to send payments through their depository institution accounts 24/7, so that the receiver of a can use the funds almost instantly.  FedNow is like other Fed payments services, such as Fedwire and FedACH. To be absolutely clear, FedNow is neither a form of currency nor a step toward eliminating any form of payment, including cash.

Sweden's Riksbank published an update on its technical work aimed at examining how an e-krona could work if a decision is taken in the future to issue central bank digital currency (CBDC). The focus during Phase 3 has been to examine how the Riksbank could interact with other actors in the payment market to give the general public access to, and the possibility to pay with, an e-krona, how conditional payments can be made and whether a digital central bank currency can simplify cross-border payments.

The Digital Euro Association (DEA) published a summary of the key takeaways from its Digital Euro Conference held on March 31, 2023, that brought together experts, policymakers, and industry leaders in a hybrid format. Both on-site and remote participants engaged in insightful discussions, presentations, and panel sessions centered around central bank digital currencies (CBDCs), stablecoins, and tokenized commercial bank deposits.

"The RBI is hoping to conduct offline transactions by testing the use of wearables, cards like debit and credit, bluetooth technology, and a smartphone. Another key concern the RBI is looking to address is the risk of double spending. More than 50 proposals have been submitted to the RBI on the closing date of March 24, 2023 to solve the problem of offline transactions, one source said."

An article by Circle Chief Economist Gordon Liao distinguishes stablecoins’ use in trading versus payment activities and their impact on financial stability. Payment stablecoins like Circle's USDC have lower speculation exposure than trading stablecoins like Tether's USDT, MakerDAO's DAI, and Binance's BUSD. Two measures are presented as evidence; the total crypto trading volume facilitated by the stablecoin in question versus the amount of it in circulation, and the correlation between the change in stablecoin circulation and crypto-asset returns. Dai shows the highest correlation with crypto-asset returns because it is collateralized with crypto-assets, so a decrease in the asset collateral’s value can prompt the forced redemption of the stablecoin.

Bills introduced in the Texas House and Senate would require the state comptroller to establish a digital currency that is fully backed by gold and fully redeemable in cash or gold. The comptroller would be required to create a mechanism to use this digital currency in everyday transactions. In practice, individuals would be able to purchase digital currency from the state. The state would then use the money to purchase gold that would be held in the Texas Bullion Depository or another secure vault. The bills must next be assigned to committees, after which they must get a hearing and pass by a majority vote before moving forward in the legislative process.

G+D has compiled a handy checklist of aspects that constitute a successful central bank digital currency (CBDC) exploration and implementation strategy.  It starts with finding the proper balance between pain points, motivations, and opportunities for all stakeholders in that particular ecosystem. Successful implementation could be based on an innovative use case that solves one or more pain points, or it could also offer an opportunity that was previously unavailable. Also, all ecosystem stakeholders - consumers, financial service providers, and merchants – should feel that their interests are kept in mind. Finally, CBDC should not be just a solution to a particular problem in itself, but rather, it is should also provide a platform for innovation that enables new business models.

"Had Circle been as opaque as its competitors, no one would have known that Silicon Valley Bank was its banker and the weekend run on USDC probably would never have occurred. The lesson would seem to be: Don't be transparent or, if you need to be transparent, don't be transparent about your shortcomings."

Wyoming's governor has signed SF 127 enacting the Wyoming Stable Token Act, creating the Wyoming stable token commission, and authorizing the issuance of stable tokens in the state. Under the Act, a Wyoming stable token is “a virtual currency representative of and redeemable for one United States dollar held in trust by the state of Wyoming” that may only be issued in exchange for a USD. The Act also outlines criteria relating to liability limitations and requires that the commission issue at least one Wyoming stable token no later than December 31, 2023.

Banco Central de Reserve del Peru (BCRP), with technical assistance from the International Monetary Fund (IMF), is actively investigating the benefits and risks of central bank digital currency (CBDC). Possible benefits include lowering financial inclusion barriers, as well as strengthening monetary and financial stability, and the security and efficiency of payment systems. A survey has been issued to learn the views of the stakeholders, including market agents, on key aspects contained accompanying white paper.