Russia's finance ministry is reportedly looking to stablecoins to avoid international payment rails denominated in the U.S. dollar and euro. "The stablecoins can be tied to some generally accepted instrument like, for example, gold, whose value is understood and appreciable for all parties... It will require additional regulation, and the ministry is only considering approaches to it, there are no ready-made solutions."

"At face value, it’s a vote of confidence for tokens like USDC and USDP, with Binance effectively stating that the value of those tokens are reliable enough to be allowed permanent 1-to-1 redemption with its own BUSD across withdrawals and deposits. Tether’s USDT, the largest stablecoin by market value, was notably left out of the party."

"Binance's move to automatically convert USDC and two other stablecoins may lead to more USDC flowing into the exchange, according to the CEO of Circle, which issues the coin. "Binance is trying to consolidate dollar liquidity w cash equivalent stables. That’s good for liquidity and market depth," said Circle CEO Jeremy Allaire on Twitter."

Binance effectively banished USD Coin (USDC), the second-biggest stablecoin, from trading at its cryptocurrency exchange in favor of its own competing product. On Sept. 29, customers' holdings of USDC will be converted to Binance USD (BUSD). The same will happen with two smaller stablecoins: Pax Dollar (USDP) and TrueUSD (TUSD).  The action effectively removes USDC as a tradable asset on one of the most prominent perches in crypto, and creates a headache for Circle Internet Financial, USDC's issuer, as the company mulls an IPO.

The Reserve Bank of India (RBI) is reportedly in talks with fintech companies and state-controlled banks about a trial run of a central bank digital currency (CBDC) with a possible rollout by the end of the fiscal year ending March 31, 2023. The list of fintechs that the RBI is consulting include US-based FIS, plus four state-run banks to run a pilot CBDC project (State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda).

"An enhanced special drawing right (SDR), valued by a basket of goods, would provide the global currency and reserve asset the global economy craves. This paper proposes linking the value of the International Monetary Fund’s SDR and national currencies that fix their exchange rates to the SDR to a representative basket of widely traded goods. The new “real SDR” would be issued and redeemed passively according to “Currency Board” rules in exchange for financial assets with the same market value as the basket. National currencies and/or an international reserve currency with the same value (i.e. fixed to a common unit of account) would lower the cost of trading by reducing transaction and information costs and exchange rate risk and would thus increase world trade and improve the efficiency of international resource allocation. A system anchored to a goods basket would not have the shortcomings that afflict the gold standard-gold's fluctuating relative value. The indirect redeemability rule, issuing and redeeming real SDRs for financial assets of equivalent value would avoid the shortcoming that makes multi-good commodity standards very costly—¬the need to maintain large reserves of all of the commodities in the basket. The innovative idea of indirect redeemability, discussed by Yeager, Greenfield, and others, keeps the quantity of SDRs equal to the amount demanded when its value is given by the valuation basket, without the need for the monetary authority to warehouse the goods in the basket."

"If a decentralized blockchain protocol is worried about being shut down by the authorities, how can it defend itself? A recent discussion surrounding MakerDAO explores this question. MakerDAO (or just Maker) issues the Dai stablecoin, of which there are around $7 billion in circulation. Rune Christensen, the founder of Maker, sees a precedent for a clampdown on Maker in the US Treasury's recent sanctions on Tornado Cash, a mixer. He worries that the authorities may try to shut down Maker by seizing its assets, specifically its real-world assets, or "RWA." To counter this threat, Christensen suggests that Maker turtle into what he calls phoenix stance:"

nChain works with central banks to explore the drivers behind Central Bank Digital Currency (CBDC) and the role blockchain plays in delivering an optimal design. Our approach to CDBC delivers the purest form of digital cash and, by using a highly scalable public ledger, we can offer new economic tools to support central banks even further.

Forbes published an interview focused on central bank digital currency (CBDC) with Jamiel Sheikh , CEO of the CBDC Think Tank (CBDCTT). The CBDCTT delivers education, the CBDC Summit in Washington D.C in collaboration with the IMF,  and is expanding into advisory with a number of key clients and central banks.  A key interview takeaway for me was the stressing of the importance of central banks building internal CBDC competencies instead of relying on vendors.

"Chavanette has teamed up with GFT to provide banks with a full service offering covering CBDC preparedness and integration. Chavanette will support you at every stage. We take inputs from central banks and upstream CBDC service providers, so we can advise our clients on how to integrate the latest developments. Chavanette and GFT can manage your CBDC integration projects and provide full support during and after launch."

The future of money is undoubtedly digital, and in the latest issue of the IMF's Finance & Development some of the world’s leading experts explore what it will look like? It includes my article about offline central bank digital currency (CBDC).

EMTECH announced today the G.R.E.E.N. CBDC Framework to assist central banks in unlocking unprecedented value when deploying a Central Bank Digital Currency (CBDC).

The Digital Dollar Project (DPP) announced today the launch of its central bank digital currency (CBDC) Technical Sandbox Program. It will serve as a collaborative space for the DDP participants and financial service providers, offering a neutral environment for the evaluation of technological, business, and policy approaches to CBDCs. Program participants will examine real-world technology, explore potential implications to business strategies and operations, and experiment to uncover possible use-case specific solutions. It is is slated to begin in early October with the inaugural cohort focused on cross-border payments.

"In the two-country model in Benigno, Schilling & Uhlig (2022), the usage of a privately-issued crypto-asset as a global means of payment leads to the enforced synchronization of nominal interest rates, and hence to a loss of monetary policy autonomy. This paper shows that the same result obtains in a world in which central banks issue digital currencies (CBDC) to be used abroad. In that case, shock transmission is symmetric, whereas it is asymmetric if only one country issues international CBDC or crypto-assets are tied to one currency (stablecoin)."

The Central Bank of Nigeria is reportedly slashing the service fees incurred by individuals and merchants using the eNaira central bank digital currency (CBDC) platform by 50%.

The Banco Central do Brasil (BCB) announced the short list of eight projects selected in the 2022 Laboratory of Financial and Technological (LIFT). One of them is a proposal to convert a stablecoin on the Celo blockchain into Real Digital, studying the interoperability between the public blockchain that runs on the EVM (Ethereum Virtual Machine) and the central bank digital currency (CBDC), in addition to the possible interoperability with Pix.

The Central Bank of Nigeria (CBN) has reportedly approved a reward scheme for users of the eNaira, including merchants. This includes providing merchants with the required promotional materials, subsidising the current Merchant Service Charge by 50% and activation of a nationwide sensitization which early business adopters of eNaira can leverage on to market its wider adoption.

"The digital euro will need safeguards in place to stop governments from snooping on people’s online spending habits, according to the architect of one of the world’s first central bank-backed digital currency."

The Federal Reserve Banks have narrowed the timing of the FedNow Service launch to mid-year 2023, specifically targeting a production rollout of the service in the May to July timeframe. This further defines the previously communicated 2023 launch window for the anticipated instant payments service and comes as the FedNow Pilot Program prepares to enter technical testing for the service starting in September.

FIS, the banking sector solution provider, announced plans to help central banks to launch central bank digital currencies (CBDC) through its CBDC Virtual Lab, which is in collaboration with digital payments startup M10 Networks.

The Bank of Canada published a paper that provides an analysis of cash trends in Canada before and during the COVID-19 pandemic. It finds that cash demand has been strong pre-pandemic and increased sharply during the pandemic. While cash use fell initially due to the decreased number of in-person shopping opportunities, it recovered as containment measures eased. The paper concludes that the long-term trend away from cash use as a method of payment could lead to a decline of merchant acceptance over time and erode the broader demand for cash more generally, which could warrant the Bank of Canada issuing a digital dollar.

Perry Warjiyo, the Governor of the Bank Indonesia (BI), provided an update on the central banks's CBDC plans. It sounds like the BI is leaning towards a distributed ledger technology (DLT) based platform, but it is undecided as to whther it will be a retail or wholesale digital currency. Building in interoperability will be important to open up the possibility of cross-border payments, particularly in the ASEAN+5 region, where there is already cooperation with Thailand and Malaysia through the support for the implementation of QR Cross Border and Local Currency Settlement (LCS).

The digital yuan payment app reportedly can now be linked to bank accounts to ensure that funds in users' e-CNY wallets never run dry. The app can automatically draw amounts from a linked account at a commercial bank when the e-CNY wallet's balance is not enough. Users also have the option not to link the app to a bank account.

Ningbo Rail Transit, the operator of the subway system in the city of Ningbo in the eastern Chinese province of Zhejiang, has reportedly launched payments in digital yuan at 125 stations. Also, bus riders in Guangzhou will be able to buy tickets with digital yuan. They will be able to use their e-CNY wallets on 10 bus lines.

Members of the Reserve Bank of Australia (RBA) Payment Systems Board discussed the increasing interest in central bank digital currency (CBDC) internationally and in Australia. Many see an increased likelihood of issuing some form of CBDC in the future, especially to support wholesale transactions.

Nigeria’s central bank believes its digital currency, the eNaira, has scored wins in the ten months since it was launched last October. The app has been downloaded 840,000 times, nearly a third of those converting to active wallets. But, the news should be taken with a healthy dose of skepticism as at an average of 1.35 transactions per active wallet, the eNaira has not convinced its users to do a lot with it. At N22,000 ($52), the currency’s average transaction value is way behind the regular naira: in 2021, Nigeria’s financial sector processed electronic payments at an average of N720,000 ($1,700) per transaction.

Given the high interest in participating in the survey on CBDC, originally planned for the months of June and July 2022, the Central Bank of Chile (BCCh) has extended the submission deadline to October 30.

The Governor of Colombia's Banco de la República, Leonardo Villar, reportedly confirmed that the central bank is evaluating the possibility of issuing central banks digital currency (CBDC). No details were provided. [Read more at El Colombiano] A few days ago, Luis Carlos Reyes, head of Dirección de Impuestos y Aduanas Nacionales (DIAN), the country's tax authority, reportedly said that the government was planning to issue a digital currency to curb tax evasion. It's not clear whether these two stories are related.