The primary function of Abaku Capital is the maintenance and promotion of a family of tokens aimed at facilitating commerce. The flagship token is designed for monetary stability, and as a hedge against foreign-exchange risk, whereas the rest of the family comprises tethers to various currencies of interest. This token is, in essence, a cryptonisation of the International Monetary Fund’s proprietary currency, the SDR (special drawing rights). The SDR, and therefore its Abaku counterpart, is an asset-backed currency based on a basket of national currencies managed by the IMF.

"Next to the fears of government overreach that the European Union’s ambitious digital euro project stirred, the main concern of the public is the prospective currency’s privacy framework. It appears that this worry might not be overblown after all, as the European Central Bank’s (ECB) latest presentation hints that user anonymity is not a desirable design option."

The Reserve Bank of Zimbabwe reportedly decided to issue central bank digital currency (CBDC). The central bank is currently still at the research stage, and will be moving to the design stage shortly, although they have yet to decide whether it would be retail or wholesale.

"Founded in 2015 by Charles Hoskinson and Jeremy Wood, IOHK is one of the world's pre-eminent blockchain infrastructure research and engineering companies. We are a fully decentralised remote working organisation committed to the highest principles of academic rigour and evidence-based software development. The company builds high-assurance blockchain infrastructure solutions for public, private sector and government clients. It is also the driving force behind the decentralised and smart contract platform, Cardano."

The Bank of Canada provided an update on the impact the COVID-19 pandemic on the demand for cash and the use of methods of payment based on data from the Bank Note Distribution System and from consumer surveys conducted in April and August 2021. Cash in circulation remained high throughout 2021, driven mainly by demand for large-denomination notes. Canadians’ holdings of cash on hand in April (median $70) and August (median $80) were comparable to results seen in 2020. Other cash holdings reported by Canadians remained elevated, with a median value of $260 in August. In August 2021, 62% of Canadians used cash for payments, and indicators of merchant acceptance of cash improved in both the April and August surveys. A large majority of Canadians (around 80%) in 2021 continued reporting that they have no plans to go cashless in the next five years.

"Central banks must ensure that the currencies are successful, but not too successful. In a report to the European Parliament Mr Brunnermeier and Jean-Pierre Landau of Sciences Po in Paris suggest that a central bank “will have to ensure that the cbdc is present everywhere but important nowhere”."

This paper, co-authored by the European Central Bank's Ulrich Bindseil, describes current potential "holy grail" ways to cheap cross-border payments that settle immediately in a secure settlement medium. It concludes that several solutions are suitable and some may even be the holy grail.

Banco Central de la República Argentina published a paper that summarizes the design and architecture alternatives under study to minimize some of the risks of issuing a retail CBDC. There are no indications in the paper that the central bank has plans for deeper exploration.

The New Zealand Reserve Bank published a summary of responses to three 2021 "future of money" issues papers, one of which canvassed issues and options for a potential central bank digital currency (CBDC). Feedback reinforced the need for privacy to be a critical feature of any potential CBDC.

The European Central Bank (ECB) has launched a call for expression of interest for payment service providers, banks and technology companies to join an exercise to develop prototype user interfaces for a digital euro. The ECB specifies 28 separate possible use cases, covering all aspects of the design process, from QR codes to user authentication, electronic ID (EID) and know-your-customer (KYC), among others.

"The issuance of retail central bank digital currency (CBDC) entails a transfer of risk from commercial banks to the central bank. While this paper does not provide an overall assessment on whether or not to issue a retail CBDC, it analyzes how different mechanisms to limit the risk transfer, such as an unattractive interest rate on retail CBDC, a quantity ceiling or preventing convertibility of cash and reserves into CBDC, have different effects on the ability of retail CBDC to fulfil its intended purposes. In particular, these mechanisms hinder the use of CBDC as a medium of exchange. Specific aspects of demand and challenges related to a potential retail CBDC in Switzerland, namely, a small open economy with a safe-haven currency and a low level of government debt, are discussed."

The Bangko Sentral ng Pilipinas (BSP) has decided to pursue a wholesale CBDC pilot project as part of its efforts to promote the stability of the country’s payment system. Dubbed CBDCPh, it will test the use of CBDCs for large-value financial transactions on a 24/7 basis across a limited number of financial institutions.

The Hong Kong Monetary Authority (HKMA) has published a discussion paper inviting views on the key issues around a retail central bank digital currency (CBDC). This is a followup to the paper published in October 2021 on potential architectures and design options for distributing e-HKD, and this new one focuses on use cases, the issuance mechanism, interoperability with other payment systems, privacy and data protection. Members of the public and the industry have until May 27, 2022 to submit comments.

"Most credit card companies don’t impose swipe fees on consumers, charging vendors instead. But shoppers end up bearing those costs, as vendors hike prices to cover the fees. The National Retail Federation (NRF), the country’s largest retail association, estimates credit cards cost the average American family $700 a year, an amount that will only grow with the new fees."

The Centrale Bank van Curaçao en Sint Maarten intends to issue a position paper on the potential contribution of central bank digital currency (CBDC) to financial inclusion in Curaçao and Sint Maarten.

I spoke at a workshop hosted by the Centre for International Governance Innovation (CIGI) and Bennett Jones on the need for, and design of, a digital Canadian central bank digital currency (CBDC) or "digital loonie". It focused on three areas: what can Canada learn from CBDC first movers (that was the session I participated in), what are the early steps necessary to prepare and design a digital loonie, and what will be required legally for a CBDC and what are the legal pillars on which that system could be based. It was run under Chatham House Rule but a summary report will be published within the next few months.

"In fact, the ability to transact between devices that are not connected to a network at all either because the cloud is down, or there is no mobile network or there is no power because of a natural disaster is a key design requirement for the Chinese digital currency and it should be one for any other digital currency that intends to replace, or even complement, cash."

"If you want to have a central bank digital currency that is a form of electronic cash, that is value that can be transferred from person to person (or, more accurately, from device to device) without online access to some central database or blockchain or whatever else, then you have the obvious problem that if the device containing the electronic cash is lost or destroyed then the value is lost or destroyed with it. But is this actually a problem? I mean, should we try to design a digital currency so that it can be recovered? Maybe it is better if it can be lost."

"It is important to note that there has not been a sufficient and proper political debate on the balance between human rights and anti-terrorism measures. And as we already have Human Right Treaties in place outlining that mass surveillance and retaining of data of innocent people are a human right infringement, we can only conclude that our Ministries of Finance and Governments are about to make a historical and major mistake that violate their own commitments to privacy. "

"Physical cash should be the standard for evaluating how to strike a balance between ensuring privacy and adhering to anti-money laundering (AML) and countering the financing of terrorism (CTF) rules. At a minimum, this implies allowing real anonymity and transaction privacy for daily life transactions up to limits that are similar to the current limits for cash. In addition to full anonymity for low-value transactions, a high level of pseudo-anonymity should be provided for all larger transactions to ensure a high level of identity protection."

"UST, by contrast, began life as what’s known as an “algorithmic” stablecoin. These could also be referred to as “decentralized” stablecoins because decentralization is their primary reason for existing. A collateralized stablecoin like USDT or USDC is reliant on banks and traditional markets. That makes them in turn subject to regulation, enforcement and ultimately, censorship of transactions. Circle and Tether are run by centralized corporate entities with the ability to blacklist users and even seize their funds. Both systems have done this, sometimes at government behest."

Russia reportedly plans to have a digital ruble capable of making international payments ready by next year and also wants to expand the number of countries that accept its Visa- and Mastercard-style banking cards that are administrated by the central bank. Central Bank Governor Elvira Nabiullina also said Russia aims to extend the number of countries that accept the central bank’s MIR banking cards, an alternative to Visa and MasterCard which have joined other Western firms and suspended operations in Russia.

Here is how an algorithmic stablecoin works. You invent two tokens, call them Dollarcoin and Sharecoin. You list them on the crypto exchanges. Sharecoin trades for whatever price is determined by supply and demand. It might be $0.01 per Sharecoin, or $1, or $100, who knows. But Dollarcoin is supposed to trade at $1. If it trades at $0.99, you have some automatic process in which you print more Sharecoins and use them to buy Dollarcoins until it is back to $1. If it trades at $1.01, you have some automatic process in which you print some more Dollarcoins and use them to buy Sharecoins until it is back to $1. The result is that Dollarcoin is firmly pegged to the dollar. The process is sometimes compared to algorithmic central banking, where the central bank maintains the value of the currency (Dollarcoin) by adjusting its supply.

The Bank of Japan will reportedly explore central bank digital currency (CBDC) design issues in measured steps like Sweden rather than pressing ahead with large-scale pilot tests like China, according to Kazushige Kamiyama, the head of the BOJ’s payment system department.

The President of the Central Bank of Brazil, Roberto Campos Neto, reportedly announced that a Digital Real pilot will probably be launched in the second half of 2022.

"A hardware security module (HSM) is a dedicated crypto processor that is specifically designed for the protection of the crypto key lifecycle. Hardware security modules act as trust anchors that protect the cryptographic infrastructure of some of the most security-conscious organizations in the world by securely managing, processing, and storing cryptographic keys inside a hardened, tamper-resistant device."

"The biggest obstacles to CBDC is skepticism and reluctance among the end users, since CBDCs will never be designed with the needs and desires of the users in mind (on the contrary, they're being designed in accordance to the rules of the end government)."

The European Commission (EC) has received about 10,000 public comments so far on its call for evidence regarding a digital euro, which is to run from April 5 to June 14 and is aimed at getting feedback for the possible establishment and regulation of a digital currency as a new form of central bank money. During a similar period, the EC is also conducting a consultation targeted at relevant authorities and experts, to help policymakers consider issues including users’ needs and expectations for a digital euro, a digital euro’s role for the EU’s retail payments and digital economy, the application of money-laundering rules, privacy and data protection aspects and international payments.

"We developed a prototype system, DigiTally, which lets users make offline payments by copying short strings of digits from one mobile handset to another. Offline payments are already used for electricity (both in prepayment meters and pay-as-you-go solar); can we extend them into a general-purpose payment system, to increase service resilience in the face of network congestion or outage, and provide service to currently excluded areas?"