DFC

In February 2026, Martina Weimert of the European Payments Initiative highlighted the absence of pan‑European private infrastructure despite national schemes and promotes Wero as an emerging network, while the European Central Bank continued to advance the digital euro to bolster monetary and payments sovereignty. In terms of C2B card transactions, the overwhelming share runs on the rails of US-based VISA and MasterCard, and this does not include co-branded cards (see country-by-country graphic). For example, Cartes Bancaires (CB) is a very popular card scheme in France, but it is not found anywhere else in Europe. So, to function outside France, CB cards use the Visa and Mastercard rails. The real challenge for Europe will be interoperability, to unite the different payment habits and scheme that may exist in each individual country. [LinkedIn]

The European Central Bank (ECB) announced agreements with three European payment standard‑setting bodies to reuse existing open standards for processing online digital euro payments. The standards include European Card Payment Cooperation (ECPC) CPACE (to support contactless “tap‑to‑pay” payments using near‑field communication between a payment device and a payment terminal); nexo (specifications to connect merchants’ systems with the back-end systems of payment service providers and acquirers; and Berlin Group (to allow payments to be made using an alias (such as a mobile phone number) and support balance checks and reconciliation across mobile devices and payment acceptance in areas like digital euro transactions initiated in merchant apps on smartphones). The deal aims to reduce integration costs, support cross‑border scaling of European schemes, and lessen dependence on proprietary card and wallet standards owned by global firms. This move embeds the project in existing retail payment infrastructure, but leaves open how additional standards and governance will evolve over time. [ECB]

Reuters published an article that I was quoted in, on how India is using its e‑rupee central bank digital currency (CBDC) in targeted pilots to tighten welfare delivery, especially for farm subsidies and subsidized food, by programming funds so they can only be spent at approved vendors, which reduces leakage and upfront costs for low‑income beneficiaries but also raises concerns about over‑controlling “programmable” money and deterring wider adoption compared with more cash‑like designs. [Reuters]

Banco Central de Reserva del Perú (BCRP) economists examined the determinants of adoption and usage of Peru's retail central bank digital currency (CBDC) pilot, implemented through Viettel's BiPay digital wallet beginning in October 2024, focusing on eight regions with low financial inclusion. Based on individual-level survey data, active CBDC usage was positively associated with awareness of the BCRP's role in the pilot, wallet satisfaction, knowledge of functionalities, and prior digital wallet use, while self-employment was negatively associated, plausibly due to the pilot's closed-loop, non-interoperable design. Targeted advertising significantly increased merchant adoption, active user counts, and bill payment volumes, with merchant network expansion identified as a key transmission channel. The authors conclude that retail CBDC scaling requires attention to both sides of the payment market — user-facing communication and financial incentives on the demand side, merchant onboarding on the supply side — with interoperability remaining a persistent structural barrier to broader adoption. [IDEAS]

The Central Bank of the United Arab Emirates (CBUAE) and the Bangko Sentral ng Pilipinas (BSP) signed a memorandum of understanding (MoU) to support broader cooperation on financial infrastructure and payments connectivity. This includes working to integrate their instant payment platforms to enable seamless cross-border payment transactions. The MoU also provides for collaboration on central bank digital currency (CBDC) initiatives, including sharing expertise on the development of CBDC platforms for individuals and institutions. [CBUAE]

Edgar, Dunn & Company published a survey of the development of stablecoins and central bank digital currencies (CBDCs) across the six Gulf Cooperation Council (GCC) states. It argues that strategic motivations — reducing dependence on dollar-denominated Western payment infrastructure, modernizing domestic financial systems, and reasserting monetary sovereignty — are driving a coordinated, regulation-first approach to digital currency development. The UAE and Bahrain are identified as the most advanced jurisdictions, with Saudi Arabia positioned as a rising participant focused primarily on wholesale CBDC applications via Project mBridge. Kuwait, Qatar, and Oman remain at earlier stages. The report characterizes the regional model as a two-tier architecture in which state authorities define the regulatory perimeter while private-sector institutions handle distribution and adoption. Several case studies — including the Digital Dirham, AE Coin, mBridge, and ADIB Smart Sukuk — are presented to illustrate current implementation status. [Edgar, Dunn & Company]

[January 1, 2019] The RBI reportedly quietly dropped its plan to issue a central bank digital currency (CBDC), despite having set up an inter‑departmental group to study it. Officials reportedly felt it was too early for such a move, and the feasibility report was never published, reflecting limited internal capacity on blockchain and digital currency policy. The proposed CBDC had been framed as a tool to address black money, money laundering, and cyber‑security risks, but industry voices argued that launching it would be premature and that India should watch smaller advanced jurisdictions like the UAE and Singapore first. [Hindu Business Line]

[December 5, 2019] Reserve Bank of India (RBI) Governor Shaktikanta Das reportedly said that it is too early to introduce a central bank digital currency (CBDC) because the necessary technology and safeguards are still at an incipient stage, though it has examined the idea internally and discussed it with other central banks and governments. He stressed that any such CBDC would only be considered seriously when technology matures and adequate safeguards are in place. He firmly distinguished this from private digital currencies, which he rejects on the grounds that currency issuance is a sovereign function and must remain with the state, noting that global central banks and governments broadly oppose private digital currencies for the same reason. [Business Standard]

[February 4, 2026] The Reserve Bank of India (RBI) has issued updated FAQs explaining the design and objectives of India’s Digital Rupee (e₹) pilots in retail and wholesale segments. Retail e₹ is presented as legal-tender central bank digital currency equivalent to cash, distributed via banks and non-banks through mobile wallets, interoperable with existing QR infrastructure, and supporting offline and programmable features to enable cash-like use, targeted transfers, and constrained spending. Wholesale e₹ is framed as restricted-access central bank money for interbank and securities settlement, using programmability and smart contracts to reduce settlement risk and infrastructure costs in government securities, call money, and tokenized certificates of deposit. The document signals an incremental, pilot-based approach focused on testing technology, scalability, and institutional roles rather than rapid scale-up, leaving open questions about future onboarding models, governance of programmability, and long-run integration with systems like UPI. [RBI]

[April 30, 2025] The Instituto Espanol de Analysts (IEA) published a book that included a chapter by European Parliament rapporteur Fernando Navarette, that argues that a digital euro is a mis-specified response to Europe’s payments challenges and should be downgraded to a contingency “Plan B.” He contends that the core problems—trust in money post‑crisis, overreliance on non‑EU payment schemes, and stablecoin‑driven currency substitution—are better addressed through institutional and regulatory reforms, wholesale central bank digital currency (CBDC), and pan‑European instant‑payment solutions based on commercial bank money. Navarrete stresses that retail CBDC is inherently destabilizing for bank funding, raises unresolved privacy and governance risks, and risks crowding out private innovation, especially if coupled with legal tender and complex “waterfall” mechanics. He instead proposes a three‑pillar architecture: private‑led interoperable instant payments, a narrowly scoped offline digital euro, and wholesale CBDC—leaving a full retail CBDC only as a last‑resort backup if private efforts fail. [IEA]

[In 2023] the Central Bank of Nigeria (CBN) published a book on the economics of digital currencies in which there was a review of how the eNaira central bank digital currency (CBDC) was designed, launched, and managed. It argues that weak demand reflects structural and institutional frictions rather than purely technological failure. The review documents a phased rollout focused on financial inclusion, payment efficiency, and monetary control, but shows that limited interoperability, burdensome onboarding, and unclear value propositions constrained uptake. It emphasizes how institutional choices around wallet tiers, distribution architecture, and bank–fintech roles reshaped market incentives, often reinforcing banks’ dominance rather than fostering broader innovation. It highlights the need to recalibrate design toward open interfaces, clearer legal and regulatory frameworks, and better alignment between central bank objectives and private‑sector business models. [CBN]

[June 2024 but published in January 2026] The IMF published its findings regarding the plans of the National Bank of Kazakhstan and National Bank and National Payments Corporation to launch a central bank digital currency (CBDC) by end‑2025, emphasizing alignment of pilots with clear policy objectives and realistic technical capacity. It highlighted the need for an explicit legal basis beyond “banknotes and coins,” prioritization of use cases, tailored evaluation frameworks, and careful analysis of macro‑financial risks from broader applications such as crypto‑asset linkages and government or large‑value payments, alongside stress‑testing, minimum cyber‑resilience standards, and stronger internal and cross‑authority coordination. [IMF]

The European Central Bank (ECB) set out the Eurosystem’s comprehensive two pronged payments strategy, defining its vision for the evolution of European payments under rapid technological change. The first prong is upgrading core infrastructures such as T2, the real time gross settlement backbone for high value and time critical payments during business days, and TIPS, the 24/7 Single Euro Payments Area (SEPA) instant retail settlement layer, while developing distributed ledger technology based wholesale settlement via Pontes and Appia. The second prong is a retail digital euro, with tokenized deposits and regulated, EU governed stablecoins in a complementary role. The strategy links tokenization choices to preserving the singleness of money, monetary sovereignty, and financial stability, reduces dependence on non European schemes, and embeds strategic autonomy and cyber resilience into core infrastructures and retail acceptance layers. It also promotes deeper integration of cross border and corporate payments through instant payments, standardization, and interlinking fast payment systems. [ECB]

Norges Bank published a paper that analyzes how tokenized bank deposits and wholesale central bank digital currency (WCBDC) interact with central bank liquidity management under different reserve regimes and settlement designs. They model four configurations combining scarce versus ample reserves with settlement either in traditional reserves via the real-time gross settlement (RTGS) system or in WCBDC on a ledger, showing that liquidity frictions arise mainly when reserves are scarce and tokenized payments can alter banks’ reserve or WCBDC positions close to RTGS cut-off. This matters because late-in-the-day tokenized flows can force abrupt recourse to standing facilities, complicate overnight redistribution, and impair short-term rate control and monetary policy implementation, particularly in corridor or quota systems. Policy responses include deferred settlement for tokenized deposits settled in reserves and time windows or design tweaks for WCBDC activity, but the optimal mix of reserve regime, platform architecture, and operating rules remains unresolved. [Norges Bank]

Norges Bank publishes an assessment arguing that a potential digital euro would have limited structural impact on Norway’s monetary and financial system while marginally increasing competition in niche payment segments. The paper finds that, given Norway’s macro stability, strong institutional credibility, and existing foreign-currency options, a capped, non‑interest‑bearing digital euro is unlikely to trigger material currency substitution away from NOK or meaningfully affect monetary policy transmission, liquidity management, or bank funding profiles. It emphasizes that use would concentrate in tourism-related and cross‑border transactions, where lower fees and pan‑EEA reach could modestly strengthen merchant competition and payment contingency but remain geographically and quantitatively constrained. Legally, enabling use in Norway would require EEA transposition and an ECB–Norges Bank agreement that could constrain domestic discretion on parameters such as holding limits, raising governance questions about central bank independence and rule‑setting. [Norges Bank]

Norges Bank published four reports from its central bank digital currency (CBDC) exploratory work, which last year concluded that introducing a CBDC is currently not warranted. The need for such a currency may, however, change in the future. The four reports published today describe the exploration work and the assessments underpinning the conclusion. Norges Bank will continue to explore tokenization and different forms of CBDC in order to introduce a CBDC should it be necessary The Bank will explore the possibilities and consequences of tokenization through activities such as experimental technology testing, also in collaboration with other payment system participants. One of the papers documents sandbox tests of a two-tier, blockchain-based retail CBDC that central bank exclusively mints and redeems, while banks and other payment service providers manage all customer relationships and data. Tests show that role-based smart contracts can technically enforce this division of responsibilities and give the central bank only aggregate, real-time circulation data, but they also highlight structural privacy risks from linkable pseudonymous addresses and operational rigidity from immutable smart contracts. [Norges Bank]

[June 2025] The Bank of Uganda (BOU) published the final report on its central bank digital currency (CBDC) consultation. It argues that a CBDC merits further, phased exploration as a tool for modernizing payments, inclusion, and regional integration. The survey of 151 largely domestic, policy‑adjacent stakeholders found high reported trust in a CBDC, strong expectations of reduced cash‑handling costs and improved payment efficiency, and majority support for a retail, potentially programmable instrument that coexists with current systems. For policy and institutional design, the report frames CBDC as building on Uganda’s extensive mobile money and real-time gross settlement (RTGS) infrastructure, potentially enhancing transparency, cross‑border trade in the East African Community, and monetary policy implementation, while emphasizing preconditions around legal frameworks, cybersecurity, and stakeholder engagement. [BOU]

The Bank of Uganda (BOU) is inviting qualified consultants or consulting firms to submit expressions of interest to conduct a comprehensive feasibility study on issuing a central bank digital currency (CBDC) in Uganda, covering technical infrastructure, legal and regulatory aspects, economic and social impacts, operational viability, and a detailed cost-benefit analysis using both quantitative and qualitative methods. The selected firm will assess national digital and payments infrastructure, propose and apply a robust methodology, and deliver specified reports demonstrating understanding, relevant experience, and a workplan. Participation is open under Bank of Uganda procurement rules, with detailed eligibility, experience, and team composition criteria (multi-disciplinary CBDC, payments, economic, legal, cybersecurity, and change-management experts) and a minimum technical score of 70 points for shortlisting. The deadline for submissions is on April 16, 2026. [BOU]

At its meeting on March 19, 2026, the European Council, the body comprising the heads of state or government of all European Union (EU) Member States, called on the EU’s two co-legislators, the European Parliament and the Council of the European Union (comprising Member State ministers), to conclude negotiations on the digital euro legislative proposal by end-2026. Although the European Council sets political direction and cannot itself pass legislation, its conclusions carry considerable authority. The deadline is consequential: the ECB has indicated that, assuming the regulation is adopted in 2026, pilot transactions could commence by mid-2027 and a first issuance could occur by 2029, with estimated development costs of approximately €1.3 billion. The ECB’s final decision on whether to issue a digital euro remains contingent on adoption of the enabling legislation.​​​​​​​​​​​​​​​​ [European Council]

Ulrich Bindseil posted a white paper that analyzes retail payments as a network industry shaped by strong incentives to influence public opinion and regulation. Due to network effects, high fixed costs, and path dependence, multiple architectures can deliver similar outcomes while redistributing value across stakeholders. The paper maps how banks, card schemes, Bigtechs, merchants, consumers, crypto actors, and public authorities promote strategic narratives, creating a noisy and biased policy debate. It evaluates central bank digital currency (CBDC) as a central policy choice, alongside alternatives such as regulation or public instant-payment systems. One of the paper’s key insights is that retail payment outcomes are not determined purely by efficiency, but by strategic communication, political economy, and institutional design under uncertainty. In addition, effective policy requires independent analysis, transparency, and preserving a balance between public and private money. [SSRN]

Crunchfish published an executive white paper that reframes offline payments from a resilience add-on to ledger-based payments platforms to core payments infrastructure. In a fully digital economy, the absence of offline capability becomes a systemic vulnerability, but the architecture matters. The paper provides an analytical framework for evaluating offline models as a lens for institutional alignment. It distinguishes between immediate offline (which shifts value and risk to devices), deferred offline (preserves ledger money but introduces credit and reconciliation risk) and governed offline (reservation-based in which funds remain reserved at source, enabling offline execution with deterministic settlement). The governed offline model aligns with card pre-authorization and smart contract settlement. In the case of central bank digital currency (CBDC) it maintains central bank control offline, preserves singleness of digital money and avoids fragmentation. [Crunchfish]

Bermuda’s Premier David Burt signalled a shift from the Government’s earlier strategy of relying solely on privately issued stablecoins toward exploring a digitally native Bermuda dollar, saying pilots and growing experience with stablecoin-based payments have prompted reconsideration of a public-sector role in issuance. He framed the prospective digital Bermuda dollar as a complementary, local instrument aimed at reducing friction in P2G transactions and strengthening monetary identity in a dollarized economy, noting that the Bermuda Monetary Authority and Ministry of Finance are now aligned on a legislative roadmap and beginning to evaluate infrastructure partners. While current stablecoin pilots continue and officials are examining whether such tokens could be accepted as legal tender, Burt emphasized that a future digital Bermuda dollar “may not be privately issued stable coins,” underscoring concerns that have been raised about consumer protection, dependence on private issuers, and the resilience of an “onchain” economy. [Royal Gazette]

The European Central Bank (ECB) launched a call for experts to join two workstreams under the digital euro Rulebook Development Group (RDG) to support further development of the digital euro scheme rulebook, which will set common rules, standards and procedures for using the digital euro across the euro area. One workstream (G5) will focus on implementation specifications for ATMs and payment terminals, including communication technologies, integration of offline digital euro functionality and leveraging existing standards, requiring expertise in ATM and terminal interfacing or provision. The other (B1) will design a certification and approval framework for testing and certifying payment and acceptance solutions and infrastructure used by payment service providers in the digital euro ecosystem, requiring expertise in payments and acceptance devices. The ECB notes that the flexible draft rulebook will be updated to reflect the outcome of the EU legislative process, with any decision to issue a digital euro to follow only after legislation is adopted. [ECB]

Santanu Mondal and T. Chithralekha propose a hybrid offline central bank digital currency (CBDC) architecture that uses zero-knowledge proofs (ZKPs) and secure hardware to enable cash-like payments on resource-constrained internet of things (IoT) devices while preserving regulatory oversight. The system combines a two-tier CBDC model with hierarchical “main wallet / IoT sub‑wallets,” secure elements and trusted execution environments for tamper-resistant key storage and counters, and NFC/BLE device-to-device transfers backed by lightweight ZKPs. This operationalizes intermittently offline CBDC designs, translating privacy-preserving anti–money laundering and counter–terrorist financing rules into on-device limits and ZKP circuits rather than continuous online monitoring, thereby shifting supervisory leverage into protocol and hardware design choices. Unresolved are empirical tradeoffs among proof complexity, device diversity, and real-world performance under regulatory stress scenarios. [arXiv]

The Bank of Korea (BOK) announced Phase II of Project Hangang. It aims to trial large-scale, won-pegged deposit tokens built on a wholesale central bank digital currency (CBDC) layer, to cut transaction costs for both major corporations and small merchants burdened by credit card fees, building on Phase I’s system build out and 2025 live pilot. Participating banks will expand from 7 to 9 and merchant coverage will be significantly broadened. Phase II will test person to person transfers, biometric authentication, and automatic deposit token funding and sweep out. It will also deepen programmability, using digital vouchers in blockchain based treasury pilots such as an electric vehicle (EV) charging infrastructure project, and continue experiments with AI agent payments and tokenized bonds and equities. The 2026 agenda includes support for government treasury execution, and external consulting on regulation and operating models, with a Phase III vision of low cost universal payments, programmable financial services, and infrastructure for Korea’s broader digital asset ecosystem. [BOK]