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"Digital currencies provide a potential form of liquidity competing with bank deposits. We introduce digital currency into a macro model with a financial sector in which financial frictions generate endogenous systemic risk and instability. In the model, digital currency is fully integrated into the financial system and depresses bank deposit spreads, particularly during crises, which limits banks' ability to recapitalize following losses. The probability of the banking sector being in crisis states can grow significantly with the introduction of digital currency. While banking-sector stability suffers, household welfare can improve significantly. Financial frictions may limit the potential benefits of digital currencies."

According to a Swedish government-appointed investigation "too many people are stuck outside the digital system" and suggested pressuring banks in Sweden to offer so-called "low-risk accounts" with limited functions (such as, for example, limits on international payments). It also calls on the government to to develop and run its own digital ID system, or to put out a tender for one which would be run by a private provider, to replace the private bank-run BankID system that excludes foreigners, such as refugees, foreign students, and people working on short-term contracts, making it impossible for them to identify themselves and use digital payment systems.

The European Banking Federation (EBF), which represents the vast majority of the European banking sector, published a paper on a digital euro ecosystem. It argues that a retail digital euro could be envisaged in the mix of new tools and solutions to meet evolving payment needs, as long as it adds value to consumers, is appropriately designed, in close cooperation with the private sector, and mitigates ex ante the accompanying risks. a retail digital euro could - if properly designed - support the strategic autonomy of Europe and ensure a monetary anchor role of the euro. A wholesale digital euro based on distributed ledger technology (DLT) for the settlement of interbank transfers and related wholesale transactions in central bank reserves, would support the international role of the euro, enhance global cross-border payments and match the needs arising from digital finance.

"The electronic purse, a new payments instrument offering advantages to both consumers and merchants, may soon replace currency in many routine transactions. Widespread use of the electronic purse could, however, raise concerns about consumer protection and the safety and soundness of the instrument. "

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.

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.

Where the relationship between citizens and the state has a trust deficit to begin with, technology may offer better solutions than institutions. One such idea comes from the world of polling. The election officer (read, the monetary authority) signs a sealed envelope that carries your secret ballot (the payment details); carbon paper (cryptography) carries the signature to the vote inside. So when the envelope is opened (the payee is credited), all that the receiver's bank sees is the signature attached to the ballot, not where the vote (the funds) came from. You, however, will know what you did or didn't intend to do. If a terror financier steals your wallet, you'd go to law enforcement to show them where your tokens are. You might even get them back.

In January 2023, the European Central Bank (ECB) will invite market participants to take part in market research to obtain an overview of options for the technical design of possible digital euro components and services. The market research will consist of a set of questions to obtain technical input, as well as cost and time estimations. Participation will not be remunerated. It will not have any impact on eligibility for future procurement procedures related to a digital euro or any other procurement procedures. Nor will it imply any pre-selection for a potential subsequent tender. The ECB intends to publish the findings of the market research in the second quarter of 2023.

"The Riksbank is continuing to investigate the possibility of issuing a digital complement to cash, known as the e-krona. This would preserve public access to government-issued money even if cash were to be marginalised further. In addition, the e-krona could strengthen the resilience of the payments market. No decision has yet been taken to issue an e-krona.

Cash is still the most frequently used means of payment at the point of sale, but its share is declining according to the latest study on the payment attitudes of consumers in the euro area, published by the European Central Bank (ECB). Cash was used for 59% of point-of-sale transactions in 2022, down from 72% in 2019. It is the means of payment most often used for small-value payments in stores and for person-to-person transactions. A majority (60%) also consider it important to have cash as a payment option. Consumers perceive cash as helpful to remain aware of their expenditures, to protect their privacy and to allow transactions to be settled immediately.

"Crunchfish in partnership with HDFC Bank and one additional Indian bank have been working together to develop a solution for Offline Retail Payments that will be demonstrated in a pilot to Reserve Bank of India (RBI) in their Regulatory Sandbox program*. The project, if successful, will provide the basis for RBI's guidance and regulatory support in providing Offline Retail Payments, based on Crunchfish Digital Cash platform, to the payment ecosystem of India. "

The European Central Bank (ECB) published the second progress report on the investigation phase of a digital euro. It outlines the developments made since the first progress report, which was published in September 2022. The report details a second set of design and distribution options that were recently endorsed by the Governing Council and describes the roles of the Eurosystem and supervised intermediaries in the digital euro ecosystem. In 2023 the ECB will further assess a number of design and distribution options and in the second half of the year present the overall design of a digital euro to the Governing Council.

"This chapter is organised as follows. To set the stage, it first describes today's monetary system and the high-level objectives it needs to achieve, and to what extent changes in technology and the economic environment have opened up room for improvement. The next section discusses the promise and pitfalls of crypto and DeFi innovations. The chapter then discusses a vision for the future monetary system, built on central bank public goods. The final section concludes."

Starting on January 9, 2023, the Central Bank of Nigeria (CBN) will allow individual banking clients to withdraw an equivalent of N500,000 ($1,120) per week (up from the N100,000 ($224) cap introduced on December 6, 2022). For corporate organizations, the cash withdrawal will be capped at N5,000,000 ($22,200 up from N500,000 ($1,120)). Also, the fees for cash withdrawals above the limits, in "compelling circumstances... for legitimate purposes", were reduced to 3% and 5% respectively (down from 5% and 10%). However, the daily limit on withdrawals from automatic teller machines (ATMs) and point-of-sale (PoS) terminals will remain at N20,000 ($45). https://www.cbn.gov.ng/Out/2022/CCD/ReNairaRedesignPolicyRevisedWithdrawal.pdf

"The e₹-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks. Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones / devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations. The e₹-R would offer features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks."

"People seem to think that cash is free, but it really isn't. The cost to merchants is significant (which is why an increasing number of them don't take it) and the cost to society should not be overlooked. So should we really be imposing a stealth tax on merchants by forcing them to accept cash any more than we should be forcing them to accept Bitcoin or, for that matter, cards? The answer is, frankly, no."

President Surangel Whipps Jr. reportedly confirmed that the Republic of Palau continues to work with Ripple on the creation of a government-issued US dollar-backed stablecoin (the US dollar is Palau's national currency). Last year Ripple announced a partnership with Palau to explore a national digital currency and its use cases based on XRP Ledger, initially focusing on cross-border payments.

Algeria's Prime Minister, Aïmene Benabderrahmane, reportedly said that the Bank of Algeria is working to create a digital dinar" as part of the digitization of payments.

Presentation by Galia Borja Gómez, Subgobernadora, Banco de México* FORO AMFE 2022 "FINANCIAMIENTO ESPECIALIZADO EN UNA ECONOMÍA INTERNACIONAL QUE SE REGIONALIZA. CASO MÉXICO on September 30, 2022.