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The Reserve Bank of India (RBI) has achieved its target of recording over one million daily e-rupee transactions. The milestone was accomplished on December 27, 2023. The pilot project for the retail e-rupee was launched on December 1, 2022. Since its initiation, there's been a significant surge in daily transactions, rising from an average of 20,000-25,000 in July to over a million by the close of the year. Commercial banks have been instrumental in this achievement, offering incentives such as cashbacks to promote the use of the e-rupee and attract new users.

The Reserve Bank of India (RBI) has achieved its target of recording over one million daily e-rupee transactions. The milestone was accomplished on December 27, 2023. The pilot project for the retail e-rupee was launched on December 1, 2022. Since its initiation, there's been a significant surge in daily transactions, rising from an average of 20,000-25,000 in July to over a million by the close of the year. Commercial banks have been instrumental in this achievement, offering incentives such as cashbacks to promote the use of the e-rupee and attract new users.

The Türkiye Cumhuriyet Merkez Bankası (CBRT) published the results of the first phase of its digital Turkish lira testing. Unfortunately it's in Turkish only for now and Google Translate choked on it, but here's a summary that I asked Microsoft's AI Copilot to prepare. The project started in 2020 with a proof-of-concept (POC) that tested the applicability of various distributed ledger technologies (DLTs) to the digital currency. The study was successfully completed and followed by the establishment of the Digital Turkish Lira Collaboration Platform with the participation of technology partners. The first phase of the project focused on retail payments and involved the preparation of the technical work environment, the design and development of the digital currency system, the integration of a prototype digital identity system, the creation of a digital wallet application, and the simulation and testing of different scenarios for the issuance, distribution, online payment/transfer and redemption of the digital currency. The first phase also included pilot tests in selected locations to measure the system performance and user experience. The tests were successfully completed in the first half of 2023 and the first phase was finalized. The findings of the first phase will inform the next phases, which will involve more extensive pilot tests and the expansion of the collaboration platform with new participants.

The National Bank of Cambodia (NBC) and UnionPay launched cross-border QR code payments between the NBC's Bakong and UnionPay's global payments platform. UnionPay cardholders will be able to use their UnionPay-enabled wallets to scan Bakong KHQR codes to complete payment transactions at merchants in Cambodia, and by early 2024, Cambodian residents will be able to use their Bakong wallet to make payments at UnionPay QR code accepting merchants in China and globally.

The National Bank of Cambodia's (NBC's) Bakong online banking and mobile payments app has seen its adoption levels surpass 10 million accounts (about 60% of Cambodia's population. Bakong allows Cambodians to transfer and receive digital funds using their smartphones without traditional bank accounts. The NBC has also established cross-border payment connectivity with Thailand, Laos, and Vietnam, and signed MOUs with the Central Bank of Solomon Islands, the Reserve Bank of Fiji, and the National Bank of Rwanda, to expand the reach of Bakong to these countries. In addition, the NBC has signed a memorandum of cooperation with Japan's Ministry of Economy, Trade and Industry, to facilitate QR code-based payments between Cambodia and Japan.

The European Central Bank (ECB) has issued five calls for applications to establish framework agreements with potential providers of digital euro components and related services. At this stage the ECB is not making a commitment to launch any of the development work listed in the calls for applications. The purpose of the selection process is to establish framework agreements with the most suitable external providers to ensure that the Eurosystem is prepared to start developing a digital euro in the future if warranted.

The European Banking Federation (EBF) published a paper that examines the impact of different digital euro holding limits on bank deposit outflows. It confirmed that the higher the limit, the greater the outflows, with smaller banks being the most vulnerable, and the effect greater when the banking system is under stress.

Crunchfish published a paper by Lipis Advisors on the challenges of implementing offline payments on smartphones and how to mitigate the risks. Offline payments require a much higher security than what is offered by the smartphone rich execution environment (REE). This higher level of security may be achieved by implementing offline payments as a trusted application (TA) protected by a tamper-resistant element (TRE) that provides a secure runtime and storage for both cryptographic keys and other offline assets, such as the offline balance and risk rules. The TRE can be provided either as a hardware-based standalone TRE or a software-based app-integrated TRE, the trade-off being the higher security of the former versus the greater scalability of the latter.

The IMF published a paper that introduces, and illustrates the use of, the ASAP (Access, Service, Asset, Platform) conceptual Digital Asset Platforms (DAP) model. Just as the utilization of a seven-layer TCP/IP model has been fundamental to the interoperability of the internet, it is anticipated that the four-layer ASAP DAP model will similarly promote cross-platform and cross-border interoperability. The model is illustrated through examples and use cases, such as asset tokenization and the concept of purpose bound money (PBM) being explored by the Monetary Authority of Singapore (MAS).

The European Central Bank (ECB) is opposed to Apple's proposed changes to the iPhone's near-field communication (NFC) at the core of Apple Pay. The ECB argues that by not providing third parties with full access to the secure element (SE) of its NFC technology, Apple Pay maintains an unfair advantage against third-party payment apps on iPhones. Because of these limitations, contactless payments made through third-party apps on iPhone would be less user-friendly and ultimately be slower than Apple's offering. Also, iPhones would be incompatible with the digital euro, because the current enabling legislation requires the ability to do peer-to-peer (P2P) and offline payments, the latter which requires access to the SE.

The Qingdao branch of the Bank of China (BOC) has rolled out a new payment option for Qingdao Rail Transit through digital yuan hardware wallets for payments without network and electricity. This "deferred payment" system allows travelers to use the public transit service first and pay later with the hardware wallet featured enabled on users' smartphones. This functionality requires the use of an Android-based smartphone running a "Super SIM" card that stores digital yuan account information for use when there's no network or electricity, introduced by China Mobile, China Telecom, and China Unicom in 2023. https://baijiahao.baidu.com/s?id=1794932657646082801&wfr=spider&for=pc

The Bank for International Settlements (BIS) together with seven central banks will explore how tokenization of wholesale central bank money and commercial bank deposits on programmable platforms can improve the monetary system. Project Agorá's primary area of exploration will be to increase the speed and integrity of international payments, while lowering costs by building on the BIS's proposed unified ledger concept. The BIS will issue a call for expressions of interest to private financial institutions, with the Institute of International Finance (IIF) acting as the intermediary and convener, to join the project.

The Reserve Bank of Zimbabwe (RBZ) launched a new "structured" currency called "Zimbabwe Gold" (ZiG) that will be anchored to a weighted value of the central bank's precious metal (mainly gold) and foreign currency reserves. As of April 5, 2024, the RBZ had reserve assets of US$100 million in cash and 2,522 kgs of gold (US$185 million) to back the entire local currency component of reserve money which stood at ZW$2.6 trillion (US$90 million). ZiG notes and coins shall be issued in denominations made up of 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG, but no mention is made of what becomes of the ZiG (now GBDT) wallets, assuming such wallets ever existed.

"Most studies on central bank digital currencies focus on the effects after they become well established. This column analyses the macroeconomic effects in the transition to the new equilibrium. Using a two-country model with financial frictions, it shows that, under plausible assumptions for demand for central bank digital currency, the transition is characterised by volatility in the digital currency, cash, and deposits, leading to volatility in loan rates, investment, and consumption. Binding caps on holdings of the digital currency during the transition period are shown to be most effective in reducing disintermediation and output losses and in minimising international spillovers."

The European Central Bank (ECB) is establishing seven new workstreams to develop the various sections of the digital euro rulebook and has issued calls for candidates for each, inviting experts in payments infrastructure and architecture, technical specifications and scheme management to apply. Last year three workstreams were launched, covering the scheme's compatibility with standards, as well as technical requirements, and identification and authentication. The workstreams will report to the Rulebook Development Group (RDG) that represents consumers, retailers, and intermediaries. Each applicant will need to be nominated by an RDG member.

"I could imagine holding bank-issued stablecoins in my digital wallet, but I have a suspicion that in time most people will drift towards tokens backed by central bank reserves. In other words, in a world with a Digital Pound, it's not clear why anyone would hold Barclays Bunce, CapOne Cabbage, Wells Wonga or Lloyds Lolly."

"During a parliamentary committee hearing, Adrian Orr, Governor of the Reserve Bank of New Zealand made a joke. 'It's a great business to be in central banking. You print money and people believe it. Touch wood,' said Orr. The Committee laughed."

"The Zimbabwean Finance Minister, Mtuli Ncube, has said his government plans to halt the local currency's freefall by linking it to gold and establishing a currency board. Ncube said these measures could permanently end the local currency's volatility."

The most recent draft of the digital euro legislation being discussed by the European parliamentary Committee on Economic and Monetary Affairs includes support for permissionless blockchains. "Conditional payments in Digital Euros may also be carried out on permissionless distributed ledgers where until now only privately issued assets like crypto-assets or stable coins are available as a means of payment. With the approval and under conditions set by the European Central Bank (ECB), the Digital Euro would be made available as a token to be referenced on these chains." The ECB and European Council previously stated they don't want programmable money at the base layer, so the legislation now specifies conditional payments will happen in the "layer above". https://www.europarl.europa.eu/doceo/document/ECON-PR-758954_EN.pdf

The IMF published an overview of the development of digital money and payment systems in twelve Pacific island countries (PICs), assessing potential benefits and risks, with a focus on how they can harness digital technology to enhance financial inclusion and payment efficiency while minimizing risks. The paper also examines the prerequisites for successfully adopting various forms of digital money and proposes a strategic framework for policy decisions (see Figure 10). It advocates a gradual, well-informed approach, tailored to PICs' unique monetary and financial circumstances, including the presence of national currencies and the maturity of payment systems. Moreover, the paper suggests that a regional approach could help address capacity and scalability challenges in introducing new digital money forms and payment methods in PICs.