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This Boston Fed paper discusses the key developments, drivers, and considerations in the U.S. market that support progress towards open banking and application programming interfaces (APIs) and how APIs offer a wide variety of new services. It finds that opening a bank's platform to third-party applications can create synergies with innovative technology businesses to build a new generation of digital financial activities that enhance the consumer experience. Open banking can create a paradigm shift in how financial institutions (FIs) treat the issue of ownership, storage, and use of data. However, several risks and challenges need to be addressed. The industry is waiting for guidance from the Consumer Financial Protection Bureau (CFPB). Interoperability is lacking and many FIs struggle to replace legacy infrastructures with fully digital platforms, which can require considerable investment. FIs may be struggling to prioritize open banking and API permissioned data with competing projects.

The South African Intergovernmental Fintech Working Group (IFWG) launched 'Project Khokha 2' to explore the use of tokenised money, blockchains and wholesale central bank digital currency (CBDC) in South Africa. The CBDC will use R3's Corda enterprise blockchain, and the settlement token and debenture will use a variant of Cosmos blockchain interoperability solution. Accenture will be responsible for tokenizing the wholesale CBDC on Corda. Block Markets Africa will help with distributed ledger technology, tokenizing the bonds and the wholesale payment token using its custom Cosmos-based solution. And Deloitte will document the insights. Other participants in the trials will include commercial banks Absa, FirstRand, Investec, Nedbank, and Standard Bank, the Johannesburg Stock Exchange (JSE), and Strate, South Africa's central securities depository.

The Central Bank of The Bahamas (CBOB) has released a consultation paper setting out its proposals for legislation to regulate the provision and use of central bank digital currency (CBDC). It summarizes the key provisions of the draft Central Bank (Electronic Bahamian Dollars) Regulations 2021. These include qualification of wallet providers, interoperability, consumer protection, financial stability and financial inclusion. The CBOB is also proposing other consequential amendments to the Payment Systems Act (No. 7 of 2012) & the Computer Misuse Act (Ch. 107A). These legislative amendments are set out in the draft Payment Systems (Amendment) Bill 2021 and the draft Computer Misuse (Amendment) Bill 2021. The consultation period will end on 31st March, 2021. https://www.centralbankbahamas.com/viewPDF/documents/2021-02-15-11-24-12-Central-Bank-Electronic-Bahamian-Dollars-Regulations-2021.pdf

The International Swaps and Derivatives Association (ISDA) and the International Securities Lending Association (ISLA) have agreed to closely collaborate on two key initiatives to deliver digital solutions to their respective memberships in a consistent and cost-effective way. As part of the agreement, ISLA will also work to model and code specific SFT components for inclusion in the CDM, creating greater alignment between derivatives and securities lending markets. The CDM establishes a single, common digital representation of events and processes that occur during the lifecycle of a trade, and is aimed at enhancing consistency and facilitating interoperability across firms and platforms.

China's State Council Information Office, prompted by the Peoples's Bank of China (PBOC), is reportedly looking at whether to launch an anti-trust probe into Alipay and WeChat Pay, The State Council's antitrust committee has been gathering information on them for more than a month. But authorities have been keen to whittle back their dominance. Also, in an effort to encourage smaller players to enter the market, the PBOC said last year that it planned to standardize the interoperability of QR code payments.

Stanford University's Future of Digital Currency Program joined forces with the International Telecommunications Union (ITU), a United nations agency headed by China, to launch the Digital Currency Global Initiative (DGCI). The purpose is to conduct research on central bank digital currency (CBDC) and other digital currencies, aiming to identify areas for standardization to facilitate interoperability. This research will focus on technical architectures, security, technical implications and challenges in deployment caused by regulatory and policy requirements. It will also construct a set of metrics by which to evaluate the robustness of various digital currency technologies against the requirements set by various stakeholders.

This World Economic Forum report examines the key challenges facing cross-border retail payments and provides recommendations for policy-makers to overcome them. It finds that to efficiently facilitate cross-border retail payments between businesses and consumers around the world, policy-makers need to address four key areas: market barriers, interoperability, security and oversight.

The National Bank of Cambodia will launch a DLT-based network to enable greater interoperability in the country's payments sector and to mitigate dollarization. Consumers will be able to make near instant payments via the platform, currently in pilot mode, using a mobile app and QR codes. The NBC is also developing a remittance-focused cross-border payment project with Malaysia's Maybank.

The Initiative will focus on Digital Currencies of all forms across the entire ecosystem spectrum, from centralized to decentralized to hybrids including Central Bank Digital Currency (CBDC) and stablecoins amongst many others. Currently, more than 40 central banks are exploring some form of digital currency initiative. The Initiative will undertake research and evaluation of technical standards for interoperability in collaboration with key government, NGO and private industry stakeholders. The Initiative will also study and implement emerging cross-border business use cases related to supply chain, financial markets, charitable giving and macroeconomic impact of these instruments on promoting financial inclusion.

The World Economic Forum's "Presidio Principles: Foundational Values for a Decentralized Future" lays out sixteen principles aimed to protect users and preserve the values of the technology so that all can benefit, in a "Bill of Rights" style document. Rights are grouped into four broad pillars; (i) transparency and accessibility (the right to information about the system), (ii) privacy and security (the right to data protection), (iii) agency and interoperability (the right for individuals to own and manage their data), and (iv) accountability and governance (the right for system users to understand available recourse).

According to a special chapter of the BIS Annual Economic Report, digital innovation is radically reshaping the provision of payment services, and central banks are embracing this innovation. They promote interoperability, support competition and innovation, and operate public infrastructures - all essential for easily accessible, low-cost and high-quality payment services. And central bank digital currencies (CBDCs) can foster competition among private sector intermediaries, set high standards for safety and risk management, and serve as a basis for sound innovation in payments.

2020 will be remembered as the year blockchain interoperability became real. Drawn by the allure of Ethereum's booming DeFi ecosystem, Bitcoin holders have ported more than half a billion dollars worth of Bitcoin onto Ethereum in the year.

China's digital currency will have two tiers, comprising the first level distributed by the central bank to commercial banks, and a second layer used by retail customers. The first-level design of the CBDC has been "basically completed" along with the formulation of technical standards and interoperability tests. The e-yuan will next be distributed to payment service providers and other private sector institutions, the central bank said in a July report published by the International Monetary Fund (IMF). To avoid such upsets, the Peoples Bank of China (PBOC) told the IMF that it is likely to limit e-yuan to small, retail transactions by setting maximum daily and yearly limits on payments and that it will only process large amounts by appointment. The PBOC said it may apply fees for large-sum or high-frequency transactions. It will also offer no interest on accounts.

The International Swaps and Derivatives Association (ISDA) announced a pilot implementation of the Common Domain Model (CDM) for the clearing of interest rate derivatives using DAML, an open-source smart contract language created by Digital Asset. Using the CDM for clearing and deploying it on a distributed ledger with DAML will remove the burden of setting up connections to incongruous systems and services, facilitating interoperability, automation and straight-through processing. This pilot takes the CDM model for clearing and adds new features for the signing of state transitions, data ownership and privacy elements, which are necessary to put the CDM clearing model into production.

"Roxe's full stack solution knits together issuance, management, distribution, and interoperation of different CBDCs with banks, central banks, cross-border money transfer companies, and peer-to-peer payment providers in a single network. This is an audacious vision, to rework the global payments system. DeFi and CeFi are losing their distinction. The global payments system needs a rework, integrating CBDCs into it and providing payment rails come as the first step in true digital asset trading towards a global capital market."

Global payment network Roxe has recruited Andreas Jobst, an International Monetary Fund (IMF) Senior Economist. As Roxe's chief currency economist, Jobst will be tasked with helping to scale Roxe's Bitcoin blochchain-based central bank digital currency (CBDC) project. The CBDC Plus Program appears to be a wholesale CBDC designed for cross-border interoperability among financial institutions.

The Central Bank of Sri Lanka rolled out LANKAQR, a standardized and interoperable QR code for payments launched "with the aim of moving towards a less-cash society while increasing financial inclusion in Sri Lanka." LANKAQR enables customers to make payments, directly from their bank accounts to accounts of merchants or service providers, using payment apps of LANKAQR certified financial institutions.

DFW's founding team developed the world's first retail CBDC in production (when the firm was called NZIA). It pioneered numerous groundbreaking innovations that have shaped the evolution of CBDC design; inclusive access, interoperability with legacy systems, policy and regulatory reform, KYC/AML compliance, and systems to guarantee privacy, integrity, governance and trust.

"Stellar is an open-source, decentralized blockchain network that was designed with asset issuance in mind. It offers the interoperability and flexibility of a permissionless ledger while possessing built-in capabilities to ensure security, certainty, and control - as with a centralized or permissioned ledger. That combination makes it particularly well-suited for issuance of CBDCs. "

The Bank of Jamaica estimates that in excess of 20,000 individuals are currently utilizing Sand Dollars, with "north of $300,000" of the central bank digital currency (CBDC) currently in circulation. The central bank is nearing the end of ensuring there is interoperability with the automated clearing house (ACH) so there can be a pass-through link between Sand Dollar wallets and deposit accounts. Once that exercise is completed, the central bank along with the financial institutions, is going to be focusing on making an aggressive push to get more businesses enrolled in the infrastructure.