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The Official Monetary and Financial Institutions Forum (OMFIF) published its annual survey-based digital assets report. 26 survey respondents comprised of bond issuers, banks and investors, the majority of which were public sector bond issuers, indicated a slow but steady gathering of momentum behind the adoption of blockchain and distributed ledger technology (DLT). About 38% said they are looking at adopting them in debt issuance. Central bank digital currency (CBDC) was chosen by 59% of respondents as the preferred cash settlement for tokenized assets, with only 23% favoring bank-issued stablecoins (e.g., tokenized deposits).

The Official Monetary and Financial Institutions Forum (OMFIF) has launched the Digital Monetary Institute, a high-level group of policy-makers, technologists, financiers and regulators to explore the challenges and opportunities of digital finance. The principal focus will be on payments instruments in wholesale and retail markets, with central bank digital currency being of particular interest.

A survey conducted by Ipsos MORI on behalf of OMFIF and G+D which provides insights into consumers' attitudes towards new digital forms of payments, including CBDC, in four countries: Germany, Indonesia, Nigeria and the US. The survey findings reveal a sharp difference in attitudes towards CBDCs between consumers in developed and developing countries. In Nigeria - where a pilot CBDC project was launched in October - 91% of respondents say they are likely to use CBDCs, with 60% of consumers saying so in Indonesia. However, these figures fall to just 24% in the US and 14% in Germany. This suggests CBDCs could offer a 'leapfrog' moment in payments in emerging markets, where systems are less developed, compared to countries such as the US and Germany, where consumers have many established payment options already.

OMFIF and G+D: "Everyone should have access to convenient, secure digital payments and other financial services. CBDC has the potential to make this a reality. It is a digital version of physical cash - a ubiquitous and fully inclusive financial instrument that people can use independently from the issuer. For the 1.4bn unbanked adults globally, as well as unbanked children who form the next generation, CBDCs promote participation in the digital economy. This should also inspire developed nations to leverage offline functionality, where a bank account is not needed, and introduce a digital form of public currency that is simple, resilient and universally accepted. CBDCs could ease life for many people by offering a cheaper way for cross-border payments for migrant workers or enabling digital payments for small merchants like rural market vendors."

The Official Monetary and Financial Institutions Forum (OMFIF) published the 2022 edition of its Future of Payments report. It focuses particularly on the challenges of cross-border payments for emerging market countries, delving into the validity of cryptocurrencies and stablecoins as a means of escaping domestic inflation and sending cheap remittances. It also examines the value proposition of CBDC for emerging markets, as well as looking at some of the progress made by CBDC cross-border integration projects. Notably, while central banks think that interlinking CBDCs might be a promising avenue for enhancing cross-border payments, they are not pursuing CBDC in order to provide a solution to the cross-border payments problem. The consensus is that CBDCs must justify their existence with other merits , such as improving financial inclusion.

The Official Monetary and Financial Institutions Forum (OMFIF) Digital Monetary Institute (DMI) published its annual Future of Payments report, based on a survey of 34 central banks, 13 from advanced and 21 from emerging market economies. It found that platforms based on multi-currency central bank digital currencies (CBDCs) are emerging as alternatives to existing cross-border payments systems, with Project mBridge being the most advanced, although liquidity issues and governance concerns still pose limitations for widespread adoption. CBDC interoperability will be a key consideration for global payments going forward, with a hub-and-spoke model being favored by survey respondents. Standardization (e.g., migrating to ISO 20022 standards) is helping to reduce the costs and frictions in cross-border payments, but implementation is patchy. However, instant payments systems are rapidly growing in importance, with 47% of survey respondents selecting it as the most promising avenue for improving cross-border payments.

The Official Monetary and Financial Institutions Forum (OMFIF) published a report on how central banks' opinions on issuing a retail central bank digital currency (CBDC) are evolving, based on a survey of 34 central banks. Three-quarters of central bank survey respondents expect to issue a CBDC. Where 34% expect to issue one in 3-5 years, 91% have done or will conduct feasibility studies. Financial inclusion and preserving central bank monetary sovereignty are the leading motivations for emerging market central banks (44%) and developed market central banks (50%), respectively. Previously ranked as the most challenging feature to deliver, 20% of surveyed central banks report improved satisfaction with progress in offline payments, up from 0% in 2023.

This OMFIF report centres on the findings of a global opinion poll on public trust in monetary institutions, payment characteristics and digital currency. The poll was conducted by Ipsos MORI across 13 advanced and emerging countries. Our findings suggest that central banks are well-positioned to issue digital currency. In almost all countries, respondents indicated that they would feel most confident in digital money issued by the domestic monetary authority. Respondents globally expressed a lack of confidence in digital money issued by a tech or credit card company, particularly respondents from advanced economies.

A number of central banks around the world are seriously considering issuing retail central bank digital currency, with one likely to arrive in the next five years. That is the key finding from a report from IBM and OMFIF, a central banking think tank.

G+D and the Official Monetary Financial Institutions Forum (OMFIF) surveyed consumers' attitudes towards central bank digital currency (CBDC) in Germany, Indonesia, Nigeria, and the United States. The survey revealed sharp differences between consumers in developed countries, where consumers already have many established digital payment options, and developing countries, where there are fewer such options. In Nigeria, 91% of respondents say they are likely to use CBDC, with 60% of consumers saying so in Indonesia. However, these figures fall to just 24% in the United States and 14% in Germany. CBDC awareness is also much higher in emerging markets.

"The RBZ says that these tokens can be used for payments, with tokens available for purchase via banks, which will create dedicated e-gold wallets and cards to facilitate person-to-person or person-to-business payments, both online and offline. This is, in effect, a gold-backed central bank digital currency. The economics of gold as a defence against inflation are somewhat heterodox but not absurd. Introducing a CBDC is a complex business, however. Questions around implementation abound. Not only will the central bank have to retain the currency reserves to ensure that it can redeem the coins and tokens, it will also have to maintain the gold reserves backing the tokens."

"Libra's current trials may mean that its introduction has been delayed. Many consider that it is by no means guaranteed to operate at all. But central banks are well aware that even if Facebook does not manage to bring its project to fruition, sooner or later someone else will succeed, and will introduce a private sector digital payment system. And the issues and implications for central banking, the commercial banking system and the wider economy that their current research has highlighted will not go away."

As the law will determine what type of central bank digital currency (CBDC) can be issued in each jurisdiction, getting the legal model right is a crucial step in introducing one. The current statutory language seems to provide the ECB with enough room to offer a digital euro directly to the public through digital accounts if it so chooses. However, for example, the US and Brazilian central banks are authorised to establish relations only with a limited set of institutions, notably banks, not with people or corporations. Without a change to these rules, digital dollars and digital reais would have to be distributed to the public through intermediaries, just like cash is made available today through banks. For all central banks considering issuing a CBDC, the time to tackle the legal troubles and seek legislative reform is now, because reaching a political consensus on this model may take time, since CBDCs raise many contentious issues, from changing the business of banking to creating new privacy risks.

The Regulated Liability Network (RLN) completed its proof-of-concept phase on 6 July, proving it can achieve legal instant dollar settlement anywhere in the world. Even as a dollar settlement network, it goes further than wholesale CBDC projects, which are essentially tokenized versions of 24/7 real-time gross settlement systems, because the RLN would include commercial bank money as well as central bank money. Enabling 24/7 cross-border dollar settlement anywhere in the world would drastically improve the payments landscape, reducing risks and improving transaction speed, freeing up liquidity to be better used elsewhere. This would help to cement the dollar's status as the preferred currency for international trade and foreign exchange reserves. Multi-currency CBDC platforms like mBridge are springing up, seeking to give members a means of transacting locally without using dollars. However, with a global 24/7 dollar settlement system in place, there might be less demand for such systems.

The Hong Kong Monetary Authority (HKMA) has yet to determine if it should issue CBDC, but it continues to experiment. 16 firms are participating in the pilot programs, working on 14 projects on topics including programmable payments, tokenized deposits, settlement of tokenized assets and offline payments. Cross-border payments applications are especially thorny due to the legal challenges of connecting payments across multiple jurisdictions, which requires a lot of political will across multiple jurisdictions.

Magyar Nemzeti Bank has collaborated with the Sovereign Official Digital Association (SODA) to issue non-fungible tokens (NFTs) on a private blockchain. By successfully participating in financial literacy quizzes, Hungarian coin collectors and NFT enthusiasts are being awarded central bank-issued tokens and then swapping and trading them on the Money Museum mobile application. This is part of a contest to win a set of limited edition commemorative coins. As any member of the public can use the blockchain to collect, swap and register their ownership of the coins, this type of activity - though gamified - this is arguably a central bank digital currency (CBDC) pilot.

"It would, however, be a mistake of historic proportions if society stopped using public money and threw away 'trust' as a concept. The challenge for central banks and other actors in the existing financial architecture is to create a form of public money on a blockchain that can deliver the promises of a decentralised digital economy. Just as at the beginning of the internet, it can be hard to envisage how the Web 3 world of non-fungible tokens, decentralised finance and cryptocurrencies can be anything more than just a niche fad, but the promise is real and the changes will be far-reaching."

"Many questions are yet to be answered and many avenues to be explored as part of the financial landscape's digital revolution. But stablecoin insurance could provide a boost of confidence as more and more regular consumers take part in the blooming digital currency market."

"For central banks, the situation in Kazakhstan shows both the importance and the limitations of cash. The crisis makes it clear that it will not be enough for central banks to develop an online digital currency transaction network while treating cash as the offline back-up."

"As sovereign issuers around the world contemplate the introduction of retail central bank digital currencies, a digital complement to physical cash, stakeholders face a once-in-a-lifetime opportunity to steward this evolution. Digital cash should not only embody the fundamental attributes of its physical counterpart but also offer additional enhancements that can serve the emerging needs of society. The dematerialisation of cash promises to unlock efficiencies and spur financial innovation. One such feature is the automated behaviour of money and transactions - programmability."