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The National Bank of the Republic of Kazakhstan (NBK) launched a one-week DigitalTenge central bank digital currency (CBDC) proof-of-concept (PoC) involving NBK staff and local merchants. (This is much like the National Bank of Ukraine 2019 PoC.) The NBK PoC will test basic payment scenarios (e.g., C2B, P2P), non-functional requirements, and programmability. For example, it will test special-purpose tokens on which consumer might purchase only from the "white list" of merchants or products, within particular time period etc. In parallel, the NBK is finalizing its research and development for offline and advanced smart contract deployment on its platform.

The IMF published a working paper that presents a vision for a multilateral platform that could improve cross-border payments, as well as related FX transactions, risk sharing, and more generally, financial contracting. It proposes a design that centralizes payments and settlement and that integrates functionality needed for cross-border transactions: streamlining compliance, reducing the cost of FX conversion, and better managing financial risks. The paper also shows how new technologies can be leveraged to better organize payments and associated financial markets. These new technologies are ledgers with unique states, programmability that allows for smart contracts, and encryption which ensures privacy, and can alleviate the underlying obstacles to trade. These technologies allow the design of a multilateral exchange system where participants can truthfully share information with smart contracts but can retain privacy relative to other parties.

"Trades in today's financial system are inherently subject to settlement uncertainty. This paper explores tokenization as a potential technological solution. A token system, by enabling programmability of assets, can be designed to eradicate settlement uncertainty. We study the allocations achieved in a decentralized market with either the legacy settlement system or a token system. Tokenization can improve efficiency in markets subject to a limited commitment problem. However, it also materially alters the information environment, which in turn aggravates a hold-up problem. This limits potential gains from resolving settlement uncertainty, particularly for markets that depend on intermediaries."

A leaked draft of the proposed Digital Euro Bill, to be proposed by the European Commission on June 28, will ban remuneration, surcharges and programmability, and make offline payments available from the outset. The regulation aims to ensure a level of privacy equal to taking cash from an ATM during offline, face-to-face interactions, and neither the European Central Bank (ECB) nor the payment service providers will have access to personal transaction data. The draft law also allows the ECB to set holding limits to limit disintermediation risk.

The Bank for International Settlements (BIS) proposed a new type of financial infrastructure that would combine central bank digital currency (CBDC) with tokenized bank deposits and other tokenized claims, on a programmable platform on a unified ledger. The BIS claims that "eventual benefits would go beyond faster speeds and lower costs, to enable entirely new types of transaction, limited only by the ingenuity of public and private innovators... Examples include new methods for securities settlements that combine all the individual steps into one seamless transaction, tokenized deposits with built-in regulatory checks that simultaneously settle in wholesale CBDC, smart contract-enabled credit that reduces the cost of trade finance for smaller companies, improving global supply chains, enhanced sharing of data on potential borrowers, and using privacy-protecting technology, to expand access to credit for disadvantaged segments of the population."

The Banco Central do Brasil (BCB) published the details of its digital real central bank digital currency (CBDC) technical testing. It will involve no real transactions (so it isn't a pilot). Its aim is to validate the use of a DLT solution on the Hyperledger Besu platform, evaluating programmability and the ability to comply with legal and regulatory requirements, mainly related to privacy, as well as its technological viability. The details include the criteria for selecting the ten participating institutions.

The Central Bank of Eswatini (CBE) has published a consultative paper that sets out the design characteristics of a potential retail digital lilangeni. The Bank has partnered with Giesecke+Devrient (G+D) to advance its research and exploration of CBDCs and is now entering the experimentation phase of its CBDC project. It will be based on a two-tiered operating model, where the CBE operates the core infrastructure and intermediaries are in charge of distributing CBDC to end users, once obtained from the CBE, and handle all customer-facing activities. It will be unremunerated, transactions will be free of charge to consumers, and it will enable true and full interoperability with the existing payment methods and wholesale and retail infrastructures. Offline functionality will ensure continued usage even in the absence of an internet connection, during power outages, or simply in certain rural areas. Some payments with - and wallets that store - digital lilangeni will be equipped with programmability features for value-added and innovative use case scenarios.

Ripple has announced the CBDC Innovate challenge, with a total prize pool of $150,000. The Ripple CBDC Innovate challenge seeks to inspire programmers to build applications capable of running on the XRP Ledger and supporting retail central bank digital currencies (CBDCs), interoperability and financial inclusion. The deadline for the first batch of submissions is August 25. Competitors are expected to build or update a fintech or payment solution that makes use of CBDC and can run on the XRP Ledger, create a solution that can take advantage of CBDC's advantages or create an interface that allows any human to engage with a CBDC.

"This consultative report - issued as part of the G20 cross-border payments programme - focuses on facilitating increased adoption of payment versus payment (PvP) to reduce foreign exchange settlement risk and improve cross-border payments. The report analyses the causes of non-PvP settlement, takes stock of existing and proposed new PvP solutions and suggests roles for the private and public sectors to facilitate PvP adoption."

A paper by a couple of Barclays staffers aims to provide a mitigation to the risk that the adoption of central bank digital currency (CBDC) fragments payments markets and retail deposits. It introduces the concept of ecosystems providing a common programmability layer that interfaces with the account systems at both commercial banks and the central bank. The paper focuses on a potential U.K. CBDC, including industry ecosystems interfacing with commercial banks using open banking application programming interfaces (APIs).

SAMA Updates Its Regulatory Sandbox Framework to Drive Innovation The Saudi Central Bank (SAMA) updated its Regulatory Sandbox framework as part of its efforts to achieve the national strategic goals in the Saudi Vision 2030 Financial Sector Development Programme. The updated framework will also support the objectives of the fintech strategy and contribute to the economic empowerment of the Saudi society and its citizens by promoting further Fintech innovations.

In July 2024, DeCurret plans to commercialize its DCJPY tokenized deposit network of over 100 Japanese institutions and enterprises that have explored proofs of concept (PoCs) for various use cases. DeCurret outlined several consumer oriented use cases, including retail in-store usage, to buy non fungible tokens (NFTs), and consumer carbon credits. All of them have programmable money elements. The DCJPY platform envisages a financial zone where banks issue deposit tokens and the money transfers take place, and separate distributed ledger technology (DLT) business zone networks (e.g., a metaverse zone, an NFT zone and an environmental value zone).

The Reserve Bank of India (RBI) reportedly started using its central bank digital currency (CBDC) in the call money markets for interbank lending. In November 2022, the RBI launched its first wholesale CBDC pilot to settle government bond transactions, but it fizzled out soon after. There's more hope for this new one because the blockchain-enabled instant atomic settlement and programmability means that if one bank lends to another, funds will automatically be returned at specific times without delays. Additionally, there's the potential to tokenize the collateral used for loans. However, none of this has been officially confirmed.

The Hong Kong Monetary Authority (HKMA) published a report on the key findings, learnings, and assessments of the 14 pilots conducted by the 16 participating firms under Phase 1 of the e-HKD pilot program. The pilots showed that the programmability, tokenization, and atomic settlement associated with an e-HKD central bank digital currency (CBDC) could add unique value to the Hong Kong payment ecosystem. An e-HKD has the potential to facilitate faster, more cost-efficient, and more inclusive transactions., and enable new types of economic transactions. The next phase of the program will explore new e-HKD use cases and delve deeper into select pilots from Phase 1.

"Mastercard has completed the Hong Kong Monetary Authority's (HKMA) e-HKD Pilot Programme, which demonstrated the efficacy of the Mastercard Multi-Token Network solution to settle Web3 transactions involving decentralized applications and digital assets, such as NFTs. The pilot also showcased the potential for seamless funding and settlement in and out of Web3 marketplaces via a retail central bank digital currency (CBDC), such as e-HKD in the future.

The Bank of Korea (BOK) will reportedly launch two wholesale central bank digital currency (CBDC) tests. The first will be a pilot in which banks will issue tokenized deposits as programmable vouchers, and settle them between each other using wholesale CBDC. This tokenized deposit pilot will involve up to 100,000 people starting in September or October 2024. The second test will be a proof-of-concept that will involve banks using wholesale CBDC to settle carbon credit transactions on the Korea Exchange. https://www.koreatimes.co.kr/www/nation/2023/11/602_363810.html

The Bank of Thailand (BoT) has been working on a retail central bank digital currency (CBDC), with an initial six month pilot planned for the second quarter of 2022, but it has been postponed to the fourth quarter of this year, to make sure the central bank gets it right. In terms of rationale, the BoT sees CBDCs offering more potential for the private sector to get involved and innovate, compared to the existing fast payments system. For example, programmability can't be built on a fast payment system.

This Central Bank of Brazil (BCB) note discusses the development of its central bank digital currency (CBDC). The main objective is to provide entrepreneurs with a safe and reliable environment to innovate through the use of programmability technologies, such as programable money and smart contracts. In the context of a modern payment system, already available to the Brazilian population, a full-fledged CBDC must enable new functionalities, beyond those brought by an instant payment arrangement. Therefore, the innovation tool for which the BCB envisions the greatest potential is the development of a platform for smart payments.

"New data on global Bitcoin mining released by the Cambridge Centre for Alternative Finance (CCAF) as part of the Cambridge Digital Assets Programme (CDAP) confirms the growing dominance of the US and reveals a surprising resurgence."

According to a 42-page chapter in the Bank for International Settlements (BIS) 2022 Annual Economic Report crypto's structural flaws make it an unsuitable basis for a monetary system, and instead envisions a future where programmability and tokenization are built on top of central bank digital currencies (CBDCs). Structural flaws make the crypto universe unsuitable as the basis for a monetary system: because it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralization narrative, crypto often relies on unregulated intermediaries that pose financial risks.