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Distributed ledger technology (DLT) is one of 20 focus areas on the U.S. National Security Council (NSC) shortlist of critical and emerging technologies. The NSC's strategy calls for investing in, developing, adopting and promoting the priority technologies. Also on the shortlist: AI, data science, quantum computing and "space technologies," weapons of mass destruction mitigation technologies, and others. https://www.whitehouse.gov/wp-content/uploads/2020/10/National-Strategy-for-CET.pdf

The Bank of England (BOE) published the minutes of the October 2023 retail CBDC Technology Forum meeting. The four subgroups presented their objectives, expected outputs and timelines. Subgroup 1 will look at privacy-enhancing technologies and aliases. Subgroup 2 will focus on alternative models of interaction between payment infrastructure providers (PIPs). Subgroup 3 will explore options for the core ledger design in general terms, rather than the technology or solutions provided by specific vendors. Subgroup 4 will assess what a platform for innovation might look like and explore the possible technology requirements for one.

Ripple is partnering with Colombia's central bank to explore blockchain technology use cases. Banco de la República, in conjunction with The Ministry of Information and Communications Technologies (MinTIC) will pilot use cases that will enhance Colombia's high-value payment system using the Ripple CBDC Platform, powered by the XRP Ledger (XRPL). The pilot will be run with Spain-based blockchain technology firm Peersyst Technology.

"Given the rapid pace of technological experimentation and development, and the multitude of variables at play, it can be challenging to assess the best technology choices for a new central bank digital currency (CBDC). This WEF white paper is intended to guide central banks and other decision-makers through major technology considerations for CBDC. It is divided into three parts: 1) discussion of CBDC technical design considerations given various policy goals, 2) an evaluation of the pros and cons, or trade-offs, of the use of distributed ledger technology in CBDC infrastructure, and 3) an overview of important cybersecurity risks and considerations for any CBDC."

The white paper, Privacy 2020: 10 Privacy Risks and 10 Privacy Enhancing Technologies to Watch in the Next Decade, identifies ten technologies that are likely to create increasingly complex data protection challenges. Over the next decade, privacy considerations will be driven by innovations in tech linked to human bodies, health, and social networks; infrastructure; and computing power. The white paper also highlights ten developments that can enhance privacy - providing cause for optimism that organizations will be able to manage data responsibly. Some of these technologies are already in general use, some will soon be widely deployed, and others are nascent.

The Monetary Authority of Singapore (MAS) announced a new Regulatory Technology (RegTech) grant scheme and an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption in the financial sector. MAS will commit $42 million for the RegTech grant scheme and enhanced DAG scheme. The RegTech grant scheme, aims to promote the adoption and integration of technology solutions in Singapore-based financial institution (FI) risk management and compliance functions. The DAG helps smaller FIs and FinTech firms adopt digital solutions to better cope with the impact of COVID-19, and to position themselves for subsequent recovery and growth.

As a result of the digitization and datafication of finance, combined with new technologies, cybersecurity and technological risks are now evolving into major threats to financial stability and national security. In addition, the entry of major technology firms into finance - TechFins - brings new issues. The first arises in the context of new forms of potentially systemically important infrastructure (such as data and cloud services providers). The second arises because data - like finance - benefits from economies of scope and scale and from network effects and - even more than finance - tends towards monopolistic or oligopolistic outcomes, resulting in the potential for systemic risk from new forms of "Too Big to Fail" and "Too Connected to Fail" phenomena. This paper suggests some basic principles about how such risks can be monitored and addressed, focusing in particular on the role of regulatory technology ("RegTech").

Digital technologies have begun to transform the payments and banking systems, but the final impact of the change is far from determined. However, faster payments are here to stay, and the new payments technologies will disrupt legacy deposit and payments franchises. The level of disruption on incumbents will depend on the structure of their legacy business and on their response in adopting the new technologies.

BlackRock Financial Management posted a job ad for a VP-level blockchain lead to create and implement strategies designed to drive demand for the firm's offerings and enhance the value proposition to clients of the firm's investments and technology offerings. The candidates must have experience in: articulating the technological foundations of blockchain technology including cryptographic hash functions, distributed network consensus mechanisms, and public-private key cryptography; devising and articulating fundamental valuation methodologies for crypto-assets; evaluating game theory and decentralizing governance models associated with blockchain technology; and working with key drivers of blockchain networks' design and their impact on the four key dimensions of blockchain performance including speed, scalability, privacy, and security.

This article sheds light on the application of blockchain technology to the existing financial market infrastructure, namely to post-trade settlement. We show how blockchain technology can facilitate trustless delivery vs. payment (DVP) settlement without any intermediary. Moving settlement processes entirely on decentral technologies makes the settlement process more efficient since it decreases the associated transaction costs and reduces involved risks. Hence, the blockchain-based multichain atomic swap technology will become a peer-to-peer alternative to a central clearing counterparty that normally facilitates the DVP settlement of financial assets.

The Banque de France published a report on its series of experiments with a wholesale central bank digital currency (#CBDC) but says its work has also thrown up new questions. The tests focused on ways of integrating CBDC into innovative procedures for the exchange and settlement of financial assets, based on new technologies such as distributed ledger technology (DLT), and in multi-currency and cross-border settings. The report covers nine experiments which were conducted as of September 2020 in conjunction with domestic and international private sector players, as well as other central banks and public authorities. Numerous technological partners were also involved, enabling the experiments to explore a broad range of technologies.

"The Monetary Authority of Singapore (MAS) today announced that it will commit up to S$150 million over three years under the renewed Financial Sector Technology and Innovation Scheme (FSTI 3.0). FSTI 3.0 seeks to accelerate and strengthen innovation by supporting projects that involve the use of cutting-edge technologies or with a regional nexus, while doubling down on MAS' commitment to promote a vibrant technology ecosystem for the financial sector."

The Reserve Bank of India (RBI) and the Bank for International Settlements Innovation Hub (BISIH) have launched the fourth edition of the G20 TechSprint, a global technology competition to promote innovative solutions aimed at improving cross-border payments. Developers from around the world should submit application from May 04, 2023 to June 04, 2023 and the TechSprint will conclude around August/ September 2023. The 2023 TechSprint will focus on AML/CFT/Sanctions technology solutions to reduce illicit finance risk, FX and liquidity technology solutions to enable settlement in emerging market and developing economy (EMDE) currencies, and technology solutions for multilateral cross-border CBDC platforms.

The National Bank of Georgia (NBG) has selected Ripple Labs as its technology partner for developing digital lari (GEL), its central bank digital currency (CBDC) pilot project. The pilot will experiment with Ripple's CBDC technology and evaluate the practical use cases to gauge potential benefits for the public sector, businesses and retail users. The NBG made the decision following a competition process, which consisted of two phases: submission of a Project Execution Plan (PEP) by nine shortlisted candidates in the first phase, and demonstration of their technology solutions in the second. https://nbg.gov.ge/en/media/news/ripple-the-flagship-international-company-becomes-the-technology-partner-for-the-digital

Regulation 2022/858 of the European Parliament and of the Council on a pilot regime for market infrastructures based on distributed ledger technology (DLT) was published in the Official Journal of the European Union. Tokenization is expected to open up opportunities for efficiency improvements in trading and post-trading processes, but EU financial services legislation was not designed with such technology and crypto-assets in mind and contains provisions that could limit the use of blockchain technology. For these reasons, the DLT Pilot Regime is being introduced to allow for such technology to flourish, while accounting for potential risks at the same time.

The U.S. Federal Deposit Insurance Corp. is seeking comment about a potential set of standards and a certification program intended to make it easier and less costly for financial institutions to partner with technology firms. The request for information will address several matters. For instance, it seeks comment on the idea of the FDIC partnering with a standards-setting organization that would develop best practices for technology firms that want to work with banks. The standards-setter would focus on areas such as credit underwriting models. The FDIC is also exploring the possibility of a voluntary certification program that would assess a technology company's compliance with the standards.

The latest European Investment bank (EIB) Investment Survey found that although 45% of firms intend to invest less than initially planned in the current financial year due to the coronavirus, they expected to increase in the use of digital technologies (50%). The survey results also show that while 37% of EU firms had not adopted any digital technology, this figure is only 27% in the United States. The areas where the US has a particularly notable edge are the use of IOT applications and drones. In addition, large firms are significantly more likely to have implemented digital technology compared to small and medium-sized enterprises (75% vs. 52%).

While some regulations (e.g., GDPR, FCRA, and CCPA) help to prevent institutions from freely sharing clients' sensitive information, some regulations (e.g., BSA 1970) require FIs to share certain financial data with government agencies to combat financial crime. This creates an inherent tension between the privacy and the integrity of financial transactions. In the past decade, significant progress has been made in building efficient privacy-enhancing technologies that allow computer systems and networks to validate encrypted data automatically. In this paper, we investigate some of these technologies to identify the benefits and limitations of each, in particular, for use in data sharing among FIs. As a case study, we look into the emerging area of Central Bank Digital Currencies (CBDCs) and how privacy-enhancing technologies can be integrated into the CBDC architecture. Our study, however, is not limited to CBDCs and can be applied to other financial scenarios with tokenized bank deposits such as cross-border payments, real-time settlements, and card payments.

"Financial intermediaries play an important role in consumer adoption and use of payment technology. Card schemes and card-issuing banks set rules for cashless payments between consumers and merchants. We document that these rules have a strong causal impact on the use of digital payment technology. We study an increase in the value limit for contactless cardholder verification ("tap-and-go" limit) that was introduced at the onset of the COVID-19 pandemic. Our analysis is based on anonymized, transaction-level data for a large sample of point-of-sale (POS) debit card payments between 2019 and 2021. We show that the increase in the "tap-and-go" limit caused a significant increase in the consumer use of contactless payments but only a minor increase in first-time adoption of this payment technology. Our results suggest that policy-makers are advised to consider the role of intermediaries and verification rules when evaluating payment innovations, such as instant payment systems or central bank digital currencies (CBDCs)."

Banca D'Italia published a paper on financial technology providers and their crucial role in enabling firms - even small ones - to become more efficient and keep pace with innovation. It draws attention to how interdependencies between such providers and financial entities may pose new systemic risks, deserving the attention of financial regulators and overseers. Although it doesn't cover central bank digital currency (CBDC) explicitly, all of the points it makes seem relevant to the role such technology providers play in CBDC launches and pilots.