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A technical report on the Central Bank of Jordan's (CBJ's) retail central bank digital currency (CBDC) explorations briefly appeared on the IMF's web page.. It was taken down before I could download it, but AgenParl news service published the abstract: "The report analyzes the retail payments markets of Jordan to identify pain points that retail CBDC (rCBDC) could address. It finds that retail payment systems in Jordan are highly integrated, enabling customers to make interoperable transactions between banks and non-bank Payment Service Providers. The country's cross-border remittance market is competitive, but may benefit from the reduced transactions cost associated with rCBDC. Despite generally accessible and appropriate product offerings and an enabling environment, various barriers prevent customers from extensively using digital means of payment. Hence, rCBDC might create an opportunity to overcome these barriers, thus making a cross-border rCBDC worth consideration. However, the CBJ should rigorously evaluate benefits against risks and costs before forging ahead. Meanwhile, the CBJ should develop capacity to address technology, cybersecurity, financial integrity, and legal issues."

"We use agent-based modelling to build a digital twin of the retail payment system, where heterogeneous consumers and merchants interact, learn, and adapt as they meet and use different monies and payment instruments. As we introduce an rCBDC, the model simulates its adoption. We calibrate this digital twin to Spain's retail payment ecosystem. We run hypothetical scenarios that correspond to publicly available discussions about the digital euro. Results show that introducing an rCBDC without attractive design options and stimulus for consumers and merchants results in low and slow adoption. Results suggest that the reverse waterfall functionality and a positive remuneration spread are effective to foster adoption, whereas balance limits and top-up limits are effective to restrain adoption. Results also suggest that combining design options and stimulus with limits to holding rCBDCs could aid to achieve a sweet spot of adoption."

The BIS published a report on the key insights and lessons learnt from its Innovation Hub's 12 central bank digital currency (CBDC) projects. For domestic use cases, two projects investigate wholesale CBDC (wCBDC) and five look at retail CBDC (rCBDC). Across borders, four experiments look at wCBDC and one looks at rCBDC. For each category, the report discusses key insights and lessons learnt from the perspectives of desirability, feasibility and viability. The report also contains tables and an annex that give details of the projects I haven't seen before.

The Financial Stability Board (FSB) published its report to the G20 on the framework for monitoring progress toward meeting the targets for the G20 Roadmap for Enhancing Cross-border Payments, to achieve cheaper, faster, more transparent, and more accessible payments. The framework includes key performance indicators defined across the 11 targets for the three market segments - wholesale, retail, and remittances. Notably, the definitions of the wholesale and retail market segments have been adjusted to more clearly separate the differing use cases and end-user experiences and better align the definitions with those most typically used by the payments industry and end-users. Wholesale transactions were defined as those between financial institutions, and retail transactions as those that were neither between financial institution end-users nor in the third market segment - remittances. Going forward, the wholesale market segment will include all payments with a value equal to or exceeding a specified threshold regardless of whether the end-users are financial institutions. The threshold will be set at a level that captures the use cases in this market segment, such as high-value corporate business-to-business. Relatedly, retail payments will be payments with a value less than the specified threshold, not including remittances.

A new experiment by the Bank for International Settlements (BIS) Innovation Hub and Hong Kong Monetary Authority (HKMA) shows central bank digital currency (CBDC) can work with private stablecoins, even if intermediary operators go bust. Project Aurum created a technology stack comprised of a wholesale interbank system and a retail e-wallet system, setting up two different types of tokens: intermediated CBDC and stablecoins backed by CBDC in the interbank system.

Despite the mangled headline (only a "central bank" can issue *central bank* digital currency (CBDC)) this Cato survey contains some interesting statistical nuggets. It found that, while only 16% of Americans polled support a digital dollar, 49% haven't even formed an opinion (34% oppose it). A majority opposes a digital dollar that would allow the government to monitor their spending (68%) or control how they spend (74%). On fears that the government could potentially do either of these things, 76% of those polled said that the government should forbid the Fed from issuing a digital dollar. There are interesting differences between CBDC opinions of those who identify as Republicans (right leaning) and Democrats (left leaning) with the former being more wary of CBDC across all of the permutations and combinations of questions.

The Central Bank of the Republic of China (Taiwan) has completed a technical feasibility study for a wholesale central bank digital currency (CBDC) and is planning retail CBDC pilots to follow up on the proof-of-concept completed in 2022. Supporting tokenization is a main motivation for the wholesale CBDC work, including providing an anchor for tokenized deposits, stablecoins and a unified ledger, plus an additional payment option in a tokenized world. The retail CBDC work will include researching an offline solution. https://www.cbc.gov.tw/tw/cp-302-164924-0423d-1.html

A paper by a couple of San Francisco Federal Reserve Bank staff (Pascal Paul and Mauricio Ulate) published a paper that uses a New Keynesian DSGE model to study the introduction of a remunerated retail central bank digital currency (CBDC). At the heart of the model are monopolistic banks with market power in deposit and loan markets. When a remunerated retail CBDC is introduced, households benefit from an expansion of liquidity services and higher deposit rates as bank deposit market power is curtailed. However, even though deposits also flow out of the banking system and bank lending contracts, the paper finds substantial welfare gains as long as the CBDC interest rate doesn't exceed the policy rate minus 1%.

The Bank of Thailand (BOT) published an English version of its update on its retail central bank digital currency (CBDC) technical testing. The original version was published in late March 2024 in Thai and, because Google Translate was returning gibberish, I wasn't able to ascertain whether the latest work was a pilot or proof of concept (POC). However, according to the new document, it is clearly a proof of concept because the 4,000 individual users that participated were employees of the BOT and the three intermediaries that took part. In any case, the POC successfully demonstrated the potential of the technology behind the retail CBDC system, but the BOT said it has no plans to launch one and will use the technology design to further develop a more efficient payment system.

The IMF published a paper that argues that successful CBDC adoption hinges not only on technical readiness and operational robustness, but also on strategic policy and design choices that target end-user and intermediary involvement from the outset. Central banks cannot take it for granted that CBDC, once launched, will be adopted and scaled up easily. The paper proposes a "REDI" framework that central banks can use to prepare for CBDC adoption comprised of (i) regulatory strategies, (ii) education and communication initiatives, (iii) design and deployment choices, and (iv) incentive mechanisms. The paper also makes several concrete recommendations including: -Early engagement with end-users focusing on identifying their needs and pain points, as well as social and cultural factors that influence their financial behavior. -Monetary and non-monetary incentives to encourage intermediary participation, including exclusivity agreements, subsidies for setup costs, and allowing for CBDC data monetization or charging for value-added services. -End-user incentives including sign-up bonuses, airdrops or lotteries upon onboarding, and once onboarded, usage incentives, such as cash-back offers and discounts on CBDC transactions. Incentives targeted specifically to merchants could include subsidies for setup costs, reduced transaction fees, tax exemptions, or volume-based rewards. -Implementing selected use cases (such as P2P, G2P or B2P payments) may help generate initial momentum (see also SODA's "test and deploy" implementation framework).

The Bank of Canada has now confirmed on its website that it is downshifting its retail central bank digital currency (CBDC) project. "The Bank is scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development... The body of knowledge built over recent years will be invaluable if, at some point in the future, Canadians, through their elected representatives, decide they want or need a digital Canadian dollar... The Bank will continue to monitor global retail CBDC developments and publish some related research, but the focus will be on preparing for the evolution of payments both in Canada and around the world, through policy research and analysis."

The Bank for International Settlements (BIS) published reports on retail central bank digital currency (CBDC) system design and legal considerations. They were written by a group comprised of the BIS and seven central banks (Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Board of Governors of the Federal Reserve System, Sveriges Riksbank and the Swiss National Bank). The system design paper provides perspectives on overall system design and four key issues: privacy, cyber security (including quantum computing), offline functionality and point of sale considerations. The legal paper examines key legal questions, focusing on four areas: the legal classification of retail CBDC; the obligations and liabilities of participants in the retail CBDC ecosystem; privacy and financial crime and cross-border issues.

The Bank for International Settlements (BIS) published a paper by its Consultative Group on Innovation and the Digital Economy (CGIDE) that discusses four main processes in a retail central bank digital currency (CBDC) architecture. These are: i) enrolling new users, ii) creating CBDC (cash-in), iii) destroying CBDC (cash-out) and iv) intra-ledger transfers. These four processes could involve other flows and vary depending on the CBDC design, regulatory framework, technological infrastructure and policy objectives of each jurisdiction. The architecture lays out a hybrid model which allows for the division of labor between the central bank and private intermediaries.

The Journal of Economics and Statistics (JES) published a paper by Bank of Thailand (BOT) staff published a paper that analyzes end-to-end transaction data from the central bank's seven-month 2023 retail central bank digital currency (CBDC) pilot. Findings indicate that the three financial service providers (FSPs) manage their CBDC holdings and liquidity by adjusting redemptions but do not adjust issuances in response to retail payments. Retail users, on the other hand, tend to use CBDC as a payment method, with usage positively correlated with reward incentives. The network topology analysis indicates that the hybrid architecture tested in this pilot creates a less connected network. CBDC is distributed sparsely and slowly within the network, relying heavily on a few key FSPs. This suggests the current distribution model is limited in effectiveness and could be improved.