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The Monetary Authority of Singapore (MAS) launched Ubin+, an expanded collaboration with international partners on cross-border foreign exchange (FX) settlement using wholesale central bank digital currency (CBDC).  Ubin+ will develop technical standards and infrastructure to support cross-border connectivity, interoperability and atomic settlement of digital currency transactions across platforms using distributed ledger technology (DLT), and non-DLT based financial market infrastructures. It will also evaluate the efficiency and risk implications of such platforms, and establish the related policy frameworks. (The BIS Innovation Hub led Project Mariana that is investigating the use of decentralized finance (DeFi) protocols and automated market makers (AMMs) to automate FX trading and settlement, is part of Ubin+.)

The Asian Development Bank (ADB) completed its Project Tridecagon proof-of-concept (PoC) probing into the viability of cross-border delivery-versus-payment (DVP) bond settlements using blockchain technology. It connected key market infrastructures: central banks' real-time gross settlement systems (RTGS) and central securities depositories' (CSD) book-entry systems, but did not use central bank digital currency (CBDC). The settlement of cross-border securities transactions was proven in principle and across different vendor solutions, but full application may depend on necessary changes to legal and regulatory prescriptions which could take years.

The Leibniz Institute for Financial Research Sustainable Architecture for Finance in Europe (SAFE) published a paper that concludes that the risks and imponderables do not favor the launch of a digital euro if that decision had to be made now.  However, there may be future circumstances in which having a CBDC ready for use may be useful. For example, there could be an unexpected collapse in the availability of banknotes or sudden switches in consumer preferences towards payment instruments which current infrastructures cannot easily handle with the available technologies. Or we could experience phases of financial instability requiring the central bank to back up the private sector in order to preserve the functionality of the payment system. Or, there could be strategic security conditions necessitating more state-driven payment infrastructures. All these are unlikely scenarios, but not impossible ones, which would lead to the need for central banks to step in, perhaps in a short time. Therefore, preparing is a good thing, even if the odds of its usefulness in normal conditions are slim. https://safe-frankfurt.de/publications/pub-details-startseite/publicationname/the-digital-euro-a-precautionary-device-not-a-deus-ex-machina.html

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.

This Asian Development Bank (ADB) report ascertains the current status of technology adoption, including wholesale CBDC applications, by its Cross-Border Settlement Infrastructure Forum member organizations. They include central securities depositories and central banks in the Association of Southeast Asian Nations (ASEAN) plus the People's Republic of China, Japan, and the Republic of Korea (collectively known as ASEAN+3) region.

The Swiss National Bank (SNB) and six commercial banks will launch a wholesale central bank digital currency (CBDC) pilot project on December 1, 2023. Project Helvetia Phase III will test the settlement of tokenized bonds against SNB-issued wholesale CBDC on a delivery-versus-payment (DVP) basis on a distributed ledger technology (DLT) based platform run by the SIX Digital Exchange (SDX). The pilot, which will run until June 2024, will use the SNB's Swiss Interbank Clearing (SIC) payment infrastructure for the tokenization of central bank money and that of the SIX SIS central securities depository (CSD) for integration with the traditional bond settlement infrastructure. This follows up on the Phase I and II proof-of-concept (POC) work conducted with the BIS Innovation Hub between 2020 and 2022.

The Bank for International Settlements published a paper on digital platform economics. It found that digital platforms can dramatically lower costs and thereby aid financial inclusion - but these same features can give rise to digital monopolies and oligopolies. Digital platforms operate in multi-sided markets, and rely crucially on big data. This leads to specific network effects, returns to scale and scope, and policy trade-offs. To reap the benefits of platforms while mitigating risks, policy makers can: (i) apply existing financial, antitrust and privacy regulations, (ii) adapt old and adopt new regulations, combining an activity and entity-based approach, and/or (iii) provide new public infrastructures. The latter include digital identity, retail fast payment systems and CBDCs. These public infrastructures, as well as ex ante competition rules and data portability, are particularly promising. Yet to achieve their policy goals, the paper concludes that central banks and financial regulators need to coordinate with competition and data protection authorities.

The Central Bank of the United Arab Emirates (UAE) is planning to issue a central bank digital currency (CBDC) for domestic and cross-border payments in order to help drive innovation for domestic payments, and address the problems and inefficiency of cross-border payments and respectively. The issuance of a digital dirham is one of nine initiatives of the central bank's Financial Infrastructure Transformation Program. https://www.centralbank.ae/media/mdupathy/cbuae-launches-a-financial-Infrastructure-transformation-programme-to-accelerate-the-digital-transformation-of-the-financial-services-sector-en.pdf

Satoshi Capital Advisors CEO Josiah Hernandez and I have written a paper that explores the application of national and sub-national government bond issuances and corresponding trade and asset lifecycle activity on blockchain-based market infrastructures. It considers existing and pending projects, how governments can carry out future projects, the various use cases corresponding to such projects, the broader market opportunity for government debt issued into blockchain-based market infrastructures, the hurdles to overcome with regards to implementing such projects, and the next steps with regards to further exploration.

The Inter-American Development Bank (IDB) provided an update on Project FuSSE (Fully Scalable Settlement Engine), a joint project with the Bank for International Settlements (BIS) Innovation Hub and Bank of Canada. It is an initiative that offers open-source technology among central banks to facilitate the implementation of payment systems and other settlement infrastructures to advance financial inclusion Latin America and the Caribbean. It will also provide technical assistance for regulatory design and institutional capacity improvement.

The Banque de France (BdF) and the Hong Kong Monetary Authority (HKMA) have launched a collaboration relating to wholesale central bank digital currency (CBDC). They will delve into the study of interoperability between their wholesale CBDC infrastructure, i.e. the BDF's DL3S and the HKMA's Project Ensemble Sandbox, with the main focus on real-time cross-border and cross-currency payments. The cross-border experiment aims to explore how to optimize settlement efficiency of cross-border transactions, and facilitate interoperability between financial market infrastructures in different jurisdictions.

State Street's Currenex trading technology arm is working with London-based FX trading infrastructure provider Pure Digital to to create an institution-focused digital currency trading platform. It will be a fully automated over-the-counter market for digital assets, with physical delivery and bank custody. Scheduled for launch in mid-2021, the new platform will reportedly allow institutional investors to trade using bilateral credit and multiple custody solutions.

Digital finance has the potential to transform emerging market and advanced economies alike. India's approach rests on the principle of providing digital financial infrastructure as a public good. It offers an important case study where the results are relevant and applicable for all economies, irrespective of their stage of development.

Under its DLT Scripless Bond Project, the Bank of Thailand (BOT) has successfully launched a new blockchain-based platform for government savings bond issuance. It aims to enhance investors' buying experience, improve operational efficiency and reduce overall cost. It is a collaborative effort among eight institutions, which are BOT, Public Debt Management Office, Thailand Securities Depository Co., Ltd, Thai Bond Market Association and selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank. In the next phase, the infrastructure will expand to support all government bonds, both retail and wholesale.

The Federal Reserve Bank of New York's New York Innovation Center (NYIC), in collaboration with members of the U.S. financial services sector, published the findings of a proof of concept (PoC) that explored the feasibility of an interoperable network for wholesale payments operating on a shared multi-entity distributed ledger. The research project, undertaken jointly with private sector organizations, experimented with the concept of a regulated liability network (RLN), a theoretical payment infrastructure designed to support the exchange and settlement of regulated digital assets. The experiment successfully simulated both the domestic and cross-border scenarios, identifying shared ledger technology as a potential solution to support payment innovation.

David Birch calls radical rethinking about payment infrastructure , like allowing more direct access to the pipes, provide digital fiat (dollars with an API) as a public good and allow non-credit creating payment banks/ institutions/ utilities to implement the transfers in space as a utility bringing value together (electronic money and digital cash) to put in place robust, inclusive and sustainable pipes for the rest of the economy to use. Let banks focus on creating credit and let them find other ways  to stay in the transaction loop.

On February 12, 2023, the Central Bank of the United Arab Emirates (CBUAE) published its Financial Infrastructure Transformation (FIT) Programme to accelerate the digital transformation in the financial services sector. It comprises implementation of nine key initiatives, including the issuance of central bank digital currency (CBDC) for cross-border and domestic uses.

The IMF published  a paper that develops a detailed model to evaluate the necessary investment requirements to achieve affordable universal broadband. The results indicate that approximately $418 billion needs to be mobilized to connect all unconnected citizens globally (targeting 40-50 GB/Month per user with 95 percent reliability). The bulk of additional investment is for emerging market economies (73%) and low-income developing countries (24%). It also finds that if the data consumption level is lowered to 10-20 GB/Month per user, the total cost decreases by up to about half, whereas raising data consumption to 80-100 GB/Month per user leads to a cost increase of roughly 90% relative to the baseline. Moreover, a 40% cost decrease occurs when varying the peak hour quality of service level from the baseline 95% reliability, to only 50% reliability. The paper concludes that broadband policy assessments should be explicit about the quantity of data and the reliability of service provided to users. Failure to do so will lead to inaccurate estimates and, ultimately, to poor broadband policy decisions.

The Bank of England published its supervision of financial market infrastructures 2022 Annual Report. It reports that the Financial Services & Markets Bill, published in July 2022 and scheduled to complete in 2023 seeks to bring systemic stablecoins into the Bank's regulatory remit, and bring the UK regime in line with standards discussed. The Bank is now working on a regulatory framework for systemic stablecoins and plans to consult on this in due course. Alongside regulation, another key component of a stablecoin regime is the potential application of the FMI Special Administrative Regime to systemic stablecoin firms. The Bank, working with His Majesty's Treasury, will continue to develop this regime to ensure it reflects international CPMI-IOSCO guidance.

Two cryptocurrency exchange portals, DragonEx and CoinBene, have disclosed hacks this week and have both gone into maintenance mode to investigate and improve their infrastructure. DragonEx is believed to have lost over $1 million worth of cryptocurrency, while CoinBebe's losses are estimated at over $45 million, according to industry observers