It is becoming increasingly difficult to keep up with all of the announcements from a raft of central banks and think tanks but here are some that caught my attention:
Official Announcements
- The Bank of England published Design Note – Interoperability models for UK based payments which explores how interoperability can support innovation, inclusion, and the singleness of money by enabling seamless exchange between digital pounds, commercial bank deposits, cash, and new forms of digital money. The note outlines three potential models for delivering interoperability, evaluates their trade-offs, and presents a preferred approach. It also shares findings from a technical proof of concept using existing UK payment infrastructure. Four core features are especially important:
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- A digital pound would be issued by the Bank and remain its direct liability.
- It would be delivered through a public-private platform, with intermediaries responsible for user-facing services – including onboarding, KYC checks, and the management of users’ personal data.
- It would be interchangeable with other forms of money – including cash, bank deposits and emerging forms such as stablecoins.
- Neither the Bank nor the Government would access users’ personal data through the core infrastructure.
There are three options for how this could be undertaken:
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- Model A: Centrally provided interoperability by the digital pound operator through the digital pound platform for the whole digital pound ecosystem.
- Model B: A small number of intermediaries (not necessarily PIPs) competitively provide interoperability to the digital pound ecosystem.
- Model C: Each PIP directly provides interoperability to their users, via commercial arrangements.
Model A would need to be in place at launch to ensure baseline interoperability across the ecosystem. Models B and C could be demand-driven from launch and may become increasingly relevant as the system evolves to support interoperability with new forms of digital money or cross-border use cases. These models are not mutually exclusive.
- According to market reports, the Bank of England is looking to pause the rollout of a CBDC with the Bank appearing more willing to defer to private innovation, especially if payment providers can achieve similar results with less risk and complexity.
- The Bank for International Settlements issued the results of its 2024 annual survey of CBDC. It found that Central banks' involvement in central bank digital currency (CBDC) work remained strong. Of the 93 central banks surveyed, 91% (85) were exploring either a retail CBDC, a wholesale CBDC or both. At an aggregate level, the exploration of wholesale CBDCs was at more advanced stages than exploration of retail CBDCs. The focus and stage of the work and envisioned use cases and design features of CBDCs varied across jurisdictions. Yet, preserving the role of central bank money amid the decline of cash and the rise of tokenisation of traditional assets remains a key driver for many central banks. More than one in three jurisdictions had also accelerated work on CBDCs in light of developments in stablecoins and other cryptoassets
- The White House released a 166-page report titled “Strengthening American Leadership in Digital Financial Technology. It proposed a taxonomy for digital assets, separating them into three categories:
- Security Tokens: Digital assets that constitute securities because, for example, they represent an interest in equity, bonds, or security-based swaps, or form part of an investment contract. This can include tokenised securities.
- Commodity Tokens: Digital assets that are not security tokens (i.e., digital assets that aren’t securities). The report notes that this category includes network tokens, meaning tokens that are connected to the functioning of a decentralised network or protocol; examples include bitcoin and ether.
- Tokens for Commercial and Consumer Use: Digital assets that are used to access some good, service, or privilege and subject to laws relating to commercial transactions. The report notes that this category includes non-fungible tokens (NFTs) representing identity credentials or event tickets.
- The Reserve Bank of Australia (RBA) launched phase two of Project Acacia - a joint initiative from the RBA and the Digital Finance Cooperative Research Centre. stablecoins, bank deposit tokens and a pilot wholesale central bank digital currency (CBDC) will be used by partners participating in the trial. A diverse range of organisations, from local fintech firms to major banks, have been selected to test 24 use cases, 19 of which will involve real money and five proofs-of-concept involving simulated transactions using a range of asset classes, including fixed income, private markets, trade receivables, and carbon credits.
- China’s central bank chief Pan Gongsheng plans to expand the footprint of the digital yuan, CBDC envisioning a “multipolar” currency system where multiple currencies support the global economy recognising that “Traditional cross-border payment infrastructures can be easily politicized and weaponized, and used as a tool for unilateral sanctions, damaging global economic and financial order,".
Resources, Reports and Announcements
- The BIS issued a Working Paper that looked at the central bank and media sentiment on CBDCs by examining the sentiments of central banks and the media regarding CBDCs across 15 major global economies between 2016 and 2022. Key messages included:
- central bank sentiment tends to have more influence on media sentiment than the reverse
- sentiment in leading economies shapes sentiment in other regions
- unsurprisingly that more positive central bank sentiments on CBDCs are associated with negative impacts on cryptocurrency market returns and the stock performance of banking and payment-related firms.
- In its third progress report, the European Central Bank said it had received “extensive feedback” from its rule book development group comprising representatives from Europe’s retail payments market as well as observers from the Eurosystem and European Union institutions. It has established an innovation platform to collaborate with almost 70 market participants – including merchants, fintech companies, start-ups, banks and other payment service providers – signed up to work with the ECB to explore digital euro payment functionalities and use cases.
In parallel, the ECB has engaged directly with small merchants, vulnerable consumers and under-represented groups through focus groups, interviews and collaborations with consumer associations. The main objective of this research is to understand the needs, preferences and challenges of diverse user groups to ensure the digital euro’s design is as inclusive and accessible as possible. Findings will be published in the third quarter of 2025.
- The Governor of the South Korean Central Bank says Seoul is planning to use CBDCs to pay over 110 trillion won ($79.3 billion) in government subsidies hoping that it will help prevent fraudulent use and improve fiscal policy efficiency.
- According to a report from MSN, digital currency pilots can have a positive impact on liquidity in emerging forex markets. In Nigeria it found that:
- Interbank Funding: Because eNaira wallets can hold overnight balances, smaller banks gain a new, collateral-free way to balance the books. That reduces their dependence on the standing lending facility and, by extension, lowers naira money-market rates in the afternoon ‘scramble’ that used to set the tone for next-day FX quotes.
- Retail Demand Aggregation: When consumers pay utilities or school fees in eNaira, merchants are credited instantly and can convert proceeds to bank deposits within minutes. The shortened settlement cycle dampens intraday liquidity risk, allowing merchants to reduce the buffer stock of working capital they normally keep in USD.
- Data-Driven Market Making: Transaction-level transparency gives the CBN a clearer view of seasonal cash-flow gaps such as vacations, school resumption week, planting season, etc., and lets the bank pre-position FX auction sizes rather than reacting afterwards. Predictable supply is the first prerequisite for tighter spreads.
In addition, if integrated with the Pan-African Payment and Settlement System (PAPSS) local corporates importing Ghanaian cocoa or Kenyan tea could skip correspondence through New York entirely. The move would lighten dollar demand at the margin, potentially narrowing the official-parallel gap that still hovers near 20 per cent.
- The Centre for Economic Policy Research issued a paper suggesting societal gains if CBDCs were interest bearing. Its analysis suggests that this could reduce the dominating effect of the main banks in many economies and improves the yields available to the public.
- The current relative size of the largest stablecoins based in latest data is below:
Naresh Aggarwal
16 September 2025
