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:
• The Bank of England published Design note – Intermediary roles and scheme rulebook which lays out potential roles and responsibilities of digital pound intermediaries and a preliminary conceptual framework for a digital pound rulebook. The overall framework is expected to cover:
o Product vision and strategy
o Scheme and regulation
o Technology
o Operations
This design note focuses on the Scheme subsection and considers:
o Actors
o System management
o Obligations and minimum standards
o Activities and the provision of services
o Compliance
Although many of the types of institutions that currently exist could easily migrate in a world of digital payments, a key development for Payment Interface Providers (PIP) is that a digital pound is a direct liability of the Bank of England and is thus a financially risk-free asset. This means that a PIP does not maintain its own balance sheet for users’ accounts. This should allow them to focus more on service innovation than firms that are responsible for deposit-taking, custody of client assets, or balance sheet dependent financial intermediation like mortgage lending. This supports innovation and growth by making it easier for new entrants, fintech and non-traditional players to participate in the digital pound ecosystem. This should also allow incumbent payments firms to provide additional services beyond their current offerings, through the digital pound.
• The Bank of England launched the Digital Pound Lab (“Lab”) - an experimental platform. The Lab will enable firms to experiment with possible digital pound products and services using the infrastructure provided, and to evaluate the viability of prospective business models. It will also enable the Bank to assess the requirements necessary for a digital pound to provide a platform for innovation.
• The Bank of England issued a report on offline payments to assess whether it was technically feasible to implement an offline payment functionality for a digital pound. Offline CBDC would be an innovative feature with potential to support different policy goals, such as resilience or financial inclusion. Whilst the project demonstrated that it might be technically feasible to implement an offline payment functionality for a digital pound, there are security, performance, and user experience challenges which need to be explored further. One key area is the security challenges related to double spending and counterfeiting. Heavy reliance on secure elements meant that if the secure elements were breached, double spending and counterfeiting might occur. Secure elements are commonly used in payments today, but they are, in most cases, paired with immediate online authentication, thus limiting losses. In contrast, the online layer in an offline payment (online reconciliation) occurs only after the transaction has taken place and losses have already been incurred.
• The European Central Bank (ECB) established an innovation platform to collaborate with European stakeholders in the context of the digital euro project. 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.
• With the news that the ratio of cashless payments in Japan rose to 42.8% in 2024, the BOJ Deputy Governor Uchida recently said a CBDC may become "a critical piece of infrastructure" shaping the future of Japan's payment and settlement systems, but stressed that he did not expect demand for cash to disappear in Japan any time soon.
• The government owned State Bank of India announced the results of a pilot study focused on tenant farmers. The initiative aims to prevent misuse of credit by ensuring that loans are used only for farming purposes, such as buying seeds and fertilisers from approved vendors. So far, in FY2025, the report stated that over ₹4.5 crore has been sanctioned under this pilot. In Odisha, 501 tenant farmers had benefited with loan approvals, while in Andhra Pradesh 218 farmers had benefited from the loan sanctions.
Naresh Aggarwal
16 June 2025
