Good morning readers,
This week, we investigate new developments surrounding China’s central bank digital currency (CBDC), as recent design changes show that the Chinese Communist Party is experimenting with new incentives to onboard people to this more tightly controlled kind of money.
In Bitcoin news, a new private transaction broadcast feature in Bitcoin Core lets a node announce transactions using Tor connections, making network-level privacy better by default, to the benefit of dissidents and nonprofits.
We include the latest edition of the HRF x Pubkey Freedom Tech Series, where HRF’s Freedom Tech Grants Lead Harrison Friedes discusses the power of vibe coding with Senior Software Engineer at Block, Alex Hancock. We end with an explainer of Silent Payments, which make Bitcoin safer to use for human rights defenders.
Now, on to the stories.
Global News
China | New CBDC Features Raise Questions
China’s decision to make its digital yuan CBDC interest-bearing has introduced ambiguity in its design. In particular, whose liability the CBDC represents appears unclear. Wholesale CBDC balances used by financial institutions remain a direct liability of the central bank, while retail balances used by the public held in bank-operated wallets appear to be commercial bank liabilities, akin to bank deposits. This departs from the standard definition of a CBDC as a direct liability of the central bank. What’s not uncertain, however, is that in China the state has extensive control over the corporate sector. While perhaps appearing to empower users, this move is the latest push by the state to onboard people to a more tightly-controlled currency mechanism.
Yemen | Major Bank Suspends Operations Amid Humanitarian Crisis
The International Bank of Yemen suspended all operations following recent sanctions imposed by the U.S. Treasury Department. The shutdown puts pressure on Yemen’s fractured financial system, where two rival monetary systems and currencies operate in parallel: one under the internationally recognized government in Aden and the other controlled by the Houthis in Sanaa. Across both regions, prices continue to rise, salaries go unpaid, and public services are deteriorating. As confidence in formal banking erodes, some Yemenis have found safety in Bitcoin and stablecoins to store and move value outside the country’s fragmented banking infrastructure.
In context: These financial woes are deepening an already severe humanitarian crisis. More than 18 million Yemenis, roughly half the population, are expected to face acute food insecurity next month. Central bank officials in Aden were also recently forced to deny rumors of a new currency issuance, stemming from fake currency images promoted on social media by the Houthis.
Iran | New Data Weighs What is Top of Iranians' Minds During Protests
Research lab Gazetta gathered responses from Iranians during a nationwide internet blackout that severely restricted the flow of information in and out of the country. Nearly one-third of respondents cited money, livelihoods, or the cost of living as a primary concern. The findings illustrate the economic hardships many Iranians face, as the Iranian rial hits a new low of 1.5 million per dollar, major banks reportedly suspend cash withdrawals, and the dictatorship continues to mismanage public services.
In context: On Dec. 28, the largest protests since the 2022 Woman, Life, Freedom movement unfolded across Iran in response to the rial reaching a record low. The regime imposed an internet blackout as it violently repressed demonstrators demanding human rights and dignity. An estimated 30,000 people have been killed, and more than 42,000 have been arrested.
Nicaragua | Economic Control Sustains the Ortega-Murillo Regime
In an investigative series published by Confidencial, reporters identify economic control as one of the four central pillars sustaining the dictatorship of Daniel Ortega and Rosario Murillo. The regime increasingly relies on restrictive controls over civil society’s monetary flows to punish dissent. In 2023, the regime froze the bank accounts of institutions affiliated with the Catholic Church, which led a Nicaraguan seminary to cease operations. Since 2018, thousands of NGOs have been forced to close or had their assets seized for alleged financial violations. In Nicaragua, authoritarian financial control is a primary way to stifle civil society.
South Africa | Digital Asset Platform’s Bank Account Frozen
The Financial Surveillance Department of South Africa’s central bank issued a blocking order and froze a bank account belonging to Kastelo, a South African fintech platform, over alleged capital control violations. The account supported a digital asset arbitrage product that helped users employ offshore investment allowances to trade across local and foreign digital asset markets. A Johannesburg High Court dismissed Kastelo’s urgent request to lift the freeze on procedural grounds, leaving customer funds inaccessible while the legal merits remain unresolved. The case highlights how capital controls empower governments with broad power over financial intermediaries and, by extension, over the financial activities of individuals.
Recommended Content
The Fight for Open Source AI with Alex Hancock
In this episode of the HRF x Pubkey Freedom Tech Series, Harrison Friedes, Freedom Tech grants lead at HRF, sits down with Alex Hancock, senior software engineer at Block. They discuss how Block’s open-source agentic architecture, Goose, empowers users to vibe code applications on their own computers. During a live demonstration, Hancock shows how Goose enables dissidents in high-risk environments to build their own freedom technologies that bypass the surveillance and censorship often found in centralized AI services under authoritarian regimes.
Bitcoin and Freedom Tech News
Bitcoin Core | New Private Transaction Broadcast Feature
A new private transaction broadcast feature in Bitcoin Core, created by developer and HRF grantee Vasil Dimov, enables a node (a computer running the Bitcoin software) to announce transactions using short-lived encrypted Tor or I2P connections. Typically, transactions are broadcast directly to a node’s peers over the public internet, allowing network observers to infer the IP address that likely originated the transaction. The new feature makes metadata (information on who transacted with whom) harder to leak by using encrypted channels to broadcast transactions.
Why this matters: This is a strong step toward default, network-layer privacy in Bitcoin. It doesn’t change consensus, doesn’t require new cryptography, and doesn’t depend on everyone upgrading at once, yet it meaningfully raises the cost of transaction surveillance for dictators and authoritarian governments.
Programming Lightning | Open-Source Lightning Network Education Released
Programming Lightning, a free and open-source guide to building on Bitcoin’s Lightning Network, recently released its first module, Intro to Payment Channels. The course, created by HRF grantee and developer Beige-Coffee, teaches students to build an off-chain wallet and a Lightning payment channel from scratch. Students get to create and broadcast transactions, open channels, and send payments while implementing the rules that govern how Lightning channels update and settle on the main Bitcoin network.
Why this matters: Free and open-source education provides developers under authoritarian rule with resources to build high-speed, censorship-resistant payment infrastructure that operates outside of state-controlled banking systems.
Electrum Wallet | Submarine Payments Integrated
Electrum, an open-source and self-custodial Bitcoin wallet, added support for submarine payments on desktop. The feature allows users to pay a Lightning invoice (a payment request used on Bitcoin’s Lightning Network) using on-chain Bitcoin. This connects on-chain and Lightning balances in Electrum without defaulting to custodial swap services, which introduce counterparty risk.
Why this matters: Submarine payments mean lower fees, increased privacy, and greater flexibility for dissidents and nonprofits using Electrum for Bitcoin payments.
Argo MAC | Private Computation for Bitcoin Launched
A group of Bitcoin researchers, best known for creating BitVM, recently launched a new project called Ideal. Their goal is to make Bitcoin more private and scalable without changing Bitcoin’s core rules. Their first breakthrough is called Argo, a faster way to compress and verify computations on Bitcoin. According to the developers, it makes systems like Bitcoin bridges (which use Bitcoin to move assets or data across systems without trusting a central party), significantly more efficient by reducing data usage and lag.
Why this matters: Bitcoin prioritizes security and simplicity over complex computation. Argo pushes the boundary of what can be built on Bitcoin without changing its rules, building more private, censorship-resistant, and permissionless tools to the benefit of those in closed societies.
Nostr Stats | Open-Source Nostr Analytics Launched
Pensieve and Nostr Stats are a new open-source attempt to answer a hard question: how do you measure a decentralized social network that has no central server, no logins, and no global view? On Nostr, every relay (a server that stores and forwards Nostr messages) only sees a fragment of activity, making basic metrics difficult to calculate. Pensieve addresses this by serving as a Nostr indexer. It pulls information from across hundreds of relays and stores it in compressed archives. Nostr Stats sits on top of that data, providing a public dashboard that visualizes publishing users over time, event types, zap and Lightning activity, relay usage, and growth trends. It measures users creating content, not passively browsing, an important distinction.
Why it matters: Transparent analytics help decentralized networks grow without recreating surveillance platforms. For activists, journalists, and builders using Nostr, this kind of public infrastructure supports accountability, resilience, and informed decision-making.
Btrust | BitDevs Playbook Released
Btrust, a nonprofit supporting Bitcoin development across Africa, released the BitDevs Playbook. The Playbook is an open-source guide for starting, running, and sustaining Bitcoin-only developer communities across the global majority, beginning in Africa. The playbook outlines standards for meetup operations, technical quality, funding accountability, and organizer development that can serve as a template and best practices guide for any Bitcoin-only developer community, anywhere in the world. It can serve as a valuable resource for Bitcoin communities around the world operating under authoritarian regimes.
Recommended Content
Silent Payments: A New Era of Privacy in Bitcoin by Area Bitcoin
In this article, Area Bitcoin, an HRF grantee and South American Bitcoin education initiative, breaks down Silent Payments, a tool that significantly improves Bitcoin privacy for donations. Silent Payments allow nonprofits to share a single reusable public address while receiving each payment to a unique address on the blockchain. This negates address reuse and repeated payment coordination, reducing the ability of third parties like dictators or chain analysis firms to trace balances, donors, or transaction histories. For civil society, Silent Payments make Bitcoin safer to use without changing how it works.
