Kiffmeister’s #Fintech Daily Digest (20251220)

December 20, 2025December 20, 2025 ~ kiffmeister ~ Leave a comment

European Council Gives Digital Euro the Provisional Green Light (European Council)

The Council of the European Union (“European Council”) has agreed on its positions on introducing a digital euro and clarifying the legal tender status of cash, for its negotiations with the European Parliament. The digital euro would complement physical cash, be backed by the European Central Bank (ECB), and available for payments across the euro area by potentially 2029, with limits on holdings to prevent it being used as a store of value and mandatory free basic services for consumers. Once the proposal to establish the legal framework is adopted by the European Parliament and Council, it will ultimately be for the ECB to decide whether to issue the digital euro. The second position aims to strengthen cash by effectively banning its non-acceptance by retailers (with exceptions for online and unmanned sales), requiring member states to monitor cash acceptance and access, and establishing cash resilience plans for electronic payment disruptions. The Council will now begin negotiations with the European Parliament on both regulations. [Source: European Council]

Federal Reserve Board Proposes Limited-Purpose “Payment Account” (FRB)

The U.S. Federal Reserve Board (FRB) is seeking public comment on a new “payment account” designed for eligible financial institutions to use specifically for clearing and settling payments. Unlike traditional master accounts, payment accounts, holders could only maintain limited overnight balances (lesser of $500 million or 10% of total assets), would receive no interest on balances, and would have no access to the discount window or intraday credit. These accounts would only support specific payment services (Fedwire Funds, FedNow, National Settlement Service, and Fedwire Securities free transfers) that have automated controls to prevent overdrafts, while excluding services like FedACH and check processing. The streamlined account is intended to reduce risks to the Federal Reserve system while providing faster access (generally within 90 days) for legally eligible institutions that primarily need payment clearing and settlement capabilities rather than full banking services. Notably, it does not widen eligibility standards beyond those already in place for regular master account access. [Source: FRB]

Upcoming Speaking Engagements:

The Digital Euro Conference 2026 (Frankfurt, March 26) will explore the future of money with a focus on CBDCs, stablecoins, and commercial bank tokens. This hybrid event offers the perfect platform to understand the future of digital money! [Register here and get 20% off the regular ticket price by using the Kiffmeister20 code!]

I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20251219)

December 19, 2025December 19, 2025 ~ kiffmeister ~ Leave a comment

Digital Euro Technical Preparations Completed (ECB)

According to Christine Lagarde, President of the European Central Bank (ECB) technical preparations for a digital euro, including system architecture and safeguards, are now complete, with further progress now awaiting legislative action from the European Council and European Parliament. [Source: ECB]

And some backfilling on Peru’s central bank digital currency (CBDC) efforts thanks to Nick Anthony and the Human Rights Foundation (HRF) CBDC Tracker:

Central Bank of Peru Prepares to Launch CBDC Pilot (BCRP)

[October 14, 2024] The Central Reserve Bank of Peru (BCRP) and Bitel signed a framework agreement on October 14, 2024, to launch the country’s first Central Bank Digital Currency (CBDC) pilot program. This initiative, formalized through regulations published in April 2024 and Bitel’s selection in July 2024, aims to improve financial inclusion by providing digital payment services to unbanked populations in rural and underserved areas. During the pilot, Bitel will distribute the CBDC through its Bipay digital wallet, allowing users to make payments and transfers with this sovereign digital money issued by the central bank. The program will assess whether CBDCs can effectively replace cash and foster a digital payments ecosystem in regions with limited financial services. [Source: BCRP]

Central Bank of Peru to Launch CBDC Pilot (BCRP)

[March 10, 2025] The Central Reserve Bank of Peru (BCRP) launched an evaluation phase on March 10, 2025, for its first digital currency innovation pilot in partnership with Bitel, following a successful trial period that began in 2024. By February 2025, Bitel’s BiPay wallet had enrolled 67,000 active users processing an average of 91,000 daily transactions, with S/ 4.2 million in BCRP digital currency in circulation. The three-month pilot aims to assess whether a central bank digital currency (CBDC) can effectively complement cash in regions with low financial inclusion and limited digital payment infrastructure, with the wallet accessible even to users without smartphones through USSD text messaging technology. [Source: BCRP]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251218)

December 18, 2025December 18, 2025 ~ kiffmeister ~ Leave a comment

VISA Launches Stablecoin Settlement in the United States (VISA)

VISA has launched USDC stablecoin settlement in the United States, allowing U.S. issuer and acquirer partners to settle transactions using Circle’s USDC for the first time. The initiative offers benefits including faster funds movement via blockchain, seven-day availability, and enhanced operational resilience during weekends and holidays. Initial U.S. banking participants include Cross River Bank and Lead Bank, which are settling with Visa using USDC over the Solana blockchain, with broader U.S. availability planned through 2026. This marks a significant expansion of VISA’s stablecoin settlement pilot program that has been operating in other regions since 2023, and the company is also partnering with Circle on Arc, a new Layer 1 blockchain designed to support VISA’s global commercial activity. [Source: VISA]

Coinbase Expands Into Stock Trading and Prediction Markets (Coinbase)

Coinbase has announced a major expansion of its platform, introducing several new products including 24/5 zero-commission stock trading), prediction markets for real-world events, and simplified futures trading—all integrated into the main Coinbase app for U.S. users. The company is also launching Coinbase Business for startups and small businesses, rolling out an AI-powered financial advisor called Coinbase Advisor, and making the Base App available globally in over 140 countries as an “onchain everything app” that combines social features, trading, and payments. Additionally, Coinbase is expanding its developer platform with payment APIs and custom stablecoin creation capabilities, positioning itself as a comprehensive financial platform that bridges traditional finance and cryptocurrency while working toward a future where all assets are tokenized and tradeable in one unified interface. [Source: Coinbase]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251216)

December 16, 2025December 16, 2025 ~ kiffmeister ~ Leave a comment

Ethiopia’s Central Bank Eyes Digital Birr (Capital Ethiopia)

The National Bank of Ethiopia (NBE) has reportedly initiated an exploratory review of potential central bank digital currency (CBDC) frameworks, aimed at understanding global digital currency developments rather than representing a commitment to implementation. The assessment is situated within Ethiopia’s draft National Digital Payments Strategy and Digital Ethiopia 2025 framework, though the central bank anticipates continued primacy of cash given the country’s substantial rural and informal economy. In February 2025, the Ethiopian Parliament passed into law National Bank of Ethiopia (NBE) Proclamation No. 1359/2025, establishing a legal framework that permits the NBE to issue CBDC as legal tender. [Source: Capital Ethiopia]

PayPal Submits Applications to Establish an Industrial Bank (PayPal)

PayPal has filed applications with the Utah Department of Financial Institutions and the U.S. Federal Deposit Insurance Corporation (FDIC) to establish a Utah-chartered industrial loan company, to be called PayPal Bank. The proposed institution would focus on providing business lending services to U.S. small businesses, a market in which PayPal claims to have extended over $30 billion in credit to more than 420,000 business accounts globally since 2013. PayPal Bank would also offer interest-bearing savings accounts to customers and seek direct membership in card networks to support processing and settlement activities. The company cites operational efficiency and reduced reliance on third-party intermediaries as primary motivations. Customer deposits would receive FDIC insurance coverage subject to regulatory approval. [Source: PayPal]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251213)

December 13, 2025December 13, 2025 ~ kiffmeister ~ Leave a comment

OCC Announces Conditional Approvals for Five National Trust Bank Charter Applications (OCC)

The U.S. Office of the Comptroller of the Currency (OCC) conditionally approved national trust bank charter applications from five major crypto-asset companies. Circle (First National Digital Currency Bank) and Ripple National Trust Bank received de novo charters. BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company were converted from state trust companies to national trust banks. These firms will now be able to offer regulated crypto-asset services nationwide without navigating complex state-by-state licensing. “The OCC will continue to provide a path for both traditional and innovative approaches to financial services to ensure the federal banking system keeps pace with the evolution of finance and supports a modern economy.” [Source: OCC]

DTCC Authorized to Offer New Tokenization Service (DTCC)

Depository Trust Company (DTC) received a No-Action Letter from the U.S. Securities and Exchange Commission (SEC), authorizing it to offer a tokenization service for real-world, DTC-custodied assets in a controlled production environment, with rollout expected in the second half of 2026. The three-year authorization covers highly liquid assets including Russell 1000 stocks, major index ETFs, and U.S. Treasury securities, allowing DTC to create digital versions with the same entitlements and protections as traditional assets. This milestone aims to enable 24/7 trading access, collateral mobility, and programmable assets while maintaining the same level of security and regulatory oversight, ultimately bridging traditional finance (TradFi) and decentralized finance (DeFi) ecosystems through DTCC’s ComposerX platform suite. [Source: DTCC]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251210)

December 10, 2025December 10, 2025 ~ kiffmeister ~ Leave a comment

Norges Bank does not Recommend CBDC Introduction (Norges Bank)

Norges Bank has decided not to recommend introducing a central bank digital currency (CBDC) at this time, as Norway’s current payment system is already efficient, secure, and stable. The bank examined both retail and wholesale CBDC, but found no immediate need for either variant. However, Norges Bank acknowledges that circumstances may change due to rapid technological advances, tokenization trends, and the potential introduction of a digital euro by the Eurosystem. The bank will continue researching CBDCs and tokenization through experimental testing and international collaboration to ensure it can implement a CBDC if necessary in the future, with a detailed report planned for Q1 2026. [Source: Norges Bank]

Project Rialto: Improving Instant Cross-Border Payments using Central Bank Money Settlement (BIS)

The BIS Innovation Hub wrapped up Project Rialto, a collaboration with central banks from France, Italy, Malaysia, and Singapore to improve instant cross-border payments. The project successfully demonstrated the technical feasibility of connecting traditional instant payment systems with an automated foreign exchange (FX) market using tokenized central bank money (CeBM) as a settlement asset. The architecture combined two functional blocks: domestic instant payment systems linked through a hub mechanism, and a cross-border distributed ledger network (XDN) for automated FX conversion via automated market makers (AMMs). The proof of concept tested both direct currency transactions and those requiring a vehicle currency for low-liquidity corridors, achieving payment-versus-payment settlement with minimal changes to existing systems. While technically successful, the report identifies key economic considerations for operational viability, including fee structures, performance under different market conditions, transparency impacts, and liquidity requirements, noting that AMMs require pre-funding which introduces costs and that further research is needed on the interaction between traditional intermediaries and decentralized exchanges in currency markets. [Source: BIS]

The Future of the Federal Reserve Banks’ Check Services (FRB)

The Federal Reserve Board (FRB) is seeking public comment on the future of its check processing services as check usage has declined dramatically, while its aging infrastructure requires substantial investment to maintain current operations. The FRB is considering four potential strategies: continuing without investment (leading to service degradation over time), significantly simplifying services, substantially winding down operations, or upgrading infrastructure with major costs that would need to be recovered through higher fees. The FRB, which currently processes nearly half of the nation’s check volume, must balance the declining demand against legal requirements to recover all operating costs through service fees, while considering the broader impacts on the payments system and communities that still depend on checks. [Source: FRB]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251205)

December 5, 2025December 5, 2025 ~ kiffmeister ~ Leave a comment

Marshall Islands Launches Crypto-Based Universal Basic Income (Hauzen)

The Republic of the Marshall Islands has launched the world’s first blockchain-based universal basic income (UBI) program, providing citizens with an annual payment of $800 funded by the country’s Compact Trust Fund. The initiative uses a U.S. Treasury Bill-backed interest-bearing stablecoin called USDM1 and a “Lomalo” digital wallet to deliver payments, particularly targeting financial inclusion for remote island populations affected by the withdrawal of traditional banking services due to “de-risking” in the Pacific region. While the program represents an innovative approach to economic sovereignty and welfare distribution, the IMF is cautioning that the UBI could drive inflation and recommending a more targeted social safety net. Also, the shift to digital wallets introduces complex regulatory risks, requiring robust anti-money laundering (AML) and know your customer (KYC) protocols. [Source: Hauzen LLP]

Understanding Stablecoins (IMF)

The IMF published a paper that examines stablecoins’ potential benefits and risks while surveying emerging international regulatory frameworks. While they offer promising benefits such as faster and cheaper cross-border payments, increased financial inclusion, and reduced remittance costs (which can reach 20% in traditional systems), they also pose substantial risks including potential runs on reserves, currency substitution that undermines national monetary policy, circumvention of capital controls, and facilitation of illicit activities. The paper emphasizes that realizing stablecoins’ potential while mitigating these risks requires coordinated international regulation and cooperation, as current regulatory approaches vary significantly across jurisdictions, creating opportunities for regulatory arbitrage and complicating efforts to monitor cross-border flows and maintain financial stability. [Source: IMF]

Digital Pound – Case Studies (BOE)

The Bank of England (BOE) is looking for participants to help it explore how the digital pound could impact existing companies who choose to integrate it alongside traditional payment methods in the future. This project will consist of a series of bilateral conversations with each of the different participants based the BOE’s previously published information. The aim of the study is to provide insight into where a retail digital pound could add value to different businesses, and what features are expected to be the most/least valuable for different kinds of businesses. The BOE is particularly keen to engage with companies that are interested in the digital pound, but have not yet been involved in the Digital Pound Lab. Applications are open until January 9, 2026. [Source: BOE]

Immediate vs. Deferred Offline Modes for Digital Payment Ecosystems (Crunchfish)

Crunchfish published a paper that compares two approaches to offline digital payments for central bank digital currency(CBDC): “immediate offline mode” that transfers digital value tokens like “digital banknotes” between devices, and “deferred offline mode” that transfers signed payment instructions (IOUs) that settle later online. The paper argues that deferred offline mode is more secure (ledger remains authoritative), more scalable (software-based, no special hardware required), easier to integrate with existing payment systems (aligns with EMV and ISO 20022), and preserves banking system liquidity since funds stay in accounts until settlement. In contrast, immediate offline mode exposes the ecosystem to double-spending risks, dependence on tamper-resistant hardware, complex reconciliation, and potential destabilization of bank lending capacity. The paper recommends that central banks adopt deferred offline mode as the baseline standard for offline CBDC payments. [Source: Crunchfish]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251204)

December 4, 2025December 4, 2025 ~ kiffmeister ~ Leave a comment

Under the GENIUS Act Stablecoins Holders Have Only Fifth Priority in an Issuer Bankruptcy (Credit Slips)

According to Georgetown Law’s Professor Adam Levitin, argues that, despite its intentions, the GENIUS Act fails to adequately protect stablecoin holders in an issuer bankruptcy. While the Act claims to give stablecoin holders “first priority” over an issuer’s reserves, Levitin explains that they actually rank fifth in practice, behind: (1) repo and margin lenders, (2) debtor-in-possession (DIP) lenders, (3) bankruptcy professionals via carve-outs, and (4) setoff claims from depositaries and brokers. This is because the Bankruptcy Code’s priority provisions only apply to unsecured debt, while secured claims (which these other parties hold) are paid first under separate rules. Additionally, the Act’s promise of rapid payment within 14 days is unrealistic—distributions will likely take months or years due to procedural requirements and DIP lender restrictions. Levitin concludes that stablecoin holders will face significant losses and delays in bankruptcy, making stablecoins fundamentally unstable without government backing like deposit insurance. [Source: Credit Slips]

The Case for a New Floating Rate Treasury Note (Brookings)

Stanford University Graduate School of Business’s Darrell Duffie is proposing that the U.S. Treasury issue a new security called Perpetual Overnight Rate Treasury Securities (PORTS) to address liquidity demands arising from the digitization of financial markets and the growth of tokenized dollar instruments such as stablecoins. PORTS would be daily redeemable at par, pay interest at rates determined through daily uniform-price auctions, and yield below the Secured Overnight Financing Rate (SOFR) given anticipated demand for their use as collateral and settlement medium. The authors argue that PORTS would provide stablecoin issuers and other market participants with a risk-free, transparent instrument for same-day liquidity, potentially reducing systemic risks associated with runs on tokenized dollar proxies backed by longer-duration assets. Additionally, if demand for PORTS materializes as expected, the Treasury could reduce longer-dated issuance, resulting in taxpayer savings through lower borrowing costs. The proposal acknowledges operational challenges, particularly regarding the infrastructure needed for same-day settlement and selective redemption mechanisms, which would require substantial modifications to existing Treasury market procedures. [Source: Brookings]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251202)

December 2, 2025December 2, 2025 ~ kiffmeister ~ Leave a comment

Operation Choke Point 2.0: Biden’s Debanking of Digital Assets (U.S. HCOFS)

The U.S. House Committee on Financial Services published an investigative report on “Operation Choke Point 2.0″—a coordinated effort by Biden Administration regulators to deny banking services to digital asset businesses and individuals. Through over 20 letters, thousands of documents, and two hearings, the Committee found that federal agencies (the Federal Reserve, FDIC, OCC, and SEC) used informal guidance, “pause” letters, non-objection requirements, and enforcement actions to pressure banks into cutting off crypto firms, rather than establishing clear regulations. This approach resulted in at least 30 entities being debanked, stifled American innovation, and drove businesses overseas. [Source: U.S. HCOFS]

Rwanda: Digital Currency POC Set for Next Year (NBR)

The National Bank of Rwanda (NBR) is planning to continue its e-FRW central bank digital currency (CBDC) proof-of-concept work in 2026. It will test technical feasibility, evaluate payment system integration, and develop recommendations for the legal framework prior to the overall technical design phase. These tests are being conducted in partnership with selected financial service providers, and the results will determine NBR’s next steps in the CBDC project. In all phases, consultation with the private sector and policy makers has been, and will be, emphasized. [Source: NBR]

Project Meridian Securities (BOE)

The Bank of England (BOE) published a summary of the findings of the Project Meridian Securities experiment that explored how synchronization can bridge traditional real-time gross settlement (RTGS) systems with tokenized securities platforms using distributed ledger technology (DLT). The project successfully demonstrated that synchronization enables atomic settlement in central bank money for tokenized securities transactions, allowing programmable features like automated repos and cross-platform liquidity management without requiring full infrastructure replacement. Key findings show that smart contracts can automate settlement workflows while maintaining the trust and safety of central bank money, supporting improved liquidity management and interoperability across diverse platforms. The experiments revealed that synchronization can extend programmability to traditional infrastructures cost-effectively, though questions remain about optimal architecture, scalability, and whether independent synchronization operators are needed in multi-platform environments. [Source: BOE]

How New Regulations Could Potentially Impact the Future of Stablecoins (VISA)

The VISA Economic Empowerment Institute published a report by Zeke Copic on how new stablecoin regulations across the US, EU, UAE, and Hong Kong are shaping the industry’s future. While all jurisdictions require 1:1 backing with high-quality liquid assets and prohibit interest payments to holders, the specific requirements vary—with the US GENIUS Act being more flexible than Europe’s MiCA regulation, which mandates 30-60% of reserves in bank deposits. Stablecoin issuers like Circle currently generate 95-99% of revenue from interest on reserve assets (primarily Treasury bills and reverse repos), making them highly vulnerable to interest rate fluctuations and counterparty risks, as demonstrated during the Silicon Valley Bank collapse. Although declining interest rates may reduce reserve income, projected growth in stablecoin supply (potentially reaching $1.6-3.7 trillion by 2030) could offset this impact, though issuers may need to develop alternative fee-based revenue streams to maintain viable business models under the new regulatory frameworks. [Source: VISA]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251130)

November 30, 2025November 30, 2025 ~ kiffmeister ~ Leave a comment

Just a reminder that I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.

I would also like to take this opportunity to give a shout out to Stephen Phillips and Richard Turrin who produce excellent weekly summaries of fintech-related developments on LinkedIn. I heartily recommend following them:

Stephen Phillips’s Digital Finance Insights: Weekly reading highlights on digital money and tokenized finance for policymakers and industry leaders.
Richard Turrin’s Cashless: CBDC & Fintech with a focus on a Rising Asia & China. You can also follow Richard on X, where he reports on a real-time basis.

I would also be remiss not to mention Norbert Gehrke. Although he describes himself as a “Japan Fintech Observer he is way more than that. If you follow him on LinkedIn you will not miss much in the global Fintech arena.

Upcoming Speaking Engagements: