Kiffmeister’s #Fintech Daily Digest (20260921)

September 21, 2026September 21, 2026 ~ kiffmeister ~ Leave a comment

Eurosystem Brings Central Bank Money to Tokenized Finance (ECB)

The European Central Bank (ECB) launched Pontes to enable wholesale transactions in tokenized assets to be settled in central bank money via Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) Services. Operating as a consolidated interoperability solution, Pontes integrates the strengths of the Eurosystem’s 2024 exploratory trials. It features a dual settlement model that allows participants to settle the cash leg of transactions either directly in T2 (the Eurosystem’s real-time gross settlement system) via application programming interface (API) based triggers, or on the Eurosystem distributed ledger technology (DLT) platform utilizing cash tokens (DLT-based central bank money representing tokenized TARGET balances) and dedicated DLT wallets. The Hash-Link protocol is specifically utilized to ensure secure, synchronized delivery versus payment (DvP) across platforms. Pontes will initially offer a core set of services, with enhanced features and extended operating hours introduced gradually toward full implementation by 2028. [ECB]

ECB to Invest Part of Own Funds in Tokenized Securities, with Settlement via Pontes (ECB)

The European Central Bank (ECB) is initiating investments of its own funds in tokenized, euro-denominated public sector securities to build institutional expertise in distributed ledger technology (DLT). Transactions will settle in central bank money via the Eurosystem’s newly launched Pontes solution, supporting the broader Appia initiative for a European tokenized financial ecosystem. [ECB]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

FYI 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 (20260920)

September 20, 2026September 20, 2026 ~ kiffmeister ~ Leave a comment

Saudi Arabia Quits mBridge Cross-Border Currency Platform (FT)

The Financial Times (FT) reported that the Saudi Arabian Monetary Authority (SAMA) withdrew from the blockchain-based mBridge cross-border payments platform on May 13, 2025. SAMA joined the project as an observing member in 2023, and became an active participant in 2024, joining China, Hong Kong, Thailand, the United Arab Emirates and the Bank for International Settlements (BIS). The BIS “graduated out” of the project in October 2024. SAMA said in a statement provided to the FT that “as planned, SAMA successfully completed its mBridge [proof of concept (PoC)] on 13 May 2025 [and] following the completion of the PoC, SAMA is no longer a participating member of mBridge.” [FT]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260918)

September 18, 2026September 18, 2026 ~ kiffmeister ~ Leave a comment

Digital Markets Clarity Act – Insolvency Safe Harbor (Credit Slips)

In a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs, fourteen legal academics argued that section 702 of the proposed Digital Asset Market Clarity Act threatens financial stability by extending bankruptcy safe harbors to digital assets. The text posits a causal link between existing safe harbors and the 2008 financial crisis and claims the absence of such exemptions contained the 2023 failures of crypto-asset firms like FTX. However, the document acknowledges a confounding variable: digital assets in 2023 were not fully integrated into the broader financial system, which inherently limited systemic effects regardless of safe harbor applicability. Ultimately, the proposed provisions would inequitably place digital asset holders in a “preferred position” over standard commercial creditors like employees, suppliers, and tort claimants. [Credit Slips]

And some more backfilling of news that I missed…

Modernizing Palau’s Financial System: Opportunities and Risks (IMF)

[February 16, 2026] The IMF published a selected issues paper on the opportunities and risks of modernizing Palau’s financial system that included an analysis of the government’s planned “tokenized dollar” (TD) that follows up on the Palau Stablecoin proof-of-concept that concluded in June 2024. While intended as a 1:1 USD-backed stablecoin to improve payment efficiency, the analysis questions its use-case justification and operational viability. Adoption faces substantial barriers, including entrenched cash preferences, inadequate IT infrastructure, and a lack of commercial bank buy-in. Furthermore, the TD introduces severe systemic vulnerabilities, notably acute financial integrity risks, cybersecurity gaps, and privacy compromises on public ledgers. Crucially, managing the reserves creates considerable fiscal exposure, risking speculative attacks. Mitigating these threats requires rigorous regulatory frameworks and profound institutional capacity building. [IMF]

Palau President Whipps Proposes Tokenized Dollar Payment System (Island Times)

[July 14, 2025] Palau President Surangel S. Whipps Jr. submitted to Congress a Draft Digital Payment System Bill outlining a modernized national payment system involving a “tokenized dollar (TD)”. The proposal would place the Ministry of Finance in charge of issuance and administration, with each TD fully backed by U.S. dollars held in a government-controlled account and redeemable for cash. TD would circulate through digital wallets for payments to participating merchants and government agencies, with private providers permitted to support operations under ministry supervision. The bill provides for monthly reporting, regular audits, and data-protection commitments, while allowing adoption incentives for two years. This follows a Palau Stablecoin proof-of-concept that concluded in June 2024. [Island Times]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260917)

September 17, 2026September 17, 2026 ~ kiffmeister ~ Leave a comment

U.S. SEC Issues Innovation Exemption to Facilitate the Trading of Tokenized NMS Stock (SEC)

The U.S. Securities and Exchange Commission (SEC) granted temporary exemptive relief to tokenized securities venues (TSVs) from the definition of “exchange” in the Securities Exchange Act of 1934 to trade tokenized National Market System (NMS) stock using innovative permissioned automated market makers and liquidity pools. The relief creates a five-year, bounded pathway for on-chain secondary trading and proprietary-capital liquidity provision without immediate exchange or dealer registration. It is conditioned on limits on symbols and volume, equivalent shareholder rights, issuer notice for third-party tokenization, auditable public smart contracts, synchronized trading halts, and transparency. The SEC will solicit comment before deciding whether durable rulemaking is warranted. Unresolved issues include appropriate scale, market-structure safeguards, issuer control, and the regulatory treatment of liquidity providers. [SEC]

Money and Power: Lessons from History for Stablecoins and US Dollar Dominance (BOE)

External member of the Bank of England (BOE) Financial Policy Committee Carolyn Wilkins concludes that while private digital currencies could theoretically scale, their stability remains highly conditional on credible convertibility, uniform regulation, and robust crisis-management frameworks. Probing the implications of expanding U.S. dollar stablecoins, she notes potential benefits for dollar settlement but questions their resilience during panics, warning that ostensibly liquid reserve assets may suffer severe liquidity deficits under systemic stress. Furthermore, Wilkins identifies regulatory heterogeneity across jurisdictions as a critical vulnerability complicating cross-border enforcement. She ultimately cautions against assuming technology guarantees dominance, asserting that enduring international monetary power depends strictly on fundamental fiscal capacity, institutional credibility, and the rule of law rather than mere network effects. [BOE]

And some catching up to something I missed in 2025:

NBKR Sets Out Digital Som Project Sequencing (NBKR)

[March 10, 2025] The National Bank of the Kyrgyz Republic (NBKR) laid out its plans to issue a blockchain-based Digital Som central bank digital currency (CBDC) to enhance financial inclusion, payment security, and digital economy infrastructure. Following the the IMF’s “5P” methodology, the project will progress sequentially from initial proof-of-concept functional testing to limited-user prototyping, followed by a live pilot before fully launch (“production”). Over the 2027–2030 horizon, the central bank aims to incorporate smart contracts for programmable payments, establish cross-border interoperability with foreign platforms, and optimize throughput and cyber resilience, supported in parallel by a dedicated regulatory framework governing platform operators and participant connectivity. [NBKR]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260916)

September 16, 2026 ~ kiffmeister ~ Leave a comment

Measuring Stablecoin, Crypto and Decentralised Finance Ecosystems (BIS)

A BIS paper by Aerts, Heijmans, Paulick, and Vuletic concludes that widely used indicators of crypto-asset and decentralized finance (DeFi) activity are highly dependent on methodological choices, rendering them noisy approximations rather than direct economic measures. Although blockchain data is transparent, underlying protocol complexities obscure true economic signals. Bitcoin’s transaction model conflates actual transfers with technical change outputs, drastically altering volume estimates based on applied heuristics. Similarly, programmable smart contracts on Ethereum generate spurious activity that complicates reliable classification. The text highlights severe data heterogeneity across blockchains, demonstrating that identical stablecoins fulfill distinct economic functions on different infrastructures. Consequently, accurately assessing DeFi dynamics demands bounded estimates and rigorous technical disaggregation rather than naive data aggregation. [BIS]

CertiK and the NBKR Partner in Digital Som Security (CertiK)

CertiK, a US-based firm specializing in blockchain security and smart contract auditing, announced that it had entered into a memorandum of understanding with the National Bank of the Kyrgyz Republic (NBKR) focused on technical security assessments, continuous monitoring, and financial integrity regulatory advisory for the Digital Som central bank digital currency (CBDC) project and broader virtual-asset oversight. However, the arrangement is purely an exploratory framework for dialogue, and it commits to no software deployment or procurement award. [CertiK]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260915)

September 15, 2026September 15, 2026 ~ kiffmeister ~ Leave a comment

Call for Online and Mobile Merchants to Participate in Digital Euro Pilot (ECB)

The European Central Bank (ECB) has launched a call for expression of interest inviting e-commerce and mobile commerce merchants operating in the euro area to take part in the 12-month digital euro pilot expected to start in the second half of 2027. The call follows the selection of payment service providers (PSPs) to participate in the pilot. Selected merchants will test a beta instrument—without legal-tender status—in remote-commerce payment journeys, operational processes, and integration with acquiring payment service providers (PSPs), and their feedback will inform technical specifications and merchant-facing design. Participation is voluntary and unpaid, requires an agreement with the ECB and an acquiring PSP, and applicants will be assessed on market reach, readiness, and suitability. Applications close October 27, 2026. (ECB)

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260914)

September 14, 2026September 14, 2026 ~ kiffmeister ~ Leave a comment

Progress Report on Bank of Japan Retail CBDC Experiments (BoJ)

The Bank of Japan (BoJ) published an English version of the progress report on its retail central bank digital currency (CBDC) experiments published in Japanese in June 2026. It finds that no fatal technical barriers preclude a full-scale launch, yet severe scalability and resource challenges remain unresolved in the current prototyping phase. The architecture is based on a two-layered model that decouples a centralized core ledger for basic accounting from a peripheral layer of privately managed overlay services. By linking application programming interfaces on the central bank’s core to diverse external systems, private intermediaries tested various innovations, including distributed ledger technology platforms for purpose-bound money and tokenized securities settlement. Although simulations processed 50,000 transactions per second, they were significantly simplified compared to real-world demands. The proposed record-splitting solution for single-account transaction concentration exhibited diminishing returns, as excessive splitting degraded performance. Furthermore, the application sandbox operated separately from the centralized high-load pilot system, leaving unresolved how cross-layer latency, asynchronous transaction failures, and ledger synchronization between the core and external systems will perform under live retail market stress. Also, despite the simplified architecture, resource consumption proved substantial, raising critical questions about the feasibility of the massive system resources required for national deployment. [BoJ]

Sixth General Meeting of the Bank CBDC Forum (BoJ)

The BoJ also published a summary of the sixth general meeting of its CBDC Forum that provided a condensed executive presentation of the technical findings detailed in progress report above. It also announced that the Forum’s seven working groups were being reorganized into three discussion groups focused on retail CBDC architecture, new technologies, and retail CBDC ecosystems. The new technologies group will evaluate stablecoins, tokenized deposits, distributed ledger technology, asset tokenization, and programmability. Furthermore, the restructured Forum will operate with a focus on initiatives that also contribute to the BoJ’s efforts related to wholesale payment systems. [BoJ]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260913)

September 13, 2026September 13, 2026 ~ kiffmeister ~ Leave a comment

Safe Settlement Assets for Wholesale Tokenized Financial Markets (LinkedIn)

Drawing on remarks delivered at the recent Currency Research Central Bank Payments Conference, Ashley Lannquist (Glenbrook Partners) set out a decision framework for policymakers weighing which form of settlement asset should support safe large-scale tokenized financial markets — settled on distributed ledger technology (DLT). (“Large-scale” denotes markets that would ordinarily settle on a systemically important financial market infrastructure such as a central securities depository or securities settlement system.) Once such activity migrates onto DLT, safety concerns compel a choice governed by whether the asset (1) should be central bank money and (2) should be “on-chain.” The resulting matrix maps to wholesale central bank digital currency (CBDC) (yes/yes), real-time gross settlement (RTGS) synchronization (yes/no), regulated asset-backed stablecoins, tokenized e-money, or tokenized bank deposits (no/yes), and bank deposits (no/no). The framework is not prescriptive, being conditional on country context and acknowledging unresolved empirical questions about benefits and risks. [LinkedIn]

Fast Payment Systems and the Cost of Remittances (Banca d’Italia)

A Banca d’Italia paper by Brandi, Di Iorio, and Nobili concludes that adopting domestic fast payment systems (FPS) reduces inbound remittance costs by roughly 0.25 percentage points. It finds this is primarily achieved by compressing foreign exchange margins via increased non-bank competition. However, the authors temper these findings by highlighting significant regional heterogeneity, noting zero statistically significant cost reductions in Latin America and Europe. Furthermore, they question causality, acknowledging that FPS adoption often coincides with broader regulatory modernization. To defend their thesis, the authors employ an instrumental variable approach using market provider density to isolate whether the FPS itself is the true catalyst for the observed competition and subsequent cost compression. [Banca d’Italia]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260911)

September 11, 2026September 11, 2026 ~ kiffmeister ~ Leave a comment

Launch of Demat 2.0 Tokenized Corporate Bond Project (SEBI)

The Securities and Exchange Board of India (SEBI) launched the “Demat 2.0” pilot project, introducing tokenized corporate bonds natively recorded on a distributed ledger. It utilizes the Reserve Bank of India’s wholesale central bank digital currency (CBDC) and Unified Market Interface to enable instantaneous atomic settlement, using smart contracts to automate interest and redemption payments. Unlike global precedents—which largely involve individual issuers on isolated platforms—Demat 2.0 natively embeds tokenized bonds and CBDC settlement directly within India’s existing regulated market infrastructure. Following an initial ₹1,025 crore issuance by three companies, the pilot aims to reduce costs and settlement risks. While the technology changes, investor safeguards, legal rights, and regulatory frameworks remain identical to conventional bonds, with future phases planned for retail access. [SEBI]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

Kiffmeister’s #Fintech Daily Digest (20260910)

September 10, 2026September 10, 2026 ~ kiffmeister ~ Leave a comment

The Stablecoin Transfer Volume Number in Most Board Packs is Misleading (AI-Mabrook)

In its third quarter 2026 Digital Assets Executive Industry Update Al-Mabrook Financial questions the reliability of headline stablecoin transfer volume metrics, challenging the oft-cited $62 trillion transfer volume for 2025 as a true measure of adoption. The data suggests it is not, filtering gross volume down to just $350–$550 billion in genuine real-economy payments. Business-to-business transactions ($150 to $230 billion) dominate this legitimate flow because traditional rails remain inefficient, followed by consumer-to-consumer remittances and consumer-to-business payments ($90 to $130 billion each). Business-to-consumer flow, largely payroll and marketplace payouts, accounts for the remainder. [AI-Mabrook]

Stablecoin Multi-Country Issuance and Dollar-Run Risks in Europe (CEPR)

A Centre for Economic Policy Research (CEPR) paper by Martino, Monnet, and Perotti critically examines the systemic risks posed by multi-country issuance of USD-denominated stablecoins. The authors argue that because the European Union (EU) Markets in Crypto-Assets (MiCA) regulations guarantees unconditional, par-value redemptions—unlike proposed U.S. regulations that permit fees and gates—technologically fungible tokens create dangerous avenues for cross-border redemption arbitrage. In times of stress, this regulatory asymmetry incentivizes rational holders to offload dollar-run risks entirely onto EU-based issuers. Conceding that structural bans on multi-country issuance are politically unlikely, the authors propose a pragmatic mitigation strategy to achieve “functional redemption equivalence.” They advocate mandating automatic, smart-contract-embedded contingent measures, specifically sequencing redemption fees ahead of hard gates, to deter self-fulfilling runs. Furthermore, the paper recommends granting the European Central Bank powers to suspend non-euro stablecoin redemptions during severe crises, aiming to safeguard EU monetary sovereignty against unhedgeable USD stablecoin market contagion. [CEPR]

Privacy in Wholesale Cross-Border Payments: Assessing Project Agorá (SUERF)

A Société Universitaire Européenne de Recherches Financières (SUERF) paper by Jan Camenisch and the Swiss National Bank’s Thomas Moser evaluates the privacy architecture of the Bank for International Settlements Project Agorá, a distributed ledger initiative for wholesale cross-border payments, against five design objectives. The authors note that Agorá utilizes the Paladin framework to achieve selective disclosure, regulatory access, and multijurisdictional configurability with low computational overhead. However, the assessment highlights significant architectural trade-offs. By relying on issuer-delegated verification rather than trustless systems, the design concentrates information and trust within issuing entities. Additionally, keeping private state off-ledger introduces resilience challenges, and the network remains vulnerable to metadata leakage. Ultimately, the paper concludes that while Agorá is operationally pragmatic, future phases must address off-chain state management and metadata vulnerabilities. [SUERF]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.