Kiffmeister’s #Fintech Daily Digest (20260619)

June 19, 2026June 19, 2026 ~ kiffmeister ~ Leave a comment

Bipartisan US Housing Bill Bans Retail CBDC until 2030 (Senate Banking Committee)

The U.S. Senate Banking Committee and House Financial Services Committee released the latest text of the 21st Century ROAD to Housing Act, with backing from the leading Republicans and Democrats on both committees, which includes a ban on central bank digital currency (CBDC) until December 31, 2030. The Act defines a CBDC as a U.S. dollar‑denominated direct Federal Reserve liability widely available to the general public. The text explicitly carves out wholesale CBDC and tokenized reserves (“any dollar-denominated currency that is open, permissionless, and private, and fully preserves the privacy protections of U.S. coins and physical currency. The Senate and the House are expected to formally pass the bill within weeks, and the President is expected to sign the bill once passed. [Senate Banking Committee]

HKEX and HKMA Launch Wholesale CBDC Pilot Project to Facilitate After-Hours Derivatives Trading (HKMA)

Hong Kong Exchanges and Clearing Limited (HKEX) and the Hong Kong Monetary Authority (HKMA) will run a joint pilot using e‑HKD wholesale central bank digital currency (CBDC) operating on a 24/7 basis to fund advance margin for derivatives after‑hours trading while keeping existing operational workflows unchanged. The aim is to improve flexibility and efficiency versus the current cut‑off, under which clearing participants must submit advance margin deposit requests to Hong Kong Futures Exchange Clearing Corporation (HKCC) by 15:00 for them to count toward the after‑hours session. Participants in HKCC can optionally conduct real‑value trial transactions, with broader adoption contingent on regulatory approval and market readiness. [HKMA]

The Trade-Offs Between Different Designs of Tokenized Systems (BoC)

The Bank of Canada (BoC) posted a blog that argues that tokenized systems’ core features—programmability and openness—are not unique to decentralized architectures and can be implemented on centralized platforms as well. It defines design space along two dimensions: validation (centralized, decentralized permissioned, decentralized permissionless) and access (public versus private), and emphasizes that trust models, not “blockchain” per se, determine who controls the ledger and visibility of state. The authors frame the key trade-off as performance versus transparency: centralized systems maximize throughput but minimize transparency; decentralized permissionless systems do the opposite; decentralized permissioned systems sit in between. [BoC]

Digital Assets and Derivatives: Where Next? (ISDA)

The International Swaps and Derivatives Association (ISDA) published a paper that argues digital assets can be integrated into derivatives markets at institutional scale if settlement, collateral and prudential frameworks are engineered to fit existing regulatory regimes rather than rebuilt from scratch. The paper documents how distributed ledger settlement, continuous margining and portfolio compression can reduce exposure persistence and x‑value adjustment (XVA) type capital charges by roughly 40–45% for a stylized crypto derivatives portfolio, even with unchanged market risk. It emphasizes that balance-sheet efficiency is constrained less by token design than by legal finality, collateral enforceability, exposure recognition under Basel crypto standards and the availability of cash‑leg settlement assets such as tokenized deposits or wholesale central bank digital currencies. Key unresolved issues include conflicts of law for on‑chain property rights, heterogeneous margin model treatment of crypto exposures, limited margin period of risk grade liquidation channels for digital collateral and the need for common standards like the Common Domain Model to avoid infrastructure fragmentation. [ISDA]

Data Externalities, Market Power, and the Optimal CBDC Design (BoC)

The Bank of Canada (BoC) published a paper by Cheng, Davoodalhosseini, Chiu, and Jiang that shows that central bank digital currency (CBDC) economics is complicated by private payment service provider (PSP) transaction data harvesting and sale. A well-designed CBDC should collect some transaction data itself — for fraud detection and financial crime monitoring — but not sell it. Counterintuitively, a U.S.-calibrated model finds that introducing a CBDC would increase rather than reduce PSP data collection, because PSP market power currently dominates – i.e., public competition pushes PSPs to expand their customer base, raising aggregate data output. The reverse holds if PSP competition intensifies, in which case a CBDC designed to curb data monetization would shrink PSPs’ market share and reduce aggregate data production. [BoC]

Stablecoin Remuneration on Centralized Crypto-Asset Exchanges (BIS)

The BIS published a paper by Huang, Tarashev and Wang that argues that the way that crypto exchanges remunerate customer stablecoin holdings drives very different macrofinancial effects. Exchanges either pass through income from low‑risk reserve assets (“reserve-based” remuneration) or use revenues from lending, margin finance and trading (“activity-based”). In the reserve‑based case (e.g., Coinbase), stablecoin remuneration closely tracks policy rates, while in the activity‑based case (e.g., Binance) yields are highly volatile and tied to crypto market conditions and funding demand. Econometric decompositions show crypto‑activity shocks dominate benchmark‑rate shocks in explaining activity‑based yields, especially during 2024 rallies. If stablecoins scale, either of these remuneration models could alter bank and money‑market funding, introduce boom‑bust dynamics and run risks, and reshape monetary policy transmission, with regulatory capital and liquidity requirements a key open mitigant. [BIS]

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 (20260617)

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

Programmable Purpose-Bound Digital Tenge for Public Spending (LinkedIn)

Kazakhstan’s Ministry of Finance now requires government expenditures above 100 million tenge (equivalent to about $200,000) to be executed in programmable Digital Tenge central bank digital currency (CBDC) with end‑to‑end identifiers and event‑triggered settlement. Initial use cases include construction, health, fuel, transport, special funds, certain budget loans, and research grants, with future extensions to utilities, energy, border infrastructure, subsidized lending, and quasi‑public entities. The funds are “colored” to their purpose. For example, tenge allocated for a road cannot be redirected to anything else. And payment is released only after a confirming event, whether an act of completed work, an electronic invoice, or a registry record. [LinkedIn]

The Impact of Potential Retail CBDC on the Canadian Financial System During a Severe Recession (BoC)

The Bank of Canada (BoC) published a staff analytical paper by Sofia Priazhkina that examines how a non-interest-bearing retail central bank digital currency (CBDC) could affect the financial stability of Canada’s systemically important banks during a severe recession. Stress test results show that the banks remain resilient, maintaining key regulatory ratios even under high CBDC demand. To manage funding outflows, banks scale back balance sheet growth and replace some lost deposits with alternative funding. Profitability stays strong overall, though short-term volatility may occur. To reduce potential risks, the paper recommends a gradual CBDC rollout with holding limits, well-timed capital buffer adjustments, liquidity regulation updates, early communication of regulatory changes, and coordination with central bank balance sheet policies. [BoC]

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 (20260615)

June 15, 2026June 16, 2026 ~ kiffmeister ~ Leave a comment

Report on the National Payment System in Peru (BCRP)

[March 2026] The Banco Central de Reserva del Perú (BCRP) published its March 2026 national payments report, detailing progress on its “Dinero Digital” retail central bank digital currency (CBDC) pilot launched in October 2024 with telecom partner Bitel (via the BiPay wallet). Designed to test digital payments in unbanked rural sectors, the pilot reached 67,000 active users, an average of 91,000 daily transactions, and S/ 4.2 million in circulation by late February 2025. By December 2025, active users expanded to 172,000, averaging 47,600 daily transactions, with S/ 10.0 million circulating directly among end users. The notable drop in transaction velocity likely stems from the cooling of early adoption biases and introductory marketing incentives as the pilot transitioned from tech-centric early adopters into deeper, lower-velocity rural segments. [BCRP]

ASX Admits Misleading Conduct Relating to CHESS Replacement Project (ASIC)

The Australian Securities Exchange (ASX) agreed to pay a A$20.5 million civil penalty and A$3 million in legal costs to settle proceedings brought by the Australian Securities and Investments Commission (ASIC) over its failed blockchain-based replacement for the Chess post-trade system. The regulator alleged ASX misled the market in February 2022 by stating the project was “progressing well” despite internally classifying it as “red,” indicating significant unresolved issues, before subsequently delaying and then cancelling the project and writing off approximately A$245–255 million in costs. [ASIC]

Euro Area TIPS Payment Platform Volumes Grew by 82.5% in 2025 (ECB)

The European Central Bank (ECB) published its 2025 TARGET (Trans-European Automated Real-time Gross settlement Express Transfer) Services Annual Report. It reported that the TARGET Instant Payment Settlement (TIPS) system experienced very strong 2025 growth: instant payments settled in TIPS rose 82.5% to 2.47 billion transactions, driven mainly by the Instant Payments Regulation, in force since April 2024, which requires Euro Area banks offering standard euro credit transfers to receive 24/7 instant euro payments from January 9, 2025 and to send them from October 9, 2025. Also, in April 2025, it became possible to settle Danish krone payments instantly in TIPS (the Swedish krone joined in 2024). Also, in June 2025, the TIPS cross-currency settlement layer, that enables linked settlement across currencies and underpins interlinking projects with other fast payment systems, was implemented and successfully tested and formally activated by the ECB, Danmarks Nationalbank, and Sveriges Riksbank. In addition, the ECB is working on supporting 24/7 instant-payment funding. [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 (20260612)

June 12, 2026June 12, 2026 ~ kiffmeister ~ Leave a comment

Zelle Heads to India, Unveils ZelleUSDSM Stablecoin For Other Markets (Zelle)

Early Warning, the operator of U.S. fast payment system (FPS) Zelle, will launch Zelle in India first for U.S. consumers sending money to family and friends abroad, with initial availability expected before year-end, and it also introduced ZelleUSD (ZLUSD), a U.S. dollar-backed stablecoin intended to support future international payments in other markets. The company framed the move as an expansion of its domestic payments network into cross-border remittances, saying financial institutions could offer near-instant transfers through existing banks and credit unions. [Zelle]

The Anatomy of Stablecoin Transactions (BIS)

The BIS published a paper by Schär, Kosse, Rice, Shirakami, and Siridhasanakul that analyze 593 million Ethereum event logs across 141 million transactions to argue that stablecoin transfers are routinely embedded within atomically executed bundles combining trading, lending, and settlement, distorting standard interpretations of stablecoin activity. While 31.6% of transactions involve such complexity, these generate nearly 60% of all transfer events, meaning transfer-level data misclassifies most observations as standalone payments. USDT, USDC, and PYUSD differ systematically in co-usage, computational burden, urgency, and business-hour alignment, reflecting distinct institutional designs rather than interchangeability. The action-set classification offers supervisors a basis for activity-based oversight, while divergent jurisdictional timing patterns underscore the need for cross-border data-sharing among regulators. [BIS]

Stakeholder Engagement and Roadmap for Philippines Wholesale CBDC (IMF)

The IMF published a technical assistance report on stakeholder engagement and roadmap development for Bangko Sentral ng Pilipinas’s (BSP’s) Project Agila wholesale central bank digital currency (wCBDC) project. As part of this work, tokenized government bond settlement and cross-border payments were identified as priority wCBDC use cases. Workshops with financial institutions, the Bureau of the Treasury, and market infrastructure providers highlighted real-time gross settlement (RTGS) system settlement-window limitations, capital market shallowness, and correspondent-banking-dependent cross-border payment inefficiencies. The roadmap calls for cost-benefit analysis of wCBDC against alternatives including trigger solutions and omnibus accounts, although the Securities Clearing Corporation (SCCP) prefers its existing fee-free settlement-bank arrangements, which also provide netting and liquidity-saving features not easily replicated on RTGS, over direct settlement access. Legal framework gaps and financial integrity regulation compliance remain key open issues. [IMF]

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 (20260610)

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

A CBDC in Search of a Use Case: The eNaira’s Quiet Reset (CBN)

The Central Bank of Nigeria (CBN) published its Nigeria Payments System Vision 2028 that keeps the eNaira central bank digital currency (CBDC) nominally alive while effectively conceding that its 2021 general-purpose retail configuration has failed. It reports low real-economy uptake, weak bank and fintech integration, no live cross-border corridors, and a negligible share of currency in circulation, and directs that the existing framework be “revisited.” The forward strategy hedges across incompatible theories rather than committing to one. The most credible surviving strand is programmable, purpose-specific government disbursement, with time-limits, sub-wallets, payment splitting, similar to the targeted-CBDC directions taken by Kazakhstan and India. Yet the document simultaneously sustains an expansionary, quasi wholesale payments-focused agenda, with bilateral cross-border CBDC corridors, a proposed eNaira pilot on SWIFT’s multilateral CBDC Linker, and trade and tokenized-securities settlement. [CBN]

Peru’s Central Bank Extends Digital Currency Pilot to 2027 (Crypto Briefing)

The Banco Central de Reserva del Perú (BCRP) has reportedly extended its retail central bank digital currency (CBDC) pilot with telecom partner Bitel and its BiPay wallet through March 2027. The decision follows strong uptake in eight underbanked regions and over 3.5 million users by August 2025. Balances reached about 7.5 million soles with reported 182.7% growth, suggesting sustained wallet loading and transaction use rather than dormant accounts. Results from the extended pilot are intended to inform a potential decision on permanent retail CBDC issuance after 2027. [Crypto Briefing]

SARB on Payments Modernization, DLT, and Retail CBDC (SRB)

South African Reserve Bank (SARB) Deputy Governor Rashad Cassim argues that South Africa’s primary digital payments priority is modernizing the formal payment system and reiterated the SARB’s position that retail central bank digital currency (CBDC) is feasible but lacks compelling near-term justification. He recounted that the SARB’s Projects Khokha 1 and 2 established distributed ledger technology (DLT) feasibility for wholesale settlement while surfacing governance, finality, and interoperability gaps. Cassim emphasized that South Africa’s immediate need is ubiquitous fast, simple, low‑cost digital payments, and that the SARB favors a hybrid model in which it expands its role beyond its real-time gross settlement (RTGS) to help shape fast retail rails together with the private sector, under the Payments Ecosystem Modernisation agenda. In this regard, the SARB is addressing issues and gaps in the PayShap fast payment system (FPS) jointly owned by the SARB and the major banks. [SARB]

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 (20260608)

June 8, 2026June 9, 2026 ~ kiffmeister ~ Leave a comment

The BOJ CBDC Roadmap: From Proof-of-Concept to Pilot Framework (Japan FinTech Observer)

A Japan FinTech Observer article by Norbert Gehrke describes the Bank of Japan central bank digital currency (CBDC) project’s shift from the proof-of-concept phase to pilot planning, restructuring governance from seven Working Groups into three Discussion Groups focused on architecture, new technology, and ecosystem design. The piece describes how work will now concentrate on defining “minimum necessary functions,” stress‑testing an online retail ledger at 50,000 transactions per second, and managing scaling limits of techniques such as record splitting. It highlights operational bottlenecks along a four‑step user journey (onboarding, charging, payments, and value‑added services), emphasizing frictions in know‑your‑customer synchronization, liquidity auto‑charge logic, and dispute handling. A core policy issue is standardizing interfaces between the central ledger and heterogeneous private money formats to maintain universal access and “singleness of money” while enabling tokenized deposits and programmability. The unresolved questions concern interface standards and privacy‑preserving data use. [Japan FinTech Observer]

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 (20260607)

June 7, 2026June 7, 2026 ~ kiffmeister ~ Leave a comment

Roadmap for Wholesale CBDC in the Philippines (IMF)
The IMF published a high-level technical assistance report that proposes a structured roadmap for exploring a wholesale central bank digital currency (wCBDC) in the Philippines, anchored in use cases for tokenized government bond settlement and cross-border payments within the wholesale payment landscape. The IMF used stakeholder workshops to surface pain points—securities settlement inefficiencies, lack of interoperability, and slow, costly cross-border flows—and then prioritize wCBDC applications to address them. The roadmap, organized under the IMF’s “5P” methodology, sequences foundational work (governance, resources, legal underpinnings, risk and suitability analysis) alongside parallel workstreams for each use case, moving from research to proofs of concept. Unresolved issues include legal reforms, coordination with foreign jurisdictions, and empirically demonstrating net system-wide benefits. [IMF]

The Rails Are Almost Ready. Is the Law? (LinkedIn)

A LinkedIn post by the Bank of Israel’s Assaf David-Margalit argues that the Eurosystem’s tokenized-settlement infrastructure (Projects Pontes and Appia) is progressing faster than the legal framework needed to make tokenized-asset settlement in central bank money legally robust and cross-border enforceable. Pontes can be delivered on time because the Eurosystem controls the technical design and build, whereas wholesale-tokenization law depends on European Union (EU) legislative processes, optional “28th regime” techniques, and remains at the level of aspiration rather than a concrete instrument, leaving firms to rely on the Distributed Ledger Technology Pilot Regime and legacy rules. This sequencing gap makes legal certainty, rather than technical readiness, the binding constraint: banks will delay serious adoption until finality, ownership, insolvency treatment, and cross-border enforceability are clarified, so the eventual usefulness of the new rails depends more on lawmaking than engineering. [LinkedIn]

HKMA Establishes Tokenised Bond Expert Group (HKMA)

Hong Kong Monetary Authority (HKMA) has created a Tokenised Bond Expert Group to design policy, market practice, and infrastructure changes to scale tokenized bond issuance and trading in Hong Kong’s fixed income market. The group aggregates industry associations, financial institutions, legal firms, and infrastructure and technology providers, and has already begun reviewing how existing legal and regulatory frameworks apply to tokenized bonds. Its initial discussions will feed into an ongoing exercise with the Financial Services and the Treasury Bureau to identify specific legal and regulatory enhancements, with details to follow. [HKMA]

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 (20260606)

June 6, 2026June 6, 2026 ~ kiffmeister ~ Leave a comment

Bank of Uganda Publishes Short List of Potential CBDC Consultants (BOU)

[May 26, 2026] The Bank of Uganda (BOU) published its expressions of interest short list of sixteen consultants to conduct a comprehensive feasibility study on issuing a central bank digital currency (CBDC) in Uganda. The contract will cover technical infrastructure, legal and regulatory aspects, economic and social impacts, operational viability, and a detailed cost-benefit analysis using both quantitative and qualitative methods. The selected firm will assess national digital and payments infrastructure, propose and apply a robust methodology, and deliver specified reports demonstrating understanding, relevant experience, and a workplan. The usual suspects (G+F, eCurrency and Soramitsu, all CBDC platform vendors) are at the top of the scoreboard. [BOU]

The Fragility of Perfectly Safe Digital Money (FRB)

The U.S. Federal Reserve (FRB) published a paper by Klee, Lubis, Ross, Ross, and Vardoulakis that shows how permissionless blockchain-based stablecoins are made fragile and prone to self-reinforcing redemption runs by way that they “unbundle” trust. Network externalities and congestion-sensitive gas fees interact to generate strategic complementarities in redemption decisions, producing runs even when reserves are perfectly safe. The global games model yields a discrete redemption regime shift, not a smooth response, once congestion crosses a threshold falling as network externalities weaken. Panel regressions on five Ethereum stablecoins (2017–2025) show congestion alone does not drive redemptions; only its interaction with low network externalities does, concentrated in the upper tail of the congestion distribution. Hence, frameworks targeting reserve quality, such as the GENIUS Act and MiCA, address the liability but not the rail, and central bank digital currencies (CBDCs) and tokenized deposits circulating on permissionless blockchains inherit the same fragility. [FRB]

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 (20260605)

June 5, 2026June 6, 2026 ~ kiffmeister ~ Leave a comment

Macau Banks execute $160 million Cross-Border Transactions on First Day of mBridge Participation (AMCM)

The Monetary Authority of Macao (AMCM) joined the multilateral central bank digital currency bridge (mBridge) earlier this year (2026) and officially launched the system on June 2. Three local commercial banks processed 23 cross-border transactions totaling nearly 13 billion patacas ($160 million), mainly for trade settlement and remittances linking Mainland China, Hong Kong, and the United Arab Emirates. The launch constitutes Macau’s initial live deployment of central bank digital currency (CBDC) infrastructure for cross-border settlement and follows the MAM’s accession as a full mBridge member in a project explicitly positioned to enable multi-currency payments without intermediation by the U.S. dollar. Early operations were technically stable, with eight additional licensed banks still in onboarding. [AMCM]

Major US Banks to Launch Tokenized Deposit Network in 2027 (Finextra)

JPMorgan, Citi, Bank of America, and Wells Fargo reportedly plan a shared blockchain network for tokenized deposits, targeting launch in early 2027. The platform tokenizes commercial bank deposits on a closed-loop, netted infrastructure broadly analogous to existing deposit clearing, but upgraded to 24/7 availability and native programmability. Strategically, it is a defensive response to open-loop stablecoins and cross‑border tokenized‑deposit offerings that enable balances to exit the banking system and settle globally on weekends and off-hours. The key unresolved issues are whether this consortium rail delivers incremental functionality beyond today’s clearing and real‑time payment systems, and how its closed architecture will compete with, or interoperate with, global stablecoin networks. [Finextra]

Even in Stablecoins, Europe Finds a Way to do it in Pieces (Blockstories)

Bancomat is positioning Eur.Bank as a euro stablecoin embedded in the domestic card and account‑to‑account network, with reserves deliberately booked on issuing banks’ balance sheets rather than in segregated custody, so that liquidity never leaves the traditional banking system. Nine Bancomat member banks will test interbank transactions, effectively treating Eur.Bank as a shared settlement instrument across participants. The overlap between Bancomat’s Eur.Bank banks and the Qivalis consortium underlines Italy’s strategy of running parallel design experiments on reserve treatment and balance‑sheet integration rather than converging early on a single stablecoin architecture. [Blockstories]

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 (20260604)

June 4, 2026June 5, 2026 ~ kiffmeister ~ Leave a comment

Stablecoins: Waiting for Regulation (U.K. House of Lords)

The U.K. House of Lords Financial Services Regulation Committee published a report that examines the development and proposed regulation of stablecoins in the United Kingdom. It argues that the UK should finalize a clear stablecoin regime quickly, because regulatory uncertainty is already suppressing sterling stablecoin development even as the global market has surged past $310 billion and remains dominated by dollar-linked coins. It finds real upside in faster, cheaper cross-border and programmable payments, but says the main risks are financial stability, possible bank disintermediation, consumer protection, and illicit finance. The report broadly supports 1:1 backing and the Bank of England’s backstop lending facility, but says the proposed 40 percent unremunerated central bank deposit requirement, one-day par redemption rule, and temporary holding limits may be too restrictive. [U.K. House of Lords]

Making Stablecoins Stable(r): Can Regulation Help? (BIS)

The Bank for International Settlements (BIS) published a paper by T. Goel, U. Lewrick and I. Agarwal that develops a dynamic model of a fiat‑backed stablecoin issuer showing that unregulated issuers optimally hold minimal capital and large bond portfolios, creating default and fire‑sale spillover risks when redemptions force bond sales. Regulation is modeled as liquidity‑ratio and capital‑ratio thresholds treated as usable buffers that, when breached, trigger additional outflows via coin‑holder discipline, endogenizing flow dynamics. Liquidity thresholds mainly raise cash holdings, while capital thresholds increase both capital and cash, so each tool affects default probability and market‑impact risk through distinct balance‑sheet channels. Calibrated to major stablecoin flows and U.S. Treasury money market depth, the framework yields a two‑way map between target default and price‑impact levels and implied capital–liquidity threshold combinations, but optimal calibration remains sensitive to assumptions about the social value of stablecoins. [BIS]

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.