Kiffmeister’s #Fintech Daily Digest (20260927)

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Just for the record, I’ve sharpened my description of the People’s Bank of China (PBOC) e-CNY pivot from a central bank digital currency (CBDC) to a tokenized commercial bank deposit platform:

e-CNY 2.0 Pivot from Central Bank Digital Currency to Tokenized Deposits (PBOC)

On December 29, 2025, the People’s Bank of China (PBOC) announced the digital yuan (e-CNY) transition from central bank digital currency to a tokenized commercial bank interest-paying deposit platform. The PBOC also introduced a “global single ledger” (GSL) that operates like a centralized real-time gross settlement system. The GSL binds payment instructions and settlement together to eliminate correspondent clearing delays. The PBOC embeds regulatory nodes into the network to have real-time, comprehensive visibility of all interbank flows for risk management and financial integrity purposes. And to reduce settlement latency, settlement on the GSL is separated from the execution of smart contracts (metadata enabling automated transaction execution based on predefined rules). Smart contract execution is offloaded to parallel, permissioned blockchain networks where programmability acts as a temporary conditional lock. Once conditions are met, the programming is stripped away, and the funds settle across the GSL to the receiving bank as unrestricted money. Only earmarked funds held in sub-wallets retain post-transfer restrictions set by “parent” wallets. [PBOC]

How Pontes (DLT) Reinvented the Time-Out and Got it Wrong (LinkedIn)

Patrick McConnell, in a September 22 LinkedIn post, argued that the European Central Bank Pontes tokenized asset settlement system pilot utilizes a flawed hash-link protocol (HLP). Pontes employs a dual settlement model, one of which settles cash legs directly in the Eurosystem’s T2 real-time gross settlement system via application programming interface triggers to achieve central bank money settlement finality. Patrick claims the HLP implements time-outs without unique transaction sequence numbers or duplicate identification flags. Consequently, delayed but successful transactions could be erroneously marked unsettled, creating double-payment risks upon resubmission. This vulnerability renders the Eurosystem Single Market Infrastructure Gateway a single point of failure with unpredictable outcomes, violating the Digital Operational Resilience Act. Comments posit that T2’s underlying reconciliation layer reduces the double-payment risk to a “tie-out problem” rather than lost funds, and that the architecture is fundamentally flawed for locking payments before verifying asset availability. [LinkedIn]

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 (20260925)

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HKMA to Introduce Wholesale CBDC as Project EnsembleTX Settlement Asset (HKMA)

The Hong Kong Monetary Authority (HKMA) is planning to make a wholesale central bank digital currency (CBDC) available for interbank settlement of tokenized deposits as part of Project EnsembleTX, enabling 24/7 payments by around the end of 2026, and will continue to explore more use cases for tokenized deposits. The pilot, launched in November 2025, initially used the HKD real-time gross settlement (RTGS) system to settle the transactions. [HKMA]

ECB Assessing Feasibility of Interlinking TIPS with Brazil’s Pix (ECB)

The European Central Bank (ECB) will assess the feasibility of linking the Eurosystem’s TARGET Instant Payment Settlement (TIPS) platform to Central Bank of Brazil’s Pix instant-payment system. A link could make payments between the euro area and Brazil faster and cheaper, extending the Eurosystem’s broader effort to connect TIPS with foreign instant-payment systems. However, technical, operational, legal and business arrangements remain to be evaluated. [ECB]

US FRB Proposes Rules for FRB-Regulated Stablecoin Issuers (FRB)

The U.S. Federal Reserve Board (FRB) proposed two rules to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act for FRB-supervised payment stablecoin issuers: one governing issuance, reserves and supervision, and another governing applications by supervised banks. The first would require full backing with eligible liquid assets, including short-term Treasury bills, and set capital and risk-management standards; it would also regulate reserve-asset safekeeping and clarify permissible bank activities. The second would require applicants to provide a business plan and financial information and establish procedures for appeals and final decisions. Their final terms remain subject to comment, due 60 days after Federal Register publication. [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.

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 (20260924)

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Central Bank of Uzbekistan Exploring Wholesale CBDC (CBU)

[August 30, 2026] At the inaugural Silk Road Finance and Technology Forum (SRFTF), Central Bank of Uzbekistan (CBU) officials outlined a model under consideration in which a wholesale central bank digital currency (CBDC) could provide a trusted settlement layer for privately issued stablecoins, with licensed institutions managing customer relationships and initial testing taking place through a regulatory sandbox. The SRFTF was co-organized by the CBU and the Global Finance & Technology Network (GFTN). The CBU has since posted on its website a white paper co-authored by the GFTN and the Official Monetary and Financial Institutions Forum (OMFIF) that explores the advantages and disadvantages of wholesale CBDCs in the Uzbekistan context. The report assesses if wholesale CBDC could securely improve domestic capital markets and cross-border settlements. However, it critically questions whether alternative synchronization systems might achieve these goals more cost-effectively, proposing a rigorous 24-month evaluative roadmap. [CBU]

Six Canadian Banks Explore Development of a Secure CAD Tokenized Deposit Solution (CIBC)

Six Canadian banks are jointly exploring the development of Canadian dollar based digital money solutions, starting with a tokenized deposits initiative. The project seeks to deliver faster, more efficient and programmable payments to Canadian customers while preserving safety, stability, and effective regulatory oversight. The first phase aims to move tokenized deposits efficiently across Canadian financial institutions with a longer term goal to connect with other emerging digital assets initiatives. The participants are Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada (NBC), Royal Bank of Canada (RBC), The Bank of Nova Scotia (Scotiabank), and TD Bank Group (TD). The participants anticipate the inclusion of other deposit-taking institutions at the appropriate time. [CIBC]

Kiffmeister’s #Fintech Daily Digest (20260921)(Second Revision)

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On further consideration, I am fully walking back my contention that the European Central Bank (ECB) Pontes pilot “cash tokens” are not tokenized central bank money (CeBM) or wholesale central bank digital currency (CBDC). Based on the standard Bank for International Settlements (BIS) definition of a CBDC (a digital liability of the central bank denominated in the national unit of account), the cash tokens unambiguously qualify. In my first revision of the September post, I had appended an additional condition that the transfer of the digital instrument must constitute instantaneous, unconditional, and legal settlement finality natively on the primary ledger. Because the current Pontes architecture relies on a subsequent defunding event in T2 to achieve ultimate legal finality, I argued they functioned as transitional settlement proxies (effectively TARGET-linked depository receipts) rather than true wholesale CBDCs. I now recognize that appending this strict settlement-timing condition to the base definition was a mistake. While the distinction between technical and legal finality remains a critical architectural discussion regarding systemic risk, it should not disqualify an instrument from being classified as a CBDC. Moving forward, I am sticking strictly to the BIS definition. Sorry for all the whipsawing!

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 (a claim on the ECB to transfer the equivalent CeBM in T2) and dedicated DLT wallets. In both cases, legal settlement finality in CeBM occurs in T2 — for cash tokens, upon defunding or the mandatory end-of-day sweep back into T2 accounts. 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 (20260923)

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South Korea to Test Wholesale CBDC-Settled Deposit Tokens for Government Expenses (MSIT)

The South Korean Ministry of Science and Information and Communication Technology (MSIT) has authorized a regulatory-sandbox pilot allowing public officials to use commercial-bank deposit tokens, settled with Bank of Korea wholesale central bank digital currency (CBDC), for eligible government operating expenses. The pilot bypasses statutory restrictions that otherwise limit such payments to government cards and bank transfers, using smartphone QR codes and pre-programmed spending controls. It extends Project Hangang from consumer and subsidy use cases into public-sector disbursement while preserving a two-tier model: banks issue the customer-facing tokenized deposits and the central bank provides interbank settlement. [MSIT]

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)

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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.

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 (20260918)

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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.

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 (20260917)

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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.

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 (20260916)

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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.

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 (20260915)

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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.

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.