Kiffmeister’s #Fintech Daily Digest (20260303)

March 3, 2026March 3, 2026 ~ kiffmeister ~ Leave a comment

Bank of Korea Calls for Banks-Only Issuance of Won-Denominated Stablecoins (EToday)

The Bank of Korea has reportedly submitted a report to South Korea’s National Assembly Strategy and Finance Committee that urged that only licensed commercial banks be allowed to issue won-denominated stablecoins at the outset, citing money‑laundering, financial stability, and FX‑regulation circumvention risks. The Bank of Korea suggests non‑bank issuers could be considered later once their risk‑absorbing capacity is assessed. South Korean lawmakers are currently debating the next phase of digital-asset legislation, which includes provisions on stablecoins. [EToday]

Stablecoin Disintermediation (FRBNY)

The New York Federal Reserve Bank (FRBNY) published a paper that develops a theory and provides empirical evidence that payment stablecoins disintermediate banks not only by drawing deposits away from traditional institutions but also by transmitting significant liquidity stress to the banks that service stablecoin issuers. Using matched data between on‑chain issuance/redemption activity of a large U.S. dollar stablecoin and Fedwire interbank payments, the authors identify “partner banks” that hold stablecoin deposits and process flows for the issuer. They show that after new partnerships form following the 2023 crypto‑bank failures, these banks experience large, persistent increases in interbank payment volume (about 67%) and in intraday reserve balance volatility tightly linked to daily primary market stablecoin activity, implying that stablecoin-related payments act as frequent liquidity shocks. To manage these shocks, partner banks operate “narrowly,” holding substantially higher reserve balances—roughly 1.5 billion dollars more on average and a much larger reserves‑to‑assets ratio—while their loan share of assets falls by about 14 percentage points relative to similar banks, indicating a crowding‑out of lending capacity. The authors argue that this liquidity channel of disintermediation broadens the ways stablecoins can weaken bank deposit franchises, concentrate reserves in a few institutions, complicate the central bank’s task of gauging system‑wide reserve demand, and potentially propagate or amplify run dynamics from stablecoins to banks during stress events. [FRBNY]

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.

Protected: Kiffmeister’s Digital Currency Monitor, February 2026

March 1, 2026March 1, 2026 ~ kiffmeister

Kiffmeister’s #Fintech Daily Digest (20260228)

February 28, 2026February 28, 2026 ~ kiffmeister ~ Leave a comment

Rwandan CBDC Project to Move to Pilot Phase (BNR)

The National Bank of Rwanda (BNR) published the results of its five‑month central bank digital currency (CBDC) proof of concept (PoC) with BNR staff that tested a retail e‑FRW across online, offline (dual‑offline smartcards), and USSD channels, confirming technical feasibility and the potential to enhance payment resilience, inclusion, and innovation. User research showed strong interest in using e-FRW if it is secure, easy to use, and widely accepted, with offline functionality viewed as essential for continuity in low‑connectivity areas. The PoC also explored wallet‑level programmability, ran a national ideathon to gauge ecosystem readiness, and simulated cross‑border atomic settlement, all within a two‑tier model that preserves the roles of financial institutions. Key lessons concern device diversity, onboarding, support processes, privacy and cybersecurity requirements, and the need for strong legal underpinnings, leading to a planned 12‑month pilot in Kigali, a secondary city, and rural sites to test real‑world use cases, integration, and cross‑border corridors under clearly defined key performance indicators (KPIs) and risk controls. Giesecke+Devrient (G+D) was the central bank’s technology partner on the project. [BNR]

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Kiffmeister’s #Fintech Daily Digest (20260227)

February 27, 2026February 27, 2026 ~ kiffmeister ~ Leave a comment

UK FCA Selects 4 Firms to Test Stablecoin Innovation in its Regulatory Sandbox (UK FCA)

The UK Financial Conduct Authority (FCA) has selected four firms—Monee Financial Technologies, ReStabilise, Revolut and VVTX—from 20 applicants to test stablecoin services in its Regulatory Sandbox, focusing mainly on issuance and use cases including payments, wholesale settlement and crypto trading, so that these products can be trialled in real-world conditions with safeguards while FCA specialists provide feedback and refine proposed rules to ensure stablecoins can be trusted for payments, settlement and trading, inform the UK’s final stablecoin regime due later in 2026, and align with the broader crypto regulatory roadmap and related initiatives such as the Digital Securities Sandbox and the new crypto-asset authorization regime starting from 2026 with full implementation by October 2027. [UK FCA]

ASEAN’s Digital Payment Revolution: A New Frontier for Regional Integration, Thailand (IMF)

The IMF published a paper that reviews how rapid digital payment adoption in ASEAN—especially Thailand’s PromptPay-led fast payments and QR linkages—is reshaping domestic and cross-border transactions by lowering costs, boosting financial inclusion, and supporting SMEs, while introducing new cyber, fraud, and AML risks. It documents a surge in domestic fast and QR payments, the build‑out of bilateral QR and fund-transfer linkages under ASEAN’s Regional Payment Connectivity and Local Currency Transaction frameworks, and emerging multilateral architectures such as BIS’s Project Nexus to overcome the limits of fragmented bilateral models. Using Thai data for 2020–24, the empirical analysis finds that cross‑border QR usage rises when local‑currency–USD volatility is higher, suggesting local‑currency QR payments help users manage FX risk compared with card payments settled via the dollar, and that QR tends to substitute for traditional bank and card channels where financial access is weaker. [IMF]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260225)

February 25, 2026February 25, 2026 ~ kiffmeister ~ Leave a comment

BNP Paribas Uses Public Blockchain for Money Market Fund (MarketsMedia)

BNP Paribas Asset Management has issued a tokenized share class of an existing French‑domiciled money market fund on the public Ethereum blockchain using its AssetFoundry platform, but with a permissioned model that restricts holdings and transfers to authorized participants to remain within regulatory requirements. This follows an earlier tokenized money market fund in Luxembourg on a private blockchain and is structured as a one‑off intra‑group pilot in which BNP Paribas Asset Management acts as issuer, Securities Services as transfer agent and wallet/key operator, and AssetFoundry as the tokenization and connectivity layer, allowing the group to test end‑to‑end issuance, transfer agency and public‑chain connectivity while maintaining governance, investor protection and operational robustness. [MarketsMedia]

U.S. SEC Loosens Broker-Dealer Stablecoin Rules (SEC)

The U.S. Securities & Exchange Commission (SEC) issued an FAQ relating to the treatment of payment stablecoins under the broker-dealer net capital rule (Exchange Act Rule 15c3-1). A “payment stablecoin” is a USD–denominated stablecoin meeting specific regulatory and reserve criteria that change once the GENIUS Act takes effect. The new treatment sharply reduces how much capital firms must reserve against payment stablecoins—from 100% of their market value to a 2% haircut, effectively treating them like money market instruments with a ready market. [SEC]

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Kiffmeister’s #Fintech Daily Digest (20260214)

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

Bank of Russia to Conduct Study on the Creation of a Russian Stablecoin (TASS)

Russia’s TASS news agency reported that the Bank of Russia plans to conduct a study in 2026 on the feasibility of creating a Russian stablecoin. First Deputy Chairman of the Bank of Russia Vladimir Chistyukhin said “we have plans to conduct a study this year where we will once again assess this situation. Indeed, our traditional position is that this is not allowed, but taking into account the practice of a number of foreign countries, we will once again look at what risks and prospects there are here and bring this up for public discussion”. [TASS]

Indian Government to Launch CBDC-Based Public Distribution System Pilot (Financial Express)

India’s Union Home Minister Amit Shah reportedly announced the February 16, 2026 launch of India’s first central bank digital currency (CBDC)-based public distribution system pilot. It introduces subsidy transfers for foodgrains through the Reserve Bank of India’s CBDC platform. Under the pilot phase, 26,333 families across the Sabarmati zone of Ahmedabad, Surat, Anand, and Valsad receive digital tokens in their wallets containing details of commodity, quantity, and price. Beneficiaries using smartphones authenticate transactions by scanning QR codes at fair price shops, while those with feature phones receive one-time passwords through an Aadhaar-based verification system. The programmable CBDC coupons can only be used to purchase specified foodgrains at authorized ration shops and cannot be converted to cash, creating a clear audit trail of grain movement and subsidy utilization. [Financial Express]

Some more backfilling of my central bank digital currency (CBDC) database:

Madagascar’s Project e-Ariary One-Pager (BFM)

[October 19, 2020] Banky Foiben’i Madagasikara (BFM) published a one-pager on its e-Ariary central bank digital currency (CBDC) project. The project aims to affirm monetary sovereignty, ensure financial system stability, promote financial inclusion, control physical currency circulation, and establish a modern payment system in response to the global shift toward digital payments, cryptocurrencies, and new financial actors accelerated by COVID-19. The project follows a cautious two-phase approach: first conducting analysis, design, and experimentation, then proceeding to deployment only if the pilot phase proves successful, while carefully managing potential impacts on monetary and financial stability. [BFM]

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Kiffmeister’s #Fintech Daily Digest (20260212)

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

European Parliament Votes for Online and Offline Digital Euro (Central Banking)

On February 10, 2025 the European Union (EU) Parliament has approved the digital euro initiative, reaching agreement with the European Council on creating a currency that will function both online and offline. They rejected an earlier proposal by the parliamentary rapporteur that would have restricted the digital euro to an offline version only (420 votes in favor, 158 against and 64 abstentions). Members of Parliament approved an amendment that stated that the central bank digital currency (CBDC) was “essential to strengthen EU monetary sovereignty, reduce fragmentation in retail payments, and support the integrity and resilience of the single market [as] the increasing digitalization of payments, if left exclusively to private and non-EU actors, risks creating new forms of exclusion for both users and merchants” (438 in favor, 158 against and 44 abstentions). [Central Banking and European Parliament]

Bank Negara Launches Digital Ringgit Pilot Programs (BNM)

Bank Negara Malaysia (BNM) announced that its Digital Asset Innovation Hub (DAIH) has onboarded three initiatives in 2026 to test real-world applications of ringgit stablecoins and tokenized deposits, focusing on wholesale payment use cases for domestic and cross-border transactions, including tokenized asset settlement. These initiatives will be conducted in a controlled environment with ecosystem partners, including corporate clients and other regulators, with some exploring Shariah-related considerations. The testing aims to assess monetary and financial stability implications, with BNM planning to provide clearer policy direction on ringgit stablecoins and tokenized deposits by end-2026, potentially integrating with existing wholesale central bank digital currency (CBDC) work. [BNM]

Programming Money Without Programmable Money (FRBNY)

The Federal Reserve Bank of New York published a staff report that examines the distinction between “programmable money” and “programmable payments” in the context of central bank digital currency (CBDC) and tokenized money systems. The authors propose a two-layer framework consisting of an “asset layer” (a ledger recording ownership of plain-vanilla money) and a “program layer” (instructions for conditional transfers), which issues “certificates” that can be classified by two properties: transferability (whether ownership can be transferred) and convertibility (whether the certificate releases basic money when conditions are met). Pure programmable money is defined as transferable but non-convertible certificates that could circulate perpetually without releasing basic money, while pure programmable payments are non-transferable but convertible certificates (like direct debit arrangements). However, programmable money would likely not satisfy the “no questions asked” (NQA) property needed for good money and therefore wouldn’t circulate widely as money. [FRBNY]

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Kiffmeister’s #Fintech Daily Digest (20260211)

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

Bank of England Selects DLT Projects for RTGS Atomic Settlement Trials (BOE)

The Bank of England (BOE) has selected ten projects involving eighteen companies to participate in its Synchronisation Lab, which will run for approximately six months starting in Spring. This initiative, part of Project Meridian, aims to test how tokenization and distributed ledger technology (DLT) projects can achieve atomic settlement using central bank money by synchronizing with the real time gross settlement (RTGS) system. The Lab will validate design models for data sharing with RTGS and demonstrate potential applications, allowing both RTGS account holders and DLT operators to participate in the simulation, though it won’t be a live system at this stage. [Source: BOE]

The Bank of England Seeks Engagement on Retail Payments (BOE)

Also, the BOE is establishing three new forums as part of its National Payments Vision to develop next-generation retail payments infrastructure. The Payments End User Forum will gather input from consumers, small businesses, and charities to ensure systems meet real-world needs; the Payments Innovation Design Group will bring together fintech firms, payment providers, and technology companies to explore emerging opportunities and challenges; and the Payments Academic Advisory Group (expanded from the previous CBDC Academic Advisory Group) will convene academics and policy experts to provide evidence-based insights on the future of payments. Applications to join these forums are open until 5pm on March 3, 2026, with the goal of creating a more resilient, innovative, and inclusive payments landscape for the UK. [Source: BOE]

Adoption of Payment Innovations: The Case of Digital Wallets in Peru (BIS)

The BIS published a paper that examines the rapid adoption of digital wallets Yape and Plin in Peru, which grew from minimal usage in 2019 to 50% of retail transactions by April 2024. Using market share data and a logit demand model, the authors find that key success factors include zero fees, immediate 24/7 fund availability, QR code payments, and interoperability with point-of-sale terminals. The study estimates that a PEN 0.01 fee increase would reduce digital wallet market share by 0.31 percentage points, while removing features like POS payments would decrease usage by 26 percentage points. Consumer welfare per transaction among banked individuals increased by 68% by April 2024 due to digital wallet availability. The paper attributes this success to enablers (telecommunications infrastructure, financial inclusion), catalysts (COVID-19 pandemic), and design features (ease of use, large merchant networks), alongside the Central Bank of Peru’s regulatory push for interoperability between payment systems. [Source: BIS]

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Jurisdictions Where Retail CBDC Is Being Explored

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

I’ve updated my tabulation of the central banks that have launched, piloted, experimented with and/or researched retail central bank digital currency (CBDC)(see below). The table was compiled from publicly available sources, including media and central bank websites, and not verified through official channels. If I’m missing anything, or you find mistakes in the tabulation, please let me know in the comments!

According to my count, 115 central banks have launched retail CBDC explorations based on publicly-available information. It doesn’t include the two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). Four jurisdictions have seen full launches, 12 pilot launches (where the central bank is issuing real CBDC to a limited subset of external users), 22 have seen proof-of-concept work started, and 77 started and remain in the pure research phase. These are less than the numbers published by the Atlantic Council, because they count individual countries in currency zones (e.g., Eurozone). BTW for those who want a more historical view of CBDC developments I strongly recommend the CBDCTracker.org database.

These numbers are higher than in my last update posted at the end of November 2025. That’s not because any central banks started working on CBDC, but because I’ve spent the last two months backfilling, during which I found ten central banks that flew under my radar screen. Also, note the table’s green highlights. They’re part of an experiment where I’m trying to capture which central banks are currently working on retail CBDC – i.e., currently in the launch, pilot or proof of concept phases and/or provided research updates within the last two calendar years (2025 and 2026). There are currently 32 projects that are “live” by that definition.

Notes: The difference between a “pilot” and “proof of concept” (POC) is that a pilot involves actual users, whereas a POC does not, even though some POCs may involve central bank staff. Also, because the tabulation is based only on publicly-available information, it is likely that there is some POC activity in the “research” category, but no announcements have been made. Finally, entries that are crossed through indicate that the projects have been shut down, or put on hold (“watchful waiting”).

BTW 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.

RCBDC 202601 Tabulation Download

Kiffmeister’s #Fintech Daily Digest (20260209)

February 9, 2026February 9, 2026 ~ kiffmeister ~ Leave a comment

I’m continuing my backfilling, this time catching up to some papers that were published in January that I put on the back burner because January was one of *those* months:

The Hidden Plumbing of Stablecoins: Financial and Technological Risks in the GENIUS Act Era (MIT DCI)

The MIT Digital Currency Initiative (DCI) published a paper evaluates the financial, technological, and regulatory risks facing U.S. dollar stablecoins under the 2025 GENIUS Act. The authors argue that while the Act strengthens reserve asset quality and transparency, it treats stablecoin stability primarily as a balance-sheet problem, leaving critical vulnerabilities unaddressed. Maintaining par-value redemption depends not only on high-quality backing assets but also on the functioning of Treasury and repo markets, broker-dealer balance-sheet capacity, and blockchain operational reliability. The paper identifies three interconnected risk layers: financial risks (including Treasury market fragility and dealer intermediation bottlenecks), technological risks (smart contract bugs, consensus attacks, bridge failures), and regulatory gaps (undefined redemption mechanics, lack of capital requirements, no access to Federal Reserve liquidity facilities). The analysis reveals that even conservatively backed stablecoins could face stress from redemption surges or market disruptions, and that stablecoin issuers have significantly lower capital buffers than commercial banks. The authors conclude that durable stability requires an integrated approach spanning financial-market infrastructure, prudential regulation, and software governance, while highlighting a key policy dilemma: granting stablecoin issuers Fed access could reduce liquidity risk but might disintermediate banks and affect monetary policy transmission. [Source: MIT DCI]

Stablecoins in Retail Payments (ArXiv)

ArXiv published a paper that systematically compares stablecoin-based payments with traditional card networks as retail payment systems. The authors introduce the CLEAR framework (Cost, Legality, Experience, Architecture, and Reach) to evaluate both systems across five dimensions. Their analysis reveals that while stablecoins offer advantages like continuous settlement, lower rail-level fees, and programmability, they suffer from significant drawbacks including weaker consumer protection (no native chargebacks), higher user-facing complexity (gas fees, wallet management), fragmented interoperability across blockchains, and limited merchant acceptance. Card networks, by contrast, subsidize consumers through interchange fees, provide strong legal recourse mechanisms, and benefit from standardized global infrastructure and network effects. The paper concludes that stablecoins demonstrate conditional advantages in closed-loop environments, cross-border corridors, and high-friction payment contexts (particularly in high-inflation economies), but remain structurally disadvantaged as general-purpose retail payment instruments compared to card networks due to their institutional incompleteness and lack of coordinated governance frameworks. [Source: ArXiv]

Central Bank Digital Currency and Monetary Sovereignty (CEPR)

The Centre for Economic Policy Research (CEPR) published an article that argues that a central bank digital currency (CBDC) is not essential for maintaining monetary sovereignty, contrary to popular claims. The author contends that throughout history, monetary stability has relied on a hybrid system of publicly defined units of account backed by private money (like bank deposits), rather than universal access to public currency. True monetary sovereignty depends on the central bank’s legal authority and its capacity to absorb risk through balance-sheet operations during crises, not on issuing retail digital currency. The article further distinguishes between money (the settlement asset) and payments (the transaction mechanism), arguing that concerns about foreign payment providers are payment system issues requiring regulatory solutions, not CBDC. [Source: CEPR]

Central Bank Digital Currency and Gresham’s Law: An Experimental Analysis (SNB)

The Swiss National Bank (SNB) published a paper that examines how people use central bank digital currency (CBDC) versus risky bank deposits through a laboratory experiment. The researchers tested Gresham’s law—the principle that “bad money drives out good”—by having participants allocate funds between a risk-free account (like CBDC) and a risky account (like bank deposits) that could lose 50% with 10% probability. Key findings show that when the risk-free account is unrestricted, people extensively hold and pay with it. However, when limited by a ceiling or negative interest rate, people tend to hoard the risk-free money as a store of value while using risky money for payments—confirming Gresham’s law. The study concludes that mechanisms designed to limit CBDC holdings (necessary to protect the banking system) may undermine its effectiveness as a payment method, suggesting it may be better to build payment systems on existing bank deposits rather than CBDC. [Source: SNB]

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