Eclipsing the Pyramid: Stablecoins and Settlement (JFMI)

The Journal of Financial Market Infrastructures (JFMI) published a paper by Clément Berthou and Xavier Lavayssière that examines stablecoins and the concept of a “settlement eclipse.” The paper shows how stablecoins circulate value globally without requiring traditional fiat redemption, leveraging quasi-bearer claims, programmable platforms, and crypto intermediaries. As a result, stablecoins produce a settlement eclipse, whereby a subordinate layer of the monetary hierarchy internalizes transfers at sufficient scale, and occults the settlement function of layers above it. Such phenomenon obscures systemic risks, transfers financial access control to private operators, and narrows policy options. Analogous occultation occurs when transfer volumes are internalized by large financial institutions, netted within private payment systems, or managed through nested correspondent banking chains. Ultimately, the authors position stablecoins within an emerging “tokenized monetary pyramid,” questioning whether this parallel structure will secure a direct public anchor or remain structurally subordinate to the traditional fiat system. [JFMI]

Project Ensemble Business Use Case Report (HKMA)

The Hong Kong Monetary Authority (HKMA) published a report that details the experiences gained from the first phase of its Project Ensemble that tested end-to-end use cases for settling digital asset transactions using experimental tokenized deposits settled using e-HKD wholesale central bank digital currency (CBDC). Although pilots across fixed income, liquidity management, green finance, and trade finance demonstrated atomic delivery-versus-payment execution, the anticipated efficiency gains face substantial friction. True straight-through processing remains constrained by legacy manual workflows, off-chain data lags, and an unproven critical mass. Furthermore, structural hurdles like potential bank liquidity strains and absent secondary market conventions threaten commercial scalability. In addition, the report acknowledges that policy shifts and regulatory interventions are required to support the viability of such new ecosystems. [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.

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.

India’s CBDC Moment: From Digital Cash to Programmable Money (S&P)

According to a recent S&P Global report, India’s central bank digital currency (CBDC), the digital rupee, should be judged on programmability and settlement efficiency, not retail wallet adoption. Retail transactions lag significantly behind the ubiquitous Unified Payments Interface (UPI). However, the digital rupee could become a foundational layer of India’s digital public infrastructure by functioning as programmable money for targeted policy outcomes. Furthermore, its most substantial economic promise lies in wholesale markets, where it could facilitate atomic settlement for tokenized assets and reduce cross-border payment friction. And in a potential tokenized global economy, the digital rupee could prevent a shift of cross-border business-to-business trade and remittances toward foreign-currency stablecoins. [S&P]

Digital Pound Lab: Phase 2 Update (BoE)

The Bank of England (BoE) updated its webpage dedicated to Phase 2 of its Digital Pound Lab that concluded in July 2026. BoE-developed use cases demonstrated included one-time aliases for privacy-preserving payments, confirmation of payee, group “kitty” payments using conditional locks, external service interface provider connections enabling third-party app integration, allowances extended to e-commerce, and usage-based streaming micropayments. Eleven private sector participants tested additional use cases that the latest update fleshed out in more detail. These included Crunchfish demonstrating deferred offline payments with a reserve-pay-settle lifecycle and double-spend controls, and TECHT Labs demonstrating conditional business-to-business payments via smart contracts. Interestingly, one of the participants listed in the June 2026 update (Focus on Monesave) was quietly dropped. The BoE explicitly disclaimed policy endorsement of any participant designs, or endorsement of the firms, their products or services. [BoE]

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.

The Russian Ministry of Finance Paying Wages in Digital Rubles (Russian MOF)

Russia’s Ministry of Finance (MOF) reports that, on October 1, 2026, several employees opted to receive salary payments in digital rubles through wallets on the Bank of Russia platform. It follows pilot federal-budget transactions in 2025, covering salaries, stipends and selected government-contract payments, with aggregate volume of nearly 16 million rubles. Since January 2026, federal institutions have been permitted to make and receive budget-related payments in digital rubles without a restricted expenditure list. The initiative therefore marks a shift from controlled pilot use toward routine Treasury and payroll integration, contingent on bank and merchant infrastructure that opened up on September 1, 2026. [Russian MOF]

Will US Firms Adopt Stablecoins? Survey Says They’re Not Enthusiastic (Cleveland Fed)

In a U.S. Federal Reserve Bank of Cleveland Economic Commentary, Dirtzu, Panzitta and Zimmerman surveyed 148 firms in the Fourth District (Ohio, western Pennsylvania, eastern Kentucky, and northern West Virginia) regarding plans to use stablecoins. Despite the 2025 Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act easing supply constraints, they find negligible latent corporate demand. Only one firm currently uses stablecoins, while seven plan future adoption. Primary deterrents include satisfaction with existing payment rails, knowledge gaps, and absent counterparty demand. While analysis of Securities and Exchange Commission (SEC) nonfinancial corporate balance sheet filings seemingly corroborates this disinterest, the authors dismiss stablecoin holdings below a 2% total asset threshold as trivial, which risks obscuring early-stage corporate experimentation. [Cleveland Fed]

UK Banks Complete First Live Customer Transactions Using tokenized Sterling Deposits (UK Finance)

[September 24, 2026] Seven U.K. banks collaborated to complete the first live customer transactions using tokenized sterling deposits on a shared platform developed by Quant, delivered through the Great British Tokenised Deposit (GBTD) initiative convened by UK Finance. The participating banks (Barclays, HSBC UK, Lloyds, Monzo, Nationwide, NatWest and Santander) tested conditional payments in two remortgage completions and a consumer marketplace exchange, in which customer balances were locked and automatically released when specified completion or delivery conditions were met. The pilots seek to preserve the legal and prudential characteristics of bank deposits while adding programmable, interoperable settlement functionality. Planned work includes tokenized bank-issued debt instruments and digital-asset settlement using delivery-versus-payment-versus-reserves. The announcement demonstrates operational feasibility, rather than resolving questions of scale, governance, interoperability, legal finality, or supervisory treatment. [UK Finance]

International Stablecoin Flows, Capital Controls and Currency Crises (IMF)

The IMF published a working paper by Marco Reuter that analyzes $21.4 trillion in international stablecoin flows across 188 countries from 2018 to 2025. These US dollar-pegged assets are concentrated in emerging markets and developing economies, which hold 75% of the total. Flows are predominantly cross-border, retail-sized transfers with a median size of $300. Furthermore, when countries restrict capital outflows, stablecoin activity rises persistently by roughly 30% over six months. Similarly, currency crises trigger a persistent 75% increase in holdings within a year. However, country-level geography is inferred via machine learning trained on domain-name linguistics and web traffic—proxies vulnerable to virtual private network (VPN) distortions, unrepresentative sampling, and the untestable assumption of equal average transaction sizes across countries. [IMF]

Tokenization of Real World Assets: Towards Embedded Crypto Finance (DC Fintech Week)

A paper by Zetzsche, Buckley and Arner that focuses on tokenization of non-financial real-world assets (TRWAs) develops a tokenization taxonomy to better understand what TRWAs entail. The authors contend that TRWAs could transform mainstream custody and securitization through continuous 24/7 settlement and central bank digital currency (CBDC) interoperability, forecasting a gradual shift toward “embedded crypto finance.” To govern this transition, they propose adapting existing securitization rules, such as expanding substituted compliance for prospectuses. This approach relies heavily on legacy frameworks to manage the unique operational and cyber risks of distributed ledger technologies, leaving open the question of whether unprecedented on-chain vulnerabilities might ultimately fall through the regulatory cracks. [DC Fintech Week]

The Compatibility of Permissionless Networks and Financial Integrity (DC Fintech Week)

A paper by Rettig, Malekan and Mosier posits that regulated financial institutions can build and use permissionless networks in compliance with financial integrity obligations. While some see the pseudonymous, decentralized nature of these networks as insurmountable compliance barriers, the authors contend that compliance can be achieved by implementing risk-based controls strictly at the application layer, rather than attempting to police the underlying neutral network protocol. Ultimately, they frame embracing open protocols not merely as a manageable risk, but as a strategic imperative, to unlock superior operational resilience and market efficiency compared to permissioned alternatives. Whether regulatory authorities will embrace this neat bifurcation of network carriage and application liability in practice remains to be seen. [DC Fintech Week]

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.

Call for Expressions of Interest to Explore Digital Euro Innovation Platform Activities (ECB)

The European Central Bank (ECB) launched a call for expressions of interest inviting private companies and organizations to collaborate in exploring how the digital euro can foster innovation in the market via two workstreams. The experimentation workstream will explore electronic integrated receipts, multi-payer and conditional payments, and payment-app features. The exploration work stream will explore artificial intelligence in payments and public-sector uses. The work could inform services built on the digital euro’s core infrastructure and possible future design changes. Applications close November 9, 2026, with activities planned for the first half of 2027. [ECB]

Trusted Execution Environments for Central Banks (BIS)

The Bank for International Settlements (BIS) published a paper that considers what trusted execution environments (TEEs) can responsibly deliver for central banks, the conditions under which they are most effective and how they can be deployed without widening who must be trusted. A TEE is a hardware-anchored, isolated computing space protecting “data in use” via verifiable code authenticity and runtime confidentiality. This capability is critical, enabling institutions to collaboratively analyze sensitive microdata without exposing raw records to peers or infrastructure operators. Yet, significant unresolved vulnerabilities persist, specifically regarding microarchitectural side-channel leakage, host-mediated subversion, and attestation failures. Consequently, TEEs offer conditional assurances rather than absolute security, demanding rigorous, evidence-based governance and layered mitigations to be viable. [BIS]

And some backfilling:

E-Cedi Project Still Active — BoG Governor Assures (BOG)

[May 20, 2026] Bank of Ghana (BOG) Dr. Johnson Asiama assured that the e-cedi project has not been abandoned, despite delays in its rollout, speaking at the 130th Monetary Policy Committee meeting. He explained that the central bank is taking additional time to complete key preparatory stages before fully deploying the initiative. The Bank is prioritizing critical systems and safeguards, particularly cybersecurity resilience, before moving to the next phase of implementation. [BOG]

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.