Digital euro sparks sovereignty battle between EU governments and ECB (Politico)

According to Politico, a battle is brewing between the European Central Bank (ECB) and several European Union national governments over the holding limits that would be applied to a potential digital euro. Under the European Parliament’s draft digital euro regulation, the ECB would decide on holding limits, consistent with a vision of the digital euro as an expression of European monetary sovereignty. However, at least nine countries, including Germany, France and the Netherlands, are reportedly concerned that allowing the ECB to set the limit would leave the institution with exclusive influence over a new tool that could have outsized effects on banking stability. [Read more at Politico]

BIS debates ending the mBridge cross-border payments project (Bloomberg)

According to Bloomberg, the Bank for International Settlements (BIS) is debating whether to shut down its wholesale central bank digital currency (CBDC) based mBridge cross-border payment project. The platform initially was developed by the central banks of China, Thailand, Hong Kong and the United Arab Emirates under the BIS’s Innovation Hub, and recently reached the minimum viable product (MVP) stage. The U.S. Federal Reserve has not joined the project. During discussions among central bankers and finance chiefs at the October 2024 International Monetary Fund and World Bank Annual Meetings, concerns were reportedly expressed about the fact that China is supplying the platform’s key technological backbone. [Read more at Bloomberg]

The consumer value proposition for a hypothetical digital Canadian dollar (BOC)

The Bank of Canada (BOC) published a paper that explores the consumer value proposition of a hypothetical digital Canadian dollar. It employs a methodology that allows participants to interact with research prototypes of increasing complexity to reveal their preferences, constraints, and adoption influences. Qualitative insights are corroborated using quantitative, large-population surveys and contrasted with results from a Bank of Canada open online public survey. The results show that most participants would support the issuance of a digital dollar, but broad early adoption is unlikely given that available payment methods meet most user needs. Important considerations for appeal and adoption include universal merchant acceptance, low costs, easy access, simplified online payments, shared payment features, budgeting tools, and customizable security and privacy settings. Participants cited these features far more often than offline functionality and the ability to make anonymous payments. The results also show that certain groups may strongly resist a digital dollar if they conflate its launch with the end of cash issuance. [Read more at the BOC]

Upcoming Speaking Engagements:

• Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.