Month: January 2025

Kiffmeister’s #Fintech Daily Digest (20250110)

~ kiffmeister

Tokenization of assets and distributed ledger technologies in financial markets (OECD)

The OECD published a paper that analyzes possible reasons for the absence of a market for tokenized assets and puts forward policy considerations for financial supervisors and policy makers, to which Josiah Hernandez and I contributed material on the wholesale central bank digital currency (CBDC) aspects. Possible impediments tokenization growth identified include “chicken and egg” problems (e.g., the lack of liquidity and absence of an ecosystem for tokenized assets, and the need for distributed ledger technology (DLT) payment rails (including wholesale CBDC) to exist for the payment leg of settlement), market functioning challenges of instant and “atomic” settlement, the lack of custodians to onboard investors and assets, and legal issues (e.g., the legal status of smart contracts, token ownership not necessarily according ownership to the underlying assets). It concludes that “with the proper foundations in place, new possibilities of potential efficiencies and productivity gains in tokenized assets markets can be brought about in a manner that need not negatively impact financial stability, law enforcement, local and global policy regimes”. [Read more at the OECD]

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Upcoming Speaking Engagements:

  • The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. [register here]
  • The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. [register here]
  • The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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.

Kiffmeister’s #Fintech Daily Digest (20250109)

~ kiffmeister

Privacy-enhancing technologies for CBDC solutions (BOC)

The Bank of Canada (BOC) published a paper that explores the use of privacy-enhancing technologies (PETs) in the design of central bank digital currency (CBDC) systems, potentially paving the way for solutions that better safeguard end-user privacy and meet rigorous data protection standards. PETs can offer robust protection for data throughout their lifecycle, whether stored, in transit or during processing, and ensure privacy is maintained even when data are extensively shared or analyzed. However, they can introduce performance overheads and add complexity to systems, and their effectiveness and applicability are currently limited due to their early stage of development. This paper provides a comprehensive overview of how PETs can transform privacy design in financial systems and the implications of their broader adoption. [Read more at the BOC]

Hong Kong launches DLT incubator for banks (Ledger Insights)

The Hong Kong Monetary Authority (HKMA) unveiled a “Supervisory Incubator for Distributed Ledger Technology”, with tokenized deposits as a major focus. At the individual bank level, the Incubator will offer a one-stop supervisory platform that enables banks to reaffirm the adequacy of their risk management controls prior to the full launch of a DLT-based initiative. By leveraging this platform, banks will have access to a dedicated team from the HKMA for obtaining supervisory feedback and may opt to conduct live trials to validate and refine specific aspects of their risk management implementation under a hands-on and iterative approach, as needed. [Read more at the HKMA]

Sponsored Content:

Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.

Upcoming Speaking Engagements:

  • The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. [register here]
  • The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. [register here]
  • The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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.

Kiffmeister’s #Fintech Daily Digest (20250108)

~ kiffmeister

State of EUR stablecoins: 2024 Update (Juuso Roinevirta)

Juuso Roinevirta posted a year-end review of the market for EUR stablecoins, explaining why they failed to grow in 2024 and will likely fail to grow in 2025. The year ended with about €320 million outstanding, and the relative share of EUR stablecoins to USD stablecoins shrank from about ~0.23% to ~0.17%. This is attributed to a general lack of interest for EUR in decentralized finance (DeFi), and the European Union (EU) Markets in Crypto-Assets (MiCA) regulation. Furthermore, most of the issuance is “pseudo-fake” in that they’re not being used on-chain, but to only facilitate trading on exchanges or simply minted to seem more important. The challenges in 2025 will revolve around the chicken and egg problem (users do not come unless there are apps won’t come unless there is liquidity won’t come unless there are users), lack of understanding, and issuer turf wars. [Read more on Juuso’s website]

Assessing the impact of a digital euro on monetary policy implementation (Banca D’Italia)

Banca d’Italia published a paper that proposes a methodological framework for estimating the maximum amount of digital euro (D€) that is consistent with a smooth monetary policy implementation (MPI) in the euro area (EA). To this end, it considers that monetary policy is implemented smoothly following the introduction of the D€ when i) the remaining aggregate liquidity in the EA is sufficient to anchor short-term rates to the deposit facility rate and ii) EA national banking sectors can largely meet D€ demand with excess reserves and additional central bank credit. It estimates that, for a smooth MPI, the maximum amount of D€ should not exceed EUR 1.7 trillion under an approach that takes into account the heterogeneity across EA countries and banks and prevents any EA national banking sector from facing a too severe liquidity distress following the introduction of the D€. The analysis suggests the importance of refinancing operations with a broad collateral framework in the Eurosystem operational framework, due to their key role in allowing the central bank to elastically withstand additional reserve demand stemming from the introduction of the D€. [Read more at the Banca d’Italia]

IZNES simulates wCBDC usage with Banque de France (Ledger Insights)

Distributed ledger technology (DLT) investment fund platform IZNES shared details about experiments during the recent Eurosystem wholesale DLT settlement trials that ended in November. It conducted two sets of experiments that used the Banque de France’s wholesale central bank digital currency (CBDC). [See below and read more at IZNES]

  • In collaboration with Generali as investor, AXA IM as issuer / asset manager of the tokenized fund, and BNP Paribas’ Securities Services business providing existing services and managing its clients’ wallets in BdF’s DL3S, the experiment focused on the subscription of fund units using Banque de France’s wholesale CBDC.
  • Partnering with Generali as investor, OFI Invest AM as issuer / asset manager of the tokenized fund, Societe Generale and Societe Generale-FORGE, this stream demonstrated the wholesale CBDC’s capabilities in a complex, multi-layered financial operation. This included the subscription of fund units in wholesale CBDC, which were subsequently reinvested into other funds, and bonds issued by Societe Generale. It concluded with the redemption of positions. Societe Generale Securities Services acted as Paying Agent.

Sponsored Content:

Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.

Upcoming Speaking Engagements:

  • The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. [register here]
  • The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. [register here]
  • The Digital Euro Conference 2025 (Frankfurt, March 27) 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! [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.

Kiffmeister’s #Fintech Daily Digest (20250107)

~ kiffmeister

FDIC releases redacted operation Choke Point 2.0 letters (Bitcoin.com)

The U.S. Federal Deposit Insurance Corporation (FDIC) published minimally redacted letters sent to banks requesting information about their crypto activities and in most cases asking them to pause activities pending feedback. The FDIC was forced by a June 2024 court order filed by Coinbase (through its contractor History Associates), to release the letters after initially turning down the exchange’s Freedom of Information Act (FOIA) request. According to Coinbase Chief Legal Officer Paul Grewal, “they show a coordinated effort to stop a wide variety of crypto activity“. [Read more at Bitcoin.com, Ledger Insights and the FDIC]

CPMI takes further steps to promote ISO 20022 harmonization (BIS)

The Bank for International Settlements (BIS) Committee on Payments and Market Infrastructures (CPMI) announced further steps to promote the adoption of its harmonized ISO 20022 data requirements for more efficient processing of cross-border payments. First, a panel of global ISO 20022 market practice groups will be established in early 2025 to support the regular maintenance of the data requirements. Second, the CPMI is encouraging industry to develop global ISO 20022 market practice guidelines for fast payments based on the harmonized data requirements. Third, the CPMI will continue to engage with payment system operators and payment service providers to encourage them to implement the harmonized data requirements by end-2027. [Read more at the BIS]

Ripple partners with Chainlink to boost RLUSD stablecoin in DeFi markets (CoinTelegraph)

Ripple has partnered with Chainlink, a decentralized oracle network, to improve the adoption and utility of its Ripple USD (RLUSD) stablecoin in decentralized finance (DeFi) applications. The collaboration will provide price feeds for RLUSD on Ethereum and the XRP Ledger, which aim to support cost-effective transactions and DeFi use cases for the enterprise-grade stablecoin. [Read more on Ripple]

Sponsored Content:

Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.

Upcoming Speaking Engagements:

  • The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. [register here]
  • The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. [register here]
  • 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.

Kiffmeister’s #Fintech Daily Digest (20250104)

~ kiffmeister

Three transactions have already been made with the BCB’s Drex (Forum)

To date, at least three transactions have reportedly been made with the Banco do Brasil (BCB) Drex central bank digital currency (CBDC) as part of its proof of concept work. One was carried out between two private banks (BTG Pactual and Itaú Bank) to test the compatibility and the efficiency of the payment network. The second was between the BCB and a public-sector bank (Caixa Econômica Federal). The third, in September 2024, was an interbank transaction between a public bank (Caixa) and a private digital bank (Inter). [Read more at Forum]

The digital euro – implications for the European banking sector (CFS)

The Center for Financial Studies (CFS) published a paper that estimates the potential impact of a digital euro CBDC on European commercial bank revenues from payment transaction services using a simulation model based on current market data. There is political agreement that digital euro users should not be charged for payments and other basic services, but banks could collect fees from merchants for providing digital euro-related services, as is the case today for other digital payment instruments. The paper finds that the annual losses of fees from users from payment transaction services could be in the range of €2.1 billion to €4.2 billion. [Read more at SSRN]

Sponsored Content:

Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.

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.

Jurisdictions Where Retail CBDC Is Being Explored (December 2024)

~ kiffmeister

105 central banks have recently launched, piloted, experimented with and/or researched retail central bank digital currency (CBDC) not including two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). This total is unchanged from the end of September 2024. Keep in mind that I don’t count all of the individual national central banks that are part of currency unions (e.g., the European or Eastern Caribbean Currency Unions). If I did the tally that way, my count would be around the oft-quoted 130+ central banks. Also, the table was compiled from publicly available sources, including the 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!

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. Also, the ones that are crossed out, are where the central bank has considered issuing CBDC but then decided to cancel the research or put it on hold (“watchful waiting”).

RCBDC Explorer TabulationDownload