Banks Explore Venturing Into Crypto World Together With Joint Stablecoin (WSJ)

According to the Wall Street Journal (WSJ) a consortium of the biggest U.S. banks, including Bank of America, Citigroup JP Morgan Chase, and Wells Fargo, are in the early conceptual stages of exploring issuing a joint stablecoin. Early Warning Services, the operator of the Zelle peer-to-peer payment system, and The Clearing House payments network, are also reportedly involved. Early Warning Services, which runs the Zelle instant payments system, is owned by Bank of America, Capital One, JP Morgan Chase, PNC Bank, Truist, U.S. Bank and Wells Fargo. The Clearing House is owned by 22 banks which include the same ones as Early Warning Services, but also Bank of New York, Citigroup and many international banks such as Barclays, Deutsche Bank, HSBC and Santander. [Read more at the WSJ]

USDF Consortium Reportedly Shuttered (Ledger Insights)

The USDF Consortium, launched in 2022 to create a US dollar stablecoin-based interbank payment system on a permissionless blockchain, has reportedly closed down. The original idea was that its USDF tokens would be redeemable at any of the participant community banks. The banks involved were New York Community Bank, Synovus, Bank, Sterling National Bank, FirstBank, and NBH Bank. Under regulatory pressure, it moved to a private chain until it became clear that regulators still didn’t want it to proceed and so it reportedly shuttered late last year. However, its website (usdfconsortium.com) is currently displaying a “maintenance mode is on… site will be available soon” message, so maybe it’s not so dead? [Read more at Ledger Insights]

Second MOF/BOJ Interim Report on a Japanese CBDC (LinkedIn)

Japan’s Ministry of Finance (MOF) published the second interim report of the joint task force with various government ministries and the Bank of Japan (BOJ) on central bank digital currency (CBDC). It’s currently available only in Japanese, but Norbert Gehrke has very helpfully provided a summary in English (see it here). The primary focus is on three main themes; (i) the legal framework (private law), (ii) privacy and data utilization, and (iii) the roles and division of labor with private payment systems. [Read more at the MOF]

Enabling Central Bank Money Settlement and Collateral Eligibility for DLT-based Securities (AFME)

The Association for Financial Markets in Europe (AFME) published proposals in areas key to further scaling of distributed ledger technology (DLT) based capital markets. Both the ability to settle DLT transactions in central bank money and to use DLT-based securities as eligible collateral are key to building liquidity and attractiveness of DLT-based markets. Two of the key building blocks are the (i) availability of a well-designed solution for settlement in central bank money of DLT-based transactions; and (ii) eligibility of DLT-based assets to serve as collateral in Eurosystem credit operations. The report goes on to recommend concrete actions by the ECB and Eurosystem with respect to these two building blocks. [Read more at the AFME]

Upcoming Speaking Engagements:

The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]

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.