Kiffmeister’s #Fintech Daily Digest (20250618)

June 18, 2025June 18, 2025 ~ kiffmeister

U.S. Senate Passes GENIUS Act Stablecoin Legislation (Ledger Insights)

The U.S. Senate has passed the GENIUS Act, a bipartisan bill aimed at establishing a regulatory framework for stablecoins. The legislation seeks to provide clarity for issuers, ensure consumer protections, and maintain financial stability while fostering innovation in the digital asset space. Key provisions include requirements for stablecoin issuers to maintain reserves, comply with anti-money laundering (AML) rules, and undergo regular audits. The bill now moves to the House of Representatives for further consideration. [Read more at Congress.gov]

DEA on the Foundational Principles for Europe’s Digital Money Ecosystem (DEA)

The Digital Euro Association (DEA) published a position statement that advocates for a balanced and innovative approach to digital money in Europe, focusing on stablecoins, retail and wholesale digital euros, and deposit tokens. The DEA emphasizes regulatory clarity, interoperability, user protection, and privacy, supporting the Markets in Crypto-Assets Regulation (MiCAR) for stablecoins while calling for proportional implementation to foster innovation. For the wholesale digital euro, the DEA highlights efficiency gains through distributed ledger technology (DLT), global interoperability, and collaborative governance. The retail digital euro should prioritize public good, privacy, and user-centric design, ensuring accessibility and legal clarity. Deposit tokens are seen as complementary to public money, requiring regulatory clarity and consumer protection. Overall, the DEA promotes a cohesive digital financial ecosystem that strengthens Europe’s monetary sovereignty, fosters innovation, and ensures trust and inclusivity. [Read more at the DEA]

JPMorgan to Launch a Stablecoin-Like Token JPMD (CNBC)

JPMorgan Chase is reportedly planning to launch a tokenized deposit on Coinbase’s Base Ethereum Layer 2 network. It will operate on a public permissioned basis and will be for use only by the bank’s institutional clients. Unlike stablecoins issued by nonbanks, JPMD operates within the regulated commercial banking system and is subject to standard supervisory requirements. [Read more at CNBC]

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.

Kiffmeister’s #Fintech Daily Digest (20250617)

June 17, 2025June 17, 2025 ~ kiffmeister

Retail CBDC Design for Basic Payments Feasibility Study (BOC)

The Bank of Canada (BOC) published a paper that explores the technical architecture for a retail central bank digital currency (CBDC) tailored for basic payments. The authors analyze a micro-partitioned system based on the UTXO (unspent transaction output) funds model, using a two-tiered model based on OpenCBDC 2PC as a representative design. It found that the baseline design handles over 250,000 transactions per second (TPS), though privacy-preserving variants (e.g., Pedersen commitments) reduce performance. Privacy is enhanced by minimizing central bank visibility into user data, with optional anonymity for users. Challenges include integrating with existing retail payment systems, auditing large-scale monetary supplies, and ensuring core system resilience. The study concludes that such architectures are feasible for basic payments but highlights areas needing further research, such as compliance mechanisms and recovery protocols for system outages. [Read more at the BOC]

Coinbase Seeking US SEC Approval to Offer Blockchain-Based Stocks (Reuters)

Coinbase is seeking U.S. Securities and Exchange Commission (SEC) approval to offer tokenized equities. Chief Legal Officer Paul Grewal described the initiative as a “huge priority,” emphasizing the benefits—lower trading costs, faster settlement, and 24/7 access—while acknowledging lingering concerns over liquidity, global standards, and regulatory clarity. To proceed in the U.S., Coinbase must secure a “no-action letter” or similar exemptive relief from the SEC, since it isn’t registered as a broker-dealer. Grewal did not specify whether a formal SEC request had been filed or when the launch might occur, though the move follows rival Kraken’s recent rollout of tokenized U.S. equities outside the United States. [Read more at Reuters]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250616)

June 16, 2025 ~ kiffmeister

Stablecoin Runs and the Centralization of Arbitrage (NBER)

The U.S. National Bureau of Economic Research (NBER) published a paper that investigates the trade-off between price stability and run risk in stablecoins, focusing on the role of arbitrage concentration. It document that stablecoin issuers, such as Tether (USDT), limit the number of arbitrageurs who can redeem stablecoins for cash, leading to concentrated arbitrage. They argue that while more efficient arbitrage improves price stability by reducing secondary market price deviations, it also increases run risk by lowering the price impact of investor sales, thereby encouraging panic selling. The study develops a theoretical model showing how issuers balance these trade-offs and analyzes policy implications, such as the unintended consequences of regulations promoting unconstrained redemptions. The findings highlight the need for coordinated policies addressing both arbitrage efficiency and reserve asset liquidity to mitigate systemic risks in the stablecoin ecosystem. [Read more at the NBER]

What is the Future of Stablecoins and How Do We Get There? (KCL)

Kings College London (KCL) Business School published a paper that explores the future of stablecoins and outlines key dimensions for their sustainable growth and adoption. It emphasizes the need for a standardized approach across seven critical areas: monetary policy (minting/burning, reserve tracking), reserve asset verification, compliance (identity, regulatory rules), interoperability (cross-chain functionality), privacy (confidential transactions), fees and yield generation (business models), and roles/events (governance and transparency). The author argues that while some aspects, like mint/burn functions, are mature enough for standardization, others, such as privacy and compliance, require further industry consensus. The paper highlights the importance of transparency in reserve assets, the potential for yield-bearing stablecoins despite regulatory skepticism, and the role of interoperability protocols like Chainlink CCIP. Ultimately, it calls for coordinated development to avoid fragmentation and ensure stablecoins can fulfill their promise as a foundational element of on-chain finance. [Read more at the KCL Business School]

CBDC and Bank Stability: Does Monetary Policy Play a Moderating Role? (ADBI)

The Asian Development Bank Institute (ADBI) published a paper that examines the impact of central bank digital currency (CBDC) adoption on bank stability in India and China, using a “benefit-of-the-doubt” approach to construct a multidimensional Bank Stability Index (BSI). The index is based on 2013-2022 data from 74 banks across five dimensions; capital adequacy, profitability, asset quality, liquidity, and efficiency. The study finds that CBDC adoption positively affects bank stability, with a stronger impact in India compared to China. The study also reveals a negative moderating role of monetary policy, suggesting that the stabilizing effect of CBDC is enhanced during accommodative monetary policy stances, and diminished when policy is tight. The research concludes that careful management of CBDC alongside appropriate monetary policy can enhance overall financial stability. [Read more at the ADBI]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250613)

June 13, 2025June 13, 2025 ~ kiffmeister

PwC study reveals that digital euro costs are running into billions (National Association of German Cooperative Banks)

A study from PwC conducted on behalf of the European Banking Federation, the European Association of Co-operative Banks (EACB), and the European Savings and Retail Banking Group shows that the introduction of the digital euro could cost up to €30 billion for banks in the eurozone, even though – as currently conceived – it would not offer any recognizable added value for either consumers or businesses. The umbrella organizations of the Savings Banks Finance Group and the Volksbanken Raiffeisenbanken Cooperative Financial Network are therefore calling for closer collaboration with private initiatives in the European financial sector. [Read more at PwC]

Ripple, SEC Ask Court to Dissolve XRP Injunction, Release $125M in Escrow (Decrypt)

The U.S. Securities and Exchange Commission (SEC) and Ripple have jointly asked Southern District of New York federal court to dissolve a prior injunction and release $125 million currently held in escrow. Under the proposal, Ripple would pay a $50 million civil penalty to the SEC, with the remaining funds to be returned to the company. The filing marks a major step in ending a case that has stretched nearly four years and triggered wide industry scrutiny. [Read the filing on X]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250611)

June 11, 2025 ~ kiffmeister

Transforming global payments: the role of tokenized money & funds in cross-border transactions (VISA)

VISA published an interim report on Phase 2 of the e-HKD Pilot Programme, an initiative by the Hong Kong Monetary Authority (HKMA) to explore cross-border transactions using new forms of digital money including central bank digital currency (CBDC) and tokenized deposits. The pilot, involving VISA, ANZ, Fidelity International, and ChinaAMC Hong Kong, testis how Australia-based investors can purchase tokenized fund units from Hong Kong asset managers using e-HKD or tokenized deposits. The program aims to explore the potential of blockchain technology for near real-time settlements, enhanced interoperability between public and permissioned blockchains, and the establishment of token standards, ultimately seeking to accelerate digital asset adoption and improve the efficiency of fund management and cross-border payments. [Read more at VISA]

Public consultation on possible extension of T2 operating hours (ECB)

The European Central Bank (ECB) is seeking input from market stakeholders on potentially extending the operating hours of T2, its real-time gross settlement system. The Eurosystem is considering the possibility of moving T2 towards a 24/7 model. The consultation will consider several options for extending T2 operating hours, including a move towards (i) a 24-hour operational day, (ii) a 6 or 7-day operational week, or (iii) a 365-day operational year. Additionally, the Eurosystem is considering some potential adjustments to key operational features or longstanding conventions such as (i) reorganizing payments settlement during night-time, (ii) adjusting key cut-off times and (iii) introducing new value dates. [Read more at the ECB]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250607)

June 7, 2025June 16, 2025 ~ kiffmeister

Bolivian central bank aims to present a study on the viability of a CBDC (BCB)

At the Eighteenth Meeting of Bolivian Economists (18EEB) “Advances and Challenges of the Digital Economy” Banco Central de Bolivia (BCB) President Edwin Rojas Ulo announced that the central bank is conducting a feasibility study of the possibility of issuing a central bank digital currency (CBDC). The project will begin with the publication of an “Initial Diagnosis” consultative paper in August 2025. The President made it clear that the intent is not seek to replace cash or abruptly disrupt the national financial structure, but to “pave the way for responsible, inclusive, and sustainable innovation that strengthens our payment system and extends the benefits of digital money to the entire population.” [Read more at the BCB]

Bank of Japan Digital Yen Project Update (Ledger Insights)

The Bank of Japan (BoJ) published a progress report on its digital yen program, which involves seven working groups and 64 private companies through its central bank digital currency (CBDC) Forum. Unfortunately, only the Japanese version is currently available. The working groups are tackling different aspects of digital currency development through both technical implementation and theoretical research. [Read more at the BoJ here, here and here]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250604)

June 4, 2025June 4, 2025 ~ kiffmeister

I’ve updated my tabulation of the 105 (+1 from end-April) central banks that have recently launched, piloted, experimented with and/or researched retail central bank digital currency (#CBDC). The new entry is Bolivia based on local media reports, so to be taken with a grain of salt. [Read more at Kiffmeister.com]

The Role of Stablecoins in European Financial Sovereignty (DEA)

The Digital Euro Association (DEA) published a paper that examines how the growing $225 billion stablecoin market impacts European financial sovereignty across four critical dimensions: monetary, payments, regulatory, and digital sovereignty. With stablecoins processing over $7 trillion (adjusted volume) in the last 12 months, rivaling established payment networks, Europe sovereignty faces both opportunities and challenges. The research introduces a novel analytical framework and demonstrates that well-regulated euro stablecoins could strengthen European autonomy, while unmanaged foreign alternatives pose sovereignty challenges. [Read more at the DEA]

Upcoming Speaking Engagements:

Jurisdictions Where Retail CBDC Is Being Explored (May 2025)

June 4, 2025June 4, 2025 ~ kiffmeister

105 central banks (versus 104 at the end of April) 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). The new entry is Bolivia based on local media reports, so to be taken with a grain of salt.

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!

Another thing to note is that I’m not currently including wholesale CBDC-backed retail tokenized deposits, like those being experimented with in the Banco do Brasil Drex proof-of-concept work, and South Korea’s recently launched “CBDC” pilots. I say “currently” because the retail payment instruments being tested do not seem be direct liabilities of the central bank, which means they don’t align with the BIS (2020) CBDC definition I go by (“a digital payment instrument, denominated in the national unit of account, that is a direct liability of the central bank”). However, I don’t know enough about the architectures of these projects from publicly-available information to know for sure whether the tokenized deposits are direct central bank liabilities. I would appreciate it if anyone out there can provide some clarity on this.

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”).

Jurisdictions Where Retail CBDC Is Being Explored Download

Kiffmeister’s #Fintech Daily Digest (20250603)

June 3, 2025June 3, 2025 ~ kiffmeister

The Bank of Japan’s Approach to General Purpose CBDC (BoJ)

The Bank of Japan (BoJ) published the English version of the chapter in its 2024 Payment and Settlement Report on its approach to general-purpose central bank digital currency (CBDC). The BoJ is engaging with various stakeholders through the CBDC Forum and thematic working groups to discuss critical aspects such as system connections, overlay services, KYC/AML/CFT, new technologies, user interfaces, and interoperability with other payment instruments. The BoJ has progressed through multiple phases of experimentation since 2021, including two proof of concept phases that tested basic CBDC functions and ledger designs, followed since April 2023 by end-to-end system testing with private sector participation through the CBDC Forum. Key principles guiding the approach include maintaining a two-tiered system with private sector involvement, ensuring horizontal coexistence between CBDC and existing payment instruments (cash, bank deposits, digital money), protecting user privacy through separated system components, and achieving interoperability across different payment methods. [Read more at the BoJ]

Upcoming Speaking Engagements:

Protected: Kiffmeister’s Digital Currency Monitor, May 2025

June 3, 2025June 3, 2025 ~ kiffmeister