Kiffmeister’s #Fintech Daily Digest (20250731)

July 31, 2025July 31, 2025 ~ kiffmeister

President’s Working Group on Digital Asset Markets Recommendations to Strengthen American Leadership in Digital Financial Technology (White House)

U.S. President Trump’s Working Group on Digital Asset Markets published its regulatory and legislative proposals aimed at strengthening America’s leadership in digital financial technology. The recommendations span six key areas: creating a fit-for-purpose regulatory framework through Congressional action including Commodity Futures Trading Commission (CFTC) oversight spot markets for non-security digital assets and embracing decentralized finance (DeFi) technology; modernizing banking regulations by ending “Operation Choke Point 2.0” and clarifying permissible bank activities in custody and stablecoin issuance; strengthening the dollar’s role through implementation of the GENIUS Act creating federal stablecoin regulations and banning central bank digital currencies (CBDCs); combating illicit finance by modernizing anti-money laundering rules while protecting self-custody rights; ensuring fair taxation by reducing compliance burdens and treating digital assets as a distinct asset class; and enabling immediate trading at the federal level through regulatory clarity on registration, custody, and trading requirements. [Read more at the White House]

Notably, the report recommends amendments to the process by which the Federal Reserve grants master account access. A Fed master account is a deposit account maintained by a bank or other type of depository institution at a regional Reserve Bank and provides a gateway to the Fed’s balance sheet. Depository institutions and other eligible entities use deposits held in their master account for the settlement of interbank payments. Some state chartered banks that have applied for a master account have expressed frustration with the transparency of the Fed’s assessment process and negative outcomes, seemingly on account of their digital asset-related activities. The working group proposes that the Fed provide more clarity and transparency regarding the master account access process, and that expected timelines for assessing requests a master account should be clarified and defined in regulation. Also, the Fed should be prohibited from denying master account and Fed services access solely because the applicant engages in digital asset-related activities.

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]

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.

Kiffmeister’s #Fintech Daily Digest (20250730)

July 30, 2025July 30, 2025 ~ kiffmeister

Implementation of Hong Kong Stablecoin Issuers Regulatory Regime (HKMA)

The Hong Kong Monetary Authority (HKMA) published various documents for the implementation of the regulatory regime for stablecoin issuers, which comes into effect on August 1, 2025. These include the finalized guidelines on supervision of licensed stablecoin issuers and on anti-money laundering and counter-financing of terrorism (AML/CFT) for licensed stablecoin issuers) plus explanatory notes on various aspects of the stablecoin issuer licensing regime and application process, and on transitional provisions for pre-existing stablecoin issuers. As of July 29, 2025, no license has been issued by the HKMA. [Read more at the HKMA]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250728)

July 28, 2025July 28, 2025 ~ kiffmeister

BNY and Goldman Sachs Launch Tokenized MMF Solution (BNY)

Bank of New York Mellon (BNY) and Goldman Sachs (GS) have launched a blockchain platform to tokenize money market funds (MMFs). The solution utilizes BNY’s LiquidityDirect platform integrated with GS’s GS DAP private blockchain technology platform to create “mirror tokens” representing MMF shares, with participation from major fund managers. While BNY continues to maintain official books and records within current regulatory guidelines, the tokenized representation aims to enhance the utility and transferability of MMF shares, potentially enabling their use as collateral and facilitating more seamless transfers in digital capital markets. GS DAP is built on Digital Asset’s Canton technology, which offers configurable privacy. Notably, GS has announced plans to spin GS DAP off into an industry-owned independent entity, which would considerably broaden its reach and potential application. [Read more at BNY]

Digital Economy, Stablecoins and the Global Financial System (NBER)

The U.S. NBER published a paper that examines the macro-financial implications of a growing digital economy, focusing on stablecoins. The authors develop a three-region model—comprising the U.S., the rest of the world (RoW), and a decentralized “digital economy”—to study how stablecoins affect global financial markets. While stablecoins may increase the demand for safe dollar-denominated reserves, they may also serve as substitutes, reducing the global demand for traditional reserve assets. The paper finds that in the long run, the reserve demand effect dominates: the proliferation of stablecoins leads to lower US interest rates and increased US foreign borrowing and reinforcement of the U.S.’s “exorbitant privilege.” . The model also shows that this expansion raises idiosyncratic consumption volatility in the US while reducing it in the RoW. Key channels of influence include both increased financial demand for digital assets and substitution of traditional services with digital alternatives. [Read more at the NBER]

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Kiffmeister’s #Fintech Daily Digest (20250725)

July 25, 2025July 25, 2025 ~ kiffmeister

The CBDCTracker.org database has been updated. Key developments include the Reserve Bank of India expanding its pilots of the Digital Rupee and tested both offline and programmable features, the European Central Bank advancing its Digital Euro preparation phase with ongoing research, the Bank of Israel launching a proof of concept, the Swiss National Bank extending its Project Helvetia wholesale CBDC securities settlement pilot, and Pakistan’s central bank confirming its ongoing research into retail CBDC designs. Also, the central banks of both the Economic and Monetary Community of Central Africa (EMCCA) and the West African Monetary Union (WAMU) announced research into retail CBDCs for their currency unions. Check out the CBDCTRacker.org website for more details.

Analyzing CBDC Adoption in Jamaica and The Bahamas (Cato Institute)

The Cato Institute published a briefing paper by Nick Anthony that examines the implementation and adoption of central bank digital currency (CBDC) in Jamaica (JAM-DEX) and The Bahamas (SandDollar), concluding that both initiatives have fundamentally failed to achieve their stated objectives. The analysis demonstrates that CBDCs in both countries have failed to gain traction with consumers or businesses, instead becoming little more than vehicles for government handouts—distributed through limited-time giveaways and incentive programs, with little lasting use. The paper documents how virtually every increase in CBDC circulation corresponds directly to government interventions rather than organic adoption, with Jamaica’s CBDC representing merely 0.1 percent of cash circulation despite extensive promotional efforts. Similarly, The Bahamas achieved a 30% sign-up rate but struggled with actual usage. Anthony argues that these Caribbean experiments reveal a fundamental flaw in CBDC policy: people are already well-served by existing payment options including cash, cards, and digital apps, making CBDC an unnecessary redundancy that requires artificial incentives to maintain even minimal usage levels. [Read more at the Cato Institute]

Central Bank and Media Sentiment on CBDC – An International Perspective (BIS)

The BIS published a paper that examines central bank and media sentiments regarding CBDCs across 15 major economies from 2016 to 2022, using large language models to analyze over 1,200 central bank publications and nearly 29,000 news articles. The study reveals significant divergences between central bank and media sentiments, with notable variations over time and across jurisdictions, finding that central bank sentiment tends to exert a stronger influence on media sentiment than the reverse. The research identifies substantial cross-border sentiment spillovers, where sentiment in leading economies shapes sentiment in other regions. The findings suggest that while media generally express more positive views about CBDCs and focus on technological aspects, central banks concentrate more on payment system implications and financial stability concerns, with the sentiment gap having narrowed over time since the initial period when media sentiment significantly exceeded central bank sentiment. [Read more at the BIS]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250724)

July 24, 2025July 24, 2025 ~ kiffmeister

Just a reminder that 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.). 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 Digital Euro Gets Shakier (Noelle Acheson)

Noelle Acheson published an article that details mounting challenges facing the European Central Bank’s digital euro initiative, highlighting significant delays and cost overruns that cast doubt on the project’s viability. She notes troubling signs including prolonged reporting delays, stalled legislative progress following the resignation of key EU officials who oppose the project, and ongoing tender processes that should have been completed months ago. While the ECB allocated approximately €1.2 billion just for initial development tenders in January 2024, with over half dedicated to offline functionality that is proving more complex than anticipated, the banking industry faces an estimated €18 billion in adaptation costs for a service that could threaten their deposit base. Noelle expresses particular skepticism about the €154 million allocated for app design, questioning why a central bank is developing retail-focused applications, and suggests that despite ECB President Christine Lagarde’s public pressure on lawmakers, the project appears increasingly unstable with potential for significant scaling back of ambitious features. [Read more on Medium]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250722)

July 22, 2025July 22, 2025 ~ kiffmeister

Morocco’s Central Bank Explores Digital Currency for Cross-Border Use (Yabiladi)

Bank Al-Maghrib, Morocco’s central bank, is advancing its central bank digital currency (CBDC) initiative, having completed its first peer-to-peer retail payment test and currently conducting a second trial focused on cross-border transfers in partnership with Egypt’s central bank and the World Bank. The work has been supported by comprehensive studies examining legal frameworks and macroeconomic implications conducted with World Bank and IMF assistance. [Read more at Bank Al-Maghrib]

Why Central Banks Shouldn’t Ignore Stablecoins (Risk.net)

In a timely move, Risk.net has dropped the paywall on an article by Manmohan Singh and Charles Kahn that argues that Federal Reserve risks repeating the monetary policy mistakes of the 1970s by ignoring the rapid growth of U.S. dollar stablecoins, drawing parallels to how the Federal Reserve initially overlooked the Eurodollar market’s expansion. Although the approximately $270 billion in stablecoins backed by high-quality liquid assets is dwarfed by traditional M1 money supply, stablecoins’ implied velocities of 60-80 times massively exceeded M1 velocities of about 1.26 when the article was written. Hence, these digital currencies punch above their weight and potentially impact monetary policy transmission mechanisms. The article suggests two potential policy responses; (i) backing stablecoins with central bank reserves, and (ii) interoperable tokenized bank deposits that can settle instantly. [Read more at Risk.net]

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Kiffmeister’s #Fintech Daily Digest (20250721)

July 21, 2025July 21, 2025 ~ kiffmeister

Bank of Japan CBDC Experiments Progress Report (English version)(BoJ)

The Bank of Japan (BoJ) published an English version of its May 2025 central bank digital currency (CBDC) preparation phase progress report. The technical development focuses on an account-based CBDC ledger system that separates customer management (handling user identities and transaction details) from ledger management (processing only anonymized settlement data with user IDs) to enhance privacy. Also, it implements a record splitting mechanism that divides user balances into multiple records, enabling parallel processing when one record is locked during transactions for high transaction volumes (testing up to 50,000 transaction per second). In addition, significant interoperability challenges with core banking systems were identified, whereby large volumes of CBDC-to-bank deposit conversions could overwhelm core banking systems with excessive traffic loads. The report proposes several solutions including aggregating conversion operations over time periods rather than processing them in real-time. [Read more at the BoJ]

U.S. Banking Associations Urge OCC to Postpone Crypto Firm Applications for Bank Charters (ABA)

Five major U.S. banking associations, including the American Bankers Association (ABA), have submitted a formal letter to the Office of the Comptroller of the Currency (OCC) expressing strong opposition to recent national trust charter applications filed by digital asset companies including National Digital TR CO, Fidelity Digital Assets, First National Digital Currency Bank, and Ripple National TR Bank. The associations argue that these applications present significant policy and legal concerns because the proposed business models—primarily involving digital asset custody services for cryptocurrencies, stablecoins, and other digital assets—do not constitute the traditional fiduciary activities historically required for national trust banks under federal law (12 U.S.C. § 92a). They contend that the public portions of these applications contain insufficient detail to enable meaningful public scrutiny, with comment periods closing despite inadequate transparency, and that approving such charters would represent a fundamental departure from established OCC precedent that should require extensive public notice and comment procedures. The associations urge the OCC to postpone consideration of all applications until more complete business plan information is made publicly available, warning that approval could establish a problematic precedent allowing companies to obtain national bank charter benefits without corresponding regulatory oversight, potentially creating systemic risks to the banking system. [Read more at the ABA]

1:1 Redemptions for Some, Not All (MIT DCI)

The MIT Digital Currency Initiative (DCI) published a blog that discusses the complexities of stablecoin redemptions and the importance of understanding the relationship between issuers, institutional clients, and retail users. It highlights that while issuers promise a 1:1 redemption, this promise is not always guaranteed due to factors such as access, solvency, and liquidity. The article explains that institutional clients have direct access to redeem tokens at face value, whereas retail users rely on intermediaries, leading to a two-tiered system. This system can be particularly punishing during times of market stress, as seen during the USDC-SVB crisis in 2023. (See also Co-Pierre Georg’s discussion on LinkedIn.) [Read more at the MIT DCI]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250718)

July 18, 2025July 18, 2025 ~ kiffmeister

FYI for some time I have been producing 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)) that goes out via email on the first business day of every month. (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) I’m now widening the distribution to include academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). If you’re interested in being on the mailing list, please email me at john@kiffmeister.com.

U.S. GENIUS Act Signed Into Law

U.S. President Donald Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act to establish a regulatory framework for “payment” stablecoin issuers. (A payment stablecoin is a non-interest-paying digital asset that is or is designed to be used as a means of payment or settlement; and the issuer of which is obligated to convert, redeem, or repurchase for a fixed amount of monetary value.) The Act will restrict issuers to subsidiaries of insured depository institutions, federal-qualified nonbank issuers, or state-qualified issuers with stablecoin issuance of $10 billion or less. Issuers must maintain reserves backing the stablecoins on an at least a one-to-one basis. Permitted reserve assets include demand deposits at insured depository institutions, short-term U.S. Treasury securities, money received under Treasury bill-backed repurchase agreements with a maturity of seven days or less, and reverse repurchase agreements with a maturity of seven days or less that are collateralized Treasury securities on an overnight basis. Issuers must also comply with all anti-money laundering regulations. The Act also prioritizes stablecoin holders’ claims in bankruptcy proceedings, and exempts payment stablecoins from securities laws. [Read more at Congress.gov]

House Passes Anti-CBDC Surveillance State Act, Blocks Fed Digital Dollar Work (The Street)

The U.S. House of Representatives passed the CBDC Anti-Surveillance State Act, which would block the Federal Reserve (Fed) from issuing or testing a retail central bank digital currency (CBDC) without Congressional approval. The bill aims to prevent the government from using a digital dollar as a tool for state surveillance and control, but grants protections for open, permissionless, and private dollar-denominated currencies. The bill, introduced by Rep. Tom Emmer, prohibits the Fed from directly or indirectly issuing a CBDC that would be widely available to the general public, and bars the use of a CBDC as a monetary policy tool. The bill is also carefully worded so that Fed testing of so-called “wholesale CBDC” is permitted. This legislation now moves to the Senate. [Read more at Congress.gov]

House Passes Crypto Market Structure Bill (The Hill)

The U.S. House of Representatives passed the Digital Asset Market Clarity Act, a bill aimed at providing regulatory rules for the crypto industry. The bill aims to draw clear lines between oversight by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The CFTC becomes the primary regulator for most digital assets classified as “digital commodities,” while the SEC retains authority over digital assets that qualify as securities. The bill now heads to the Senate for further consideration. [Read more at Congress.gov]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250717)

July 17, 2025July 17, 2025 ~ kiffmeister

Digital Pound Design Note – Product Strategy (BoE)

The Bank of England (BoE) published a design note outlining its emerging product strategy for a potential digital pound, which would operate under a public-private model where the Bank manages the core ledger while regulated private firms provide user-facing services to individuals and businesses. The strategy proposes a three-stage rollout (Initial, Near, and Later) focusing first on enabling convenient peer-to-peer payments and online commerce acceptance, with more complex features like point-of-sale terminal integration and conditional payment functionality introduced in subsequent phases. The digital pound aims to preserve the “singleness of money” and support payments innovation while complementing physical cash, though business acceptance would not be mandated and adoption is expected to be gradual. [Read more at the BoE]

Digital Pound Design Note – Interoperability Models for UK-Based Payments (BoE)

The BoE also published a note on interoperability models for UK-based payments and outlined its emerging thinking on how a potential digital pound could seamlessly exchange with other forms of money within domestic UK transactions. The core objective of a digital pound would be to preserve the “singleness of money” – ensuring all sterling forms remain equally valued and interchangeable – while supporting innovation, choice, and efficiency in the payments ecosystem. The note outlines and evaluates three interoperability models—centralized, intermediary-based, and direct provision by payment interface providers—and evaluates their trade-offs for users, participants, and the financial system. It concluded that the centralized model would best provide the capability to ensure uniform access and reduce costs. [Read more at the BoE]

JD.com and Ant Group Lobby for Yuan Stablecoins (CoinTelegraph)

JD.com and Ant Group are reportedly pushing Chinese regulators to launch yuan-based stablecoins to boost the currency’s global role and counter the US dollar’s dominance. The move aims to strengthen the yuan’s presence in global trade and limit the dollar’s influence. The two companies are preparing to apply for stablecoin licenses in Hong Kong and Singapore, with early feedback from regulators described as positive. JD.com also plans to apply for stablecoin licenses in major countries to reduce cross-border payment costs, initially targeting business-to-business transactions but eventually perhaps extending to consumer payments. [Read more at CoinTelegraph]

Upcoming Speaking Engagements:

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 (20250716)

July 16, 2025July 16, 2025 ~ kiffmeister

Third Progress Report on the Digital Euro Preparation Phase (ECB)

The European Central Bank (ECB) published its third progress report on the preparation phase of a digital euro. Since the second report, the ECB has made progress on the draft digital euro scheme rulebook, which aims to harmonize digital euro payments across the euro area. The ECB has also conducted extensive user research and experimentation engaging with market participants, merchants, and consumers through various sessions and focus groups, to ensure the digital euro meets the needs of end users and provide technical input to support the legislative process. The project’s next steps include finalizing tender procedures to select providers for the digital euro platform and infrastructure, drafting the scheme rulebook, and testing and implementing the digital euro’s technical specifications. [Read more at the ECB]

U.K. Digital Gilt Instrument (DIGIT) Pilot Update (HMT)

The U.K. Treasury (HMT) provided an update on the preparations for its Digital Gilt Instrument (DIGIT) pilot. The government is still reviewing responses to the Preliminary Market Engagement Notice (PMEN) published in November 2024, but announced a further set of features to be tested in the pilot. These features include (i) delivering distributed ledger technology (DLT) on-chain settlement. prioritize solutions that allow DIGIT to be settled on DLT including the cash leg of DIGIT transactions, (ii) enabling settlement of over-the-counter trades including using smart contracts, (iii) working with industry, platform providers and existing market infrastructure providers to foster interoperability in supporting access to DIGIT from investors operating in both traditional and DLT markets, and (iv) delivering greater transparency. The government plans to engage with the Digital Markets Champion and appoint industry leads to these roles in the Autumn of 2025. Further details on the pilot will be published over the summer, with the aim of appointing suppliers later tin 2025. [Read more at HMT]

Citigroup Looks to Issue Its Own Stablecoin to Smooth Payments (Bloomberg)

According to CEO Jane Fraser during a post-earnings call, Citigroup is considering issuing its own stablecoin, as part of the bank’s broader digital assets strategy, which includes reserve management and crypto custody services, aiming to strengthen its position in the digital payments space. Fraser pointed to the supportive regulatory framework under the Genius Act, which enables banks to participate more fully in digital assets. [Read more at Bloomberg]

Upcoming Speaking Engagements: