Design Note – Alias Service (BOE)
The Bank of England (BOE) published a digital pound design note that explores how alternative aliases, such as mobile numbers, email addresses, or randomly generated codes, could improve convenience, privacy, and interoperability in retail payments. The note highlights that, when used as alternative identifiers for digital money accounts, aliases can improve the convenience, privacy and security of retail payments, while also supporting interoperability between different payment schemes and jurisdictions. The BOE proposes that a digital pound alias service should be integrated into its infrastructure, ensuring neutral mapping of aliases to user accounts irrespective of provider, but with careful safeguards for privacy. The preferred model would see the BOE host or orchestrate the service while potentially delegating data management to intermediaries (payment interface providers), balancing system control with innovation and privacy. [Source: BOE]
Bank of England Launches Synchronization Lab (BOE)
The BOE launched its Synchronization Lab, a non-live environment aimed at helping industry participants demonstrate and test synchronization use cases for the renewed real-time gross settlement (RTGS) service (RT2). The Lab enables potential synchronization operators, such as RTGS account holders, asset ledger operators, and end-customers, to experiment with and validate business models, technical designs, and settlement processes for synchronized (atomic) transactions in central bank money. Running for six months starting in spring 2026, it will provide a platform for hands-on prototyping and evaluation of different synchronization models, allowing participants to build, integrate, and demonstrate their solutions while the Bank gathers insights to refine the RTGS synchronization capability for future production. The initiative is complementary to the Bank’s other innovation programs but does not involve real-money payments or constitute a regulatory sandbox. [Source: BOE]
Stablecoin-Related Yield Products: Some Regulatory Approaches (BIS FSI)
The BIS Financial Stability Institute (FSI) published a brief that analyzes regulatory approaches for stablecoin-related yield products, where crypto-asset service providers (CASPs) offer returns to holders of payment stablecoins, despite these tokens not being designed to generate on-chain yields. CASPs create returns through mechanisms such as lending, margin pools, DeFi protocols, or loyalty programs, which blur payment-investment boundaries and expose users to consumer protection risks, absent deposit insurance or strict oversight. While all surveyed jurisdictions prohibit issuers from directly remunerating stablecoin balances, regulation of CASP-provided yields varies: some (EU, Hong Kong) ban yield products entirely, some (Singapore) restrict them for retail users but allow for professionals, and others (US) currently lack explicit prohibitions. The paper highlights potential risks of these products, including consumer protection holes, financial stability vulnerabilities, and operational conflicts of interest. Addressing these risks may require a regulatory framework that cover CASPs’ stablecoin-related activities, close regulatory gaps and safeguard end users’ protection and financial stability. [Source: BIS FSI]
Vantage Bank and Custodia Launch Tokenized Deposit Platform for U.S. Banks (Custodia)
Vantage Bank and Custodia have launched a platform enabling U.S. community and regional banks to offer tokenized deposits and stablecoins, integrating these digital assets directly into online banking environments. This interoperable solution allows member banks to control their own wallets for tokenized deposits and stablecoins, shifting tokens seamlessly between regulatory categories while maintaining oversight and deposit stability. Early use cases include instant cross-border payments and flexible payroll options. The initiative distinguishes itself by addressing interoperability—creating a single token usable as both a tokenized deposit and a stablecoin—and offers open access to institutions of all sizes. Custodia’s compliance credentials ensure regulatory alignment, and the system is designed to preserve deposit stability within banks, and unify tokenized deposits and Avit stablecoins under a shared smart contract framework. Only traditional and tokenized deposits are FDIC insured; stablecoins remain uninsured and subject to regulatory risks. [Source: Custodia Bank]
Upcoming Speaking Engagements:
The Digital Euro Conference 2026 (Frankfurt, March 26) will explore the future of money with a focus on CBDCs, stablecoins, and commercial bank tokens. This hybrid event offers the perfect platform to understand the future of digital money! When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [register here]
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.
