Eurosystem Moving to Next Phase of Digital Euro Project (ECB)
The European Central Bank (ECB) announced the transition to the next phase of the digital euro project after successfully completing the preparation phase begun in November 2023. This advance responds to European leaders’ calls to accelerate digital euro progress, aiming to ensure technical readiness for possible issuance. If the necessary legislation is adopted in 2026, pilot activities could begin in 2027, with the Eurosystem ready for a potential first issuance in 2029. Projected overall development costs are estimated at €1.3 billion until the first issuance, with annual operating costs of about €320 million thereafter. [Source: ECB]
Bank Indonesia Governor Reveals Government Bond Tokenization Plans (CNBC)
Bank Indonesia (BI) Governor Perry Warjiyo reportedly announced plans to issue a national stablecoin backed by government bonds (Surat Berharga Negara or SBN). The digital central bank securities will be tokenized versions of government bonds built on a prospective wholesale digital rupiah central bank digital currency (CBDC) platform. He goes on to say that the tokenized bonds would represent “Indonesia’s national version of a stablecoin” but he might mean that in the broader sense of “stablecoin” rather than as a generally-accepted medium of exchange. My interpretation would be consistent with where the BI’s Project Garuda wholesale CBDC proof of concept (POC) left off, concluding that the BI will proceed with broader explorations of a securities ledger. [Source: CNBC]
The Rise of Stablecoins and Implications for Treasury Markets (Brookings)
The Brookings Institution published a working paper that examines how the rapid adoption of U.S. dollar-pegged stablecoins has begun to transform international finance and demand for U.S. Treasury securities. Stablecoins are favored in cross-border payments and remittance corridors, particularly in economies facing high inflation or weak local currencies, due to their lower costs, quicker settlements, and easy access. The authors show that stablecoin issuers now hold Treasury exposure approaching major foreign holders, and their continued growth could drive stablecoin-backed demand for Treasuries to trillions of dollars by 2030. While this diversification may benefit U.S. fiscal stability, it also introduces risks, such as regulatory arbitrage, concentration among few issuers, systemic vulnerabilities, and potential currency substitution in emerging markets. The authors emphasize the need for clear global oversight, regulatory coordination, and stress-testing frameworks for issuers, as well as monitoring the broader impacts on monetary sovereignty and financial stability. [Source: Brookings]
Upcoming Speaking Engagements:
The Cedi@60 Anniversary Currency Conference (Accra, Ghana, November 17-20) hosted by the Bank of Ghana, in partnership with Currency Research, will celebrate 60 years of the Ghanaian Cedi, bringing together leaders from across Africa and beyond to reflect on the currency’s legacy and chart its digital future. Learn about Ghana’s eCedi pilot and the future of sovereign digital currencies in Africa, and engage with innovators driving mobile money, QR code payments, and financial inclusion across the region. [Register here and get 15% off by using the Kiffmeister15 code!]
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! [Register here and get 20% off the regular ticket price by using the Kiffmeister20 code!]
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.
