Kiffmeister’s #Fintech Daily Digest (20251011)

October 11, 2025October 11, 2025 ~ kiffmeister

The Potential Financial Stability Impact of the Digital Euro (ECB)

The European Central Bank (ECB) published an analysis of potential banking sector disintermediation associated with the introduction of a digital euro, finding that potential deposit outflows vary substantially by scenario. Under the business-as-usual scenario, outflows from banks are modest for all assessed holding limits, with total outflows well below stress thresholds—deposit inflows from payment digitalization until 2034 (about €127 billion) may actually exceed digital euro outflows for limits up to €3,000. In the flight-to-safety scenario—a highly unlikely, systemic confidence crisis—the maximum aggregate deposit outflow rises from €156 billion with a €500 holding limit to €699 billion with a €3,000 limit (representing up to 8.2% of retail sight deposits and 2.2% of total banking sector assets). For comparison, past real-world crises saw much higher retail deposit outflows: 20.9% in Cyprus (2013) and 25.9% in Greece (2015). Even under stress, most banks maintain liquidity and funding buffers well above regulatory minima, and only a handful would risk falling below these thresholds. The analysis underscores that careful design of digital euro holding limits is critical, as limits contain outflows and help maintain financial stability. [Source: ECB]

Assessment of Digital Euro Investment Costs for the Euro Area Banking Sector (ECB)

The European Central Bank (ECB) published an assessment of digital euro investment costs for the euro area banking sector, incorporating critical factors overlooked in previous industry studies. The ECB argues that significant cost synergies and mutualization opportunities exist within the payment industry, which could substantially reduce the €18 billion figure estimated by a previous study by PricewaterhouseCoopers (PwC). By accounting for external synergies through shared vendors, outsourcing arrangements, and collaborative infrastructures—as well as adjusting for specific digital euro design features—the ECB estimates that actual implementation costs could range from €4-5.77 billion total (€1-1.44 billion annually over four years). This analysis reveals that banking group synergies within Institutional Protection Schemes (IPSs) could achieve 90-98% cost savings, while market synergies for independent banks could yield 25-40% reductions depending on vendor concentration and collaboration history. The report emphasizes that banks already extensively use shared solutions for payment channels and compliance functions, and this model can be leveraged for digital euro implementation, bringing costs closer to the European Commission’s original estimate of €2.8-5.4 billion. [Source: ECB]

Banque de France and Euroclear to Tokenize Short-Term Debt in Paris (Euroclear)

Banque de France and Euroclear launching a joint project ( “Pythagore”) to tokenize Negotiable European Commercial Paper (NEU CP) using distributed ledger technology (DLT)—a major step to modernize the euro area’s largest short-term debt market, which has €310 billion outstanding. This initiative aims to enhance efficiency, transparency, and security in short-term financing. The pilot phase of the project is scheduled to start at the end of 2026, in line with the start of the pilot of the Eurosystem “Pontes” project (see below). [Source: Euroclear]

Eurosystem Selects Members for the Pontes Market Contact Group (ECB)

The Eurosystem has chosen a group of financial market participants and central banks to join the new Pontes market contact group, following a July call for expressions of interest. This group aims to facilitate focused dialogue around Pontes, a project designed to enable settlement of distributed ledger technology (DLT) transactions in euro using central bank money. Pontes will begin work in October 2025, initially targeting the pilot phase set for launch in Q3 2026, and later expanding its services. Pontes is a short-term solution for wholesale euro transaction settlement on DLT platforms, with a longer-term project, Appia, to follow, both building on the European Central Bank’s (ECB’s) earlier exploratory work regarding settlement using wholesale central bank digital currency (CBDC). [Source: ECB]

Group of Leading International Banks Explores Stablecoin Issuance (BNP Paribas)

“A group of leading international banks is jointly exploring the issuance of a 1:1 reserve-backed form of digital money that provides a stable payment asset available on public blockchains, focused on G7 currencies. The group of banks includes Banco Santander, Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG Bank Ltd, TD Bank Group and UBS. The objective of the initiative is to explore whether a new industry-wide offering could bring the benefits of digital assets and enhance competition across the market, while ensuring full compliance with regulatory requirements and best practice risk management. The group is in contact with regulators and supervisors in each relevant market and will continue to keep appropriate parties updated as the project progresses.” [Source: BNP Paribas]

Upcoming Speaking Engagements:

Stablecoin C-Suite Summit (New York City on November 14-15) will be the definitive conference for exploring the future of digital money and intelligent payments. The event brings together founders, C-level executives, investors, policymakers, and developers for two immersive days of talks, panels, and networking. This be the place to be if you’re building, backing, or regulating the next wave of programmable finance. [Register here]

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.

Kiffmeister’s #Fintech Daily Digest (20251010)

October 10, 2025October 10, 2025 ~ kiffmeister

Ugandan Digital Shilling Stablecoin Launched (GSN and Diacente)

Global Settlement Network (GSN) and Diacente Group have launched a stablecoin backed by Ugandan government bonds deployed on GSN’s permissioned blockchain. This digital shilling will incorporate full compliance with financial integrity (AML/CFT/KYC) regulations, and will be accessible by both smartphone and USSD, even to those without bank accounts. [Source: GlobeNewswire] It is being billed as a central bank digital currency (CBDC) but there is no mention of Bank of Uganda (BOU) involvement, so at best it might be a central bank issued stablecoin. I’ve checked on the BOU website and there is no mention of this initiative. In September 2024, the BOU published a consultative paper setting out its CBDC design thinking, and at a BOU workshop in March 2025, BOU official Peter Kagumya said the central bank will continue with a “phased approach for CBDC implementation in Uganda.”

Predicting the Payment Preference for CBDC: A Discrete Choice Experiment (BIS)

The Bank for International Settlements (BIS) published a paper that examines consumer preferences for central bank digital currency (CBDC) as a payment method through a discrete choice experiment conducted with over 3,500 participants in South Korea. The authors varied nine payment attributes—including issuer, form, privacy, acceptance rates, loss risk, discounts, transaction speed, settlement timing, and fees—to estimate preferences that could predict CBDC adoption. Their findings indicate that monetary incentives (“cash” backs) and disincentives (monthly fees) exert the strongest influence on payment method selection. For example, setting CBDC cash-back rates equal to credit card reward rates, raises CBDC adoption from 19% (with no CBDC cash back or fees) to 27%. Contrariwise, when credit card fees are eliminated (and mobile payments money payment users get a 3% reward), CBDC adoption drops from the 19% to 17.9%, suggesting CBDC adoption is more sensitive to its own reward structure than to competitive adjustments by private payment providers. Non-monetary attributes, particularly the form of issuance (with smartphone apps valued substantially more than banknotes), also significantly affect choice. [Source: BIS]

How Will Stablecoins Integrate with the Financial System (CIGI)

The Centre for International Governance Innovation (CIGI) published a paper by Christian Catalini on ho stablecoins might integrate with the financial system. In the most likely scenario—a reformed Bretton Woods framework—he sees fully reserved, well-regulated stablecoins becoming core settlement infrastructure, connecting disparate payment systems and streamlining cross-border transactions for banks, fintechs, and merchants. If the world shifts toward a multipolar arrangement, stablecoins might be expected to thrive within Western financial spheres, driving programmable payments and innovation, while central bank digital currencies (CBDCs) dominate in other blocs, with bitcoin serving as a neutral bridge. In more fragmented or authoritarian scenarios, stablecoins could be relegated to niche roles or co-opted by states for surveillance and control, with CBDCs or state-aligned stablecoins prevailing in domestic flows and bitcoin acting as a hedge against capital restrictions. Ultimately, Catalini foresees an interoperable, layered regime where stablecoins link platform economies and global commerce, CBDCs address domestic policy needs, and permissionless digital assets like bitcoin provide an escape valve, with speed and programmability determining which form will set the standard for future monetary integration. [Source: CIGI]

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Kiffmeister’s #Fintech Daily Digest (20251009)

October 9, 2025 ~ kiffmeister

Bank of England “Well Advanced” in Stablecoin Regulation (BOE)

According to the Bank of England’s (BOE’s) Sasha Mills the Bank is well advanced in developing a regulatory framework for systemic stablecoins, following the powers granted by the Financial Services and Markets Act 2023. This framework aims to set robust, forward-looking standards for stablecoins that could be widely used for everyday payments or for settling tokenized core transactions. The Bank’s approach prioritizes financial stability and trust, drawing on international standards and lessons from other jurisdictions such as the EU’s MiCA and Singapore’s stablecoin regulations. Mills notes that the Bank will allow systemic stablecoin issuers to hold a portion of their backing assets in high-quality liquid assets, but also stresses that some assets should be held in central bank deposits, positioning the Bank as “the banker” to stablecoin issuers and enhancing trust. The Bank is listening to industry feedback and plans a consultation paper later this year to further set out its regulatory proposals for stablecoins, emphasizing flexibility, proportionate requirements, and a commitment to enabling responsible innovation without jeopardizing monetary confidence or market stability. [Source: BOE]

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Kiffmeister’s #Fintech Daily Digest (20251008)

October 8, 2025October 8, 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.). (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.

BOE Plans Carveouts on Stablecoin Cap After Industry Backlash (Bloomberg)

The Bank of England (BOE) reportedly plans to grant exemptions to its proposed £20,000 cap for individuals and £10 million cap for businesses on stablecoin holdings, specifically targeting crypto exchanges and other firms that require large stablecoin positions. The central bank will also allow firms to use stablecoins as settlement assets in its experimental Digital Securities Sandbox, marking a notable shift from Governor Andrew Bailey’s earlier warnings that stablecoins could destabilize public trust in money. This policy adjustment comes amid growing concerns that the UK is falling behind the US in stablecoin regulation, with only $581,000 worth of pound-pegged stablecoins in circulation compared to $468 million in euro-pegged tokens, and fears that talent and investment could flow to New York under the Trump administration’s more favorable Genius Act framework. The changes reflect pressure from the digital payments industry. [Source: Bloomberg]

Pricing in Fast Payments: A Practical and Theoretical Overview (BIS)

The Bank for International Settlements (BIS) published a paper that provides an overview of how fast payment systems (FPS) are priced at various levels, including system participants (banks and payment service providers) and end-users. It reviews global practices, such as free, paid, freemium, and subscription models, highlighting incentives and trade-offs for financial inclusion, innovation, and competition. Using a two-sided market theoretical model (focused on person-to-merchant (P2M) transactions), the authors show that zero-fee models are unsustainable without external subsidies, while different pricing approaches influence both usage volume and social welfare. Some systems (eg Türkiye, Brazil) avoid joining or fixed fees for participants to encourage adoption, while others (eg Australia, the United Kingdom) use a mix of fee types. At the end user level, many (eg Brazil, Malaysia, Thailand) offer free or low-cost transactions for individuals. Fees for merchants can be market-based or regulated (eg Türkiye, India, Mexico). The model shows that FPS usage may be sub-optimal under many pricing schemes that are currently applied in practice. [Source: BIS]

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Kiffmeister’s #Fintech Daily Digest (20251007)

October 7, 2025October 7, 2025 ~ kiffmeister

Indian Central Bank to Launch Pilot for Deposit Tokenization (Reuters)

The Reserve Bank of India (RBI) will reportedly launch a pilot program for deposit tokenization using wholesale central bank digital currency (CBDC) as the underlying infrastructure. Additionally, the RBI is exploring tokenization applications in money market instruments, including commercial paper. [Source: Reuters]

ERC-3643 Tokens for Derivative Collateralization (ERC3643 Association)

The ERC3643 Association published a paper that explores the use of ERC-3643 tokens as collateral for smart derivative contracts to modernize the uncleared over-the-counted (OTC) derivatives market. It identifies significant inefficiencies in the current system, where 38% of operational resources are consumed by manual processes and 45% of margin calls are disputed, creating high costs that exclude smaller market participants. Their proposed solution combines ERC-3643 compliant security tokens—which embed regulatory compliance, KYC/AML verification, and automated transfer restrictions—with smart derivative contracts based on the ERC-6123 standard. Through two detailed use cases the paper demonstrates how this approach can automate the entire trade lifecycle from identity verification and trade inception through ongoing margin management to final settlement. However, it acknowledges that institutional adoption will require custodian integration and privacy-preserving technologies like fully homomorphic encryption. [Source: ERC3643 Association]

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Kiffmeister’s #Fintech Daily Digest (20251006)

October 6, 2025October 6, 2025 ~ kiffmeister

DEA MiCAR-Compliant Stablecoin Tracker Expands to Cover CASPs (DEA)

The Digital Euro Association (DEA) open source Markets in Crypto-Assets Regulation (MiCAR) Tracker has broadened its coverage to include both electronic money tokens (EMTs) and crypto-asset service providers (CASPs)(EMTs are stablecoins backed by traditional currencies). The data comes directly from the European Securities and Markets Authority (ESMA) and is continuously updated. The tracker was showing 23 authorized EMTs and 15 licensed EMT issuers across 9 European countries, and 57 registered CASPs across 11 countries as of late September 2025. [Source: DEA]

CBRT and CBUAE Sign MoUs to Exchange CBDC Expertise and Facilitate Cross-Border Payments (CBRT)

The Central Bank of the Republic of Türkiye (CBRT) and the Central Bank of the United Arab Emirates (CBUAE) signed a memorandums of understanding (MoU) on the exchange of expertise in developing central bank digital currency (CBDC) platforms for individuals and institutions. Additionally, the MoU outlines the integration of the Türkiye’s FAST system with UAE’s instant payment platform (Aani) to enhance the efficiency of cross-border financial transactions. This includes linking electronic systems and switches in both countries to improve interoperability and operational effectiveness. [Source: CBRT]

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Jurisdictions Where Retail CBDC Is Being Explored (September 2025)

October 3, 2025October 3, 2025 ~ kiffmeister

I’ve updated my tabulation of the 110 central banks that have recently conducted launched, piloted, experimented with and/or researched retail central bank digital currency (CBDC). This total is unchanged since the end-August update. It doesn’t include the two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). 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).

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.

BTW for those who want a more historical view of CBDC developments I strongly recommend the CBDCTracker.org database.

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. (Again the Atlantic Council puffs up its numbers with a very loose definition of “pilot”.) 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”).

Kiffmeister CBDC Monitor (202509)Download

BTW 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 (20251002)

October 2, 2025October 2, 2025 ~ kiffmeister

ECB Selects Digital Euro Service Providers (ECB)

The European Central Bank (ECB) has selected service providers for five key components of the digital euro project, following a call for applications and tender process. However, the actual development of components will only proceed pending adoption of the Digital Euro Regulation and further ECB Governing Council decisions. No payments have been made yet, and the agreements include safeguards to adapt to possible legislative changes. Framework agreements have been signed for: (i) alias lookup (Sapient and Tremend Software Consulting), (ii) risk and fraud management (Feedzai), (iii) app and software development kit (SDK) development (Almaviva and Fabrick), (iv) offline payment solutions (Giesecke+Devrient), and (v) secure exchange of payment information (Senacor). Service requests will initially be directed to the above providers, but second-ranked providers may be approached if required (see press release for full list). [Source: ECB]

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Kiffmeister’s #Fintech Daily Digest (20251001)

October 1, 2025October 1, 2025 ~ kiffmeister

Provisional Digital Euro Legislative Roadmap (LinkedIn)

Fernando Navarrete, the rapporteur responsible for shepherding the digital euro legislation through the European Parliament, posted the likely milestones. The report proposal is scheduled for publication during the last week of October 2025, and presented to the Committee on Economy and Monetary Affairs (ECON) on November 5/6. December 12 will be the deadline for submitting amendments that ECON will debate on January 28/29, 2026. That will be followed by negotiation meetings between political groups from January to April 2026, and then (provisionally) an ECON vote in May 2026. That will be followed by negotiations between the European Parliament, Council (of European Union finance ministers), and Commission to converge on a final, unified legislative framework for the digital euro. [Source: LinkedIn]

The New U.K. Stablecoin Regime (FT)

In an op-ed in the Financial Times (FT), Bank of England Governor Andrew Bailey, explained the evolving regulatory approach toward stablecoins in the United Kingdom. He identifies key requirements: backing stablecoins with risk-free assets, establishing insurance and insolvency protection for holders, and ensuring transparent, consistent exchange terms with other forms of money. Bailey noted the potential for stablecoins to separate money creation from credit provision, with banks and stablecoins coexisting and non-banks carrying out more of the credit provision role. By the end of 2025, the Bank of England plans to publish a consultation on a regime for systemic stablecoins, aiming to retain trust in money while fostering innovation by allowing widely used U.K. stablecoins access to central bank accounts. [Source: FT]

ESRB and ECB Push Multi-Issuance Stablecoin Ban (Bloomberg)

The European Systemic Risk Board (ESRB), backed by the European Central Bank (ECB), has reportedly recommended a ban on multi-issuance stablecoins—those issued jointly in the European Union (EU) and other jurisdictions—citing concerns about financial stability. While not legally binding, the ESRB’s guidance increases pressure on regional authorities to either adopt such restrictions or demonstrate how stability will be maintained without them. The move targets major stablecoin issuers like Circle and Paxos, operating mainly in the US, but the impact on companies already licensed in the EU remains unclear. ECB President Lagarde had previously spoken out about the dangers of a situation where foreign holders of a stablecoin had a claim on EU-based issuers, warning that it posed “significant legal, operational, liquidity and financial stability risks at EU level.” [Source: Bloomberg]

Visa Direct Taps Stablecoins to Unlock Faster Funding for Businesses (VISA)

VISA is launching a stablecoin prefunding pilot through Visa Direct, aimed at upgrading cross-border business payments. By allowing banks, remittance companies, and financial institutions to pre-fund payouts using stablecoins instead of traditional fiat, VISA intends to streamline and accelerate global money movement. This approach helps businesses unlock liquidity (no longer requiring large fiat pre-funding), provides modern treasury flexibility with near-instant settlement, and offers predictability by minimizing currency volatility. The pilot, active with select partners, will expand in 2026. [Source: VISA]

Chainlink Advances Tokenized Fund Workflows With SWIFT Messaging (Chainlink)

Chainlink, in collaboration with SWIFT and UBS, has introduced a new technical solution that allows financial institutions to seamlessly manage tokenized fund subscription and redemption workflows directly from their existing systems using SWIFT messages and the Chainlink Runtime Environment (CRE). This integration means banks can interact with blockchain-based digital asset processes without overhauling their infrastructure or adding new identity management systems. The first use case, involving UBS Tokenize, successfully used ISO 20022 messages sent via SWIFT to trigger smart contract-based fund subscriptions and redemptions. This advancement could significantly streamline the $100 trillion fund industry by reducing operational barriers, automating compliance, and allowing institutions to tap blockchain benefits such as efficiency, transparency, and programmability using familiar, existing messaging standards. [Source: Chainlink]

Deutsche Börse Group and Circle Announce Stablecoin Collaboration (Circle)

Deutsche Börse Group and Circle have announced a collaboration to integrate Circle’s EURC and USDC stablecoins into Deutsche Börse’s market infrastructure, beginning with listing and trading on Deutsche Börse’s digital exchange (360T/3DX) and institutional crypto services, and leveraging their post-trade infrastructure for custody solutions. This initiative aims to reduce settlement risk, lower costs, and streamline trading, settlement, and custody for banks and asset managers. Both organizations see this as a step toward transforming European financial markets with efficient, secure, regulated digital asset and stablecoin ecosystems, bridging traditional and digital finance for broader market access and efficiency. [Source: Circle]

Stripe’s “Open Issuance” Tool to Streamline Stablecoin Management (Stripe)

Stripe announced new products to help businesses take advantage of AI and stablecoins. One was a platform, Open Issuance, that enables businesses to launch and manage their own stablecoins with just a few lines of code, thanks to Stripe’s acquisition of Bridge, a stablecoin infrastructure company. By offering direct minting and burning of coins and the ability to customize reserve compositions between cash and treasuries (managed by partners like BlackRock and Fidelity, with liquidity via Lead Bank), Open Issuance removes the operational and regulatory hurdles of launching a proprietary stablecoin. Coins created through the platform are fully interoperable, with low-cost conversion tools, allowing businesses to capture rewards from stablecoin origination and use these to incentivize customers. The first stablecoins on the platform include CASH (by Phantom), mUSD (for Metamask), and USDH (by Hyperliquid). [Source: Stripe]

Cloudflare Introduces NET Dollar to Support AI-Driven Internet (Cloudflare)

Cloudflare launched NET Dollar, a USD-backed stablecoin designed to facilitate instant, secure, and global payments, enabling pay-per-use, microtransactions, and fractional payments. The initiative aims to modernize online financial rails to support autonomous agents, developers, and creators, fostering an open and sustainable Internet economy that benefits from automated, programmatic transactions and fairly compensates content sources. Cloudflare is also contributing to open standards in agent payments, enhancing trust and interoperability across the evolving digital landscape. [Source: Cloudflare]

ECB and SNB Explore Link Between Instant Payments Systems (ECB)

The European Central Bank (ECB) and Swiss National Bank (SNB) are exploring interlinking the Eurosystem’s Transeuropean Automated Real-time Gross-settlement Express Transfer (TARGET) Instant Payment Settlement (TIPS) and the Swiss Interbank Clearing (SIC) Instant Payment (IP) services. The aim is to assess the feasibility and economic viability of such an interlinking. This exploration phase will continue throughout 2026. Interlinking would allow for cross-currency instant payments. This initiative supports the general goal of making cross-border payments faster, cheaper, more transparent and more accessible. [Source ECB]

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Protected: Kiffmeister’s Digital Currency Monitor, September 2025

October 1, 2025October 1, 2025 ~ kiffmeister