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.
I would also like to take this opportunity to give a shout out to Stephen Phillips and Richard Turrin who produce excellent weekly summaries of fintech-related developments on LinkedIn. I heartily recommend following them:
Richard Turrin’s Cashless: CBDC & Fintech with a focus on a Rising Asia & China. You can also follow Richard on X, where he reports on a real-time basis.
I would also be remiss not to mention Norbert Gehrke. Although he describes himself as a “Japan Fintech Observer he is way more than that. If you follow him on LinkedIn you will not miss much in the global Fintech arena.
The South African Reserve Bank published a position paper and background note on retail central bank digital currency (CBDC). They examine whether a retail CBDC could address persistent gaps in South Africa’s payment ecosystem, where approximately 16% of adults remain unbanked and many rely on cash despite growing digital payment adoption driven by commercial banks and fintechs. The SARB identifies three core considerations: whether a CBDC fills an unmet need, whether it should be prioritized given ongoing modernization initiatives (particularly the PayShap fast payments system and expanded non-bank participation), and whether it can match or exceed cash’s value proposition across twelve dimensions including accessibility, offline capability, trust, acceptance, cost, and privacy. Drawing on limited international evidence, primarily characterized by low adoption rates in the few jurisdictions that have launched retail CBDCs, the SARB determines that current resources should focus on existing payment system modernization rather than CBDC implementation. The paper acknowledges potential longer-term value in maintaining public access to central bank money in a digital economy and enabling financial innovation through technologies like smart contracts and tokenization, but concludes these considerations do not justify immediate action. Consequently, the SARB will shift its attention toward wholesale CBDC exploration while continuing to monitor retail CBDC developments globally. [Source: SARB]
At the Currency Research (November 17-20 Cedi@60 Anniversary Currency Conference I had the honor of moderating a panel on central bank digital currency (CBDC) trust establishment with Jean-Michel Godeffroy (ex-ECB), Roman Hartinger (G+D) and Musa Jimoh (Director of the Payments System Policy Department at the Bank of Nigeria). The whole 30 minute session is worth watching (it starts at around the 4h 58m mark), but Musa’s interventions are particularly newsworthy, as he explained why the Nigerian central bank is pivoting away from retail CBDC to wholesale CBDC. Recall that Nigeria is one of only three countries where retail CBDC has recently been fully launched.) He explained how the e-Naira story is not a “rosy” one, and ran through some of the reasons. For starters, commercial banks were not willing to support the new payment instrument that they viewed as competition, and that support was essential for e-Naira success because the banks “owned” the merchants. It didn’t help that the banks couldn’t charge fees on e-Naira transfers, and the central bank wasn’t sharing in any of the platform costs. Also, Nigerians are very much into crypto-asset markets and the e-Naira didn’t offer the payments privacy expected of a payment medium. In addition, the central bank has been running a popular instant payment system since 2014, which made the e-Naira rather redundant. [Source: YouTube]
The European Central Bank (ECB) will invite European payment service providers in early 2026 to join a 12‑month digital euro proof-of-concept (POC) that will take place in the second half of 2027. It will be aimed at testing the technical, functional and operational readiness of a potential digital euro in a controlled environment with limited participants. The POC will involve only Eurosystem staff, selected merchants that already provide everyday services on the office premises of the ECB and of euro area national central banks, as well as selected e-commerce platforms. Eurosystem staff will have the opportunity to make payments from person-to-person (both online and offline) and from person-to-business (both at the physical point of sale and on e-commerce platforms). Participating payment service providers will be selected based on their capabilities and a set of pre-defined selection criteria, and their ability to ensure representative coverage of the Euro area market in terms of size, geographical coverage and market reach. [Source: ECB]
Sveriges Riksbank published a staff memo that argues that while stablecoins are still largely used within the crypto-asset ecosystem, they could meaningfully improve payments—especially cross‑border—by leveraging open distributed ledger technology (DLT) networks, supporting faster and cheaper transfers, and offering easier foreign‑currency access in weak monetary jurisdictions, but that this potential is tightly bound up with significant risks and policy trade‑offs. Key concerns include: heavy concentration in USD‑pegged coins and the associated risk of dollarization and spillovers from US markets; financial‑stability vulnerabilities such as runs, fire‑sale risk in reserve assets, decentralized finance (DeFi) linked contagion, and possible bank disintermediation; and loss of “monetary singleness” if different stablecoins trade at discounts. The memo reviews how regimes like European (MiCA) and U.S. (GENIUS Act), plus emerging U.K. and other hub‑jurisdiction frameworks, try to balance innovation with safeguards around full backing, redemption, governance, and financial integrity, while central banks debate whether to give issuers access to settlement systems, allow reserves as backing assets, or provide liquidity backstops. Overall, it concludes that stablecoins should evolve into tightly regulated private money aligned with existing monetary systems, and that strong international coordination is essential to manage their cross‑border, systemic implications. [Source: Sveriges Riksbank]
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.
S&P has reassessed the ability of Tether (USDT) to maintain its peg to the U.S. dollar to its lowest stability score of 5 (weak) from 4 (constrained), highlighting that while the token has generally maintained its dollar peg and benefits from large scale and liquidity, its risk profile has deteriorated due to a growing share of higher‑risk reserve assets such as Bitcoin, gold, secured loans, and corporate bonds. The report also emphasizes persistent transparency gaps around the composition, credit quality, and custody of reserves, limited insight into Tether’s risk appetite and governance, and the absence of a robust regulatory framework or clear asset segregation to protect holders if the issuer became insolvent. S&P also notes structural frictions in primary market redeemability and the potential vulnerability of USDT’s peg in a severe stress event. [Source: S&P] By comparison, S&P has assigned its second highest stability score of 2 (strong) to Circle’s due to its full backing by low-risk assets, primarily short-dated securities, and deposits with banks. [Source: S&P]
The Bank for International Settlements (BIS) published a paper that assesses how the introduction of a central bank digital currency (CBDC) and/or a central bank-run fast payment system (FPS) affects bank deposits and private tokens issued by digital platform operators. The paper finds that the key welfare driver is whether payments are interoperable across “walled gardens.” In a stylized model with banks and digital platforms, non‑interoperable systems generate financial exclusion and allow intermediaries to extract rents from merchants, reducing trade volumes and welfare relative to the social optimum. Introducing either a retail CBDC or an FPS makes payment instruments interoperable, eliminates financial exclusion, maximizes the volume of transactions, and unambiguously raises social welfare, even though it may lead to some degree of disintermediation. In this framework, a well-designed retail CBDC is effectively equivalent to a central bank-run FPS for the industrial organization of the payment system, implying that in jurisdictions with robust fast payments, launching a retail CBDC is less urgent. [Source: BIS]
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.
Bolivia’s Economy Minister Jose Gabriel Espinoza announced the integration of crypto-assets into its formal financial system, starting with stablecoins. Banks will be allowed to offer crypto-asset services such as savings accounts, credit cards, and loans, so that crypto-assets begin to function as legal tender. This move is intended to leverage the growing adoption of stablecoins in Bolivia, which surged as citizens sought a hedge against boliviano depreciation. Espinoza said the policy is designed to boost financial inclusion and recognizes the global nature of crypto-assets, suggesting that using it to Bolivia’s advantage is preferable to trying to control it. [Source: Reuters]
Kazakhstan’s Prime Minister’s Office (PMO) announced that it is advancing the use of its the country’s digital tenge central bank digital currency (CBDC) to finance government projects, starting with medium-term road repairs and the provision of school meal vouchers. The initiative aims to automate and monitor targeted budget spending using programmatic controls and marking of digital funds, ensuring funds are utilized strictly for contractually specified purposes. Pilot projects in road repairs and school meal distribution have highlighted needs for improved integration and sector-specific digital processes. Additional pilots are testing programmable spending in public procurement, SME support, digital VAT, safe transactions for vehicles and real estate, and procurement of medical and industrial equipment. The program is expected to increase payment transparency and efficiency, with further scaling and integration into broader treasury operations planned for the coming year. [Source: Kazakhstan’s PMO]
The New York (NY) Fed published an article that examines the potential role of permissionless blockchains in future payment infrastructures, focusing on how stablecoins leverage global, peer-to-peer transfer networks for accessibility and borderless payments. While stablecoin transaction volumes have skyrocketed, automated activity and bot transactions dominate, so true payment adoption still lags. The piece contrasts stablecoins’ borderless nature with faster payments systems like FedNow, noting that existing solutions remain reliant on bank accounts and thus exclude unbanked users and impede international transfers. Permissionless blockchains offer universal access, programmability, and composability, but face hurdles around regulation, security, privacy, and scalability. Despite growing regulatory clarity, mainstream adoption rests on balancing user control, societal safety, and functional integration with the financial system, as the public pivots from legacy account-based money toward digital, peer-to-peer transfers in practice. [Source: NY Fed]
The Bank for International Settlements (BIS) published an article on the fast-growing markets for tokenized money market funds (TMMFs). TMMFs operate as tokenized representations of money market fund shares on public permissionless blockchains. They function both as collateral and as savings vehicles, offering money market yields and regulatory protections of securities, unlike stablecoins, which do not pay interest. Primarily used in decentralized finance (DeFi), TMMFs enforce regulatory compliance through the “allow-listing” of blockchain wallets, limiting direct peer-to-peer trading to pre-approved participants, though this mechanism does not prevent all forms of secondary trading. While TMMFs aim to improve on stablecoins by providing yield and programmability, they also introduce risks, such as liquidity mismatches, as well as the operational and anti-money laundering / countering the financing of terrorism-related risks associated with stablecoins. [Source: BIS]
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.
The IMF published a paper that examines how retail central bank digital currencies (rCBDCs) can affect financial integrity, particularly in the context of anti-money-laundering/combating the financing of terrorism (AML/CFT) frameworks. The paper identifies offline-capable rrCBDCs as a distinct departure from standard online payment systems because transactions may be executed without real-time connectivity to a central ledger, which raises unique financial-integrity risks. The authors argue that jurisdictions must explicitly calibrate design choices around offline limits (transaction size, frequency), device and software safeguards, audit trails (including reconnection protocols) and risk-based customer due-diligence regimes for offline use. While offline capability can support resilience, merchant reach and financial-inclusion (especially in connectivity-poor settings), the more flexible the offline mode (in terms of transfer autonomy, reversibility or anonymity), the larger the integrity trade-off becomes. [Source: IMF]
The IMF published a paper that informs its Executive Board on the current state of central bank digital currency (CBDC) development, noting that while wholesale projects are gaining prominence, several retail efforts have stalled or been paused due to a lack of clear domestic necessity. The paper also summarizes the key messages and findings from the third wave (of six) CBDC Virtual Handbook chapters published in November 2025, that cover the macro-financial implications for stability and competition; the legal intricacies regarding frameworks and financial integrity; and specific challenges related to tokenized reserves and payment resilience in fragile, conflict-affected states. In total 23 chapters are planned, with the remaining six to be published in 2026. [Source: IMF]
The U.S. Federal Reserve Board (FRB) published a paper that examines how the speed of settlement in payment networks influences systemic risk and financial stability. It develops a network model that incorporates netting benefits, liquidity costs, and counterparty risks. It finds the effect of faster settlement is ambiguous: while it can reduce the probability of crisis events by lowering the chance of defaults, it can also amplify the severity of crises when they occur by increasing liquidity needs and reducing netting efficiency. The optimal settlement speed for a payment system depends on the network’s structure, the balance between efficiency and risk, and prevailing liquidity conditions. The paper identifies “default threshold points” at which small reductions in settlement time lead to discrete jumps in the number of defaults across the network. The paper concludes against uniform settlement speed policies, arguing that optimal design requires attention to network topology and liquidity conditions, and that targeted liquidity support be provided during times of stress. [Source: FRB]
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.
The Central Bank of the United Arab Emirates (CBUAE) executed the first direct payment to China using a central bank digital currency (CBDC) via the Jisr platform, established with the participation of a group of Emirati and Chinese banks. In parallel, the instant payment systems of the UAE and China were interconnected, allowing students, residents and firms in both countries to transfer funds securely and instantly across borders, aiming to reduce costs, enhance transaction reliability, and strengthen commercial ties. Also, the two countries’ central banks signed a memorandum of understanding to deepen cooperation in cross-border payments and financial infrastructure development. [Source: CBUAE]
The European Central Bank (ECB) will advance the integration of the Eurosystem’s instant-payments platform (TARGET Instant Payment Settlement (TIPS)) with the Indian Unified Payments Interface (UPI) and the Nexus Global Payments scheme. India’s UPI is an instant payments system developed by the National Payments Corporation of India. Nexus is a multilateral payments scheme that will initially connect the fast payment systems of Bank Negara Malaysia, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore, the Bank of Thailand and the Reserve Bank of India. The original concept was developed by the Bank for International Settlements. The decision is part of the Eurosystem’s overall efforts to make it easier for businesses and consumers in Europe to send and receive payments to and from other countries, including remittances. [Source: ECB]
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.
The IMF published a Fintech Note that examines how central banks are exploring the use of wholesale central bank digital currency (CBDC) to modernize wholesale payment and settlement systems. The note critically analyzes the trade-offs inherent in various implementation architectures, noting that while “common ledger” models (where wholesale CBDC and tokenized assets are issued and exchanged on the same ledger) can facilitate atomic settlement and programmability, they introduce contagion risks and governance challenges. The note also warns that the coexistence of wholesale CBDC and traditional reserves could drive liquidity fragmentation and complicate monetary policy operations, suggesting that central banks rigorously evaluate whether these risks outweigh the utility of alternative solutions. One alternative, RTGS links, uses technical bridges or synchronization operators to coordinate the settlement of tokenized asset transactions with payment on existing central bank real-time gross settlement (RTGS) systems. The note also discusses private-sector common ledger solutions that use as payment instruments privately-issued tokenized money like stablecoins and tokenized deposits, including stablecoins backed by central bank money (e.g., Bank of England “omnibus” accounts). [Source: IMF]
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.
In an interview with the Financial Times (FT) the chair of the Basel Committee on Banking Supervision, Erik Thedéen, has called for a reworking of global crypto rules for banks after the US and UK refused to adopt requirements imposing a 1,250% risk weighting on stablecoins and other digital assets that used permissionless blockchains. Thedéen noted that the sharp rise in stablecoin usage and differing regulatory stances have made it difficult to achieve consensus, prompting calls for a new approach. While the current Basel rules, originally focused on assets like bitcoin, would subject many stablecoins to the harshest capital requirements, major regulators such as the US Federal Reserve and the Bank of England have decided not to implement them in full. [Source: FT]
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.
I may not be posting any Kiffmeister #Fintech Digests this week as I’m attending and speaking at the Bank of Ghana’s Cedi@60 Conference in Accra. Normally conferences don’t slow me down, but even in downtown Accra, 3G and WiFi connectivity are very spotty. So it’s near impossible to scan for new developments and post about them!
This has led to some policy rethinking on my part. When I think about the need for offline digital payments, except for catastrophe backup, I assumed use case rationales were weak for urban areas. I’ll be rethinking that assumption now!
Meanwhile, I’ll keep monitoring for developments and post them if and when possible. In any case, rest assured that nothing will slip through the cracks. It may just be reported on a delayed basis.
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.
