Bank of Korea Launches Full-Scale Implementation of “Project Han River” Phase 2 (BOK)
The Bank of Korea (BOK) announced Phase II of Project Hangang. It aims to trial large-scale, won-pegged deposit tokens built on a wholesale central bank digital currency (CBDC) layer, to cut transaction costs for both major corporations and small merchants burdened by credit card fees, building on Phase I’s system build out and 2025 live pilot. Participating banks will expand from 7 to 9 and merchant coverage will be significantly broadened. Phase II will test person to person transfers, biometric authentication, and automatic deposit token funding and sweep out. It will also deepen programmability, using digital vouchers in blockchain based treasury pilots such as an electric vehicle (EV) charging infrastructure project, and continue experiments with AI agent payments and tokenized bonds and equities. The 2026 agenda includes support for government treasury execution, and external consulting on regulation and operating models, with a Phase III vision of low cost universal payments, programmable financial services, and infrastructure for Korea’s broader digital asset ecosystem. [BOK]
ECB Calls for Experts to Participate in Digital Euro Rulebook Development (ECB)
The European Central Bank (ECB) launched a call for experts to join two workstreams under the digital euro Rulebook Development Group (RDG) to support further development of the digital euro scheme rulebook, which will set common rules, standards and procedures for using the digital euro across the euro area. One workstream (G5) will focus on implementation specifications for ATMs and payment terminals, including communication technologies, integration of offline digital euro functionality and leveraging existing standards, requiring expertise in ATM and terminal interfacing or provision. The other (B1) will design a certification and approval framework for testing and certifying payment and acceptance solutions and infrastructure used by payment service providers in the digital euro ecosystem, requiring expertise in payments and acceptance devices. The ECB notes that the flexible draft rulebook will be updated to reflect the outcome of the EU legislative process, with any decision to issue a digital euro to follow only after legislation is adopted. [ECB]
ECB Workshop on Pontes Platform Decentralized Programmability (ECB)
The ECB published an updates to its Pontes project aimed at enabling the settlement of distributed ledger technology (DLT) transactions using central bank money (CeBM). Pontes is the near-term DLT-based interoperability solution linking DLT platforms with TARGET Services so DLT transactions settle in CeBM, using API-based trigger and hash-link mechanisms and dedicated DLT cash wallets funded from TARGET accounts. The update focused on a workshop on market-developed smart contracts deployed by national central banks on the Eurosystem DLT (“decentralized programmability”) that would enable cash-locking for delivery-versus-payment, programmable payments, microtransactions, DLT interoperability, and automated corporate actions. [ECB]
Consultation on the Eurosystem’s Appia Project (ECB)
The ECB also published an update to its Appia project aimed at enabling the settlement of DLT transactions using CeBM. Appia is the longer-term initiative to provide tokenized CeBM for DLT-based wholesale markets via a unified settlement ecosystem. The update concerns the launching a formal consultation inviting market and public authorities to comment on Appia’s proposed DLT‑based wholesale ecosystem design and six‑block workplan via a structured questionnaire due 22 April 2026. Feedback will shape standards, governance choices, cross‑border linkages, and prioritization of analytical and practical work toward a 2028 blueprint. [ECB]
SEC Approves Nasdaq’s Securities Tokenization Plan (SEC)
The U.S. Securities and Exchange Commission (SEC) approved a Nasdaq rule change allowing certain listed securities to clear and settle in tokenized form via a Depository Trust Company (DTC) tokenization pilot. The order authorizes trading tokenized versions of large-cap equities and major index exchange-traded funds (ETFs) on the same order book, with identical CUSIP, symbol, rights, and execution priority as traditional shares, with tokenization preferences expressed through an order flag and implemented post‑trade by DTC. This embeds distributed-ledger-based entitlements within existing exchange, clearing, and surveillance infrastructures, preserves T+1 settlement, and treats tokenized and traditional shares identically for fees, market data, and audit trail. The SEC frames the decision as technology‑neutral, while leaving broader questions about alternative tokenization models, issuer choice, and future non‑fungible tokenized instruments to subsequent rulemakings. [SEC]
Zero-Knowledge Proof Authentication for Offline CBDC Payments (arXiv)
Santanu Mondal and T. Chithralekha propose a hybrid offline central bank digital currency (CBDC) architecture that uses zero-knowledge proofs (ZKPs) and secure hardware to enable cash-like payments on resource-constrained internet of things (IoT) devices while preserving regulatory oversight. The system combines a two-tier CBDC model with hierarchical “main wallet / IoT sub‑wallets,” secure elements and trusted execution environments for tamper-resistant key storage and counters, and NFC/BLE device-to-device transfers backed by lightweight ZKPs. This operationalizes intermittently offline CBDC designs, translating privacy-preserving anti–money laundering and counter–terrorist financing rules into on-device limits and ZKP circuits rather than continuous online monitoring, thereby shifting supervisory leverage into protocol and hardware design choices. Unresolved are empirical tradeoffs among proof complexity, device diversity, and real-world performance under regulatory stress scenarios. [arXiv]
Upcoming Speaking Engagements:
The Crypto Assets Conference (Frankfurt, March 25) will focus on the growing importance of digital assets for capital markets and the competitiveness of the European economy. I will be speaking on the uncertain future of CBDC projects. [Register here and get 15% off the regular ticket price.]
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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.
