ECB Signs Agreements with European Standard Setters to Facilitate Digital Euro Payments (ECB)
The European Central Bank (ECB) announced agreements with three European payment standard‑setting bodies to reuse existing open standards for processing online digital euro payments. The standards include European Card Payment Cooperation (ECPC) CPACE (to support contactless “tap‑to‑pay” payments using near‑field communication between a payment device and a payment terminal); nexo (specifications to connect merchants’ systems with the back-end systems of payment service providers and acquirers; and Berlin Group (to allow payments to be made using an alias (such as a mobile phone number) and support balance checks and reconciliation across mobile devices and payment acceptance in areas like digital euro transactions initiated in merchant apps on smartphones). The deal aims to reduce integration costs, support cross‑border scaling of European schemes, and lessen dependence on proprietary card and wallet standards owned by global firms. This move embeds the project in existing retail payment infrastructure, but leaves open how additional standards and governance will evolve over time. [ECB]
Western Union to Launch Stablecoin Next Month (The Block)
Western Union will launch a Solana-based, U.S. dollar–backed stablecoin called USDPT next month, initially using it as an internal settlement rail with key agents in select countries as an alternative to SWIFT, enabling on-chain cross-border settlement even during traditional banking holidays. The firm is also rolling out a Digital Asset Network (DAN) that connects consumer crypto wallets to Western Union’s retail and agent network so users can cash out digital assets into local currency through familiar outlets, with the first partner going live this week. Later this year, Western Union plans a USD “Stable Card” in dozens of markets, allowing consumers—especially in inflation-prone countries—to hold dollar-denominated value in stablecoins and spend globally. [The Block]
FIDO Alliance to Develop Standards for Trusted AI Agent Interactions (FIDO)
The FIDO Alliance announced a new Agentic Authentication Technical Working Group and payments workstream to standardize how AI agents authenticate, delegate, and execute commerce on users’ behalf. The initiative, building on contributions like Google’s Agent Payments Protocol and Mastercard’s Verifiable Intent, aims to create phishing‑resistant mechanisms for verifiable user instructions, agent authentication, and bounded, user‑controlled delegation for transactions. This matters for policy and market structure because it could harden agentic commerce against fraud, reduce reliance on proprietary stacks, and provide interoperable guardrails around intent, authorization, and liability allocation, while leaving governance and enforcement models still under‑specified. [FIDO]
Reforming MiCA for Euro Stablecoins (Blockchain for Europe)
Blockchain for Europe published a report in which Ulrich Bindseil and Erwin Voloder propose reforms to the Markets in Crypto-Assets Regulation (MiCAR) to bolster euro-denominated electronic money tokens (EMTs). Core recommendations include permitting remuneration limited to reserve income pass-through, eliminating the 30-60% minimum bank deposit requirement to enable diversified high-quality liquid assets (HQLA) akin to liquidity coverage ratio standards, enhancing proportionate reserve transparency via standardized reporting, mandating stress testing and concentration limits, granting calibrated central bank deposit access for safeguarding, and clarifying cross-border multi-issuance frameworks. These adjustments aim to mitigate MiCAR’s regulatory overreach—placing Europe on the downward-sloping Laffer curve for stablecoin competitiveness—while preserving prudential safeguards, reducing bank interdependencies, and elevating the euro’s global on-chain role amid U.S. dollar dominance. [Blockchain for Europe]
A Tale of Transactions: An Analysis of Retail Payments in the Euro Area (JPSS)
The Journal of Payments Strategy & Systems (JPSS) published an article in which Diederik Bruggink uses euro area retail payment data to inform debate on potential holding limits for a digital euro. Drawing on the European Central Bank’s Study on the Payment Attitudes of Consumers in the Euro Area 2024 and ECB statistical data, he derives average transaction values and cash holdings by country, and analyzes card and e‑money transactions by instrument and merchant category. The paper shows cash still anchors small-value payments and backup liquidity, debit cards dominate everyday non‑cash transactions with falling average ticket sizes, and e‑money is highly concentrated in a few markets. This matters because realistic digital euro limits must reflect actual transaction sizes, cross‑country heterogeneity, and the contingency role of cash, or risk distorting payment choice, inclusion, and bank funding. Open questions include how to integrate instant payments and how behavioral substitution will evolve once a digital euro exists. [JPSS]
FYI 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.
