Strong Stakeholder Support for Appia Roadmap Paves Way for Further Market Engagement (ECB)
According to the European Central Bank (ECB) the Appia roadmap public consultation has confirmed strong market support for building a European tokenized financial ecosystem with central bank money (CeBM) at its core and developed through public-private cooperation. The 127 respondents emphasized the ECB’s essential role in providing neutral governance and utilizing CeBM to connect private settlement assets. Stakeholders prioritized standardization to prevent market fragmentation and guarantee interoperability between distributed ledger technology and existing infrastructures. Additionally, participants endorsed the initiative’s strategic autonomy objectives and advocated for harmonized regulatory frameworks across the European Union. Consequently, forthcoming collaborative workstreams will analyze tokenized deposits, securities, and shared standards to directly inform the 2028 Appia blueprint. [ECB]
ECB Selects Network Service Providers for the Digital Euro (ECB)
The European Central Bank (ECB) has selected two network service providers (NSPs) following the call for applications initiated in August 2025 and the subsequent invitation to tender. These NSPs—a consortium of Nexi Payments and Deutsche Telekom, alongside a grouping of Telefónica and Indra—will connect national central banks and participating payment service providers to the digital euro service platform. The first contract, effective September 2026, supports the ongoing digital euro pilot, while the second commences in May 2027. Both providers are mandated to be fully operational by 2029 to support a potential issuance, contingent upon a final decision by the ECB Governing Council. These parallel service agreements are designed to retain operational flexibility as project requirements evolve. [ECB]
The Roles of Central Banks and Central Bank Money in the Evolving Payment System (BIS)
The BIS Committee on Payments and Market Infrastructures (CPMI) published a report that examines the implications of technological innovation, changing user demand and the emergence of new types of entities and infrastructures that are transforming payment systems, for central banks and for the role of central bank money. The landscape is shifting toward digital, cross-border transactions, with non-bank participants and tokenization unbundling traditional payment functions. Despite these shifts, foundational elements such as the singleness of money and settlement finality remain essential. Central bank money must continue to serve as the core settlement asset to anchor trust. Consequently, central banks must adapt their complementary roles as issuers, operators, overseers, and catalysts. They face key policy choices regarding access to settlement accounts, modernizing infrastructures, managing systemic risks arising from programmable platforms, and fostering international cooperation to preserve safety and efficiency in evolving financial networks. [BIS]
Bank of England Sets Out Approach to Tokenized Collateral in Central Clearing (BOE)
The Bank of England (BOE) launched a consultation on central counterparty (CCP) acceptance of tokenized forms of eligible collateral. While acknowledging that tokenization may enhance asset mobilization, the draft supervisory statement applies the principle of “same risk, same regulatory outcome” without creating a separate regulatory regime. It expects a CCP to demonstrate that tokenized assets meet existing standards for liquidity, valuation, and legal certainty, particularly during market stress or member default scenarios. The framework examines how novel infrastructure could alter collateral management dynamics, potentially introducing distinct operational and settlement risks that warrant rigorous scrutiny. Furthermore, the consultation seeks industry feedback on the potential future eligibility of broader asset classes, including regulated stablecoins and tokenized money market funds. [BOE]
The Honest Price of Stablecoin FX (Orbital Research)
Orbital Research published a report that challenges the assumption that stablecoins automatically deliver cheaper foreign exchange, revealing how costs vary significantly depending on the liquidity provider, direction of the transaction and timing. Analyzing 27,057 quotes, the data indicates stablecoin conversions are generally less expensive than financial technology firms but comparable to institutional desks. The report notes that the token consistently traded below one United States dollar, creating hidden costs when paying out versus collecting funds. Furthermore, weekend trading reduced liquidity, causing spreads to double among some providers. Finally, limited competition in certain regional markets resulted in substantial price markups. The findings demonstrate that stablecoin networks frequently shift, rather than eliminate, traditional cross-border payment frictions. [Orbital Research]
BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.
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.
