Kiffmeister’s #Fintech Daily Digest (20251210)

December 10, 2025December 10, 2025 ~ kiffmeister

Norges Bank does not Recommend CBDC Introduction (Norges Bank)

Norges Bank has decided not to recommend introducing a central bank digital currency (CBDC) at this time, as Norway’s current payment system is already efficient, secure, and stable. The bank examined both retail and wholesale CBDC, but found no immediate need for either variant. However, Norges Bank acknowledges that circumstances may change due to rapid technological advances, tokenization trends, and the potential introduction of a digital euro by the Eurosystem. The bank will continue researching CBDCs and tokenization through experimental testing and international collaboration to ensure it can implement a CBDC if necessary in the future, with a detailed report planned for Q1 2026. [Source: Norges Bank]

Project Rialto: Improving Instant Cross-Border Payments using Central Bank Money Settlement (BIS)

The BIS Innovation Hub wrapped up Project Rialto, a collaboration with central banks from France, Italy, Malaysia, and Singapore to improve instant cross-border payments. The project successfully demonstrated the technical feasibility of connecting traditional instant payment systems with an automated foreign exchange (FX) market using tokenized central bank money (CeBM) as a settlement asset. The architecture combined two functional blocks: domestic instant payment systems linked through a hub mechanism, and a cross-border distributed ledger network (XDN) for automated FX conversion via automated market makers (AMMs). The proof of concept tested both direct currency transactions and those requiring a vehicle currency for low-liquidity corridors, achieving payment-versus-payment settlement with minimal changes to existing systems. While technically successful, the report identifies key economic considerations for operational viability, including fee structures, performance under different market conditions, transparency impacts, and liquidity requirements, noting that AMMs require pre-funding which introduces costs and that further research is needed on the interaction between traditional intermediaries and decentralized exchanges in currency markets. [Source: BIS]

The Future of the Federal Reserve Banks’ Check Services (FRB)

The Federal Reserve Board (FRB) is seeking public comment on the future of its check processing services as check usage has declined dramatically, while its aging infrastructure requires substantial investment to maintain current operations. The FRB is considering four potential strategies: continuing without investment (leading to service degradation over time), significantly simplifying services, substantially winding down operations, or upgrading infrastructure with major costs that would need to be recovered through higher fees. The FRB, which currently processes nearly half of the nation’s check volume, must balance the declining demand against legal requirements to recover all operating costs through service fees, while considering the broader impacts on the payments system and communities that still depend on checks. [Source: FRB]

Upcoming Speaking Engagements:

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! [Register here and get 20% off the regular ticket price by using the Kiffmeister20 code!]

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 (20251127)

November 27, 2025November 27, 2025 ~ kiffmeister

S&P Downgrades Tether’s USDT Stability to “Weak” (S&P)

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]

Competing Digital Monies (BIS)

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]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251121)

November 21, 2025 ~ kiffmeister

First UAE-China Direct Cross-Border CBDC Payment Made (CBUAE)

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]

ECB Advances Integration of TIPS with UPI and Nexus (ECB)

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]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251115)

November 15, 2025November 15, 2025 ~ kiffmeister

Public Demand and Financial Implications for Retail CBDC: A Randomized Survey Experiment (BOK)

The Bank of Korea (BOK) published a working paper that examines public demand for retail central bank digital currency (CBDC) through a randomized survey experiment conducted in October 2023 with 2,879 South Korean respondents. The researchers tested five different CBDC designs varying by online/offline functionality, privacy protection features (through physical cards), and interest payment options. The key findings indicate that while CBDC design features (privacy protections and offline capabilities) do not significantly influence demand for CBDC as a payment method, offering positive interest rates does enhance its appeal as a store of value. The study finds that CBDC would primarily substitute debit card usage rather than credit cards or mobile payment apps, with overall projected usage around 28% of transactions. Trust in the central bank and willingness to adopt new technology emerge as more important determinants of CBDC demand than specific technical features. The authors recommend setting holding limits around 4-5 million KRW (EUR 3,000) to balance financial innovation against risks to bank disintermediation, as this would affect fewer than 15% of users while potentially reducing demand deposits by approximately 15-17% without such limits. [Source: BOK]

Payment Resilience in Fragile and Conflict-Affected States: Lessons for CBDC (IMF)

The IMF published a Fintech Note that analyzes how payment systems in fragile and conflict-affected states (FCS) face severe disruptions, from cyberattacks and infrastructure breakdowns to institutional challenges, and offers practical strategies to strengthen payment system resilience. Key lessons for policymakers include building redundancy through multisite operational architectures, leveraging distributed/cloud infrastructure and satellite networks, promoting user-centric design and digital literacy, and ensuring robust contingency planning and regulatory agility. The note finds that both cash and digital payments remain essential for continuity, with innovations in digital money, such as stablecoins and CBDC, playing emerging roles. For CBDCs, resilience depends on careful design, redundancy, offline capabilities, interoperability, and trust-building, but adoption faces operational, regulatory, and trust-related challenges unique to FCS settings. [Source: IMF]

The Impact of Central Bank Digital Currency on Payments Competition (IMF)

The IMF published a Fintech Note that examines whether central bank digital currencies (CBDCs) could enhance competition in retail payment markets. The authors analyze CBDC’s potential competitive impact through four channels: pricing discipline, service quality improvements, market contestability, and financial access expansion. The analysis identifies three market scenarios with varying competitive implications. In unregulated markets dominated by private platforms, CBDC could exert substantial competitive pressure by reducing fees and lowering entry barriers, particularly if interoperability with existing systems is ensured. In markets already subject to regulatory interventions such as interchange fee caps, CBDC would likely have more moderate effects, addressing residual gaps rather than fundamentally altering market dynamics. In jurisdictions with well-functioning public fast payment systems, CBDC would offer primarily incremental benefits, mainly extending access to underserved populations. The Note emphasizes that CBDC’s actual competitive impact depends critically on design choices—including fee structures, intermediary participation rules, holding limits, and interoperability requirements—and warns that overly aggressive pricing could crowd out private providers, potentially reducing payment system resilience and diversity. [Source: IMF]

Selected Legal Considerations for Central Bank Digital Currencies (IMF)

The IMF published a Fintech Note that provides comprehensive guidance for policymakers evaluating legal frameworks for central bank digital currency (CBDC) issuance, focusing primarily on retail CBDC (rCBDC) with separate analysis of wholesale CBDC (wCBDC). The authors examine how rCBDC should be legally classified as currency under public law—establishing it as a direct central bank liability with attributes including monopoly of issuance, cours forcé, legal tender status, and criminal law protections. The Note addresses central banks’ legal authority to issue rCBDC and operate payment platforms, the regulatory frameworks needed for intermediaries in two-tier distribution models, and the legal relationships between central banks, intermediaries, and users. Specific design features are analyzed, including limits on holdings and transactions, interest-bearing capabilities, programmability, and offline functionality. For wCBDC, the Note examines legal challenges related to tokenization, settlement finality, and central bank mandates to operate platforms for financial institutions. Throughout, the analysis draws on enacted laws and regulatory drafts from various jurisdictions, emphasizing that while the Note identifies legal considerations and potential approaches, it does not constitute a recommendation for jurisdictions to issue CBDCs. [Source: IMF]

Stablecoin Performance in Cross-Border Payments: Evidence from a Digital Dollar Wallet (Stanford FDCI)

The Stanford University Future of Digital Currency Initiative (FDCI) published a paper that examines the performance of dollar-based stablecoins in cross-border payments using a dataset of over 41 million transactions from Airtm, a digital dollar wallet platform, spanning May 2019 to May 2024. The analysis benchmarks transaction speed and cost against G20 Roadmap targets for enhancing cross-border payments. The findings indicate that stablecoins demonstrate substantial advantages in speed, with more than 96% of transactions settling within one hour, significantly exceeding the G20’s 75% target. Cost performance is more variable: approximately 51% of transactions meet the 3% fee target for remittances and 36.7% meet the 1% target for retail payments, though fees remain elevated for certain transaction types, particularly peer-to-peer marketplace on- and off-ramps. The study also highlights that stablecoins enable previously uneconomical use cases, with nearly half of enterprise disbursements being micropayments under $2. [Source: Stanford FDCI]

Upcoming Speaking Engagements:

The Cedi@60 Anniversary Currency Conference (Accra, Ghana, November 17-20) hosted by the Bank of Ghana, in partnership with Currency Research, will celebrate 60 years of the Ghanaian Cedi, bringing together leaders from across Africa and beyond to reflect on the currency’s legacy and chart its digital future. Learn about Ghana’s eCedi pilot and the future of sovereign digital currencies in Africa, and engage with innovators driving mobile money, QR code payments, and financial inclusion across the region. [Register here and get 15% off by using the Kiffmeister15 code!]

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]

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]

Kiffmeister’s #Fintech Daily Digest (20250924)

September 24, 2025September 24, 2025 ~ kiffmeister

Digital Euro May Be Rolled Out in Mid-2029, ECB’s Cipollone Says (Bloomberg)

The digital euro could be launched by mid-2029, according to ECB Executive Board member Piero Cipollone, speaking at a Bloomberg Future of Finance event. A recent agreement among euro-area finance chiefs on customer holding limits has accelerated the project’s momentum, but the initiative’s progress now depends on the European Parliament passing required legislation. Cipollone suggests that the Parliament’s formal position may be ready by early May 2026, with broader agreement among EU member states likely by year-end. [Source: Bloomberg]

CFTC Launches Tokenized Collateral and Stablecoins Initiative (CFTC)

The U.S. Commodities Futures Trading Commission (CFTC) has launched an initiative to allow tokenized collateral—including stablecoins—to be used in U.S. derivatives markets, citing the need for modernization and greater market efficiency. Industry leaders from Circle, Coinbase, Ripple, Tether, and Crypto.com publicly support the move, emphasizing how regulated stablecoins could enhance liquidity, reduce risks, and strengthen U.S. global leadership in financial innovation. The CFTC is inviting stakeholders and the public to submit feedback by October 20, 2025, as it prepares to implement new pilot programs and regulatory updates in line with recommendations from the President’s Working Group and its own Global Markets Advisory Committee. [Source: CFTC]

Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico (NBER)

The U.S. National Bureau of Economics and Research (NBER) published a paper that explores why digital person-to-person (P2P) payment platforms like Brazil’s Pix and Costa Rica’s Sinpe Móvil achieve broad, cash-like usage while Mexico’s CoDi lags. It finds that mass adoption depends on rapid spread from affluent early adopters to lower-income groups, which is enabled by low barriers to entry, strong network effects, policy support, universal connectivity, and public trust. For example, CoDi’s adoption plateaued at only 2–3% of adults, due to pre-existing low bank account ownership (~40%), lower mobile and internet penetration, and restrictive access. For example, opening a bank account in Mexico is more cumbersome than in Brazil because it typically involves heavier and stricter documentation requirements, in-person branch visits, and processes that are not fully digitized or simplified for unbanked or low-income populations. [Source: David Argente]

Stablecoins and the Future of Money: Economic Principles and Policy Implications (IMK)

The Institut für Makroökonomie und Konjunkturforschung (IMK) published a paper by Peter Bofinger that argues for the integration of national payment systems across European Union (EU) member states as a means of strengthening European payment sovereignty and resilience, particularly in the face of risks posed by foreign-currency stablecoins—most notably those denominated in USD. The rationale is that by unifying fragmented domestic payment infrastructures, the EU can achieve faster, cheaper, and more seamless cross-border transactions for both consumers and businesses, reducing dependence on non-EU payment schemes and lessening the appeal of private stablecoins for euro area payments. This integration would build on the existing Single Euro Payments Area (SEPA) and extend its ease and efficiency, allowing instant, interoperable euro payments at scale. [Source: IMK]

Upcoming Speaking Engagements:

Stablecoin NYC 2025 (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]

Kiffmeister’s #Fintech Daily Digest (20250919)

September 19, 2025September 19, 2025 ~ kiffmeister

The Digital Euro has Enraged Half of Brussels (Politico)

Politico published an article about how the European Central Bank (ECB) push for a digital euro is provoking controversy across Brussels, especially among banks and right-leaning politicians. The legislative process, led by skeptical European Union (EU) lawmaker Fernando Navarrete, is mired in political debate: privacy advocates demand strong safeguards, some governments insist on offline use. Another ongoing debate is whether banks should be paid for distributing digital euros and ensuring their payment rails accept and profit from digital euro transactions. Also the lEuropean Parliament will have to work with the Council of the European Union, which represents member countries whose ministers are being lobbied by their respective banking industries. The final legislative framework likely won’t be ready before May 2026, so practical rollout is unlikely before 2028. [Source: Politico]

Wholesale Central Bank Money in the Context of Technological Innovation (BIS)

The Bank for International Settlements (BIS) published a report, produced by a group of major central banks, that examines the implications of technological innovation—especially distributed ledger technology (DLT) and tokenization—for wholesale central bank money (CBM) and settlement systems. The report finds that while wholesale CBM has existed for decades in the form of reserves, “wholesale CBM tokens” represent a new technical form enabling programmability and composability, but their fundamental economic function remains unchanged. The report lays out options and trade-offs for central banks, including whether to support private settlement solutions, enhance existing systems, or build new infrastructures—potentially with integration of multiple assets/tokens. While technological advances like DLT could improve efficiency, interoperability, and resilience, the report stresses that choices will differ by jurisdiction and caution is needed to avoid liquidity fragmentation, loss of central bank oversight, and inefficient duplication. Ultimately, central banks must balance innovation, risk management, and policy objectives when considering whether and how to make central bank money available for the settlement of tokenized wholesale transactions, with international cooperation seen as important for navigating trade-offs and possible next steps. [Source: BIS]

Upcoming Speaking Engagements:

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]

Kiffmeister’s #Fintech Daily Digest (20250620)

June 20, 2025June 20, 2025 ~ kiffmeister

BoE Governor Expresses Doubts About Case for Digital Pound (BoE)

Bank of England (BoE) Governor Andrew Bailey expressed doubts that there is a need for the central bank to introduce retail central bank digital currency (CBDC). Instead, he thinks that “commercial banks need to step up to the challenge of digital money provision… [because] if there are real benefits to digital technology in payments, we should want to see them in commercial bank money”. He also mentioned tokenized deposits as a way to apply digital technology to the form of money that we have today, with the challenge being to apply them to both domestic and cross-border payments. [Read more at the BoE]

The HKMA and the PBoC Launch Payment Connect (HKMA)

On June 20, 2025 the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) announced the launch of Payment Connect. It will link Mainland China’s Internet Banking Payment System (IBPS) and Hong Kong’s Faster Payment System (FPS), to support secure, efficient and convenient real-time cross-border payments for residents and institutions in both countries. Residents will be able make instant small-value cross-boundary remittances by simply inputting the recipient’s mobile number or account number. [Read more at the HKMA]

Retail Central Bank Digital Currency: A Review and Assessment (SUERF)

SUERF published a paper by David Llewellyn, Charles Goodhart and Alistair Milne that critically examines the potential benefits, costs, and risks of introducing a retail central bank digital currency (CBDC). The authors argue that while proponents highlight advantages such as maintaining trust in the monetary system, enhancing competition, and promoting financial inclusion, these benefits may not outweigh the drawbacks or be uniquely addressed by a CBDC. The authors highlight risks like disintermediation of banks, financial instability, cybersecurity threats, and privacy concerns. Plus, retail CBDC could struggle to become a significant payments mechanism with the necessary critical mass unless it can offer additional or better payments mechanisms than are already available with commercial bank money and the wide range of other payment mechanisms. The paper emphasizes the need for a thorough cost-benefit analysis. [Read more at SUERF]

Upcoming Speaking Engagements:

The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]

And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20250527)

May 27, 2025May 27, 2025 ~ kiffmeister

Circle Files IPO on NYSE at $6.7 Billion Valuation (Decrypt)

USDC stablecoin issuer Circle filed paperwork with the U.S. Securities and Exchange Commission (SEC) to offer 24 million shares for $24 to $26 each. The firm is targeting a $6.7 billion fully diluted valuation. Circle is expected to trade on the New York Stock Exchange under the ticker CRCL. USDC was launched by Circle and Coinbase in 2018 via the Centre Consortium. Coinbase, which went public in 2021, took an equity stake in Circle in August 2023 amid the dissolution of the consortium. In April, Bloomberg reported that Ripple made a $4-5 billion offer for Circle, but was rebuffed due to the offer being too low. [Read more at Businesswire]

Competing Digital Monies (TSE)

In a University of Toulouse School of Economics (TSE) working paper, Jon Frost (BIS), Jean-Charles Rochet, Huyn Song Shin (BIS), and Marianne Verdier analyzed the competition between three digital payment instruments: bank deposits, private stablecoins, and central bank digital currencies (CBDCs). Using a theoretical model grounded in two-sided market economics, the authors explore how market structure and social welfare are affected by “walled gardens” (non-interoperable payment ecosystems) versus interoperable systems such as central bank-operated fast payment systems (FPS) or CBDCs. They find that both CBDCs and FPS can increase financial inclusion, raise trade volumes, and enhance welfare—though they may reduce the market share of traditional financial intermediaries and paradoxically lead to higher merchant fees due to decreased price elasticity. The paper concludes that, in many cases, a well-designed FPS may offer similar benefits to a retail CBDC, suggesting that countries with robust FPS infrastructure may not urgently need a CBDC. [Read more at the TSE]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20250425)

April 25, 2025 ~ kiffmeister

CBDCs included in the EAC Draft Cross-Border Payment System Masterplan (EAC)

The East African Community (EAC) Draft Cross-Border Payment System Masterplan was validated by its eight member countries (Burundi, the Democratic Republic of Congo, Kenya, Rwanda, Somalia, South Sudan, Uganda and Tanzania). The Masterplan aims to enhance the speed, security, affordability and integration of payment systems across the region. It tackles key obstacles such as fragmented regulations, high transaction costs, and limited interoperability by outlining twenty targeted initiatives. These include a regional instant retail payment switch, and exploring using central bank digital currencies (CBDCs) for regional transactions. [Read more at the EAC]