Kiffmeister’s #Fintech Daily Digest (20251110)

November 10, 2025November 10, 2025 ~ kiffmeister

Proposed Regulatory Regime for Sterling-Denominated Systemic Stablecoins (BOE)

The Bank of England (BOE) published a consultation paper that outlines its proposed regulatory regime for sterling-denominated systemic stablecoins, digital assets that could pose risks to UK financial stability if widely used for payments. The regime would require systemic stablecoin issuers to hold at least 40% of their backing assets as non-interest-bearing BOE deposits and up to 60% in short-term UK government debt. Issuers must meet robust capital and reserve requirements, with reserves held in trust for holders to protect against market and insolvency risks. Individuals would be subject to £20,000 per-coin holding limits, and businesses to £10 million limits, although retail businesses and intermediaries servicing retail customers (such as crypto-asset trading platforms) could be exempted. Systemic stablecoins would be supervised jointly by the BOE and the Financial Conduct Authority (FCA), but only after HM Treasury (HMT) formally recognizes a stablecoin or its issuer as systemically important. Non-systemic stablecoins (not widely used) will face solo FCA regulation. This consultation closes on February 10, 2026. After considering stakeholder feedback, the BOE will develop and consult on the detailed Codes of Practice in 2026, with finalized rules expected thereafter. [Source: BOE]

Blockchain Price Oracles: Accuracy and Violation Recovery (JoCF)

The Journal of Corporate Finance (JoCF) published a paper that analyzes the accuracy and risk management of blockchain-based price oracles, focusing on Chainlink Price Feeds (CPFs) as the dominant oracle infrastructure for decentralized finance (DeFi), particularly collateralized lending protocols. The authors compile a dataset of over 150 million CPF price observations on Ethereum and match them to centralized exchange benchmarks, estimating how price deviations are shaped by oracle design, reporter behavior, and market conditions. Employing econometric models, they find that CPF price deviations average 57 basis points, and that tighter update parameters and faster heartbeats improve accuracy, while volatility and trading volume increase deviations. A Markov framework reveals most accuracy violations resolve within minutes, with severity and duration affecting the odds of recovery. The study also analyzes user behavior in leading DeFi lending markets, showing that improved oracle accuracy allows users to optimize collateral buffers more effectively, enhancing capital efficiency but with varied effects by user sophistication and asset type. [Source: JoCF]

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!]

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 (20251107)

November 7, 2025November 7, 2025 ~ kiffmeister

Regulatory Responses to the Financial Stability Implications of Stablecoins (Ulrich Bindseil)

Ulrich Bindseil posted a paper that examines the regulatory and financial stability implications of stablecoins, framing them as electronic money issued by narrow balance sheet entities onto programmable platforms. He highlights that European, U.S and U.K. regulatory approaches aim to prevent stablecoins from destabilizing the financial system, but the rules on what assets must back stablecoins diverge widely, with the U.S. favoring short-dated Treasury bills, the EU requiring bank deposits, and the U.K. preferring central bank deposits. However, all insist that stablecoins must not pay interest, a legacy from the era of paper money that does not make sense for electronic assets. The rationale appears to be protection of banks from excessive competition, based on supposed positive externalities from deposit creation and lending, yet the author argues that non-remuneration is a blunt instrument, not a well-designed response to any market failure. Opportunity costs for stablecoin holders rise with interest rates, triggering shifts to other assets, while issuers still earn intermediation margins. The author proposes that better-targeted regulation can address risks and market failures without unnecessarily distorting incentives or relying on mechanical non-remuneration, thus calling for more nuanced policy approaches. For example, Ulrich suggests targeted regulatory charges levied on stablecoin issuers, designed to offset any negative externalities or to compensate for positive externalities lost when funds flow out of banks toward stablecoins. [Source SSRN]

Draft Digital Euro Legislation Prioritizes Offline Payments (European Parliament)

It is notable that the European Parliament’s draft digital euro legislation prioritizes the rollout of the offline version. It mandates that the European Central Bank (ECB) complete all technical and organizational preparations for the offline digital euro before the online version is considered. Introduction of the online digital euro will depend on a market assessment by the European Commission, which will proceed only if there is no suitable pan-European private retail payment solution that covers person-to-person, point-of-sale, and e-commerce. Both forms, upon ECB authorization, enter a minimum 24-month adaptation phase to allow payment service providers and stakeholders to adjust securely and gradually. This framework aims to avoid crowding out private sector solutions, synchronize technical standards, and ensure interoperability, with clear fee guidelines and user choice, making public sector intervention conditional and proportional to actual market needs. [Source: European Parliament]

The draft legislation also requires that offline transactions resemble the anonymity of physical cash. Payments are conducted directly between devices, without reliance on central infrastructure, so payment service providers do not process or record any personal data linked to individual transactions. Only minimal information needed for funding or defunding the device—such as device identifiers—is handled, and no monitoring or tracking of payment activity occurs during offline use. Robust safeguards will be required to prevent the identification of users through device registration, mandating that only the data strictly necessary for regulatory compliance is processed and never used for profiling or tracing specific transactions. As a result, offline digital euro payments would be highly privacy-preserving, ensuring that personal information and payment details remain outside the access of both authorities and service providers.

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251105)

November 5, 2025November 5, 2025 ~ kiffmeister

Canada Moves to Regulate Stablecoins in New Budget (Decrypt)

The Canadian government will introduce legislation to regulate the issuance of fiat-backed stablecoins in Canada. Under this framework, issuers will be required to maintain and manage adequate asset reserves, establish clear redemption policies, and implement robust risk management systems to protect consumers. The legislation ensures privacy safeguards for Canadians’ sensitive information and includes national security provisions to strengthen trust in the system, making stablecoins safe and secure for individuals and businesses. The Bank of Canada will administer these regulations, retaining $10 million over two years and subsequently $5 million annually, with costs offset by regulated stablecoin issuers. Additionally, the Retail Payment Activities Act will be amended to allow for the regulation of payment service providers conducting payment functions with stablecoins, reinforcing oversight and consumer protection in digital payments. [Source: Government of Canada]

Amazon Sues to Stop Perplexity From Using AI Tool to Buy Stuff (Bloomberg)

Amazon has filed a lawsuit against Perplexity AI, demanding that the startup stop allowing its AI browser agent, Comet, to make purchases for users on Amazon’s platform. Amazon alleges that Perplexity violated its terms of service and committed computer fraud by failing to disclose when the AI agent was shopping on behalf of a real person. The dispute, which follows a cease-and-desist letter, highlights the growing tension over the use of agentic AI tools to automate complex online tasks such as shopping, and raises important questions about transparency, competition, and user choice in the evolving landscape of AI-powered web interactions. Perplexity responded by accusing Amazon of using bullying tactics to limit consumer choice and defend its own advertising business, arguing that third-party agents should be allowed to operate on equal footing with human users. [Source: Bloomberg]

Anonymous Quantum Tokens with Classical Verification (arXiv)

Some Google researchers posted a paper on arXiv on the concept of single-use quantum tokens designed for secure, unforgeable, anonymous transactions with classical verification. Leveraging the quantum no-cloning theorem, which states that it is physically impossible to make an exact copy of an unknown quantum state, the authors develop tokens that are identically minted and provide strong privacy guarantees, including the ability of users to verify whether the issuing bank is tracking them through an audit process. The scheme theoretically supports classical verification, which means that all steps to prove the quantum token’s validity require only regular (non-quantum) memory and communication. However, given current technology limitations, only the issuer can check the validity of a token, in contrast to public key schemes, where any user can efficiently verify the tokens. [Source: arXiv]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251104)

November 4, 2025November 4, 2025 ~ kiffmeister

I’ve updated my tabulation of the 110 central banks that have recently conducted launched, piloted, experimented with and/or researched retail central bank digital currency (#CBDC). This total is unchanged since the end-August update. It doesn’t include the two that started issuing retail CBDC and then shut the platforms down (Ecuador and Finland). Keep in mind that I don’t count all of the individual national central banks that are part of currency unions (e.g., the European or Eastern Caribbean Currency Unions)

RCBDC 202510 Tabulation Download

UBS, Chainlink Execute First Onchain Tokenized Fund Redemption (CoinDesk)

UBS completed the first on-chain redemption of a tokenized fund using Chainlink’s Digital Transfer Agent (DTA). The transaction involved the UBS USD Money Market Investment Fund Token (uMINT) on Ethereum, with DigiFT serving as the on-chain distributor. Through automation and integration of digital and traditional systems, UBS aims to streamline major processes such as order-taking, execution, and settlement, reducing operational complexity and accelerating processing times. This initiative, part of UBS Tokenize, demonstrates how smart contract technology and technical standards can enhance fund operations and expand possibilities for financial product composability, while also illustrating efforts to connect legacy banking systems to blockchain rails using technologies like Chainlink and Swift. [Source: UBS]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251103)

November 3, 2025November 4, 2025 ~ kiffmeister

Understanding Disputes Over Digitalization: A Perspective of Cross-Border CBDCs (Heng Wang)

In a forthcoming paper in the Emory International Law Review Heng Wang analyzes the complexity of disputes arising from digitalization, with a particular focus on cross-border central bank digital currencies (CBDCs). The paper highlights that CBDCs—as novel digital forms of national currency issued by central banks—bring transformative changes, especially through cross-border initiatives like Project mBridge and other multilateral efforts. The paper argues that the rapid digitalization of currency systems increases the likelihood of disputes due to diverging stakeholder interests, regulatory inconsistencies, technological challenges, and evolving governance structures. Wang proposes a framework examining social (stakeholder interests and interactions), material (subject matter and party perceptions), and temporal (evolution and timing of disputes) dimensions to better understand these disputes. By dissecting disputes along these lines, the paper aims to bridge the gaps between digital transformation and dispute settlement, helping public and private actors navigate the complex regulatory, technological, and operational landscape emerging from global CBDC adoption. [Source: ResearchGate]

Everyone Is Wrong About Tokenized Bank Deposits (Omid Malekan)

Crypto consultant Omid Malekan argues that widespread optimism about tokenized bank deposits is misplaced and reflects a misunderstanding of blockchain’s disruptive potential. He contends that tokenized deposits are inferior to stablecoins in terms of economics, safety, and compliance—requiring banks to pay competitive interest, being riskier due to fractional reserves, and suffering from restrictive permissioning that reduces utility. On the supply side, challenges like deposit insurance and price discovery on-chain could exacerbate instability and bank runs, and regulatory compliance will force banks into permissioned systems that undermine the very benefits of tokenization. Malekan concludes that unless banks radically rethink their structure, tokenizing legacy bank deposits simply reproduces outdated models, missing the transformative promise of blockchain technology. [Source: Substack]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251101)

November 1, 2025November 1, 2025 ~ kiffmeister

Custodia Suffers Another Court Rejection in Fed Master Account Pursuit (CoinDesk)

Wyoming-based crypto-focused Custodia Bank suffered another legal setback in its multi-year campaign to secure a Federal Reserve master account, which would provide direct access to the U.S. central bank’s payment system. The 10th Circuit Court of Appeals affirmed a lower court’s decision, ruling that the Fed possesses the discretion to deny master account access to eligible entities, contrary to Custodia’s argument that the law requires approval for all qualifying institutions. Custodia’s claims that the Federal Reserve Bank of Kansas City coordinated improperly with the Board of Governors and the Biden administration were also rejected. While the ruling leaves open the possibility of Custodia petitioning for a rehearing, no clear path forward exists, though Fed Governor Chris Waller recently mentioned potential for a limited-access “skinny master account” for crypto firms to address systemic risk concerns. [Source: CoinDesk]

The Past and Future of Money: New Technologies and Economic Risks (G30)

In early October, the Group of Thirty (G30) published a report that explores how rapid technological innovation is transforming money and payment systems while exposing new risks to monetary stability. It emphasizes the enduring importance of trust, singleness, and stability in the monetary system, particularly through the two-tier structure where central bank and commercial bank money remain interchangeable at par—an achievement of modern regulation and oversight. Drawing on historical lessons from commodity money and banking eras, the report argues that while new technologies like cryptocurrencies and stablecoins promise efficiency and programmability, they also risk undermining monetary singleness, facilitating illicit finance, and evading regulation if not carefully managed. The working group recommends policymakers accelerate work on central bank digital currencies (CBDCs), encourage bank sector innovations such as tokenized deposits within a robust regulatory perimeter, and urgently develop strong regulatory frameworks for stablecoins to promote payment competition without destabilizing the system. [Source: G30]

I’ve been reporting a lot of updates on digital euro legislative process, but here are a few I missed:

On October 28, 2025, Fernando Navarrete, the rapporteur responsible for shepherding the digital euro legislation through the European Parliament, published his draft report for the Single Currency Package, which includes the Establishment of the Digital Euro Regulation. The package included legislative proposals for the establishment of the digital euro, legal tender status, and the provisions for payment service providers (PSPs) in non-euro member states. [Source: European Parliament]

At its October 23, 2025 Summit, the European Council called for the swift completion of digital euro legislative work and the acceleration of other preparatory steps. The statement noted that “the digital euro offers a strategic opportunity for supporting a competitive and resilient European payment system, contributing to Europe’s strategic autonomy and economic security, and strengthening the international role of the euro”. The European Council is the top political body of the European Union (EU), composed of the heads of state or government of all EU member countries, the European Council President, and the European Commission President. [Source: European Council]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251030)

October 30, 2025October 30, 2025 ~ kiffmeister

Eurosystem Moving to Next Phase of Digital Euro Project (ECB)

The European Central Bank (ECB) announced the transition to the next phase of the digital euro project after successfully completing the preparation phase begun in November 2023. This advance responds to European leaders’ calls to accelerate digital euro progress, aiming to ensure technical readiness for possible issuance. If the necessary legislation is adopted in 2026, pilot activities could begin in 2027, with the Eurosystem ready for a potential first issuance in 2029. Projected overall development costs are estimated at €1.3 billion until the first issuance, with annual operating costs of about €320 million thereafter. [Source: ECB]

Bank Indonesia Governor Reveals Government Bond Tokenization Plans (CNBC)

Bank Indonesia (BI) Governor Perry Warjiyo reportedly announced plans to issue a national stablecoin backed by government bonds (Surat Berharga Negara or SBN). The digital central bank securities will be tokenized versions of government bonds built on a prospective wholesale digital rupiah central bank digital currency (CBDC) platform. He goes on to say that the tokenized bonds would represent “Indonesia’s national version of a stablecoin” but he might mean that in the broader sense of “stablecoin” rather than as a generally-accepted medium of exchange. My interpretation would be consistent with where the BI’s Project Garuda wholesale CBDC proof of concept (POC) left off, concluding that the BI will proceed with broader explorations of a securities ledger. [Source: CNBC]

The Rise of Stablecoins and Implications for Treasury Markets (Brookings)

The Brookings Institution published a working paper that examines how the rapid adoption of U.S. dollar-pegged stablecoins has begun to transform international finance and demand for U.S. Treasury securities. Stablecoins are favored in cross-border payments and remittance corridors, particularly in economies facing high inflation or weak local currencies, due to their lower costs, quicker settlements, and easy access. The authors show that stablecoin issuers now hold Treasury exposure approaching major foreign holders, and their continued growth could drive stablecoin-backed demand for Treasuries to trillions of dollars by 2030. While this diversification may benefit U.S. fiscal stability, it also introduces risks, such as regulatory arbitrage, concentration among few issuers, systemic vulnerabilities, and potential currency substitution in emerging markets. The authors emphasize the need for clear global oversight, regulatory coordination, and stress-testing frameworks for issuers, as well as monitoring the broader impacts on monetary sovereignty and financial stability. [Source: Brookings]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251029)

October 29, 2025 ~ kiffmeister

HKMA Completes Second Phase of e-HKD Pilot Programme (HKMA)

The Hong Kong Monetary Authority (HKMA) has completed the second and last phase of its e-HKD central bank digital currency (CBDC) pilot program. It evaluated the commercial viability and scalability of an e-HKD in various retail scenarios and compared it with tokenized deposits, structured around three themes: (i) settlement of tokenised assets, (ii) programmability, and (iii) offline payments. The results showed that an e-HKD can deliver benefits such as cost-efficient, programmable, and resilient transactions. One of the key takeaways was that, for retail end users, including merchants, consumers and individual investors, the difference between an e-HKD and tokenized deposits is not immediately clear, particularly in the context of routine payment transactions. Hence, the HKMA concluded that the immediate priority for the e-HKD lies in wholesale payments, and going forward it will prioritize the development of the tokenization ecosystem and cross-border payments. [Source: HKMA]

eCurrency to Pilot Central Bank Digital Currency Solution in Madagascar (eCurrency)

eCurrency Mint is set to begin an eAriary CBDC pilot in Madagascar. The project aims to introduce a digital version of the Ariary currency, leveraging eCurrency’s DSC3 technology to enable secure and efficient transactions. The solution is designed to integrate seamlessly into Madagascar’s existing financial ecosystem, and will be piloted in partnership with PayLogic SA to align with the “specific requirements of the Banky Foiben’i Madagasikara”. However, it is unclear to what extent the central bank itself is involved. [Source: PR Newswire]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251028)

October 28, 2025October 28, 2025 ~ kiffmeister

Citi and Coinbase Join Forces to Boost Digital Asset Payment Capabilities for Global Clients (Citi)

Citi and Coinbase will collaborate to enhance digital asset payment capabilities for Citi’s institutional global clients, starting with a focus on streamlining fiat pay-ins and pay-outs, and optimizing payment orchestration as a bridge between traditional finance and digital asset ecosystems. The initiative aims to simplify and expand access to 24/7 digital asset payments, with plans to explore new fiat-to-stablecoin payout methods. [Source: Citi]

OpenAI and PayPal Team Up to Power Instant Checkout and Agentic Commerce in ChatGPT (PayPal)

OpenAI and PayPal will collaborate to implement the Agentic Commerce Protocol (ACP) to enable direct payments and commerce within ChatGPT. This will allow ChatGPT users to make instant purchases from PayPal’s global network of merchants, using PayPal’s wallet, payment options, and protections. Merchants who use PayPal will be able to make their product catalogs available on ChatGPT through PayPal’s ACP server, eliminating the need for individual integrations. The arrangement also extends PayPal’s use of OpenAI’s technology across its business operations, including employee access to ChatGPT Enterprise and integration with development tools. The rollout of these integrated commerce and payment features is scheduled to begin in 2026. [Source: PayPal]

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 (20251027)

October 27, 2025October 27, 2025 ~ kiffmeister

Kyrgyzstan launches national stablecoin in partnership with Binance (Reuters)

Kyrgyzstan has reportedly launched its first national stablecoin, KGST, pegged 1:1 to its national currency, the som, and built on Binance’s BNB Chain. The launch was attended by Binance co-founder Changpeng “CZ” Zhao, who also serves as a strategic advisor to Kyrgyzstan’s crypto committee. Alongside the stablecoin, Kyrgyzstan is piloting a central bank digital currency (CBDC) called the digital som. [Source: X]

Can CBDCs Improve the Delivery of Social Safety Nets? (IMF)

The IMF published a paper that evaluates whether retail central bank digital currencies (CBDCs) can improve the effectiveness and efficiency of delivering social safety nets (SSNs) to vulnerable populations. The authors find that while CBDCs used merely as payment delivery mechanisms offer limited advantages over existing fast payment systems, their real potential lies in serving as payment administration platforms. Features such as programmability, peer-to-peer transfers, decentralized ledger access, and direct transaction monitoring could enable SSN agencies to automate transfers, operate independently from private financial institutions, and better track payments, leading to more streamlined and transparent benefit delivery. However, these benefits come with significant challenges: privacy protection, compliance and customer due diligence requirements, technological and infrastructure risks, and the need for thoughtful integration with established systems. The paper concludes that unlocking CBDCs’ full potential for social safety nets requires close collaboration between digital currency developers and SSN administrators, with careful consideration of comparative advantages and risks. [Source: IMF]

Early Warning Expands Zelle Network with Stablecoin Initiative (EWS)

Early Warning Services (EWS), the network operator of the U.S. Zelle fast payment system, announced a new stablecoin-based initiative to enable Zelle to deliver faster and more reliable cross-border money movement. The Zelle service enables individuals to electronically transfer money from their bank account to another registered user’s bank account using a mobile device or the website of a participating banking institution. Transfers between bank accounts of registered users are typically completed within minutes and without fees. [Source: EWS]

Western Union to Pilot Stablecoin-Powered Transfers (Coin Telegraph)

Western Union is piloting a stablecoin-based settlement system to modernize its remittance operations, aiming to reduce reliance on traditional banking systems and improve efficiency for its 150 million customers. CEO Devin McGranahan highlighted the potential of blockchain technology to shorten settlement times and enhance capital efficiency, especially for users in high-inflation countries. [Source: Coin Telegraph]

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]