Kiffmeister’s #Fintech Daily Digest (20260710)

July 10, 2026July 10, 2026 ~ kiffmeister ~ Leave a comment

SWIFT’s Blockchain Ledger for Tokenized Deposits Ready for Use (SWIFT)

SWIFT announced that its new blockchain-based shared ledger for tokenized bank deposits is ready for initial live cross-border payment pilots, positioned as an extension of its existing messaging infrastructure rather than a new settlement asset. Seventeen banks across six continents will orchestrate 24/7 movements of bank-issued tokenized deposits on their own ledgers, with final settlement still occurring through current systems, aiming to improve intraday and overnight liquidity efficiency and customer payment availability without altering underlying compliance, credit, and control frameworks. Key unresolved issues include how far this model can scale beyond deposits to broader regulated digital assets and whether interoperability across competing tokenized networks will remain under SWIFT-led governance. [SWIFT]

EU Parliament Agrees on Digital Assets Policy Stance (EU Parliament)

The European Parliament voted to adopt a position paper on how the European Union (EU) should approach crypto regulation after the rollout of its Markets in Crypto-Assets (MiCA) framework. The paper calls on the EU to extend its regulatory perimeter to currently under-specified activities such as decentralized finance, staking, lending, non-fungible tokens, and tokenized assets, while tightening MiCA’s implementation. It calls on the European Commission to assess whether and how these activities should be brought into MiCA or adjacent regimes, and warns that divergent national measures that could fragment the single market. The report also signals a more supportive posture toward euro-denominated stablecoins and tokenization as tools for capital-market competitiveness. Key open questions are the precise treatment of interest-bearing stablecoins and the institutional allocation of oversight for DeFi-type arrangements. [EU Parliament]

Zelle Head to India and Unveils ZelleUSD Stablecoin (EWS)

[On June 11, 2026] Early Warning Services (EWS), the network operator of Zelle, unveiled ZelleUSD (ZLUSD), its proprietary U.S. dollar-backed stablecoin. ZLUSD will support future international payment capabilities, giving U.S. consumers more opportunities to send money to family and friends around the world. EWS is owned by Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo. EWS runs Zelle, a U.S.-based service that enables individuals to near instantly 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. Coincidentally, EWS announced that India will be the first country where U.S. consumers can use Zelle to send money to family and friends overseas. Further details on ZLUSD will be announced in the coming months. [EWS]

Digital Bonds as Collateral in Central Bank Lending (EUI)

A European University Institute (EUI) Florence School of Business and Finance paper by Long and Fisher argues that central banks should treat digital bonds that replicate conventional bond economics as eligible collateral but must adapt collateral frameworks and operations to capture benefits and manage novel risks. The authors map existing collateral policy (eligibility, haircuts, pricing, rehypothecation, pre‑positioning) and the role of central securities depositories (CSDs) and real‑time gross settlement (RTGS) in ensuring delivery‑versus‑payment (DVP) and settlement finality. They then assess how distributed ledger technology (DLT), tokenized and digitally native bonds, and sandbox regimes alter issuance, settlement, and collateral mobility, highlighting operational, legal, liquidity, and procyclicality risks that remain unresolved and require explicit policy adaptation. [EUI]

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.

Kiffmeister’s #Fintech Daily Digest (20260707)

July 7, 2026July 7, 2026 ~ kiffmeister ~ Leave a comment

The Shift in China’s CBDC (Digital Yuan) Policy and Key Implications (JRI)

Japan Research Institute (JRI) published a paper that analyzes China’s decision in late 2025 to shift the digital yuan (e‑CNY) from a non‑interest‑bearing central bank digital currency (CBDC) to an interest‑bearing commercial bank liability integrated into reserve requirements and deposit insurance (i.e., functionally a tokenized deposit). It argues this redesign aims to align bank balance‑sheet incentives, move usage toward corporate and cross‑border payments, and better plug into the mBridge cross‑border infrastructure as part of a strategy to deepen renminbi‑denominated settlement outside the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. Unresolved issues include whether this deposit‑based model can achieve scale amid entrenched super‑app payments, opaque mBridge usage, and continued constraints on non‑official digital currencies in China. [JRI]

Blockchain Consensus Mechanisms and Fragmentation (BIS)

The BIS published a paper by Eidan, Frost, Kansal, Lewrick, Lim and Rybarczyk that argues permissionless blockchains are structurally driven toward fragmented, specialized infrastructures rather than a unified financial market infrastructure, in the context of rising crypto and stablecoin use. The paper links heterogenous consensus mechanisms and token incentive structures to distinct equilibria across layer 1 and layer 2 networks, which fragment liquidity horizontally and vertically. It shows that mitigation tools—bridges, native multi‑chain issuance, shared middleware and interoperability protocols—reduce frictions but recreate concentrated trust, governance and operational nodes. A key unresolved issue is how to design standards and regulatory perimeters that reduce fragmentation while preserving competition and cross‑border interoperability. [BIS]

A Money View of Offline Payment Functionality (SSRN)

G+D’s Lars Hupel has updated his “money view” offline payments paper, arguing that offline-capable retail payment systems should use a single issuer, not multiple bank issuers, in the context of CBDC and fast payment system design. The paper compares central bank CBDC, a multi-issuer commercial bank token model, and a single-issuer model for offline value transfer; it finds that multi-issuer offline tokens create foreign-liability, fungibility, and counterparty-risk problems, while a single-issuer structure more closely preserves cash-like bearer behavior. The policy significance is that offline functionality can be built without a central bank-issued instrument, but only if issuance, prefunding, settlement access, and anti-money-laundering controls are centralized enough to preserve finality and risk management. [SSRN]

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.

Kiffmeister’s #Fintech Daily Digest (20260615)

June 15, 2026June 16, 2026 ~ kiffmeister

Report on the National Payment System in Peru (BCRP)

[March 2026] The Banco Central de Reserva del Perú (BCRP) published its March 2026 national payments report, detailing progress on its “Dinero Digital” retail central bank digital currency (CBDC) pilot launched in October 2024 with telecom partner Bitel (via the BiPay wallet). Designed to test digital payments in unbanked rural sectors, the pilot reached 67,000 active users, an average of 91,000 daily transactions, and S/ 4.2 million in circulation by late February 2025. By December 2025, active users expanded to 172,000, averaging 47,600 daily transactions, with S/ 10.0 million circulating directly among end users. The notable drop in transaction velocity likely stems from the cooling of early adoption biases and introductory marketing incentives as the pilot transitioned from tech-centric early adopters into deeper, lower-velocity rural segments. [BCRP]

ASX Admits Misleading Conduct Relating to CHESS Replacement Project (ASIC)

The Australian Securities Exchange (ASX) agreed to pay a A$20.5 million civil penalty and A$3 million in legal costs to settle proceedings brought by the Australian Securities and Investments Commission (ASIC) over its failed blockchain-based replacement for the Chess post-trade system. The regulator alleged ASX misled the market in February 2022 by stating the project was “progressing well” despite internally classifying it as “red,” indicating significant unresolved issues, before subsequently delaying and then cancelling the project and writing off approximately A$245–255 million in costs. [ASIC]

Euro Area TIPS Payment Platform Volumes Grew by 82.5% in 2025 (ECB)

The European Central Bank (ECB) published its 2025 TARGET (Trans-European Automated Real-time Gross settlement Express Transfer) Services Annual Report. It reported that the TARGET Instant Payment Settlement (TIPS) system experienced very strong 2025 growth: instant payments settled in TIPS rose 82.5% to 2.47 billion transactions, driven mainly by the Instant Payments Regulation, in force since April 2024, which requires Euro Area banks offering standard euro credit transfers to receive 24/7 instant euro payments from January 9, 2025 and to send them from October 9, 2025. Also, in April 2025, it became possible to settle Danish krone payments instantly in TIPS (the Swedish krone joined in 2024). Also, in June 2025, the TIPS cross-currency settlement layer, that enables linked settlement across currencies and underpins interlinking projects with other fast payment systems, was implemented and successfully tested and formally activated by the ECB, Danmarks Nationalbank, and Sveriges Riksbank. In addition, the ECB is working on supporting 24/7 instant-payment funding. [ECB]

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.

Kiffmeister’s #Fintech Daily Digest (20260420)

April 20, 2026April 20, 2026 ~ kiffmeister

19th ERPB Technical Session on the Digital Euro (ECB)

The European Central Bank (ECB) posted the presentations discussed at the 19th Euro Retail Payments Board (ERPB) technical session on the digital euro held virtually on April 9. Main topics included a refresher on the fundamentals of the offline digital euro solution and its main components, and an overview of the 12-month pilot slated to start in H2 2027 to be conducted with a limited number of payment service providers, merchants and Eurosystem staff. [ECB]

Canada’s Stablecoin Framework (Government of Canada)

The Government of Canada published a federal framework in which non‑bank issuers of fiat‑backed stablecoins must register with the Bank of Canada, maintain fully backed high‑quality liquid reserves, and offer at‑par redemption in the reference currency. The framework centralizes prudential oversight at the Bank of Canada while leaving trading, payments, and anti‑money‑laundering oversight to existing securities and payments regimes, aiming to enable innovation and competition in digital payments while tightening consumer protection and financial stability safeguards. It is explicitly designed to align with European Union and United States approaches and with Financial Stability Board recommendations, positioning Canadian‑issued coins for prospective cross‑border interoperability. Key open questions concern how detailed reserve, redemption, and governance standards will be calibrated in regulation over 2026–27 and how authorities will exercise expansive national‑security and public‑interest powers to deny or revoke market access. [Government of Canada]

Changes Made for KfW’s Third Blockchain Bond (KfW)

KfW announces that its third blockchain-based crypto security will migrate both registrar and distributed ledger infrastructure mid‑term to stress‑test Germany’s Electronic Securities Act framework under real market conditions. The bond will shift registrar functions from Cashlink to DekaBank and move from the Polygon blockchain to SWIAT/Regulated Layer One, while also switching wholesale payment processing from the Deutsche Bundesbank’s trigger solution at issuance to the Eurosystem’s forthcoming Pontes platform for coupons and redemption. This staged migration aims to generate evidence for scalable, standardized digital capital-market infrastructure in Europe, but leaves open whether secondary-market liquidity and operational risks will prove manageable at scale. [KfW]

Kiffmeister’s #Fintech Daily Digest (20260311)

March 11, 2026March 11, 2026 ~ kiffmeister

National Bank of Kazakhstan Digital Tenge Annual Review (NBK)

The National Bank of Kazakhstan (NBK) published its annual review of the Digital Tenge project, which has shifted from research (2021) to limited production (2023) and scaled pilots in state-related payments (2025) within a broader National Digital Financial Infrastructure strategy. Programmable applications are focused on government spending, tax administration (“Digital VAT”), and targeted subsidies, rather than large-scale retail distribution. It operationalizes central bank digital currency (CBDC) as fiscal and public-finance infrastructure, tightening traceability, automating conditionality, and integrating with identification, anti-fraud, and open banking rails, rather than as a standalone payments product. The open question is how far Kazakhstan will extend CBDC use beyond state-linked flows and cross-border experiments once the 2026 roadmap and full-scale production decisions are implemented. [NBK]

Appia Roadmap for European Tokenized Finance (ECB)

The European Central Bank (ECB) published the Appia roadmap, a strategic workplan to design a tokenized wholesale financial ecosystem in Europe in which central bank money remains the settlement anchor. It will complement its Pontes distributed ledger technology (DLT) settlement solution due to launch in late 2026. Appia will, through structured engagement with market participants and public bodies, generate by 2028 a blueprint for tokenized market infrastructures, including choices between shared versus interconnected DLT networks and associated governance and standard-setting. It seeks to preserve effective monetary policy transmission, safeguard financial stability and payment system functioning, and reduce market fragmentation while enabling smart-contract based innovation in securities and payments. It also has a strategic autonomy dimension, aiming to keep euro-denominated financial market infrastructures competitive and interoperable in a tokenized world. The key open questions concern optimal network configuration, European governance arrangements and how far private infrastructures should rely on central bank money in tokenized form. [ECB]

Stablecoin Shocks (IMF)

The IMF published a paper that constructs narrative, high-frequency measures of “stablecoin shocks” based on USDT/USDC market-cap changes around stablecoin-specific news to identify their causal effects on U.S. financial markets. A 1 percent stablecoin demand shock persistently lowers short-term Treasury yields (about 1.9 bps at the 1‑month tenor), with limited effects on longer maturities. The broad dollar index modestly depreciates and crypto prices rise, with a small, economically minor increase in the S&P 500. Equity effects are heterogeneous: payment providers and crypto platforms benefiting from stablecoin infrastructure see gains, while large and community banks and major retailers show no significant response, implying markets do not yet price material disintermediation risk. Results are robust across identification strategies, event definitions, and econometric specifications. [IMF]

Tokenomics and Blockchain Fragmentation (BIS)

The BIS published a Hyun Song Shin paper that develops a global-games model of distributed technology technology (DLT) network validator coordination to show that higher decentralization requires disproportionately higher validator rents funded by user fees. This implies that capacity must be endogenously constrained and congestion is structurally necessary rather than incidental. This tokenomic structure induces entry of lower-security, lower-fee chains that attract users priced out of incumbent ledgers, generating persistent fragmentation across base layers and layer‑2s and eroding the network effects that normally drive convergence on a single medium of exchange. As a result, for example, nominally identical stablecoins on different chains are non‑fungible, bridged rather than natively interoperable, so liquidity and acceptance remain chain‑specific despite common issuers and regulatory regimes. The paper argues that a central‑bank‑anchored trust and settlement layer is required to deliver monetary integration, rather than relying on fully decentralized consensus. [BIS]

Stablecoins and the Missing Infrastructure Layer (LinkedIn)

Tord Coucheron posted a paper that argues that stablecoin growth reflects a structural response to cross‑border payment frictions in correspondent banking, not a fundamental demand for new private money. It shows that liquidity fragmentation, prefunding costs, and opaque, sequential settlement make traditional cross‑border transfers slow and capital‑intensive, making privately issued tokenized settlement claims economically attractive despite reserve and governance risks. It then introduces a real‑time multi‑currency financial market infrastructure (FMI) in central bank money, where banks hold multiple currencies and settle via payment‑versus‑payment (PvP), driving settlement costs toward zero and preserving the deposit‑funded banking model, monetary policy transmission, and monetary sovereignty. [LinkedIn]

Upcoming Speaking Engagements:

The Crypto Assets Conference (Frankfurt, March 25) I will be speaking on the uncertain future of CBDC projects. [Register here and get 15% off the regular ticket price.]

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 (20260304)

March 4, 2026March 5, 2026 ~ kiffmeister

The New Financial Ecosystem and the Role of Central Banks (BOJ)

Bank of Japan (BOJ) Governor Ueda Kazuo provided updates to the central bank’s digital payments projects. The BOJ is still investigating retail central bank digital currency (CBDC) with an eye towards providing a “digital form of cash” if needed, and has set up (and now plans to reorganize) a CBDC Forum to draw on private‑sector expertise and consider the future of payments more broadly. Internationally, the BOJ is participating in Project Agorá, exploring tokenized deposits and smart‑contract‑based cross‑border interbank payments on blockchains, and domestically it has launched a sandbox to test settlement in central bank current account balances on blockchain‑based systems, including links to existing infrastructures and use cases such as interbank and securities settlement. [BOJ]

Digital Pound Design Phase Progress Update (BOE)

The Bank of England (BOE) published a progress update on the digital pound design phase, which is focusing on four workstreams: a joint assessment of need, policy and public‑interest impacts, commercial viability, and operational feasibility; a detailed blueprint covering product design, roles of intermediaries, interoperability in a multi‑money ecosystem, product roadmap, alias services and offline functionality; targeted experiments and proofs of concept (including a prototype ledger architecture and the Digital Pound Lab, where firms test use cases such as POS payments, conditional B2B payments, tourist wallets and programmable features via allowances and locks); and extensive engagement with industry, academia and civil society to refine requirements, privacy protections and user safeguards. This work is tightly linked to the UK National Payments Vision and the new Retail Payments Infrastructure Board, with an emphasis on interoperability between bank deposits, tokenized deposits, stablecoins and a potential digital pound, and on preserving access to cash, prohibiting “programmable money”, and embedding strong privacy and data‑protection guarantees in both law and system architecture. The design phase runs to 2026, and the Bank and HM Treasury plan to publish the blueprint assessment and a decision on whether to proceed with building a digital pound later in 2026. [BOE]

Kraken Becomes First Crypto Company to Secure a Fed Master Account (CoinDesk)

Kraken has become the first crypto firm to obtain a Federal Reserve master account, granted to its banking subsidiary Kraken Financial under a Wyoming special-purpose bank charter, with oversight by the Federal Reserve Bank of Kansas City. The account gives Kraken direct access to Fedwire, the Fed’s core interbank payment network, eliminating its previous reliance on partner banks to handle U.S. dollar settlements and enabling faster deposits and withdrawals for large traders and institutional clients. The approval is limited in scope, however, as Kraken will not earn interest on reserves nor have access to the Fed’s emergency lending facilities, unlike traditional banks. [CoinDesk]

Stablecoins and Monetary Policy Transmission (ECB)

The European Central Bank (ECB) published a paper on rising stablecoin adoption’s impact on monetary policy by reshaping banks’ funding structures and, in turn, the strength and composition of transmission channels. As stablecoins alter banks’ liability mix towards wholesale funding, the traditional bank lending channel is strengthened (through tighter funding constraints) but the deposit channel is weakened (by changing how deposit rates and quantities react to policy rates), thereby undermining the predictability of the overall pass‑through from policy rates to financial conditions. If foreign‑currency (especially USD‑pegged) stablecoins became widely used in the euro area, they would increase banks’ reliance on foreign‑currency wholesale funding and “import” foreign monetary and risk conditions into domestic liquidity and spending, eroding monetary sovereignty and making it harder for the central bank to stabilize inflation and output, particularly in stress episodes. [ECB]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260225)

February 25, 2026February 25, 2026 ~ kiffmeister

BNP Paribas Uses Public Blockchain for Money Market Fund (MarketsMedia)

BNP Paribas Asset Management has issued a tokenized share class of an existing French‑domiciled money market fund on the public Ethereum blockchain using its AssetFoundry platform, but with a permissioned model that restricts holdings and transfers to authorized participants to remain within regulatory requirements. This follows an earlier tokenized money market fund in Luxembourg on a private blockchain and is structured as a one‑off intra‑group pilot in which BNP Paribas Asset Management acts as issuer, Securities Services as transfer agent and wallet/key operator, and AssetFoundry as the tokenization and connectivity layer, allowing the group to test end‑to‑end issuance, transfer agency and public‑chain connectivity while maintaining governance, investor protection and operational robustness. [MarketsMedia]

U.S. SEC Loosens Broker-Dealer Stablecoin Rules (SEC)

The U.S. Securities & Exchange Commission (SEC) issued an FAQ relating to the treatment of payment stablecoins under the broker-dealer net capital rule (Exchange Act Rule 15c3-1). A “payment stablecoin” is a USD–denominated stablecoin meeting specific regulatory and reserve criteria that change once the GENIUS Act takes effect. The new treatment sharply reduces how much capital firms must reserve against payment stablecoins—from 100% of their market value to a 2% haircut, effectively treating them like money market instruments with a ready market. [SEC]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260116)

January 16, 2026January 16, 2026 ~ kiffmeister

Kazakhstan’s Digital Tenge CBDC Officially Launched (NBRK)

The National Bank of the Republic of Kazakhstan (NBRK) announced that its digital tenge central bank digital currency (CBDC) has officially launched. The digital tenge is now legal tender in Kazakhstan, with the NBRK as the sole issuer, and interaction with it facilitated through financial market participants. [Source: NBRK]

SG-FORGE and SWIFT Move Forward in Digital Asset Interoperability (SG-Forge)

Societe Generale-FORGE (SG-FORGE) and SWIFT completed a trial involving the exchange and settlement of tokenized bonds using both fiat and digital currencies. The EUR CoinVertible, a stablecoin issued by SG-FORGE that is compliant with European Markets in Crypto-Assets (MiCA) regulations, was integrated with SWIFT’s interoperability capabilities to connect blockchain platforms with traditional payment systems. The initiative demonstrated several market operations including issuance, delivery-versus-payment settlement, coupon payments, and redemption. SG-FORGE provided its open-source Compliance Architecture for Security Tokens (CAST) framework and the EUR CoinVertible stablecoin, which became the first on-chain settlement asset natively compatible with SWIFT’s infrastructure. The trial, conducted with participating banks, showed that tokenized bonds can utilize existing payment systems while incorporating ISO 20022 standards. [Source: SG-FORGE]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260112)

January 12, 2026January 12, 2026 ~ kiffmeister

Interoperability Standards for Digital Assets (MIT/SODA)

The Massachusetts Institute of Technology (MIT) and the Standards Organization for Digital Assets (SODA) published a white paper that addresses the need for global standards to enable tokenized real-world assets to move seamlessly across different blockchain networks and traditional financial systems. The White Paper describes the need to create neutral, open standards through three workstreams: a data model defining asset information, common digital functions for smart contracts, and legal/governance frameworks ensuring regulatory compliance. The paper draws parallels to historical standardization successes like the internet’s TCP/IP protocol and shipping containers, arguing that without interoperability standards, tokenization will only deliver isolated efficiencies rather than transforming global finance. Contributors from major institutions including Chainlink, Fireblocks, Wormhole, and others emphasize that true scalability requires standardized approaches to cross-chain transfers, identity verification, compliance, and connectivity with existing financial infrastructure, ultimately enabling the tokenized asset market by 2030 to reach its full potential. [Source: SODA]

Ethiopia Unveils 5-Year National Digital Payment Strategy (NBE)

[December 9, 2025] The National Bank of Ethiopia (NBE) published a draft National Digital Payment Strategy 2026–30. The five-year framework outlines a roadmap to build a trusted, innovative, and integrated digital payments ecosystem. Part of the study involves studying stablecoins, cryptocurrencies, and central bank digital currency (CBDC), map their current use in Ethiopia, and identify concrete, locally viable use-cases for future policy and product development. Furthermore, white papers will be published and, if deemed necessary, required regulatory frameworks and pilot programs will be implemented. [Source: NBE]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260107)

January 7, 2026January 7, 2026 ~ kiffmeister

RAKBANK Receives In-Principle Approval to Launch a Dirham-Backed Stablecoin (RAKBANK)

RAKBANK became the latest United Arab Emirates (UAE) bank to received in‑principle approval from the central bank to issue a fully reserved, 1:1 Dirham-backed stablecoin. Al Maryah Community Bank secured in-principle approval in October 2024 and full licensing in December 2024 for its AE Coin, and Zand (an “AI-powered bank) received full approval in November 2025 for its Zand AED stablecoin. The Central Bank of the UAE’s Payment Token Services Regulation restricts payment tokens to Dirham-backed or specifically approved fiat-referenced stablecoins for onshore payments, effectively steering merchant crypto acceptance toward Dirham stablecoins. In parallel, Dubai’s Virtual Assets Regulatory Authority has finalized Version 2.0 of its activity-based rulebooks, including requirements for fiat‑referenced stablecoins issued by Dubai‑incorporated virtual asset service providers, creating a distinct but complementary regime for Dubai and its free zones. [Source: RAKBANK via Zaya.com]

Lloyds and Archax Complete UK’s First Public Blockchain Transaction Using Tokenised Deposits (Lloyds)

Lloyds Banking Group has completed the United Kingdom’s first public blockchain transaction using tokenized deposits. The transaction involved Lloyds issuing tokenised deposits on the Canton Network (a public blockchain for regulated financial markets) to purchase a tokenised Gilt from Archax, demonstrating how traditional banking can integrate with blockchain technology. Lloyds believes that this innovation offers businesses key benefits including instant settlement, the ability to earn interest while maintaining regulatory protections, access to wider securities trading, automated smart contracts, and enhanced transparency—all while preserving the security of traditional deposits under the Financial Services Compensation Scheme. [Source: Lloyds]

A Framework for Understanding the Vulnerabilities of New Money-Like Products (FRB)

The Federal Reserve (FRB) published a paper that introduces a framework for analyzing vulnerabilities in new money-like products by comparing them to money market funds (MMFs), which have well-documented risks. The authors examine five key features that contribute to vulnerabilities: liquidity transformation, threshold effects, moneyness (perceived safety and liquidity), contagion risks, and reactive investors. They apply this framework to three emerging products: money market ETFs (MMETFs), tokenized MMFs, and stablecoins. The analysis finds that MMETFs have similar liquidity transformation to MMFs but reduced threshold effects due to market pricing; tokenized MMFs largely mirror their underlying MMF vulnerabilities but could become more money-like if token transfers can effect ownership changes; and stablecoins present mixed risks, with the 2025 GENIUS Act likely to standardize payment stablecoins and align them more closely with MMF characteristics. The framework emphasizes that vulnerabilities arise from combinations of these features rather than individual attributes, and that as these novel products evolve and become more familiar to investors, their non-structural features—particularly their perceived moneyness and investor base composition—will likely shift significantly. [Source: FRB]

Upcoming Speaking Engagements: