Kiffmeister’s #Fintech Daily Digest (20260901)

September 1, 2026September 2, 2026 ~ kiffmeister ~ Leave a comment

Tokenizing Central Bank Money on Public Blockchains (SSRN)

Ulrich Bindseil and Benjamin Duve posted a paper that explores the option of issuing central bank digital currency (CBDC) on public blockchains. The paper first reviews the main reservations, which include technical fragmentation, governance and operational risks, financial-stability concerns, and illicit-use and reputational risks. It then assesses how modern blockchain features may mitigate risks and evaluates the public policy objectives such issuance could advance. For example, central banks can mitigate chain-selection, operational, and illicit-use risks through formal admission criteria and strict issuer-controlled interoperability, plus embedded compliance architecture, and issuer-level control over minting, redemption, and freezing—paralleling existing stablecoin practice. Public rails would be markedly cheaper than proprietary infrastructure, while advancing monetary sovereignty, seigniorage, and financial stability. The authors conclude these risks may be manageable, proposing licensed, fully backed licensed stablecoins as a transitional alternative. [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.

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 (20260828)

August 28, 2026August 28, 2026 ~ kiffmeister ~ Leave a comment

Russia’s Digital Ruble Goes Live on September 1 (Bank of Russia)

The large-scale rollout of the digital ruble will begin on September 1, 2026, when customers of the largest Russian banks may use the retail central bank digital currency (CBDC) through a single wallet accessible in participating banks’ mobile applications. The Bank of Russia will initially require major banks and merchants with annual revenues exceeding ₽120 million to support the digital ruble, with broader bank and merchant obligations phased in through September 2028. Firms with annual revenues below ₽5 million are exempt from acceptance requirements. The arrangement avoids interbank transfers of digital-ruble balances: users can fund the wallet from conventional bank accounts up to ₽300,000 rubles per month, make unrestricted person-to-person transfers, and pay merchants without fees. A universal merchant QR code will present digital-ruble payment alongside the Faster Payments System and other available methods. [Bank of Russia]

Regulating Stablecoin Issuance: Permissible Entities and Activities (BIS)

The BIS published a paper by Currat, Ehrentraud and Ocampo that provides a comparative analysis of the regulatory frameworks for stablecoin issuers across the European Union, Hong Kong, Singapore, the United Kingdom and the United States. It finds that approaches differ significantly, particularly in terms of the types of entities allowed to issue them and the scope of activities permitted beyond core issuance. Stablecoin frameworks generally limit issuers to a core set of functions such as issuance, redemption and reserve management, but they differ in how far issuers may stray from them. Frameworks that allow banks to issue under existing prudential regimes tend to permit a broader range of activities, as their regulatory framework already mitigates associated risks. In constrast, bespoke regimes for stablecoin issuers impose stricter limits. These activity restrictions apply to the issuing entity rather than the group. For banks, consolidated supervision already constrains the relocation of activities to affiliates; for non-banks, no equivalent group-wide framework applies, and restrictions can be circumvented with corporate structuring. [BIS]

First Fully Onchain Repo Transaction Completed Using a Sovereign Digital Bond (Businesswire)

Virtu Financial, M1X Global, and Tradeweb completed the first fully onchain repo transaction using a sovereign digital bond, USDM1, as collateral on the Canton Network. USDM1, natively issued by the Republic of the Marshall Islands (RMI) under New York law as a Brady-bond-style instrument backed 1:1 by short-dated US Treasuries, functioned as collateral with atomic settlement across securities, cash, and repurchase legs, completing a full cycle in under 10 minutes. Unlike prior onchain repo demonstrations using digital cash or off-chain collateral, this combined natively issued sovereign collateral with full onchain settlement. The structure claims favorable Basel 3.1 risk-weighting versus stablecoins or tokenized funds, and supports ISDA/GMRA netting. However, USDM1 is being offered and sold solely outside the United States in reliance on Regulation S under the U.S. Securities Act. [Businesswire]

Marshall Islands MEC Partnering With Lomalo to Expand Electricity Payment Options (MEC)

The Republic of the Marshall Islands (RMI) Marshalls Energy Company (MEC) will enable prepaid electricity (“Cash Power”) purchases through Lomalo’s mobile wallet from August, supplementing existing online purchases through MEC’s website. Verified users link a meter number, buy credit in the app, and receive a token for manual entry into the existing meter. Registered meters receive a $10 introductory credit. The arrangement embeds an essential-utility payment use case in Lomalo, a mobile wallet operated with the Ministry of Finance, Banking and Postal Services. Lomalo wallet-to-wallet transfers are made via blockchain-based interest-paying USDM1 sovereign digital bonds pegged to the U.S. dollar and backed by equivalent values of short-term U.S. Treasury Bills. Lomalo’s and USDM1’s flagship use case is distributing ENRA, the RMI’s universal basic income (UBI) program. [MEC]

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 (20260827)

August 27, 2026August 27, 2026 ~ kiffmeister ~ Leave a comment

Meeting the Challenge of Correspondent Bank Relationship Withdrawals in fully Dollarized Microstates (SSRN)

I have just completed a first draft of a paper that examines emerging digital financial infrastructure and instruments as potential complements to the standard prescriptions aimed at mitigating the domestic financial system risks risks of correspondent banking relationship (CBR) withdrawal in officially dollarized microstates. Such microstates surrender the monetary autonomy of a central bank in exchange for the stability of a foreign currency, and in doing so make their domestic financial systems dependent on CBRs that global banks are increasingly unwilling to maintain. The existing IMF and World Bank literature treats CBR withdrawal primarily as a cross-border payments problem, and its prescriptions are addressed to that dimension. This paper assesses the capacity of emerging digital financial infrastructure and instruments to sustain domestic financial system functionality independent of a CBR, and the extent to which they may allow governments to recapture economic benefits analogous in some respects to the seigniorage that dollarization forgoes. Comments please! [SSRN]

Tokenized Deposits Could Affect Bank Liquidity, Maturity Transformation (Dallas Fed)

The U.S. Federal Reserve Bank of Dallas (Dallas Fed) published an article that claims that widespread tokenized-deposit adoption could erode banks’ maturity-transformation capacity and increase liquidity needs, in the context of real-time payments, stablecoin competition, and emerging bank-led on-chain deposit models. By making deposits more transferable and rate-sensitive, tokenization could shorten their expected life and raise deposit betas, reducing the effective duration that supports longer-term lending. The authors estimate that deposits support roughly 80% of aggregate bank duration exposure; a 10% reduction in deposit life or increase in rate sensitivity could materially reduce capacity or require more term funding, raising credit costs. Faster outflows could also increase demand for reserves and Treasuries. [Dallas Fed]

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 (20260826)

August 26, 2026 ~ kiffmeister ~ Leave a comment

India Plans First Tokenized Corporate Bond Issue in September (Reuters)

India will reportedly pilot its first tokenized corporate bond issuance in September, with state-owned power financier Rural Electrification Corporation (REC) Limited issuing under 5 billion rupees in blockchain-recorded notes settled via the central bank digital currency (CBDC). The Reserve Bank of India and the markets regulator are jointly developing the framework, requiring investors to hold both a wholesale CBDC wallet and a new distributed-ledger securities wallet (“DEMAT 2.0”) built by depositories, rather than trading on conventional electronic book platforms. Access is restricted to a select investor group at the pilot stage, bonds carry a three-month lock-in, and a secondary market is only expected by December, leaving interoperability and scaling questions unresolved. [Reuters]

Japan Eyes Blockchain for Instant Stock, Government Bond Settlement (Nikkei)

Japan’s Ministry of Finance (MOF) and the Bank of Japan (BOJ) reportedly plan to develop a blockchain-based platform to support real-time 24/7 settlement of government bond and stock transactions using a wholesale central bank digital currency (CBDC). A study group involving the MOF, BOJ, Financial Services Agency, and financial institutions will soon be established, with a development plan expected to be finalized by early 2027, with a view to launching in the early 2030s. [Nikkei]

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 (20260802)

August 2, 2026August 2, 2026 ~ kiffmeister

China Cuts Durian Settlement to 30 Minutes with First Outbound e-CNY Payment to Malaysia (SCMP)

China has completed its first outbound payment via the Cross‑Border e‑CNY Express Service (CBETS) to Malaysia, settling a 43,000 yuan shipment of fresh durian. The transaction was executed by China Construction Bank’s Xiamen branch in coordination with its Labuan branch in Malaysia, using direct bank‑to‑bank ledger transfers and on‑the‑fly conversion into Malaysian ringgit. Compared with traditional correspondent banking networks operating under the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, this cut settlement to 30 minutes from one to three days and eliminated clearing fees of up to 6% and per‑transaction charges of $25 to $35. CBETS, operated by the e‑CNY International Operation Center under the guidance of the People’s Bank of China’s Digital Currency Institute, provides on‑chain and off‑chain connectivity and 24/7 cross‑border settlement. [SCMP]

FYI most publications are presenting this as a central bank digital currency (CBDC) story, but there’s no concrete evidence that it is. For starters, the Peoples Bank of China (PBOC) announced earlier in the year that the e-CNY is now a tokenized commercial bank deposit-based platform. And earlier stories going back to September 2025 (see below) that I missed make it clear that the Cross‑Border e‑CNY Express Service (CBETS) platform is only operating under PBOC guidance, so none of these platforms are CBDC-based according to the core part of the CBDC definition; a direct liability of the central bank.

26 Financial Institutions Sign On as direct participants with e-CNY Center International (SCIO)

[June 17, 2026] The State Council Information Office of China (SCIO) announced that the e‑CNY International Operation Center, which operates under the guidance of the Digital Currency Institute of the People’s Bank of China, has enrolled 26 institutions as direct participants on its Cross-Border e-CNY Transfer Services (CBETS) platform. Since the beginning of 2026, the e-CNY International Operations Center, which commenced operations in September 2025, has upgraded its three major platforms into the CBETS. CBETS provides on-chain and off-chain connectivity and 24/7 settlement, reducing reliance on three-to-five intermediary correspondent banks per transaction. The 26 aforementioned institutions include Standard Chartered China and Chinese bank branches in Thailand, Singapore, Laos, and Qatar. [SCIO]

e-CNY International Operation Center Officially Launched in Shanghai (PBOC)

[September 25, 2025] The People’s Bank of China (PBOC) formally launched the e‑CNY International Operation Center in Shanghai to provide dedicated infrastructure for cross‑border use of the digital renminbi, framed as part of a broader upgrade of monetary and payment systems. The center’s three core “business platforms” are a cross‑border digital payment platform, a blockchain service platform, and a digital asset platform, together supporting e‑CNY cross‑border settlement, asset tokenization, and related digital financial services. Institutionally, the PBOC’s Digital Currency Institute will build and operate these systems, with a mandate to connect domestic and foreign financial infrastructures and support international operation of e‑CNY. [PBOC]

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 (20260730)

July 30, 2026July 30, 2026 ~ kiffmeister

Project Agorá Real Value Testing (BIS)

The Bank for International Settlements (BIS) and Institute of International Finance (IIF) completed real value testing of their Project Agorá multi‑currency programmable platform for atomically settled wholesale cross‑border payments using wholesale central bank digital currency (CBDC) and tokenized commercial bank deposits. The trials involved 28 private-sector financial institutions and central banks executing approximately CHF 800,000 in transactions across 17 scenarios (corporate, interbank, intra-group, and payment‑versus‑payment) and six major currencies (CHF, EUR, GBP, JPY, KRW, USD) across Asia, Europe and North America, with end‑to‑end processing averaging 80 seconds from submission to settlement. The exercise focused on feasibility and operational performance under realistic conditions, highlighting improvements in speed, transparency, and status/routing visibility relative to existing correspondent banking architectures. However, still to be resolved are questions around legal treatment of tokenized claims, settlement finality, data‑sharing, and governance models. [BIS]

Are Stablecoins Efficient for Remittances? Evidence from a Mystery Shopping Exercise (Banca d’Italia)

Banca d’Italia published a paper that finds stablecoin-based remittances offer no systematic cost advantage over traditional channels, based on a mystery shopping exercise. Researchers transacting as ordinary customers transferred 200 USD Coin (USDC) across ten corridors linking Italy with Argentina, Brazil, South Africa, the UAE, and Japan. Total costs ranged from 0.30% to nearly 9%, with the on-chain transfer contributing a marginal 0.4%; the on- and off-ramp fiat-conversion steps, exchange fees, and funding method drove costs and duration. Speed depended on domestic payment infrastructure: instant-payment jurisdictions (Brazil’s PIX, Italy’s TIPS) settled end-to-end under 20 minutes, while standard bank transfers extended settlement to one or two days. Regulatory design shaped operator availability and feasibility. However, cross-corridor comparability is confounded by Argentina’s parallel exchange rates and single-stablecoin, and single-transaction scope limits generalization. [Banca d’Italia]

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 (20260710)

July 10, 2026July 10, 2026 ~ kiffmeister

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.

Kiffmeister’s #Fintech Daily Digest (20260707)

July 7, 2026July 7, 2026 ~ kiffmeister

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]