Kiffmeister’s #Fintech Daily Digest (20251116)

November 16, 2025November 16, 2025 ~ kiffmeister

Evaluating the Implications of CBDC for Financial Stability (IMF)

The IMF published a Fintech Note that examines the potential financial stability implications of introducing retail central bank digital currencies (CBDCs). The paper identifies six transmission channels through which CBDCs could affect financial stability: liability and asset channels (affecting bank funding structures and balance sheets), fee income channel (reducing bank revenues), run-risk channel (potentially facilitating bank runs), information channel (affecting data flows on borrowers), and payment system resilience channel (impacting competition and operational resilience). While acknowledging theoretical ambiguities, the paper reviews quantitative studies suggesting that under moderate adoption scenarios (approximately 10% of deposits), CBDCs would likely have manageable effects on bank profitability and financial stability, particularly in systems characterized by low competition, diverse funding sources, and limited deposit reliance. The magnitude of impacts depends critically on CBDC adoption rates, country-specific characteristics, and design features such as remuneration rates and holding limits. And in any case, quantity restrictions, tiered remuneration, and access parameters, combined with traditional prudential policies, can effectively mitigate potential financial stability risks. [Source: IMF]

I found it surprising that the paper didn’t include in its assessment two papers that under certain conditions CBDC can actually expand bank lending and deposits when its interest rate falls within an intermediate range. A 2023 Journal of Political Economy article written by several Bank of Canada staffers found that banks with market power typically restrict deposit supply to keep rates low, but a CBDC provides an outside option that sets a floor on deposit rates, forcing banks to supply more deposits. In their calibration to the US economy, a CBDC increases bank lending when its rate is between 0.30% and 1.49% (with the average 3-month T-bill rate at 0.90% during the calibration period), with maximum increases of 1.57% in lending and 0.19% in output at a CBDC rate of 0.98%. However, if the CBDC rate exceeds this range (above 1.49%), disintermediation occurs as banks must raise lending rates to break even, reducing loan demand. The paper concludes there is no single “optimal” CBDC rate but rather a range that promotes intermediation, with the effectiveness depending on the degree of bank market power rather than CBDC usage per se.

And a 2025 National Bureau of Economic Research (NBER) paper written by several San Francisco Fed staffers found that the welfare impact of CBDC introduction follows an inverted U-shape with respect to the interest rate paid on CBDC: rates that are too low fail to curtail bank deposit market power significantly, while rates that are too high cause excessive bank disintermediation, reducing credit supply and output. For their baseline U.S. calibration with a 2% policy rate, the optimal CBDC rate is approximately 0.8% annually, yielding welfare gains of 27 basis points of consumption. More generally, across economies with different steady-state policy rates, they derive a simple rule of thumb for optimal CBDC remuneration: the maximum of 0% and the policy rate minus 1%. This rule captures the key insight that CBDC should pay interest to effectively compete with bank deposits (especially in high interest rate environments where bank deposit market power is greatest), but not so much as to cause harmful bank disintermediation. The welfare gains from CBDC are larger in high interest rate environments, reaching about 1% of consumption at a 6% policy rate, because CBDC more effectively curtails bank monopoly power when the deposit spread is otherwise large.

BMA Advances Embedded Supervision Initiative To Architect Real-Time Regulatory Oversight For DeFi (BMA)

The Bermuda Monetary Authority (BMA) launched an Embedded Supervision initiative, aiming to modernize regulatory oversight for decentralized finance (DeFi) by embedding supervisory requirements directly within financial infrastructure. Through its Innovation Hub, the BMA is collaborating with technology partners to create real-time, verifiable, and privacy-preserving regulatory frameworks that allow for continuous assurance, rather than relying on retrospective reporting. The initiative’s pilot project, involving Chainlink Labs and other industry players, explores expressing policy logic and compliance conditions directly in blockchain infrastructure, providing regulators with real-time data and reducing the compliance burden. [Source: BMA]

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 (20251112)

November 12, 2025November 12, 2025 ~ kiffmeister

Brazil’s Central Bank Reportedly Shuts Down Drex CBDC Platform (Valor)

Banco Central do Brasil (BCB) has reportedly shut down its Drex central bank digital currency (CBDC) project, due to high maintenance costs and unresolved privacy concerns in transaction processing. The next phase of the Drex project will take a technology-neutral approach, with ongoing studies into tokenization and settlement environments for central bank-issued currency, but privacy solutions remain a challenge. It has been a long while since the last official update from the BCB, but back in August 2025, it had reportedly signaled that it was dropping the blockchain-based design due to immature privacy solutions that failed to meet bank-grade confidentiality and verifiability standards, although at that time the project was still reportedly alive. What is not clear from these latest reports is whether the BCB is walking completely away from the CBDC project or they are just confirmations that the blockchain-based design is being dropped. Until the BCB speaks up for itself, we’ll just have to wait. [Source: Valor]

VISA Direct Stablecoin Payouts Pilot Speeds Up Access to Funds for Creators & Gig Workers (VISA)

VISA has launched a new pilot for VISA Direct that enables businesses and platforms to send payouts directly to recipients’ USD-backed stablecoin wallets, notably benefiting creators and gig workers with much faster access to their funds. The service funds payouts in fiat currency but recipients can choose to receive their funds in stablecoins like USDC, allowing for near-instant global money movement even in markets with currency volatility or limited banking infrastructure. Currently launching with select partners, Visa plans a wider rollout in 2026, emphasizing broader financial flexibility and support for the evolving creator and gig economy. [Source: VISA]

Fit of the Digital Euro in the Payment Ecosystem (ECB)

[October 30, 2025] The European Central Bank (ECB) published a report on the digital euro’s prospective business model. The aim will be to minimize transaction and implementation costs for payment service providers (PSPs) while unlocking revenue potential to offset new investments. The Eurosystem will cover all scheme and processing costs, ensuring that there are no scheme or processing fees—unlike card networks—so savings flow to PSPs, merchants, and ultimately consumers. Merchants should benefit from capped merchant service charges (MSC), with fees for digital euro acceptance expected to be notably lower than those for international card schemes and similar to or below domestic alternatives. However, PSPs question the model, preferring the ability to set market-based fees and compensation structures, and warn that a uniform cap across diverse markets could be problematic. All stakeholders agree on using standard, open infrastructure to reduce costs, and many see outsourcing (offering “digital euro as a service”) as a way for PSPs—especially smaller ones—to contain costs. Consumers are expected to access digital euro basic services free of charge. [Source: ECB]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251111)

November 11, 2025November 11, 2025 ~ kiffmeister

JPMorgan and DBS Bank Team Up on Cross-Border Tokenized Deposit Framework (CoinDesk)

JPMorgan and Singapore’s DBS Bank are collaborating to develop a cross-border tokenized deposit framework that will connect their respective blockchain payment systems, allowing institutional clients to transfer tokenized deposits in real time between both public and private blockchains. This initiative links DBS Token Services with JPMorgan’s Kinexys Digital Payments project, enabling interoperability and 24/7 settlement between banks without relying on traditional payment rails. The move aims to set new standards for interoperability in institutional digital payments, reflecting the global trend of major banks seeking seamless, cross-system digital deposit solutions. According to BIS, about a third of banks worldwide are now exploring or launching tokenized deposit innovations, signaling accelerating adoption in this area. [Source: CoinDesk]

Visa, Mastercard Reach $38 billion Swipe Fee Settlement, Draw Opposition (Reuters)

Visa and Mastercard have reached a revised $38 billion settlement with U.S. merchants, aiming to resolve two decades of litigation over antitrust violations and high card “swipe fees.” The deal would lower card processing fees by 0.1 percentage point for five years and grant merchants more control over card acceptance and surcharging, with standard consumer rates capped at 1.25% for eight years—a 25% drop. While Visa and Mastercard tout the relief for all merchants, especially smaller ones, major merchant groups like the National Retail Federation object, arguing the reforms don’t go far enough to address excessive fees and market power. The settlement replaces a previously rejected $30 billion accord and comes amid opposition from some merchant coalitions. Visa and Mastercard deny wrongdoing in agreeing to settle. [Source: Reuters]

Tokenization of Financial Assets (IOSCO)

IOSCO published a report on the tokenization of financial assets that assesses the adoption and implications of distributed ledger technology (DLT) in capital markets. It finds that while tokenization aims to drive efficiencies—such as fractionalization, programmability, and atomic settlement—the ecosystem remains nascent, with limited large-scale commercial adoption mostly seen in fixed income products and money market funds. Most lifecycle processes (issuance, trading, settlement, custody) continue to depend on conventional infrastructure due to challenges in DLT interoperability and credible on-chain settlement assets. The report highlights that risks from tokenization generally fit under existing legal and operational risk categories, but technology-specific risks (like smart contract bugs, cyber threats, and legal uncertainties around token ownership) may demand new controls. Regulators have mainly relied on existing, technology-neutral frameworks, sometimes complemented by specific guidance, sandboxes, or updated laws, as the economic substance of tokenized assets closely resembles traditional financial products. [Source: IOSCO]

Fast Payments in Latin America and the Caribbean (World Bank)

The World Bank published a report that analyzes new data on fast payments systems (FPS) in Latin America and the Caribbean (LAC). FPSs are rapidly transforming digital finance in LAC, making digital transactions far faster, more affordable, and accessible. In the last eight years, fast payments grew from 2% to about 45% of all digital payments in LAC-11 countries, catalyzed especially by the COVID-19 pandemic and proactive central bank policies. Brazil’s Pix system stands out globally for per-adult transaction volume, demonstrating how open design, broad use cases, and regulatory support drive adoption. Most LAC nations now offer fast payments through varied models, with increasing central bank involvement. These systems deepen financial inclusion for those with accounts and can attract the unbanked, but further policy attention is needed to expand access. Challenges remain around interoperability, governance, fraud, and use-case diversification. The report recommends prioritizing open nonbank access, robust governance, broader use cases, enhanced fraud management, and alignment with digital public infrastructure for sustained impact and inclusion. [Source: World Bank]

Upcoming Speaking Engagements:

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:

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 (20250929)

September 29, 2025September 29, 2025 ~ kiffmeister

SWIFT to Add Blockchain-Based Ledger to its Infrastructure Stack [SWIFT]

SWIFT will integrate a blockchain-based shared ledger into its global financial infrastructure, aiming to enable instant, always-on cross-border payments and enhance digital finance across over 200 countries. Partnering with more than 30 major financial institutions and developing a prototype with Consensys, the initiative will deliver real-time validation, sequencing, and interoperable transactions for regulated tokenized value, while maintaining SWIFT’s focus on resilience, security, and compliance. Supported by an international coalition of leading banks, this move advances SWIFT’s strategy to simultaneously upgrade current payment rails and build new digital pathways. [Source: SWIFT] The prototype will reportedly run on the Ethereum Layer-2 platform Linea. [Source: The Big Whale]

Make the Digital Euro Work for Merchants to Ensure it Meets its True Potential (IRE)

Independent Retail Europe (IRE), part of the Merchant Payments Coalition Europe, urged European policymakers to ensure the digital euro is designed to benefit merchants as well as consumers. The coalition argues for a simple, uniform transaction fee capped at 4 cents, allowing merchants to incentivize adoption and keep payment costs low, and for digital euro transactions to be accessible both online and offline without added complexity. They recommend prioritizing in-store and e-commerce payments over person-to-person use, enabling merchants to hold and use digital euros for supplier payments, and building a single, standardized European payments infrastructure to foster competition and integration. The statement emphasizes that the digital euro’s potential for innovation, cost reduction, and resilience depends on transparent, inclusive, and merchant-focused legislative and technical decisions. [Source: IRE]

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 (20250927)

September 27, 2025September 27, 2025 ~ kiffmeister

UK Finance Announces Live Tokenized Sterling Deposit Pilot (UK Finance)

UK Finance is launching a collaborative industry pilot to deliver live transactions using tokenized sterling deposits (GBTD). Building on lessons from the U.K. Regulated Liability Network (RLN) project, the pilot will test three use cases—person-to-person (P2P) online marketplace payments, remortgaging, and digital asset settlement—running until mid-2026. Major banks including Barclays, HSBC, Lloyds, NatWest, Nationwide, and Santander are participating with support from Quant, EY, and Linklaters. The initiative aims to improve payment efficiency, fraud reduction, and settlement transparency, positioning the United Kingdom as a leader in programmable digital money and supporting broader government innovation goals such as the National Payments Vision. The platform will be interoperable across digital payment systems, and UK Finance will keep stakeholders updated through events and webinars. [Source: UK Finance]

Canton Network and Chainlink Enter Into Strategic Partnership (Canton)

Canton Network and Chainlink have announced a strategic partnership aimed at accelerating institutional adoption of blockchain technology. The Canton Network, is a public, permissionless blockchain purpose-built for institutional finance, and Chainlink is an oracle platform that connects blockchains with real-world data, providing secure and reliable data feeds and interoperability to power decentralized finance and institutional blockchain use cases. Through this collaboration, Canton Network joins the Chainlink Scale program to integrate Chainlink’s data streams, smart data (such as Proof of Reserve and NAVLink), and cross-chain interoperability protocol, strengthening Canton’s infrastructure for institutional finance. Chainlink Labs will participate as a Super Validator in the Canton Network, enhancing its governance and operational resilience. Canton expects this partnership to increase cost-efficiency, transparency, and connectivity for financial institutions, supporting innovation in tokenization, stablecoins, payments, and digital identity. [Source: Canton]

SWIFT Reportedly Chooses Linea for Blockchain Testing (The Big Whale)

SWIFT has reportedly launched a blockchain payments trial using the Ethereum Layer 2 platform Linea, partnering with several major banks (including BNP Paribas and BNY). The Linea platform, developed by ConsenSys, is designed to enhance Ethereum’s scalability and privacy. This pilot aims to move SWIFT’s traditional messaging and settlement system fully on-chain, combining payment instructions and settlement in one transaction to boost transparency and reduce costs. The trial, while still early, signals SWIFT’s intent to modernize global payments and integrate blockchain into traditional finance, while securely and efficiently working with existing banking systems. [Source: The Big Whale]

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 (20250920)

September 20, 2025September 20, 2025 ~ kiffmeister

Chile’s Central Bank Considers CBDC to Settle Tokenized Assets (BCCh)

The Central Bank of Chile (BCCh) is preparing to launch a proof of concept to simulate the transfer of tokenized assets between agents on a blockchain ledger using a wholesale central bank digital currency (CBDC) as the settlement instrument. [Source: BCCh]

Optimal Policy for Financial Market Tokenization (IMF)

The IMF published a paper that analyzes how policymakers should approach the emergence of broker-led platforms that tokenize financial assets, promising efficiency gains but risking market fragmentation. The authors model competing brokers—each with varying numbers of clients—who can form coalitions to set up tokenized markets offering faster, cheaper settlement, but which may exclude rivals. The resulting equilibrium tends to produce partial coalitions, meaning either excessive investment in platforms (where private incentives for trade diversion outweigh social costs) or insufficient tokenization (excluding brokers who would increase welfare), while the welfare-maximizing outcome is either full participation or no tokenization. The analysis shows that neither mandating interoperability among platforms nor public-private cost-sharing alone is sufficient for optimal market structure—but their combination is. Even if open-access (public blockchain) platforms are allowed, policy intervention is still required to achieve the social optimum. Thus, the study suggests efficiency gains from tokenization are real, but policy must carefully balance interoperability mandates and cost sharing to avoid market fragmentation or inefficient investment. [Source: IMF]

Blockchain Consensus Mechanisms: A Primer for Supervisors (IMF)

The IMF published an update of a 2022 paper on blockchain consensus mechanisms such as proof-of-work, proof-of-stake, and Solana’s Tower BFT/proof-of-history, emphasizing their mechanics, incentives, and supervisory risks. The paper details operational risks (e.g., centralization of mining, energy use, network attacks), economic and market integrity challenges (e.g., validator dominance, slashing, liquid staking, maximal extractable value), and settlement finality differences across major networks. Additionally, it reviews scalability solutions (state channels, rollups, sidechains), highlighting the “scalability trilemma” and new complexities and risks these layer 2 solutions introduce. It notes regulatory challenges around staking, embedded supervision, and the trend toward distinguishing mature (decentralized) vs. centralized networks in regulation. [Source: IMF]

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 (20250901)

September 1, 2025September 1, 2025 ~ kiffmeister

Japan Post Bank to Consider Handling Tokenized Deposits (JPB)

Japan Post Bank (JPB) is considering offering blockchain-based tokenized deposits to customers by March 31, 2026 (the end of its fiscal year), aiming to enable instant and transparent settlement of non-fungible tokens (NFTs) and securities tokens. They will be eligible for deposit insurance. They will use a platform provided by DeCurret DCP. [Source: JPB]

Paypal Glitch – Direct Debits Worth Billions Stopped (SZ)

According to Sueddeutsche Zeitung (SZ) a significant technical failure in PayPal’s security system recently (in late August 2025) allowed direct debit transactions to go through without the usual fraud checks, prompting banks to halt billions of euros in payments to prevent potential fraud. This disruption primarily affected German customers and merchants, causing delays in legitimate transactions. Although PayPal states the issue has been fixed and systems are back to normal, consumer advocates recommend users check their accounts for unauthorized debits. European regulations allow for easy reversal of unauthorized payments, and regulatory authorities in Luxembourg, where PayPal Europe is based, have been notified about the incident. PayPal is a crucial online payment provider in Germany, making this outage especially impactful for the region. [Source: SZ]

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]

Kiffmeister’s #Fintech Daily Digest (20250815)

August 15, 2025August 15, 2025 ~ kiffmeister

Circle Launching Arc Open Layer-1 Blockchain (Circle)

Circle announced plans to launch a new stablecoin-focused, Ethereum Virtual Machine (EVM) compatible Layer 1 blockchain called Arc, which will use USDC as its native gas token. Aimed at supporting enterprise-grade stablecoin payments, FX, and capital markets, Arc promises features like a stablecoin FX engine, rapid sub-second settlement, opt-in privacy, seamless integration with Circle’s platform, and interoperability across other partner blockchains. The public testnet for Arc is expected to go live in the fall of 2025 and a mainnet beta in 2026. [Read more at Circle]

Digital Dollar: Privacy and Transparency Dilemma (UC Law)

The University of California (UC) Law Journal published a paper by Jiaying Jiang that explores the debate around implementing central bank digital currency (CBDC), focusing on the tension between privacy and regulatory demands. The author argues that the prevailing fear of government surveillance is not a technical inevitability but a result of outdated anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. To address this, the paper proposes concrete solutions: modernizing AML/CFT rules to allow for limited, threshold-based anonymity in everyday CBDC transactions; updating institutional record-keeping and reporting so small or low-risk transfers can occur privately; adopting privacy-preserving technologies like token-based payment options and encryption; and introducing clear legal carve-outs that permit financial institutions to implement privacy-by-design features without breaching regulatory obligations. These reforms, the author contends, would enable a digital dollar that protects user privacy while still equipping authorities with the tools necessary for oversight and crime prevention—demonstrating that privacy and compliance can be achieved together through thoughtful legal and technical innovation. [Read more at UC Law]

Public Attitudes Towards CBDC and the Role of Trust in the Central Bank (SSRN)

A forthcoming Bar Ilan University Faculty of Law Research Paper reports on the results of a multi-stage nationally-representatvie survey conducted in collaboration with the Bank of Israel on Israeli attitudes towards a possible digital shekel. The survey revealed that willingness to adopt was strongly correlated with trust in the central bank; respondents who expressed higher trust in the Bank of Israel were much more likely to intend to use the digital shekel. Interestingly, concerns about privacy were lower among Israelis compared to similar surveys in other countries, which may explain their relatively high acceptance. When asked about the most important features, respondents prioritized ease of use across payment scenarios, fraud protection, the ability to use the currency offline, absence of hidden fees, the option to earn interest, and above all, assurance that the central bank would not have access to personal transaction data. Overall, the survey highlights that while technical features matter, trust in the central bank is the most decisive factor influencing public willingness to adopt CBDC in Israel. [Read more at SSRN]

Personal Financial Planning and the Propensity of CBDC Adoption [Emerald Insight]

A paper published in the International Journal of Bank Marketing explores how personal financial planning impacts individuals’ willingness to adopt central bank digital currencies (CBDCs), using survey data from Sweden and the UK. The research finds that individuals who engage in activities such as budgeting, tracking expenses or setting long-term goals are more likely to express interest in CBDC adoption. These behaviors, reflecting financial literacy and forward-looking decision-making, align with openness to innovative financial technologies, were strengthened by perceptions of security, safety, and trust in the new technology. Individuals who believe that CBDCs are secure and that their personal data will be protected are significantly more likely to adopt the technology. Socioeconomic factors like education and age, as well as personal attitudes toward technology and risk, also influence adoption. [Read more at Emerald Insight]

Instant Cross-Currency Payments to Launch in October (Riksbank)

The TIPS Cross-Currency (TIPS X-CCY) service, a joint initiative by the Riksbank, ECB, Banca d’Italia, and Danmarks Nationalbank, will launching in October 2025, to enable instant, simultaneous settlement of cross-currency payments between the euro, Swedish krona, and Danish krone, with a future expansion to the Norwegian krone planned. This system leverages the Enhanced Linked Transaction (ELKT) model to ensure real-time payment and settlement across participating central bank systems, and is undergoing technical trials and regulatory updates to support its rollout, aiming to interlink with additional global payment systems over time. [Read more at the Riksbank]

Upcoming Speaking Engagements: