Kiffmeister’s #Fintech Daily Digest (20260305)

March 5, 2026March 5, 2026 ~ kiffmeister

Call for Payment Service Providers to Participate in Digital Euro Pilot (ECB)

The European Central Bank (ECB) has opened applications for euro area licensed payment service providers (PSPs) to join a twelve‑month digital euro pilot in the second half of 2027. It will use a non‑legal‑tender “beta” digital euro in a controlled environment to test technical, operational and user experience (UX) aspects of P2P (online/offline) and P2B payments at physical and online points of sale. PSPs will onboard users and merchants without remuneration, be selected based on eligibility plus weighted criteria (compliance status, technical capacity, market presence, geographic/segment coverage, delivery track record), and then work directly with national central banks and Eurosystem teams. The ECB has published technical and procedural documentation and PSPs must apply by May 14, 2026, with the whole exercise framed as preparatory and conditional on future EU legislation and a separate decision to issue a digital euro. [ECB]

Towards a Consistent Regulatory Approach to Illicit Payments (BIS)

The Bank for International Settlements (BIS) published a paper that develops a framework for how illicit payment rules, centered on whether payment instruments rely on intermediaries, shape both illicit and legitimate users’ choice among payment instruments. Because detection probabilities differ by design and by whether instruments fall inside or outside anti-money laundering (AML) scope, actors shift activity toward instruments with the lowest expected detection and sanctioning, undermining overall effectiveness and prompting iterative regulatory expansion. Illicit payment measures also constrain informational privacy and freedom of choice for legitimate users, creating a privacy–integrity trade off moderated by data protection regimes and trust in public authorities. The paper argues for a forward looking architecture that applies uniform, risk based lex generalis AML/CFT and data protection requirements across all intermediated instruments, while using lex specialis tools such as transaction/holding limits, reliance on touch points, and additional duties on issuers or platforms for instruments without intermediaries, to reduce regulatory driven substitution across payment instruments while preserving both integrity and user privacy. [BIS]

Targeted Report on Stablecoin and Unhosted Wallet P2P Transactions (FATF)

The Financial Action Task Force (FATF) published a report that concludes that stablecoins, now a major share of on‑chain and illicit virtual‑asset activity, create elevated money laundering/ terrorist financing/ proliferation financing (ML/TF/PF) risks, especially via P2P transfers through unhosted wallets outside direct anti-money laundering/ countering the financing of terrorism/ counter proliferation financing (AML/CFT) controls. FATF affirms that stablecoins are virtual assets and that issuers, intermediaries and relevant DeFi actors must be regulated as virtual asset service providers (VASPs) or financial institutions under Recommendation 15, with licensing, supervision, Travel Rule compliance and sanctions screening. Jurisdictions are encouraged to build stablecoin‑specific regimes, require issuers to embed technical controls (freeze, burn, allow/deny‑lists) and strengthen cross‑border supervisory cooperation and data collection on P2P use. The report stresses expanded use of blockchain analytics, targeted controls on transfers to unhosted wallets, structured public‑private partnerships, and detailed red‑flag indicators to guide monitoring and investigations. [FATF]

New Recommendations for Public Payment Preparedness (Riksbank)

Sveriges Riksbank issued new recommendations on “public payment preparedness,” urging households to see themselves as part of Sweden’s total defence and to maintain multiple means of payment so essential purchases can continue during disruptions, crises or war in an increasingly digitalized environment. It advises adults to hold at least SEK 1,000 in cash at home (in mixed denominations) for roughly a week’s essential spending and to use cash periodically so cash infrastructure remains robust, to have at least two payment cards linked to different card networks (e.g. Visa and Mastercard), to ensure access to a mobile payment service such as Swish that relies on different infrastructure than cards, and to keep physical payment cards and PINs accessible even if mobile wallets are normally used. The recommendations feed into the Riksbank’s broader work on national payment contingency and will also feature in the Payments Report 2026, due on March 12, 2026. [Riksbank]

Upcoming Speaking Engagements:

The Digital Euro Conference 2026 (Frankfurt, March 26) will explore the future of money with a focus on CBDCs, stablecoins, and commercial bank tokens. This hybrid event offers the perfect platform to understand the future of digital money! [Register here and get 20% off the regular ticket price by using the Kiffmeister20 code!]

I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (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 (20260227)

February 27, 2026February 27, 2026 ~ kiffmeister

UK FCA Selects 4 Firms to Test Stablecoin Innovation in its Regulatory Sandbox (UK FCA)

The UK Financial Conduct Authority (FCA) has selected four firms—Monee Financial Technologies, ReStabilise, Revolut and VVTX—from 20 applicants to test stablecoin services in its Regulatory Sandbox, focusing mainly on issuance and use cases including payments, wholesale settlement and crypto trading, so that these products can be trialled in real-world conditions with safeguards while FCA specialists provide feedback and refine proposed rules to ensure stablecoins can be trusted for payments, settlement and trading, inform the UK’s final stablecoin regime due later in 2026, and align with the broader crypto regulatory roadmap and related initiatives such as the Digital Securities Sandbox and the new crypto-asset authorization regime starting from 2026 with full implementation by October 2027. [UK FCA]

ASEAN’s Digital Payment Revolution: A New Frontier for Regional Integration, Thailand (IMF)

The IMF published a paper that reviews how rapid digital payment adoption in ASEAN—especially Thailand’s PromptPay-led fast payments and QR linkages—is reshaping domestic and cross-border transactions by lowering costs, boosting financial inclusion, and supporting SMEs, while introducing new cyber, fraud, and AML risks. It documents a surge in domestic fast and QR payments, the build‑out of bilateral QR and fund-transfer linkages under ASEAN’s Regional Payment Connectivity and Local Currency Transaction frameworks, and emerging multilateral architectures such as BIS’s Project Nexus to overcome the limits of fragmented bilateral models. Using Thai data for 2020–24, the empirical analysis finds that cross‑border QR usage rises when local‑currency–USD volatility is higher, suggesting local‑currency QR payments help users manage FX risk compared with card payments settled via the dollar, and that QR tends to substitute for traditional bank and card channels where financial access is weaker. [IMF]

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 (20260214)

February 14, 2026February 14, 2026 ~ kiffmeister

Bank of Russia to Conduct Study on the Creation of a Russian Stablecoin (TASS)

Russia’s TASS news agency reported that the Bank of Russia plans to conduct a study in 2026 on the feasibility of creating a Russian stablecoin. First Deputy Chairman of the Bank of Russia Vladimir Chistyukhin said “we have plans to conduct a study this year where we will once again assess this situation. Indeed, our traditional position is that this is not allowed, but taking into account the practice of a number of foreign countries, we will once again look at what risks and prospects there are here and bring this up for public discussion”. [TASS]

Indian Government to Launch CBDC-Based Public Distribution System Pilot (Financial Express)

India’s Union Home Minister Amit Shah reportedly announced the February 16, 2026 launch of India’s first central bank digital currency (CBDC)-based public distribution system pilot. It introduces subsidy transfers for foodgrains through the Reserve Bank of India’s CBDC platform. Under the pilot phase, 26,333 families across the Sabarmati zone of Ahmedabad, Surat, Anand, and Valsad receive digital tokens in their wallets containing details of commodity, quantity, and price. Beneficiaries using smartphones authenticate transactions by scanning QR codes at fair price shops, while those with feature phones receive one-time passwords through an Aadhaar-based verification system. The programmable CBDC coupons can only be used to purchase specified foodgrains at authorized ration shops and cannot be converted to cash, creating a clear audit trail of grain movement and subsidy utilization. [Financial Express]

Some more backfilling of my central bank digital currency (CBDC) database:

Madagascar’s Project e-Ariary One-Pager (BFM)

[October 19, 2020] Banky Foiben’i Madagasikara (BFM) published a one-pager on its e-Ariary central bank digital currency (CBDC) project. The project aims to affirm monetary sovereignty, ensure financial system stability, promote financial inclusion, control physical currency circulation, and establish a modern payment system in response to the global shift toward digital payments, cryptocurrencies, and new financial actors accelerated by COVID-19. The project follows a cautious two-phase approach: first conducting analysis, design, and experimentation, then proceeding to deployment only if the pilot phase proves successful, while carefully managing potential impacts on monetary and financial stability. [BFM]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260207)

February 7, 2026February 7, 2026 ~ kiffmeister

Universal Launches UAE’s First Central Bank-Registered USD Stablecoin (Universal Digital)

[January 29, 2026] Universal Digital Intl Limited become the first Foreign Payment Token Issuer registered by the Central Bank of the United Arab Emirates (UAE), alongside the launch of USDU, the first USD-backed stablecoin to be registered as a Foreign Payment Token under the UAE’s Payment Token Services Regulation. This makes USDU the only compliant USD settlement option for digital assets in the UAE market. The stablecoin is backed 1:1 by reserves held in safeguarded accounts at Emirates NBD and Mashreq, with Mbank providing corporate banking support, and features monthly independent attestation by a global accounting firm. Universal, regulated by Abu Dhabi Global Market’s Financial Services Regulatory Authority, is partnering with AECoin, the first licensed UAE Dirham (AED) stablecoin in the UAE, for future AED conversions and with Aquanow for broader institutional distribution, positioning USDU as a bridge between traditional financial systems and the emerging digital asset economy both domestically and internationally. [Source: Universal Digital]

Some more backfilling:

Potential Implementation of Timor-Leste eCentavos (BCTL)

[September 6, 2024] Banco Central de Timor-Leste (BCTL) published its 2025-2035 Strategic Plan for Financial Sector Development in which it discussed its plans to possibly issue eCentavos central bank digital currency (CBDC), as part of its strategy to modernize the financial system, enhance payment efficiency, and promote financial inclusion. The project will follow a phased approach starting with a comprehensive feasibility study in 2025 that examines potential benefits, challenges, and lessons from other central banks’ CBDC experiences. This may be followed by pilot testing in at least five municipalities in 2026, and full-scale implementation in 2028. The plan emphasizes the importance of assessing technological resilience, privacy and security concerns, user adoption, and interoperability with existing financial systems during the gradual rollout. [Source: BCTL]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20260128)

January 28, 2026January 28, 2026 ~ kiffmeister

Tether Launches USA₮, the Federally Regulated, Dollar-Backed Stablecoin (Tether)

Tether launched USA₮, a U.S. dollar-backed stablecoin specifically designed for the U.S. market under the GENIUS Act framework. Issued by Anchorage Digital Bank (America’s first federally regulated stablecoin issuer), USA₮ aims to provide institutions with a compliant digital dollar alternative while Tether’s global USD₮ continues operating worldwide. The stablecoin features Cantor Fitzgerald as reserve custodian, bank-grade compliance infrastructure, and is initially available on major exchanges including Bybit, Crypto.com, Kraken, OKX, and Moonpay. This launch represents Tether’s effort to strengthen U.S. dollar dominance in the digital economy while meeting American regulatory standards. The press release notes that Tether is the 17th-largest holder of U.S. Treasuries globally, ahead of sovereign holders including Germany, South Korea, and Australia. [Source: Tether]

ECB Paves Way for Acceptance of DLT-Based Assets as Eligible Eurosystem Collateral (ECB)

The European Central Bank (ECB) announced that it will accept marketable assets issued using distributed ledger technology (DLT) as eligible collateral for Eurosystem credit operations starting March 30, 2026. These DLT-based assets must meet standard Eurosystem collateral eligibility criteria and be available for settlement in systems compliant with the Central Securities Depository Regulation (CSDR) and reachable via TARGET2-Securities (T2S). The Eurosystem is also launching a work plan to explore whether DLT-native assets not represented in traditional securities settlement systems could become eligible collateral in the future, taking a staggered approach that considers market developments and evolving regulations like the DLT Pilot Regime and Markets in Crypto-Assets Regulation (MiCAR). This initiative reflects the ECB’s commitment to supporting innovation and technological progress in financial markets while maintaining safety and efficiency standards. [Source: ECB]

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:

Kiffmeister’s #Fintech Daily Digest (20251229)

December 29, 2025December 31, 2025 ~ kiffmeister

China to Pay Interest on Digital Yuan in Bid to Boost Adoption (Bloomberg)

China will begin paying interest on its digital yuan (E-CNY) starting January 1, 2026, as part of efforts to boost adoption of the central bank digital currency (CBDC). Commercial banks operating digital yuan wallets will pay interest based on holdings, giving the digital currency the same legal status as traditional bank deposits. However, the initiative faces challenges: interest rates on demand deposits at major Chinese banks are currently just 0.05%, and the digital yuan has struggled to compete with established payment platforms like WeChat Pay and Alipay despite being piloted in over half of mainland provinces. [Source: Bloomberg]

Regulatory Responses to the Financial Stability Implications of Stablecoins (SSRN)

Ulrich Bindseil posted an updated version of his paper that examines the financial stability implications of stablecoin regulation, particularly regulations that prohibit remuneration to protect banks from deposit outflows. He argues that these particular regulations make stablecoin viability cyclically dependent on interest rates rather than addressing financial stability systematically. Additionally, the prohibition creates competitive distortions between European and U.S. stablecoin markets, because European Union (EU) regulations also prohibit stablecoin wallet providers from offering indirect returns, whereas U.S. regulations allow circumvention through third-party yield arrangements. This makes EU stablecoins relatively uncompetitive as stores of value. If protecting banks from deposit outflows is the goal, Bindseil proposes requiring stablecoin issuers to hold a proportion of reserves with the central bank at below-market rates. At the extreme, that proportion could be 100%, which would additionally reduce the risk of stablecoin runs. [Source: SSRN]

Lessons from Global CBDC Pioneers for Rwanda’s Next Leap (RBA)

The Rwanda Bankers’ Association (RBA) published an analysis of pioneering central bank digital currency (CBDC) implementations in the Bahamas (Sand Dollar), Jamaica (JAM-DEX), and Nigeria (eNaira). Using quantitative pre- and post-launch data analysis, the study finds that theoretical fears of bank disintermediation did not materialize—commercial bank deposits actually grew significantly in all three countries after CBDC introduction. The research reveals that CBDC rollouts coincided with broader macroeconomic shifts including tighter monetary policy and economic rebounds, while direct effects on inflation remained statistically insignificant. However, the primary challenge across all cases was achieving widespread public adoption rather than financial instability, with uptake remaining extremely low despite technical readiness. The paper concludes that for Rwanda, currently in its CBDC Proof-of-Concept phase, success will depend less on mitigating theoretical risks and more on delivering a compelling value proposition that addresses the country’s specific challenges including limited smartphone ownership (34.3%), low internet access (29.8%), and the need for enhanced payment system resilience, financial inclusion, and reduced cross-border remittance costs. [Source: RBA]

Upcoming Speaking Engagements:

Kiffmeister’s #Fintech Daily Digest (20251224)

December 24, 2025December 24, 2025 ~ kiffmeister

Russian Ministry of Finance Approves Some Digital Ruble Payments for Government Budget Expenditures (MoF)

[December 18, 2025] The Russian government has approved a list of budget expenditures using the digital ruble starting January 1, 2026, reported on the website of the Ministry of Finance (MoF). The list includes social security payments, and salaries and other payments to staff, as well as expenses for capital construction, repair and maintenance of state-owned facilities. Also, the use of the digital ruble will become available for transfers to budgets and transfers of funds to federal institutions. Furthermore, from July 1, 2027, corresponding transactions with regional and local budgets, as well as transactions with extra-budgetary funds and recipients of funds, will become available. Payments from the budget will be made in digital rubles only if the recipients wish. [Source: Russian MoF]

South Korea to Test Distributing Government Subsidies in New CBDC Test Phase (Decenter)

The South Korean press is reporting that the Bank of Korea (BoK) is preparing to launch a new phase of its “Project Hangang River” wholesale central bank digital currency (CBDC) project, focusing on distributing government subsidies. A first three-month proof-of-concept phase with commercial banks, during which central bank authorities made it clear that it was actually testing tokenized deposits, reportedly ended in June 2025. Unfortunately the central bank itself has been silent on the project so we have to rely on press reports that are often short on details, like whether the purported second test will really be about wholesale CBDC or perhaps tokenized deposits again, or a hybrid in which tokenized deposits are settled in wholesale CBDC. [Source: Decenter]

European Council Agrees Position on the Digital Euro and on Strengthening the Role of Cash (European Council)

[December 19, 2025] The European Council released a 157-page document outlining its position on digital euro legislation, rejecting a proposal for an offline-only approach and insisting on both online and offline versions of the central bank digital currency (CBDC). While the digital euro is primarily intended for peer-to-peer and retail payments to reduce dependence on Visa and Mastercard, the Council envisions a broader scope including machine-to-machine payments for Industry 4.0, Web3 applications, and business-to-business conditional payments from the outset. The proposal also aims to safeguard acceptance of cash as a payment method throughout the euro area, and guarantee that people have access to cash and are free to choose their preferred payment method. It proposes to effectively ban non-acceptance of cash by retailers or service providers with a few exceptions, notably for payments for goods or services purchased at a distance, including online, and unmanned points of sale. [Source: European Council]

How New Regulations May Impact the Future of Stablecoins (CBPN)

Central Bank Payments News published an article by Ezechiel Copic that examines how new stablecoin regulations in the U.S. (GENIUS Act) and EU (MiCA) may impact the business models of stablecoin issuers. Both regulatory frameworks require 1:1 backing with high-quality liquid assets and prohibit interest payments to holders, but differ in prescribed asset allocations—the EU mandates 30-60% in bank deposits while the U.S. sets no specific limits. The analysis shows that while stablecoin issuers like Circle currently generate 95-99% of revenue from interest on reserve assets (primarily Treasury bills and reverse repos), they face significant interest rate risk as rates are expected to decline. However, projected growth in stablecoin supply to $1.4 trillion by 2030 could offset revenue losses from lower rates, resulting in modest revenue increases. The article concludes that Europe’s more prescriptive MiCA regulations may hinder stablecoin growth compared to the U.S. approach, and issuers may need to develop alternative revenue sources beyond reserve asset yields to maintain viable business models. [Source: CBPN]

Upcoming Speaking Engagements: