DFC

Bangko Sentral ng Pilipinas (BSP) published a paper that concludes a wholesale central bank digital currency (WCBDC) on Hyperledger Fabric is technically feasible for 24/7 interbank settlement and could serve as a conditional back-up to PhilPaSS Plus, subject to major design, risk, and legal work. The two-phase Project Agila sandbox showed Oracle’s distributed ledger technology (DLT) platform can support full WCBDC lifecycle operations, programmable payments and high volumes, but with clear constraints around transaction finality, access controls, cybersecurity, and scalability at larger loads. The report frames WCBDC as reserves-on-ledger and potential high-quality liquid asset, analyzes implications under the National Payment Systems Act and BSP Charter, and identifies systemically important payment system treatment, access, holding limits, and charter changes as key policy questions. It recommends focusing next on tokenized securities settlement and institutional cross-border use cases while hardening governance, IT risk, and integration with existing financial market infrastructures (FMIs). [BSP]

Gita Gopinath argues that global stablecoin usage is structurally evolving toward maximum pseudonymity, in tension with decades of policy that pushed traditional money toward transparency. Empirically, most United States dollar‑pegged stablecoins (Tether and USD Coin) are held in self‑custody wallets and increasingly transferred wallet‑to‑wallet, with regulated exchanges and issuers involved in a shrinking share of flows, even on the most identifiable chains. This pattern undermines tax collection, financial‑crime controls, capital controls, and sanctions that depend on residence and identity information, while exploiting lighter compliance burdens relative to banks. Existing United States and European frameworks focus on issuers and centralized exchanges, leaving self‑custody and offshore activity largely outside ex ante monitoring, raising unresolved questions on how far regulation should extend into wallet‑level and cross‑border infrastructure. [BIS]

The Bank of England (BoE) published a paper that outlines how it and the Financial Conduct Authority (FCA) will jointly regulate “systemic” stablecoin issuers within the new U.K. stablecoin regime created by recent legislative changes. The paper allocates supervisory remits across the two authorities and the Payment Systems Regulator, explains how issuers move from solo Financial Conduct Authority oversight to joint regulation once HM Treasury recognizes them as systemic, and details transitional tools such as staged onboarding and the BoE’s power of direction. It hard‑codes a more prudentially oriented regime for systemic issuers (backing assets in central bank deposits and short‑term gilts, capital and reserve requirements, issuance guardrails) while leaving conduct, disclosure, and competition issues primarily with the Financial Conduct Authority. Unresolved points include final calibration of failure arrangements, guardrail withdrawal, and rule disapplication mechanics. [BoE]

CashEssentials published an article that argues Germany’s payment landscape remains cash‑centric even as digital usage overtakes cash in transaction counts, based on the Bundesbank’s 2025 payment behavior study. The study reports that digital means of payment account for 55% of recorded purchases, but cash is still the single most used instrument with 45% of payments, ahead of debit cards and mobile payments. Measured by value, debit cards lead with 28% of turnover, while cash and credit transfers each hold 23%, indicating differentiated roles by ticket size and use case. The article emphasizes inclusion and resilience; cash usage is higher among older, lower‑income, and less digitally literate groups, and respondents strongly support retaining cash and developing European digital alternatives such as Wero and a digital euro. [Cash Essesntials]

The Bank of England (BoE) published a Phase 2 interim update for its Digital Pound Lab, developed with Accenture, ahead of the phase's July 2026 conclusion. BoE-developed use cases demonstrated include one-time aliases for privacy-preserving payments, confirmation of payee, group "kitty" payments using conditional locks, external service interface provider connections enabling third-party app integration, allowances extended to e-commerce, and usage-based streaming micropayments. Twelve private sector participants are testing additional use cases; two featured to date are Crunchfish, demonstrating deferred offline payments with a reserve-pay-settle lifecycle and double-spend controls, and TECHT Labs, demonstrating conditional business-to-business payments via smart contracts. The BoE explicitly disclaimed policy endorsement of any participant designs. A full Phase 2 report and webinar are expected in July 2026. [BoE]

The European Parliament's Economic and Monetary Affairs Committee adopted its negotiating position on the digital euro by 43 votes to 14, part of a three-file single currency package. The digital euro would be account-based online and local-storage offline, with privacy-by-design using zero-knowledge proofs and no European Central Bank (ECB) access to personal identification data; basic services and offline payments would be fee-free; most merchants required to accept it. European Commission-set individual holding limits, calibrated on ECB recommendations and reviewed biennially, protect financial stability; businesses may accumulate incoming digital euro payments for up to 24 hours only; no interest accrues. The ECB must complete a rulebook, infrastructure, and pilots before a minimum 24-month rollout. A companion file allows non-euro EU member state payment service providers to distribute the digital euro under the same rules; a third file reinforces cash as legal tender and prohibits merchants from refusing it. Council negotiations on all three files are the next legislative step. [European Parliament]

The U.S. Senate passed the 21st Century ROAD to Housing Act in an 85-5 vote, a bipartisan package meant to boost housing supply and stop large investors from snapping up single-family homes. The bill would also bar the Federal Reserve from issuing or creating a central bank digital currency (CBDC), or any substantially similar distributed ledger technology (DLT) based digital asset, until the end of 2030, including via intermediaries. The text includes a carve‑out for private “dollar‑denominated currency that is open, permissionless, and private, and fully preserves the privacy protections of United States coins and physical currency”. The bill now goes back to the House of Representatives, where quick approval is expected. [Decrypt]

Korea's Electronic Times reports that, as part of Project Han River Phase 2, participating banks are integrating deposit-token infrastructure with their core banking ledgers inside the Bank of Korea (BOK) Naver Cloud test environment. Under the architecture, the BOK issues wholesale central bank digital currency (CBDC) to banks as the interbank settlement asset, while banks issue deposit tokens that users spend via bank-app wallets. The new work links deposit tokens to core deposit, transfer, and accounting systems, including interest accrual and payment, and builds treasury-voucher systems for programmable government subsidy disbursement. Sources frame this as a pre-institutionalization step, moving from "can it settle payments" to "can it run inside production banking systems." [Electronic Times]

The Bank of England (BoE) published a policy statement and draft code of practice for systemic stablecoin issuers, reflecting extensive engagement with industry and stakeholders that resulted in targeted revisions to the proposals consulted on in 2025. The maximum share held in short-term U.K. government debt has been increased from 60% to 70%, with the remainder in central bank deposits. Also, a temporary issuance guardrail will apply to each systemic stablecoin, initially set at £40 billion, dropping the holding limits (£20,000 on individuals and £10 million on corporations) proposed in the 2025 draft. However, the BoE will ban issuers (directly or indirectly) from paying interest or dividends directly to users for simply holding stablecoins, but will permit activity-based rewards, similarly to the U.S. CLARITY Act currently winding its way through Congress. The BoE is also considering offering a backstop lending facility for eligible, solvent, and viable systemic stablecoin issuers, which would allow them to borrow against short-term sterling-denominated UK government debt securities in a limited set of circumstances. [BoE]

The BIS published a paper by Huang, Tarashev and Wang that argues that the way that crypto exchanges remunerate customer stablecoin holdings drives very different macrofinancial effects. Exchanges either pass through income from low‑risk reserve assets ("reserve-based" remuneration) or use revenues from lending, margin finance and trading ("activity-based"). In the reserve‑based case (e.g., Coinbase), stablecoin remuneration closely tracks policy rates, while in the activity‑based case (e.g., Binance) yields are highly volatile and tied to crypto market conditions and funding demand. Econometric decompositions show crypto‑activity shocks dominate benchmark‑rate shocks in explaining activity‑based yields, especially during 2024 rallies. If stablecoins scale, either of these remuneration models could alter bank and money‑market funding, introduce boom‑bust dynamics and run risks, and reshape monetary policy transmission, with regulatory capital and liquidity requirements a key open mitigant. [BIS]

The Bank of Canada (BoC) published a paper by Cheng, Davoodalhosseini, Chiu, and Jiang that shows that central bank digital currency (CBDC) economics is complicated by private payment service provider (PSP) transaction data harvesting and sale. A well-designed CBDC should collect some transaction data itself — for fraud detection and financial crime monitoring — but not sell it. Counterintuitively, a U.S.-calibrated model finds that introducing a CBDC would increase rather than reduce PSP data collection, because PSP market power currently dominates - i.e., public competition pushes PSPs to expand their customer base, raising aggregate data output. The reverse holds if PSP competition intensifies, in which case a CBDC designed to curb data monetization would shrink PSPs' market share and reduce aggregate data production. [BoC]

Hong Kong Exchanges and Clearing Limited (HKEX) and the Hong Kong Monetary Authority (HKMA) will run a joint pilot using e‑HKD wholesale central bank digital currency (CBDC) operating on a 24/7 basis to fund advance margin for derivatives after‑hours trading while keeping existing operational workflows unchanged. The aim is to improve flexibility and efficiency versus the current cut‑off, under which clearing participants must submit advance margin deposit requests to Hong Kong Futures Exchange Clearing Corporation (HKCC) by 15:00 for them to count toward the after‑hours session. Participants in HKCC can optionally conduct real‑value trial transactions, with broader adoption contingent on regulatory approval and market readiness. [HKMA]

Kazakhstan’s Ministry of Finance now requires government expenditures above 100 million tenge to be executed in programmable Digital Tenge central bank digital currency (CBDC) with end‑to‑end identifiers and event‑triggered settlement. Initial use cases include construction, health, fuel, transport, special funds, certain budget loans, and research grants, with future extensions to utilities, energy, border infrastructure, subsidized lending, and quasi‑public entities. The funds are "colored" to their purpose. For example, tenge allocated for a road cannot be redirected to anything else. And payment is released only after a confirming event, whether an act of completed work, an electronic invoice, or a registry record. [LinkedIn]

The Bank of Canada (BoC) published a staff analytical paper by Sofia Priazhkina that examines how a non-interest-bearing retail central bank digital currency (CBDC) could affect the financial stability of Canada’s systemically important banks during a severe recession. Stress test results show that the banks remain resilient, maintaining key regulatory ratios even under high CBDC demand. To manage funding outflows, banks scale back balance sheet growth and replace some lost deposits with alternative funding. Profitability stays strong overall, though short-term volatility may occur. To reduce potential risks, the paper recommends a gradual CBDC rollout with holding limits, well-timed capital buffer adjustments, liquidity regulation updates, early communication of regulatory changes, and coordination with central bank balance sheet policies. [BoC]

[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]

The IMF published a paper by Capelle, Fernandes, Kruger, and McAdam that uses credit registry microdata (AnaCredit, RIAD) to estimate barriers to cross-border bank-firm relationship formation, loan pricing, and bank entry across the euro area, finding cross-border relationships 95% less likely than domestic ones and entry barriers equivalent to a 99-percentage-point implicit tax, while interest rate and loan-quantity wedges remain small. These extensive-margin frictions correlate strongly with a novel bilateral regulatory-distance index spanning prudential, resolution, deposit insurance, and bankruptcy regimes. A calibrated spatial general equilibrium model finds a 10% reduction in relationship wedges yields a 1.6% euro-area GDP gain, driven overwhelmingly (96%) by capital and labor accumulation rather than allocative efficiency, with smaller economies and financial centers (Ireland, Luxembourg, Netherlands) gaining disproportionately. Whether reallocation gains remain modest even as integration deepens is unresolved. [IMF]

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]

Early Warning, the operator of U.S. fast payment system (FPS) Zelle, said it will launch Zelle in India first for U.S. consumers sending money to family and friends abroad, with initial availability expected before year-end, and it also introduced ZelleUSD (ZLUSD), a U.S. dollar-backed stablecoin intended to support future international payments in other markets. The company framed the move as an expansion of its domestic payments network into cross-border remittances, saying financial institutions could offer near-instant transfers through existing banks and credit unions. [Zelle]

The IMF published a technical assistance report on stakeholder engagement and roadmap development for Bangko Sentral ng Pilipinas's (BSP's) Project Agila wholesale central bank digital currency (wCBDC) project. As part of this work, tokenized government bond settlement and cross-border payments were identified as priority wCBDC use cases. Workshops with financial institutions, the Bureau of the Treasury, and market infrastructure providers highlighted real-time gross settlement (RTGS) system settlement-window limitations, capital market shallowness, and correspondent-banking-dependent cross-border payment inefficiencies. The roadmap calls for cost-benefit analysis of wCBDC against alternatives including trigger solutions and omnibus accounts, although the Securities Clearing Corporation (SCCP) prefers its existing fee-free settlement-bank arrangements, which also provide netting and liquidity-saving features not easily replicated on RTGS, over direct settlement access. Legal framework gaps and financial integrity regulation compliance remain key open issues. [IMF]

The BIS published a report on Project Aperta, a proof-of-concept "network of networks" connecting domestic open finance frameworks across five jurisdictions (Brazil, Hong Kong, India, United Kingdom and the United Arab Emirates) without requiring bilateral integration or standards harmonization. A centralized architecture—chosen over a federated alternative as faster and less disruptive to domestic systems—provided trust, discovery, and real-time data translation, tested via cross-border SME account opening and a three-stage trade finance workflow incorporating LEIs and MLETR-aligned digital documents. For institutional design, the centralized model concentrates cost and single-point-of-failure risk centrally while minimizing participant burden; federation remains the long-term goal but requires substantial regulatory convergence. Open questions include consent portability, cross-border liability, data localization, and the governance and funding arrangements for any future network operator. [BIS]

The BIS published a paper by Schär, Kosse, Rice, Shirakami, and Siridhasanakul that analyze 593 million Ethereum event logs across 141 million transactions to argue that stablecoin transfers are routinely embedded within atomically executed bundles combining trading, lending, and settlement, distorting standard interpretations of stablecoin activity. While 31.6% of transactions involve such complexity, these generate nearly 60% of all transfer events, meaning transfer-level data misclassifies most observations as standalone payments. USDT, USDC, and PYUSD differ systematically in co-usage, computational burden, urgency, and business-hour alignment, reflecting distinct institutional designs rather than interchangeability. The action-set classification offers supervisors a basis for activity-based oversight, while divergent jurisdictional timing patterns underscore the need for cross-border data-sharing among regulators. [BIS]

South African Reserve Bank (SARB) Deputy Governor Rashad Cassim argues that South Africa's primary digital payments priority is modernizing the formal payment system and reiterated the SARB’s position that retail central bank digital currency (CBDC) is feasible but lacks compelling near-term justification. He recounted that the SARB's Projects Khokha 1 and 2 established distributed ledger technology (DLT) feasibility for wholesale settlement while surfacing governance, finality, and interoperability gaps. Cassim emphasized that South Africa’s immediate need is ubiquitous fast, simple, low‑cost digital payments, and that the SARB favors a hybrid model in which it expands its role beyond its real-time gross settlement (RTGS) to help shape fast retail rails together with the private sector, under the Payments Ecosystem Modernisation agenda. In this regard, the SARB is addressing issues and gaps in the PayShap fast payment system (FPS) jointly owned by the SARB and the major banks. [SARB]

The Central Bank of Nigeria (CBN) published its Nigeria Payments System Vision 2028 that keeps the eNaira central bank digital currency (CBDC) nominally alive while effectively conceding that its 2021 general-purpose retail configuration has failed. It reports low real-economy uptake, weak bank and fintech integration, no live cross-border corridors, and a negligible share of currency in circulation, and directs that the existing framework be "revisited." The forward strategy hedges across incompatible theories rather than committing to one. The most credible surviving strand is programmable, purpose-specific government disbursement, with time-limits, sub-wallets, payment splitting, similar to the targeted-CBDC directions taken by Kazakhstan and India. Yet the document simultaneously sustains an expansionary, quasi wholesale payments-focused agenda, with bilateral cross-border CBDC corridors, a proposed eNaira pilot on SWIFT's multilateral CBDC Linker, and trade and tokenized-securities settlement. [CBN]

A Japan FinTech Observer article by Norbert Gehrke describes the Bank of Japan central bank digital currency (CBDC) project's shift from the proof-of-concept phase to pilot planning, restructuring governance from seven Working Groups into three Discussion Groups focused on architecture, new technology, and ecosystem design. The piece describes how work will now concentrate on defining “minimum necessary functions,” stress‑testing an online retail ledger at 50,000 transactions per second, and managing scaling limits of techniques such as record splitting. It highlights operational bottlenecks along a four‑step user journey (onboarding, charging, payments, and value‑added services), emphasizing frictions in know‑your‑customer synchronization, liquidity auto‑charge logic, and dispute handling. A core policy issue is standardizing interfaces between the central ledger and heterogeneous private money formats to maintain universal access and “singleness of money” while enabling tokenized deposits and programmability. The unresolved questions concern interface standards and privacy‑preserving data use. [Japan FinTech Observer]

A LinkedIn post by the Bank of Israel's Assaf David-Margalit argues that the Eurosystem’s tokenized-settlement infrastructure (Projects Pontes and Appia) is progressing faster than the legal framework needed to make tokenized-asset settlement in central bank money legally robust and cross-border enforceable. Pontes can be delivered on time because the Eurosystem controls the technical design and build, whereas wholesale-tokenization law depends on European Union (EU) legislative processes, optional “28th regime” techniques, and remains at the level of aspiration rather than a concrete instrument, leaving firms to rely on the Distributed Ledger Technology Pilot Regime and legacy rules. This sequencing gap makes legal certainty, rather than technical readiness, the binding constraint: banks will delay serious adoption until finality, ownership, insolvency treatment, and cross-border enforceability are clarified, so the eventual usefulness of the new rails depends more on lawmaking than engineering. [LinkedIn]

The IMF published a high-level technical assistance report that proposes a structured roadmap for exploring a wholesale central bank digital currency (wCBDC) in the Philippines, anchored in use cases for tokenized government bond settlement and cross-border payments within the wholesale payment landscape. The IMF used stakeholder workshops to surface pain points—securities settlement inefficiencies, lack of interoperability, and slow, costly cross-border flows—and then prioritize wCBDC applications to address them. The roadmap, organized under the IMF’s “5P” methodology, sequences foundational work (governance, resources, legal underpinnings, risk and suitability analysis) alongside parallel workstreams for each use case, moving from research to proofs of concept. Unresolved issues include legal reforms, coordination with foreign jurisdictions, and empirically demonstrating net system-wide benefits. [IMF]

Hong Kong Monetary Authority (HKMA) has created a Tokenised Bond Expert Group to design policy, market practice, and infrastructure changes to scale tokenized bond issuance and trading in Hong Kong’s fixed income market. The group aggregates industry associations, financial institutions, legal firms, and infrastructure and technology providers, and has already begun reviewing how existing legal and regulatory frameworks apply to tokenized bonds. Its initial discussions will feed into an ongoing exercise with the Financial Services and the Treasury Bureau to identify specific legal and regulatory enhancements, with details to follow. [HKMA]

The U.S. Federal Reserve (FRB) published a paper by Klee, Lubis, Ross, Ross, and Vardoulakis that shows how permissionless blockchain-based stablecoins are made fragile and prone to self-reinforcing redemption runs by way that they "unbundle" trust. Network externalities and congestion-sensitive gas fees interact to generate strategic complementarities in redemption decisions, producing runs even when reserves are perfectly safe. The global games model yields a discrete redemption regime shift, not a smooth response, once congestion crosses a threshold falling as network externalities weaken. Panel regressions on five Ethereum stablecoins (2017–2025) show congestion alone does not drive redemptions; only its interaction with low network externalities does, concentrated in the upper tail of the congestion distribution. Hence, frameworks targeting reserve quality, such as the GENIUS Act and MiCA, address the liability but not the rail, and central bank digital currencies (CBDCs) and tokenized deposits circulating on permissionless blockchains inherit the same fragility. [FRB]