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Regulating Stablecoins in the European Union
Regulating Stablecoins in the European Union
This work describes the main features of those stalbecoins. Current rules seek to provide legal certainty for issuers of stablecoins in the UE (by imposing a common set of provisions applicable to all of them regarding their authorisation, governance requirements, etc.), give appropriate protection for holders of those crypto assets (by regulating their rights against issuers, the rules applicable to crypto-asset white papers or the marketing communications), or address potential financial stability and monetary policy risks that could arise from their use as a means of exchange (by monitoring or restricting the issuance).
#CryptoAssets#Fintech#Regulation#Stablecoins#Europe#DFC
·link.springer.com·
Regulating Stablecoins in the European Union
Tokenisation of assets and DLTs in financial markets
Tokenisation of assets and DLTs in financial markets
The OECD published a paper that analyzes possible reasons for the absence of a market for tokenized assets and puts forward policy considerations for financial supervisors and policy makers, to which Josiah Hernandez and I contributed material on the wholesale central bank digital currency (CBDC) aspects. Possible impediments tokenization growth identified include "chicken and egg" problems (e.g., the lack of liquidity and absence of an ecosystem for tokenized assets, and the need for distributed ledger technology (DLT) payment rails (including wholesale CBDC) to exist for the payment leg of settlement), market functioning challenges of instant and "atomic" settlement, the lack of custodians to onboard investors and assets, and legal issues (e.g., the legal status of smart contracts, token ownership not necessarily according ownership to the underlying assets). It concludes that "with the proper foundations in place, new possibilities of potential efficiencies and productivity gains in tokenized assets markets can be brought about in a manner that need not negatively impact financial stability, law enforcement, local and global policy regimes".
#Tokenization#DLT#Fintech#CBDC#wCBDC#OECD#Regulation#DFC
·oecd.org·
Tokenisation of assets and DLTs in financial markets
Hong Kong launches DLT incubator for banks
Hong Kong launches DLT incubator for banks
The Hong Kong Monetary Authority (HKMA) unveiled a “Supervisory Incubator for Distributed Ledger Technology”, with tokenized deposits as a major focus. At the individual bank level, the Incubator will offer a one-stop supervisory platform that enables banks to reaffirm the adequacy of their risk management controls prior to the full launch of a DLT-based initiative. By leveraging this platform, banks will have access to a dedicated team from the HKMA for obtaining supervisory feedback and may opt to conduct live trials to validate and refine specific aspects of their risk management implementation under a hands-on and iterative approach, as needed. https://www.hkma.gov.hk/eng/news-and-media/press-releases/2025/01/20250108-3/
#Fintech#DLT#HongKong#Tokenization#Regulation#DepositTokens#DFC
·ledgerinsights.com·
Hong Kong launches DLT incubator for banks
Privacy-Enhancing Technologies for CBDC Solutions
Privacy-Enhancing Technologies for CBDC Solutions
The Bank of Canada published a paper that explores the use of privacy-enhancing technologies (PETs) in the design of central bank digital currency (CBDC) systems, potentially paving the way for solutions that better safeguard end-user privacy and meet rigorous data protection standards. PETs can offer robust protection for data throughout their lifecycle, whether stored, in transit or during processing, and ensure privacy is maintained even when data are extensively shared or analyzed. However, they can introduce performance overheads and add complexity to systems, and their effectiveness and applicability are currently limited due to their early stage of development. This paper provides a comprehensive overview of how PETs can transform privacy design in financial systems and the implications of their broader adoption.
#CBDC#Privacy#Fintech#PETs#DFC
·bankofcanada.ca·
Privacy-Enhancing Technologies for CBDC Solutions
Why everyone is wrong about stablecoins
Why everyone is wrong about stablecoins
According to Christian Catalini, network effects in the stablecoin market are likely to be much weaker than most anticipate, and it’s far from a winner-take-all environment. In fact, stablecoins may function as loss leaders and, without essential complementary assets, could even become a losing venture. And relying solely on reserve interest isn’t a sustainable way to monetise a stablecoin, and issuers will need to start competing with their own customers. While industry insiders often cite liquidity as the primary reason only a few stablecoins will dominate, the truth is far more complex.
#Fintech#Stablecoins#CryptoAssets#DFC
·omfif.org·
Why everyone is wrong about stablecoins
IZNES simulates wCBDC usage with Banque de France
IZNES simulates wCBDC usage with Banque de France
Distributed ledger technology (DLT) investment fund platform IZNES shared details about experiments during the recent Eurosystem wholesale DLT settlement trials that ended in November. It conducted two sets of experiments that used the Banque de France’s wholesale central bank digital currency (CBDC). Read more about them here: https://iznes.io/en/2024/12/23/dlt-settlement-in-central-bank-money-by-iznes-with-eurosystem/
#Fintech#CBDC#wCBDC#Settlement#Eurozone#France#Tokenization#DFC
·ledgerinsights.com·
IZNES simulates wCBDC usage with Banque de France
Assessing the impact of introducing a digital euro on monetary policy implementation
Assessing the impact of introducing a digital euro on monetary policy implementation
Banca d'Italia published a paper that proposes a methodological framework for estimating the maximum amount of digital euro (D€) that is consistent with a smooth monetary policy implementation (MPI) in the euro area (EA). To this end, it considers that monetary policy is implemented smoothly following the introduction of the D€ when i) the remaining aggregate liquidity in the EA is sufficient to anchor short-term rates to the deposit facility rate and ii) EA national banking sectors can largely meet D€ demand with excess reserves and additional central bank credit. It estimates that, for a smooth MPI, the maximum amount of D€ should not exceed EUR 1.7 trillion under an approach that takes into account the heterogeneity across EA countries and banks and prevents any EA national banking sector from facing a too severe liquidity distress following the introduction of the D€. The analysis suggests the importance of refinancing operations with a broad collateral framework in the Eurosystem operational framework, due to their key role in allowing the central bank to elastically withstand additional reserve demand stemming from the introduction of the D€.
#CBDC#Eurozone#MonetaryPolicy#Fintech#DFC
·bancaditalia.it·
Assessing the impact of introducing a digital euro on monetary policy implementation
Ripple partners with Chainlink to boost RLUSD stablecoin in DeFi markets
Ripple partners with Chainlink to boost RLUSD stablecoin in DeFi markets
Ripple has partnered with Chainlink, a decentralized oracle network, to improve the adoption and utility of its Ripple USD (RLUSD) stablecoin in decentralized finance (DeFi) applications. The collaboration will provide price feeds for RLUSD on Ethereum and the XRP Ledger, which aim to support cost-effective transactions and DeFi use cases for the enterprise-grade stablecoin. https://ripple.com/ripple-press/ripple-adopts-the-chainlink-standard-to-further-rippleusd-utility-and-access-in-defi/
#Ripple#Stablecoins#CryptoAssets#Chainlink#DeFi#Fintech#RLUSD#DFC
·cointelegraph.com·
Ripple partners with Chainlink to boost RLUSD stablecoin in DeFi markets
CBDC Spells Doom for Financial Privacy
CBDC Spells Doom for Financial Privacy
Considering that the US Bank Secrecy Act was passed in 1970 as a way to monitor foreign accounts and is now responsible for over 26 million reports on Americans a year, it should be no surprise that people are worried about the threat a CBDC could pose to financial privacy. There is little doubt that government officials will tout the risks of terrorists, drug cartels, and money launderers to justify the surveillance that a CBDC would bring. But surveilling “for bad actors” inevitably means surveilling innocent people as well. It’s time to reduce financial surveillance, not further entrench it. Introducing a CBDC would mark the end of what little financial privacy is left in the United States.
#CBDC#Fintech#UnitedStates#Cato#DFC
·cato.org·
CBDC Spells Doom for Financial Privacy
Three transactions have already been made with the BCB's Drex
Three transactions have already been made with the BCB's Drex
To date, at least three transactions have reportedly been made with the Banco do Brasil (BCB) Drex central bank digital currency (CBDC) as part of its proof-of-concept experimentation. One was carried out between two private banks (BTG Pactual and Itaú Bank) to test the compatibility and the efficiency of the payment network. The second was between the BCB and a public-sector bank (Caixa Econômica Federal). The third, in September 2024, was an interbank transaction between a public bank (Caixa) and a private digital bank (Inter). All were presumably conducted in the BCB's Drex sandbox.
#CBDC#Fintech#Brazil#wCBDC#DFC
·revistaforum.com.br·
Three transactions have already been made with the BCB's Drex
Banque de France carried out two tokenized asset transactions in tokenised assets
Banque de France carried out two tokenized asset transactions in tokenised assets
The Banque de France carried out two transactions involving tokenised assets: a reverse repurchase agreement with Société Générale and an outright securities purchase with BNP Paribas. Société Générale pledged bonds issued in 2020 on the public blockchain Ethereum as collateral, in exchange for CBDC tokens issued by the Banque de France on the DL3S interoperability solution (distributed ledger). Both parties used the technological capabilities of the Société Générale Forge platform, which acted as registrar for the issuer. The Banque de France purchased a tokenised euro area sovereign bond in the secondary market, and successfully tested two corporate actions – coupon payment and redemption – both of which were settled on the Banque de France DL3S platform. BNPP's securities business acted as subscriber and registrar for the Banque de France, operating on the Neobonds blockchain.
#Fintech#CBDC#Tokenization#Settlement#Eurozone#France#Repo#wCBDC#DFC
·banque-france.fr·
Banque de France carried out two tokenized asset transactions in tokenised assets
Digital ruble legislation submitted to Russian State Duma
Digital ruble legislation submitted to Russian State Duma
A bill has reportedly been introduced to Russia’s State Duma that that would make the use of the digital ruble central bank digital currency (CBDC), mandatory for banks and merchants. The draft law proposes a phased rollout starting on July 1, 2025, with systemically important banks, and expanding to all banks by 2027. It would make accepting digital ruble payments mandatory for retailers with annual revenues over 30 million rubles by July 2025, with the threshold dropping to 20 million rubles by July 2026. The draft bill would also mandate the use of a universal QR code system for almost all digital ruble payments.
#Fintech#CBDC#Russia#DFC
·news.bitcoin.com·
Digital ruble legislation submitted to Russian State Duma
Wholesale CBDC Approaches, Implementation Strategies and Use Cases
Wholesale CBDC Approaches, Implementation Strategies and Use Cases
The Cambridge Centre for Alternative Finance (CCAF) published a report that examines the key motivations, models, and policy considerations for wholesale central bank digital currency (CBDC). It discusses the need for wholesale CBDCs as risk-free settlement assets to support digital transaction infrastructure and mitigate potential instability arising from reliance on tokenized private assets. Central banks are considering wholesale CBDCs as an alternative to upgrading real-time gross settlement (RTGS) systems, aiming to keep pace with programmable, always-on infrastructures that facilitate real-time, cross-currency liquidity and tokenized asset transactions.
#CBDC#wCBDC#Fintech#DFC
·jbs.cam.ac.uk·
Wholesale CBDC Approaches, Implementation Strategies and Use Cases
Russian banks authorized to halt transfers with CBDCs for days
Russian banks authorized to halt transfers with CBDCs for days
The Bank of Russia introduced new rules, effective on February 23, 2025, requiring banks to suspend digital ruble transactions for two days if they are suspected of involving fraud. If such a transaction is detected, the bank will notify the customer about possible fraud. If the customer doesn't confirm it by the next day, the transaction will be canceled. Similar measures have been in effect for ordinary transfers since July 24, 2024. https://cbr.ru/press/event/?id=23261
#CBDC#CryptoAssets#Fraud#Fintech#DFC
·crypto.news·
Russian banks authorized to halt transfers with CBDCs for days
Hyperledger in Action: Central Bank Digital Currencies
Hyperledger in Action: Central Bank Digital Currencies
As central banks around the world have explored and researched the uses, viability, and needs for a central bank digital currency (CBDC), Hyperledger’s distributed ledger technologies (DLTs) have been at the forefront of these experimentations. This ebook provides the reader an overview of the Hyperledger Foundation, why open source development is appropriate for all central bank projects and real-life examples of CBDC projects around the world.
#CBDC#Fintech#Hyperledger#DFC
·media.licdn.com·
Hyperledger in Action: Central Bank Digital Currencies
CBDC in the Market for Payments at the Point of Sale
CBDC in the Market for Payments at the Point of Sale
The Bank of Canada (BOC) published a paper that investigates the introduction of a retail central bank digital currency (CBDC) into the market for payments. Focusing on the point of sale (POS), it develops and estimates a structural model of consumer adoption, merchant acceptance and usage decisions. It counterfactually simulates the introduction of a CBDC, considering a version with debit-like characteristics and one encompassing the best of cash and debit, and characterize outcomes for a range of potential adoption frictions. It shows that, in the absence of adoption frictions, CBDC has the potential for material consumer adoption and merchant acceptance, along with moderate POS usage. However, modest adoption frictions substantially reduce outcomes along all three dimensions. Incumbent responses required to restore pre-CBDC market shares are moderate to small and further reduce the market penetration of CBDC. Overall, this implies that an introduction of retail CBDC into the market for payments is by no means guaranteed to be successful.
#Fintech#CBDC#Payments#Canada#DFC
·bankofcanada.ca·
CBDC in the Market for Payments at the Point of Sale
Study on the payment attitudes of consumers in the euro area (SPACE)
Study on the payment attitudes of consumers in the euro area (SPACE)
The European Central Bank (ECB) published its latest study on the payment attitudes of consumers in the euro area (SPACE), which looks at the payment habits of consumers in euro area countries. It finds that cash remains the payment method used most frequently in shops, although its use is declining. The share of digital payments continues to increase, but at a slower pace, with cards still being the most popular method. The share of mobile apps is on the rise. Over half of euro area consumers prefer to use cards and other digital payment methods. However, a majority of consumers consider it important to have the option to pay with cash.
#Eurozone#Payments#Cash#Fintech#DFC
·ecb.europa.eu·
Study on the payment attitudes of consumers in the euro area (SPACE)
A proposal for a retail CBDC architecture
A proposal for a retail CBDC architecture
The Bank for International Settlements (BIS) published a paper by its Consultative Group on Innovation and the Digital Economy (CGIDE) that discusses four main processes in a retail central bank digital currency (CBDC) architecture. These are: i) enrolling new users, ii) creating CBDC (cash-in), iii) destroying CBDC (cash-out) and iv) intra-ledger transfers. These four processes could involve other flows and vary depending on the CBDC design, regulatory framework, technological infrastructure and policy objectives of each jurisdiction. The architecture lays out a hybrid model which allows for the division of labor between the central bank and private intermediaries.
#Fintech#CBDC#rCBDC#BIS#DFC
·bis.org·
A proposal for a retail CBDC architecture
Fee-free period for digital ruble transactions extended
Fee-free period for digital ruble transactions extended
On November 29, 2024 the Bank of Russia announced the extension of extend the fee-free period for digital ruble transactions to December 31, 2025. After that the fee for businesses accepting payments for goods and services in digital rubles will be 0.3% of the payment amount (but no more than ₽1,500). The fee for housing and utility companies will be 0.2% but no more than ₽10. The fee on business-to-business transfers will equal ₽15 per transaction. However, digital ruble transactions will always be fee-free for individuals.
#Fintech#CBDC#Russia#DFC
·cbr.ru·
Fee-free period for digital ruble transactions extended
Exploring Open Source in CBDC Development
Exploring Open Source in CBDC Development
The Digital Euro Association (DEA) published a paper that I contributed to on the opportunities and challenges of using open-source software (OSS) in central bank digital currency (CBDC) development. The use of OSS could be crucial in building trust and transparency within CBDC projects, especially for retail CBDCs in regions where consumers and advocacy groups have resisted their implementation. By making the source code publicly available, central banks can facilitate independent verification of the software’s functionality, which could help to address concerns around privacy and surveillance. By analyzing successful case studies and industry best practices, this report seeks to guide central banks in making informed decisions about OSS adoption.
#CBDC#Open Source#Fintech#DEA#DFC
·blog.digital-euro-association.de·
Exploring Open Source in CBDC Development
Digital euro stakeholder feedback and update on holding limit methodology
Digital euro stakeholder feedback and update on holding limit methodology

The European Central Bank (ECB) published material presented at the December 10, 2024 European Retail Payments Board (ERPB) digital euro technical session. The ECB provided an overview of the market stakeholder feedback and contributions on the consultation launched at the October 1, 2024 ERPB technical session. Aso, the ECB provided an initial overview of the methodology being used for the calibration of holding limits. https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse/shared/pdf/ecb.deprep241212_14erpb_Summary_of_feedback_on_Fit_in_the_ecosystem.en.pdf https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse/shared/pdf/ecb.deprep241212_14erpb_Annex_to_preliminary_methodology_for_holding_limit_calibration.en.pdf

#Fintech#CBDC#Eurozone#ECB#DFC
·ecb.europa.eu·
Digital euro stakeholder feedback and update on holding limit methodology
The role of CBDC in an increasingly digital economy
The role of CBDC in an increasingly digital economy
The Bank of England (BOE) published a paper that proposes a simple mechanism through which an unremunerated central bank digital currency (CBDC) may improve welfare by lowering the market power financial intermediaries have in negotiating fees with digital firms that cannot use cash as an alternative means of payment. However, welfare benefits will be reduced to the extent that the CBDC reuses existing payment infrastructure without providing additional competition, efficiency and functionality. Final version:
#Fintech#CBDC#UnitedKingdom#DFC
·bankofengland.co.uk·
The role of CBDC in an increasingly digital economy
Ubyx and stablecoin ubiquity
Ubyx and stablecoin ubiquity
Citibank's Tony McLaughlin has founded a new venture called Ubyx Inc. with the goal of stablecoin ubiquity. Ubyx makes stablecoins ubiquitous through acceptance at traditional financial institutions, neo-banks and fintechs all around the world. In doing so it strengthens the stablecoin ecosystem for users, issuers, accepting institutions and regulators. Stablecoin users will be able to deposit their stablecoins into their bank account, simpler than paying in a physical cheque. Stablecoin issuers will be able to access a global network of stablecoin acceptance through regulated financial institutions. And financial institutions will b able to offer a new payment option to their clients and be part of the public blockchain revolution.
#Fintech#CryptoAssets#Stablecoins#DFC
·ubyx.xyz·
Ubyx and stablecoin ubiquity
Macau pataca prototype system development completed
Macau pataca prototype system development completed
The Monetary Authority of Macau (AMCM) has completed the development of a prototype digital Macau pataca (e-MOP) which will soon undergo sandbox and public testing. There is also a chance it will be linked to China’s e-CNY and Hong Kong's e-HKD in the future. The People’s Bank of China (PBOC) provided technical support, and the Hong Kong Monetary Authority (HKMA) is responsible for supervising and managing e-MOP issuance, cancellation and circulation. The AMCM will set up self-service money exchangers to allow holders to accept e-MOP or other foreign currencies for cash reloading by exchanging money. https://www.amcm.gov.mo/zh-hant/news-notice/emop/
#Fintech#CBDC#China#HongKong#Macau#DFC
·gov.mo·
Macau pataca prototype system development completed
Bank Indonesia complete digital rupiah PoC
Bank Indonesia complete digital rupiah PoC
Bank Indonesia (BI) completed its Project Garuda proof of concept (PoC) for a distributed ledger technology (DLT) based digital rupiah wholesale cash ledger. The testing confirmed that the solution can meet the business and technical needs requirements (transaction security, interoperability with existing payment systems and financial infrastructure). Two DLT-based platforms were tested; Corda (R3) and Hyperledger Besu (Kaleido). Both were able to meet all testing scenarios and address all key questions. Project Garuda will proceed with a broader exploration of securities ledger, including exploring liquidity management and privacy technology.
#Fintech#CBDC#Indonesia#wCBDC#DFC
·bi.go.id·
Bank Indonesia complete digital rupiah PoC
SocGen completes repo transaction on public blockchain with Banque de France
SocGen completes repo transaction on public blockchain with Banque de France
Societe Generale (SocGen) completed a collateralized market transaction fully executed on blockchain through its FORGE subsidiary. This is the first sale and repurchase agreement (repo) transaction in digital securities with a Eurosystem central bank. SocGen deposited as collateral with the Banque de France some bonds issued in 2020 on the public Ethereum blockchain in exchange for pilot central bank digital currency (CBDC) issued by the Banque de France on its DL3S blockchain.
#Fintech#Blockchain#Settlement#Tokenization#CBDC#wCBDC#Eurozone#France#Repo#Ethereum#DFC
·societegenerale.com·
SocGen completes repo transaction on public blockchain with Banque de France
The EBA assesses potential benefits and challenges of tokenised deposits
The EBA assesses potential benefits and challenges of tokenised deposits
The European Banking Authority (EBA) published a report to facilitate awareness of tokenized deposits, as well as assess their potential benefits and challenges. The report also aims to promote convergence in the classification of tokenized deposits in contrast with electronic money tokens (EMTs) issued by credit institutions under the Markets in Crypto-Assets Regulation (MiCAR).
#Fintech#DepositTokens#Europe#Regulation#DFC
·eba.europa.eu·
The EBA assesses potential benefits and challenges of tokenised deposits
Digital tool sheds light on stablecoin flows and regulation
Digital tool sheds light on stablecoin flows and regulation
The Cambridge Centre for Alternative Finance (CCAF) updated its Cambridge Digital Money Dashboard (CDMD), offering new insights into the geographical flows of stablecoins, as well as regulatory overviews for a wider set of jurisdictions. This new update was made possible through a joint work with Chainalysis, a blockchain data platform specializing in on-chain data analytics for investigations and compliance.
#Fintech#CryptoAssets#Stablecoins#Chainalysis#DFC
·jbs.cam.ac.uk·
Digital tool sheds light on stablecoin flows and regulation
Exploring wholesale central bank digital currencies
Exploring wholesale central bank digital currencies
The Cambridge Centre for Alternative Finance (CCAF) published a report that reviews the case for a wholesale CBDC, the various approaches in how it can be delivered, and an assessment of the pilots and experiments undertaken by the industry and central banks. It finds that buy- and sell-side firms are progressing with tokenization initiatives, driving a need for digital money for the cash leg. which may increasingly be delivered through tokenized bank deposits or stablecoins. Meanwhile, central banks are raising concerns on the risks of using such private settlement assets for settlement, facilitating experiments demonstrating how central bank money can be used instead, but with no clear indication yet on how and when this may be delivered in practice.
#Fintech#CBDC#wCBDC#Tokenization#Settlement#DFC
·jbs.cam.ac.uk·
Exploring wholesale central bank digital currencies
AXA IM in two ECB wholesale CBDC trials
AXA IM in two ECB wholesale CBDC trials
AXA Investment Managers (AXA IM) executed two transactions using the Banque de France’s pilot distributed ledger technology (DLT) based wholesale central bank digital currency (CBDC), as part of the Eurosystem wholesale DLT settlement trials. The first was a €3 million investment by AXA IM, on behalf of AXA France, into a digital sovereign bond issued by the Republic of Slovenia. The transaction was executed on BNP Paribas’ “Neobonds” tokenization platform with T+1 settlement on T+1 using the Banque de France’s DL3S platform. The second experiment executed a fund share subscription of €1 million from Generali into AXA Court Terme with instant settlement process using digital CeBM via the IZNES blockchain platform. https://www.axa-im.com/media-centre/axa-im-continues-its-initiatives-test-blockchain-technology-part-ecbs-exploratory-work-central-bank
#Fintech#CBDC#wCBDC#Settlement#Tokenization#DLT#ECB#France#Eurozone#DFC
·ledgerinsights.com·
AXA IM in two ECB wholesale CBDC trials