Moody's published a paper on the multiple risks of fiat-backed/pegged stablecoins. "As the number of stablecoins grows, they are more frequently being used in traditional finance, where they have the potential to lower transaction fees and make cross-border payments more efficient. Moreover, stablecoins are increasingly used to buy and sell securities, filling the void caused by the current absence of wholesale central bank digital currencies (CBDCs) compatible with distributed ledger technology (DLT). However, stablecoins are subject to multiple risks and have therefore not always lived up to their promised stability."
Project Pyxtrial: monitoring the backing of stablecoins
The BIS and the Bank of England have have developed a prototype data analytics pipeline which includes data collection, storage and analysis, that can provide supervisors with near real-time data about stablecoins' liabilities and their backing assets. Pyxtrial can provide insight into whether the backing assets exceed their liabilities at all times, and enhance the efficiency and responsiveness of the monitoring process, which helps supervisors to respond faster to potential risks.
28th Meeting of the Digital Euro Scheme Rulebook Development Group (ECB)
The European Central Bank (ECB) posted the outcome of the 28th Digital Euro Rulebook Development Group meeting (10 March 2026) reviewed work on ecosystem fit, the digital euro app, user journeys and minimum user-experience requirements, and additional clarifications on offline functionality, including thresholds, recovery and terminal readiness. It discussed risk management (including financial crime, privacy, reputational and multi-account risks), reuse of PCI and other security standards, and updates to front- and back-end implementation specifications, including alignment with ISO 20022 and Berlin Group structures and separation of authorisation and settlement. The group launched a new terminal/ATM workstream (G5), considered rulebook v0.9 consultation updates, and addressed scheme-wide timeouts and potential deep-dive sessions. [ECB]
27th Meeting of the Digital Euro Scheme Rulebook Development Group (ECB)
The European Central Bank (ECB) posted the outcome of the 27th Digital Euro Scheme Rulebook Development Group meeting (27 January 2026). It was agreed to launch two new workstreams on terminal/ATM providers and on the certification and approval framework, reviewed the ECB’s proposed offline digital euro solution, and discussed risk management including use of a digital euro fraud risk score and alignment with the Payment Services Regulation. The group noted progress on cooperation with standardisation bodies (Nexo, ECPC, Berlin Group, EPC), handling of comments on rulebook v0.9, preparation of a limited digital euro pilot with selected payment service providers and merchants, and forthcoming batches of minimum user experience requirements and implementation specifications. [ECB]
Digital Shekel Project: Progress Report 2025 (Bank of Israel)
The Bank of Israel published an update on its digital shekel project that is progressing toward an end‑2026 issuance decision, concluding that expected macroeconomic benefits are likely to exceed the associated costs. The analysis found that disintermediation risk is low under appropriately calibrated holding limits, with policy rate cuts and liquidity injections (via short‑term Bank of Israel bill redemptions) sufficient to offset deposit outflows except under extreme scenarios. A decentralized supervisory model is proposed, with existing financial regulators overseeing their respective digital shekel participants under a uniform Bank of Israel rulebook. A unified multipurpose infrastructure for retail and wholesale use is found technologically feasible and preferable to separate systems. Open questions include whether the digital shekel should be remunerated, offline payment double‑spend prevention, and retail‑versus‑wholesale sequencing. In addition, a quantitative survey of small businesses found that only one‑fifth expressed interest in using digital shekels, citing satisfaction with existing digital payment methods, although they indicated general interest in a digital shekel if it were to offer lower fees than current digital payment methods. A qualitative survey of large corporations also found lukewarm interest in using a digital shekel, with respondents mainly viewing it as potentially relevant for internal settlement and treasury operations rather than for customer‑facing retail payments, and stressing the importance of compatibility with existing systems. [Bank of Israel]
eCurrency Launches ISO 20022 Compliant CBDC-to-RTGS Implementation (PR Newswire)
eCurrency has productized an ISO 20022‑compliant interface between its central bank digital currency (CBDC) platform and a real‑time gross settlement (RTGS) system, now live at the Bank of Jamaica, enabling real‑time CBDC issuance, settlement, and lifecycle management over standard RTGS messaging rails. The implementation embeds the eCurrency retail CBDC platform as a participant in a Montran‑type RTGS environment, using ISO 20022 messages as the interface layer for issuance, redemption, and high‑value CBDC funding movements. In structural terms, the RTGS system continues to operate as the central bank’s settlement asset ledger and queue manager, while the CBDC platform manages retail‑level token creation, destruction, and lifecycle. RTGS accounts are debited or credited in real time when CBDC is issued to, or redeemed from, intermediaries, with those events triggered and synchronized via ISO 20022 messages rather than proprietary APIs. [PR Newswire]
BOE DLT Innovation Challenge 2025: Final Report (BOE)
The Bank of England (BOE) reported on explorations, carried out in September–October 2025 with nine firms, to see if wholesale central bank money can be transacted and settled on an external programmable ledger not controlled by the central bank. It concluded that DLT can technically speed wholesale settlement and improve throughput but only by accepting material trade‑offs in finality, governance, and resilience. Designs that deliver faster, more “deterministic” settlement tend to shift risk and trust assumptions, weakening decentralization or operational robustness relative to established real‑time gross settlement systems. Scalability enhancements add architectural complexity and create new dependencies that interact negatively with control and resilience requirements. Interoperability solutions with other DLT and legacy systems rarely eliminate trust or operational dependencies; instead they reallocate them across networks or third parties, including off‑chain components for permissionless ledgers. Overall, the trials suggest no dominant DLT architecture for wholesale settlement and frame the policy problem as one of choosing which trade‑offs in speed, control, and governance are acceptable. Further targeted DLT experiments are planned for 2026. [BOE]
CBDC From Global Challenges to Implementation in Kazakhstan (NPCK)
The National Payment Corporation of Kazakhstan (NPCK) published a survey of global central bank digital currency (CBDC) implementation experience to frame Kazakhstan's Digital Tenge rollout, arguing that a phased, programmability-first approach centered on government-to-business use cases can overcome five identified adoption barriers: low public awareness, high bank integration costs, uncertain banking-sector benefits, distributed ledger technology scalability limits, and competition from established payment instruments. For institutional design, the report advocates a two-tier model (central bank issues, commercial banks and fintechs distribute), holding limits and a reverse-waterfall mechanism to contain deposit outflow risk, and non-DLT distributed databases for high-volume retail transactions. The Kazakhstan-specific case emphasizes automated VAT refunds, targeted budget fund marking, and agricultural payment escrow as priority use cases. [NPCK]
The Future of Programmable Payments: Why CBDC and Stablecoins Need Each Other (LinkedIn)
The Future of Programmable Payments: Why CBDC and Stablecoins Need Each Other (LinkedIn)
The Bank of Israel's Assaf David-Margalit posted a nice interpretation of the Bank of Canada's recently published "to tokenize or not to tokenize" working paper. Assaf argues that tokenized central bank digital currencies (CBDCs) and regulated stablecoins should operate as complementary infrastructure layers rather than rivals. The Bank of Canada's paper's core insight is that a tokenized CBDC establishes a "technological floor" by offering superior collateral efficiency—eliminating default risk allows the central bank to support transaction volumes with lower collateral requirements, crowding out inefficient stablecoins through market discipline. Assaf distinguishes programmable payments infrastructure (capable of interacting with smart contracts) from programmable money (which would compromise fungibility), asserting that CBDC should provide the settlement layer while private stablecoins innovate at the application layer using CBDC as the reserve asset. [LinkedIn]
After Acacia: The Next Era of Financial System Innovation? (RBA)
[March 25, 2026] Reserve Bank of Australia (RBA) Assistant Governor Brad Jones foreshadowed the conclusions from the Project Acacia. Assisted with regulatory relief from ASIC and AUSTRAC, industry participants in Project Acacia explored 20 use cases involving a range of assets, forms of money and settlement arrangements. It found that tokenisation and related infrastructure changes can materially reduce settlement frictions, counterparty risk and manual processing in wholesale markets, especially in fixed income and term deposits, and support new asset structures and investor segments, However, large‑scale adoption is constrained by entrenched network effects, legal uncertainty (enforcement of on‑chain records, settlement finality, licensing perimeter, prudential treatment) and the absence of a coordinated public‑private strategy to scale from pilots to commercial deployment. [RBA]
To Tokenize, or Not to Tokenize: The Design Question for a CBDC (Bank of Canada)
The Bank of Canada published a paper that develops a general equilibrium model to assess whether a central bank digital currency (CBDC) should be tokenized—deployable on programmable ledgers to compete with stablecoins—or non-tokenized and confined to off-chain markets, where traditional and crypto banks coexist. Tokenization matters for equilibrium only when collateral use differs across sectors; the three governing structural parameters are crypto-bank pledgeability, crypto-asset scarcity, and the social valuation of on-chain transactions. For institutional design, tokenized CBDC crowds out stablecoins and improves welfare when crypto banks are unreliable and crypto collateral is scarce, whereas non-tokenized CBDC may dominate when on-chain activity is less socially desirable or bond-collateral reallocation to the crypto sector is itself welfare-improving; both forms reduce bank lending, posing a payment-efficiency-versus-intermediation trade-off. [Bank of Canada]
Legal Tender -A Barbarous Relic in the Digital Currency Era (SSRN)
In a paper posted on SSRN, Christian Pfister argues that granting legal tender status to retail central bank digital currency (CBDC) in advanced economies is a conceptually weak and potentially distortionary extension of a historically contingent, often obsolete institution. The paper critiques recent IMF legal analyses for presuming a “digital cash” equivalence and for conflating the unit of account, the issuer, and specific payment instruments when defining legal tender. Pfister shows that modern payment efficiency, financial inclusion, and safety can be achieved through regulation and public infrastructure without legal tender, and that combining legal tender status with regulated aggressive pricing of public rails could crowd out deposits, weaken bank intermediation, and recreate public “walled gardens.” This raises a core design question: whether any residual role for legal tender should attach to the unit of account, central bank liabilities, or particular instruments, and how to do so without impairing monetary transmission, competition, or innovation. [SSRN]
The BCEAO Invites Submissions for Research on Financial Inclusion (BCEAO)
The Central Bank of West African States (BCEAO) is inviting submissions for the 2026 Abdoulaye FADIGA Prize, which rewards high‑quality economic research on West African Economic and Monetary Union (WAEMU) economies. It explicitly invites research on financial inclusion and digital innovation, including work on how cryptocurrencies, mobile money, central bank digital currencies, and fintech can expand access to financial services in WAEMU, while rigorously assessing associated risks, regulatory and supervisory implications, and their interaction with payment systems, financial stability, and monetary policy transmission in the Union. [BCEAO]
Central Bank Digital Currency and Monetary Architecture (Dirk Niepelt)
In a literature review that has been accepted for publication by the Journal of Economic Literature, Dirk Niepelt argues that the macroeconomic consequences of retail central bank digital currency (CBDC) depend primarily on the policy choices accompanying its introduction. Organizing the survey around a neutrality result, the paper demonstrates that bank disintermediation does not independently constitute a source of non-neutrality, provided the central bank recycles CBDC proceeds to banks on deposit-equivalent terms. Most existing research conflates policy-contingent with fundamental sources of non-neutrality, obscuring the extent of policymaker control. Because CBDC represents a structural shift in monetary architecture rather than a technical payment upgrade, it raises political economy questions that exceed the conventional mandate of central banks. [Niepelt.ch]
BOE Considers Keeping Digital Pound On Ice (Bloomberg)
The Bank of England (BOE) and HM Treasury (HMT) are reportedly considering slowing down the digital pound project to defer making an immediate firm decision to approve or scrap it. Officials have been encouraged by private-sector innovation—especially tokenized deposits—that could deliver many CBDC benefits (faster, cheaper payments) within the existing regulated banking system, reducing the urgency to build a central-bank solution. The project has faced skepticism from the public, Parliament, and even BOE Governor Andrew Bailey, who remains unconvinced of the need for a retail CBDC. A decision to build would entail upfront costs in the hundreds of millions of pounds (later offset by CBDC income), voluntary participation by banks, and risk of political backlash over privacy concerns. [Bloomberg]
For a Political Economy of Central Bank Digital Currency (REP)
In this 2024 Revue d’Economie Politique (REP) article, Christian Pfister applies a positive (political economy) rather than normative framework to retail central bank digital currency (rCBDC). He maps stakeholder incentives across governments, central banks, regulators, incumbent banks, and fintech firms, then tests whether stated policy rationales align with those incentives. He concludes that publicly foregrounded motives, like financial inclusion, payment system safety, monetary sovereignty, and privacy, are analytically weak or already reached in developed economies. The dominant but largely unstated drivers are fiscal, such as seigniorage maximization through balance-sheet expansion, permanent rollover of sovereign debt held as rCBDC backing, and reduced tax evasion. Setting rCBDC remuneration at zero, officially framed as “do no harm” to bank intermediation, simultaneously serves those seigniorage objectives while suppressing a monetary policy transmission channel that the academic literature broadly endorses. For institutional design, combining legal tender status with fee exemptions advantages rCBDC in ways that raise competitive-neutrality concerns and risk crowding out private innovation. In non-democratic settings, programmable money creates structural conditions for mass surveillance. [REP]
Why Java Card Is a Natural Foundation for Secure Digital Cash (G+D)
Lars Hupel (G+D) argues that Java Card, as the execution environment for secure elements, is a strong foundation for digital cash (including CBDCs) because it supports offline-capable, tamper-resistant wallets, integrates standardized cryptography and PKI for secure issuance and transfer, enforces wallet lifecycle policies and integrity, and keeps sensitive operations inside certified hardware to balance privacy with control, while its modular, standards-based design can adapt to future cryptographic and regulatory changes. [G+D]
Eastern Caribbean Central Bank Suspends DCash 2.0 Project (ECCB)
[February 13, 2026] The Monetary Council of the Eastern Caribbean Central Bank (ECCB) approved the suspension of the DCash 2.0 central bank digital currency (CBDC) project to prioritize the development of the fast payment system (FPS) and participation in the The Caribbean Community (CARICOM) Payments and Settlement System (CAPSS) pilot. [ECCB]
On April 22, 2026, the Peterson Institute for International Economics (PIIE) hosted a virtual event at which Nicolas Véron interviewed the European Central Bank's (ECB's) Piero Cipollone on the digital euro project. As Izabella Kaminska noted on X, at one point Veron opined that the ECB's concerns about the big US payment companies (e.g., MasterCard and VISA) pulling out of Europe is somewhat far-fetched, to which Cipollone admitted that the rhetoric is largely in play just to motivate legislators to push ahead with the digital euro. "The geopolitical risk, this is resonating much more with politicians and that's where we saw some acceleration from the political side to put this project into focus... I must confess that before, this was a slow-moving project, at least at the legislative level. Then what happened in the last three/four years, it provided a sort of acceleration, mostly on the political side". [PIIE] https://x.com/izakaminska/status/2046942778437829085
Can Europe Realistically Build a Third Global Scheme? (LinkedIn)
In February 2026, Martina Weimert of the European Payments Initiative highlighted the absence of pan‑European private infrastructure despite national schemes and promotes Wero as an emerging network, while the European Central Bank continued to advance the digital euro to bolster monetary and payments sovereignty. In terms of C2B card transactions, the overwhelming share runs on the rails of US-based VISA and MasterCard, and this does not include co-branded cards (see country-by-country graphic). For example, Cartes Bancaires (CB) is a very popular card scheme in France, but it is not found anywhere else in Europe. So, to function outside France, CB cards use the Visa and Mastercard rails. The real challenge for Europe will be interoperability, to unite the different payment habits and scheme that may exist in each individual country. [LinkedIn]
ECB Signs Agreements with European Standard Setters to Facilitate Digital Euro Payments (ECB)
The European Central Bank (ECB) announced agreements with three European payment standard‑setting bodies to reuse existing open standards for processing online digital euro payments. The standards include European Card Payment Cooperation (ECPC) CPACE (to support contactless “tap‑to‑pay” payments using near‑field communication between a payment device and a payment terminal); nexo (specifications to connect merchants’ systems with the back-end systems of payment service providers and acquirers; and Berlin Group (to allow payments to be made using an alias (such as a mobile phone number) and support balance checks and reconciliation across mobile devices and payment acceptance in areas like digital euro transactions initiated in merchant apps on smartphones). The deal aims to reduce integration costs, support cross‑border scaling of European schemes, and lessen dependence on proprietary card and wallet standards owned by global firms. This move embeds the project in existing retail payment infrastructure, but leaves open how additional standards and governance will evolve over time. [ECB]
India's Digital Currency Push Targets its Leaky Welfare System (Reuters)
Reuters published an article that I was quoted in, on how India is using its e‑rupee central bank digital currency (CBDC) in targeted pilots to tighten welfare delivery, especially for farm subsidies and subsidized food, by programming funds so they can only be spent at approved vendors, which reduces leakage and upfront costs for low‑income beneficiaries but also raises concerns about over‑controlling “programmable” money and deterring wider adoption compared with more cash‑like designs. [Reuters]
Bank of Korea's New Chief Vows to Push CBDC and Deposit Tokens (The Block)
Bank of Korea’s new governor, Shin Hyun-song, used his inauguration speech to pledge support for expanding CBDC and bank-issued deposit tokens through the second phase of Project Hangang and cooperation with global initiatives like BIS’s Project Agora to strengthen the won’s role in digital payments, while emphasizing price stability amid external shocks. He conspicuously omitted any reference to won-pegged stablecoins even as lawmakers, backed by President Lee Jae-myung, work on a Digital Asset Basic Act to legally frame local stablecoins, and major financial firms prepare related products, with the bill’s progress delayed until after June regional elections. [The Block] https://www.bok.or.kr/eng/bbs/E0000634/view.do?nttId=10097597&menuNo=400423&relate=Y&depth=400423&programType=newsDataEng
Is the Digital Euro a Solution in Search of a Problem? (Banque de France)
Second Deputy Governor of the Banque de France Agnès Bénassy-Quéré argues that the digital euro responds to Europe’s strategic dependence on Visa and Mastercard and rising card fees, not an abstract techno-fix. Bank cards dominate non-cash payments, yet many euro-area countries lack national schemes and rely entirely on US networks, giving them leverage over European users and pricing. Instant transfers exist but are under-used in retail due to weak commercial front-ends. Bénassy-Quéré argues that the digital euro, rolled out euro-area wide as legal tender, can break network effects, underpin a sovereign infrastructure, and complement private solutions like Wero and EuropA within unified wallets, improving resilience and autonomy. [Banque de France]
Factors that Promote Adoption and Use of a CBDC in Peru (IDEAS)
Banco Central de Reserva del Perú (BCRP) economists examined the determinants of adoption and usage of Peru's retail central bank digital currency (CBDC) pilot, implemented through Viettel's BiPay digital wallet beginning in October 2024, focusing on eight regions with low financial inclusion. Based on individual-level survey data, active CBDC usage was positively associated with awareness of the BCRP's role in the pilot, wallet satisfaction, knowledge of functionalities, and prior digital wallet use, while self-employment was negatively associated, plausibly due to the pilot's closed-loop, non-interoperable design. Targeted advertising significantly increased merchant adoption, active user counts, and bill payment volumes, with merchant network expansion identified as a key transmission channel. The authors conclude that retail CBDC scaling requires attention to both sides of the payment market — user-facing communication and financial incentives on the demand side, merchant onboarding on the supply side — with interoperability remaining a persistent structural barrier to broader adoption. [IDEAS]
Central Banks of UAE and Philippines Agree to Link Instant Payment Systems (CBUAE)
The Central Bank of the United Arab Emirates (CBUAE) and the Bangko Sentral ng Pilipinas (BSP) signed a memorandum of understanding (MoU) to support broader cooperation on financial infrastructure and payments connectivity. This includes working to integrate their instant payment platforms to enable seamless cross-border payment transactions. The MoU also provides for collaboration on central bank digital currency (CBDC) initiatives, including sharing expertise on the development of CBDC platforms for individuals and institutions. [CBUAE]
Building Gulf stablecoins and CBDCs infrastructures (Edgar, Dunn & Company)
Edgar, Dunn & Company published a survey of the development of stablecoins and central bank digital currencies (CBDCs) across the six Gulf Cooperation Council (GCC) states. It argues that strategic motivations — reducing dependence on dollar-denominated Western payment infrastructure, modernizing domestic financial systems, and reasserting monetary sovereignty — are driving a coordinated, regulation-first approach to digital currency development. The UAE and Bahrain are identified as the most advanced jurisdictions, with Saudi Arabia positioned as a rising participant focused primarily on wholesale CBDC applications via Project mBridge. Kuwait, Qatar, and Oman remain at earlier stages. The report characterizes the regional model as a two-tier architecture in which state authorities define the regulatory perimeter while private-sector institutions handle distribution and adoption. Several case studies — including the Digital Dirham, AE Coin, mBridge, and ADIB Smart Sukuk — are presented to illustrate current implementation status. [Edgar, Dunn & Company]
RBI Shelves Plan to Launch Digital Currency (Hindu Business Line)
[January 1, 2019] The RBI reportedly quietly dropped its plan to issue a central bank digital currency (CBDC), despite having set up an inter‑departmental group to study it. Officials reportedly felt it was too early for such a move, and the feasibility report was never published, reflecting limited internal capacity on blockchain and digital currency policy. The proposed CBDC had been framed as a tool to address black money, money laundering, and cyber‑security risks, but industry voices argued that launching it would be premature and that India should watch smaller advanced jurisdictions like the UAE and Singapore first. [Hindu Business Line]
RBI Governor ays Its Too Early for CBDC (Business Standard)
[December 5, 2019] Reserve Bank of India (RBI) Governor Shaktikanta Das reportedly said that it is too early to introduce a central bank digital currency (CBDC) because the necessary technology and safeguards are still at an incipient stage, though it has examined the idea internally and discussed it with other central banks and governments. He stressed that any such CBDC would only be considered seriously when technology matures and adequate safeguards are in place. He firmly distinguished this from private digital currencies, which he rejects on the grounds that currency issuance is a sovereign function and must remain with the state, noting that global central banks and governments broadly oppose private digital currencies for the same reason. [Business Standard]
