Central Bank Digital Currencies (CBDCs) And Other Digital Currencies

CBDCS

Resources, Reports, and Announcements

• The European Central Bank has selected 36 payment service providers to participate in the digital euro pilot. Participants include Deutsche Bank, Revolut, Stripe, UniCredit, Adyen, SumUp, and Worldline. Central bank staff will act as users, and select online stores, restaurants, cafes, and other merchants will accept payments. A final decision on issuing the digital euro hasn’t been made – the ECB aims to be ready for a potential launch by 2029.

• The US passed legislation which prohibits the Federal Reserve from issuing a CBDC until December 31, 2030. The restriction applies to any “substantially similar” virtual assets but makes an exception for private stablecoins.

• According to the Financial Times, China is getting ready for the commercial rollout of a digital currency programme that could reshape cross-border transactions, reduce reliance on the dollar and draw Beijing closer to its “Belt and Road” trading partners.

  The Beijing-led platform, known as mBridge, is backed by the central banks of mainland China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia. The exact commercial launch date has not been announced, but preparation fees would be half those of conventional international payment systems. Smaller businesses that found international payment systems, such as SWIFT, expensive and difficult were expected to use mBridge. China’s drive to expand global use of its currency has been boosted by the Iran war, with adoption of Beijing’s more conventional renminbi cross-border clearing and payments system (CIPS)—its version of SWIFT—surging since the conflict erupted. The mBridge platform is a separate, complementary system designed to bolster the use of digital renminbi.

Stablecoins

• The Bank of England has been set a new official objective of boosting innovation in digital currencies and payments, in a strong sign that ministers want the central bank to go further to promote the UK as a hub for stablecoins and other digital assets.

• The Bank of England published its policy statement and draft Code of Practice (rules) for systemic stablecoin issuers, marking a key milestone in establishing the UK’s stablecoin regime. The framework supports safe innovation, enabling UK issued stablecoins to develop as trusted forms of digital money. It responded to industry feedback with the following decisions on systemic stablecoins:

  • central bank deposit requirement down to 30%, aligning the regime with historical liquidity stress events. Issuers will be allowed to hold short-term UK government debt securities with a residual maturity of up to 6 months for the remaining 70%

  • per-coin holding limits for individuals and businesses have been dropped in favour of temporary guardrails on the level of issuance

  • under the proposed statutory trust mechanism, there will be two trusts, one to protect coin-holders’ interests and the other to cover the costs of returning value to them

  • to prohibit the payment of interest and income paid by the issuer to the coin-holder in connection with the holding or retention of a stablecoin. This includes any returns provided in cash, tokens, fee rebates or other forms of consideration that are calculated by reference to the period for which the stablecoin is held.

• An analysis from the BitCoin foundation found that three new stablecoin issuers were gaining widespread adoption. These are Ethena, PayPal and Ripple.

• UK Finance launched a video explaining the Great British Tokenised Deposit programme whereby the major banks and the central bank are coordinating on interoperability standards to create a tokenised deposit scheme that is acceptable across all UK payment institutions.

• Moody’s launched Token Integration Engine (TIE), which takes the credit analysis it performs off-chain and wraps it in a digital format that can be read natively in blockchain environments, such as smart contracts. TIE is network-agnostic by design: first deployed on the Canton Network in March 2026, and now live on Solana through Alphaledger.

• Fitch issued a report on the Challenges in Assessing Stablecoin Peg Stability.

• S&P announced that six of the 11 stablecoins covered by its Stablecoin Stability Assessments (SSAs) have an adequate or above ability to maintain their peg to the fiat currency. Over the past three quarters, S&P Global Ratings revised two of its 11 SSAs to a weaker level, while the other 9 remained unchanged. De-pegging is a major risk, which is why they have built this methodology. "With over half of our assessments now at adequate or above, we are seeing stronger asset quality and good risk management practices among some issuers. However, significant differences remain across stablecoins which can increase the risk of de-pegging."

• Twenty-one financial institutions today committed to establish a company to issue a USD stablecoin, targeting a market launch in the first half of 2027. The group, which announced its exploratory phase last October with ten global systemically important banks (G-SIB), plans to expand into other G7 currencies over time, with the euro as the priority. Potential use cases will target wholesale, institutional and retail markets, with the new company to be formed in the second half of this year, subject to closing conditions.

• A global G7 stablecoin consortium has been formed by 17 G-SIB banks including Banco Santander, Bank of America, Citi, Deutsche Bank, Goldman Sachs, MUFG Bank, TD Bank and UBS, BBVA, Capital One, Commerzbank, Crédit Agricole, Lloyds, PNC, Scotiabank, Rabobank, Wells Fargo and Standard Bank (not a G-SIB). They are joined by two US asset managers, Fidelity Investments and WisdomTree, and Abu Dhabi conglomerate subsidiary Sirius International Holding.

• KPMG completed the first full financial audit undertaken of Tether, which included verifying its gold holdings as at 31 December 2025.

• The Bank for International Settlements’ Financial Stability Institute (FSI) published a brief comparing stablecoin issuance rules across the European Union, Hong Kong, Singapore, the UK and the United States. Its headline concern is that activity restrictions apply to the issuing entity rather than the wider corporate group. Hence, a nonbank issuer’s affiliates can conduct the lending, staking, or custody that the issuer itself cannot, and no group-wide oversight applies to nonbanks.