Fintech Daily Digest

Ripple has integrated its enterprise-grade Ripple USD (RLUSD) USD-denominated stablecoin into its Ripple Payments cross-border payments solution. RLUSD allows enterprises to facilitate instant settlement of cross-border payments, access liquidity for remittance and treasury operations, integrate with decentralized finance (DeFi) protocols, bridge between traditional fiat currencies and the crypto ecosystem, and provide collateralization for trading tokenized real-world assets on-chain. Since launching in December 2024, RLUSD is nearing $250 million in market capitalization and $10 billion in trading.

Stablecoin circulation has exceeded $215 billion globally as of Q1 2025, with on-chain transaction volume hitting $5.6 trillion in 2024-equivalent to 40% of Visa's payments volume. Tether (USDT) and USD Coin (USDC) remain the giants - with ~$140B and ~$55B circulating respectively - but their combined ~90% share in 2024 is slowly diluting as new issuers emerge. Notably, PayPal USD (PYUSD) launched in late 2023, FDUSD (First Digital USD) out of Hong Kong, Agora's AUSD,Ethena's USDe, and others like TrueUSD (TUSD) and DAI collectively make up the remaining ~10%. By 2030, stablecoins are expected to be integral to global finance, especially in cross-border payments, B2B transactions, and digital asset settlement.

According to this slide deck from Artemis, stablecoin supply continues to hit all time highs of $230 billion, up 68% Y/Y Supply continues to increase despite the overall crypto market cap being down YTD. Q1 2025 was a record for stablecoin launches and was the first time 100 stablecoins have over $10mn in supply. Majority of stablecoins launched are crypto or fiat backed as DeFi shifts away from algorithmic backed stablecoins.

Amidst rapid digitalisation, many countries are increasingly moving towards 'cashless' or 'cash-lite' environments. While this development provides benefits for many, evidence indicates that it also raises risks for some consumers, especially those who may be vulnerable or who cannot-or prefer not to-transact digitally. This paper presents the impact of digitalisation on access to cash and summarises policies and measures enacted to ensure access to and acceptance of cash.

The European Payments Initiative (EPI) is an initiative backed by 16 European banks and financial services companies to progressively build Wero, a payment solution tailored for Europe. EPI leverages the instant account-to-account payments infrastructure available in Europe to improve efficiency and remove intermediaries in the payment flow. It aims at enabling next-generation payments for consumers and merchants in Europe across all types of retail transactions. EPI will initially support person-to-person (P2P) and person-to-professional (P2Pro) payments, followed by online and mobile shopping payments and then point-of-sale payments.

Stablecoins are good candidates for studying interoperability across blockchains because they are nonspeculative by design. Using stablecoins and bridged stablecoins, we examine the price relation between native and bridged USDC and USDT on multiple blockchains and bridges. In principle, a bridged representation of an asset ("bridged asset") represents value that is identical to the original asset. We provide evidence of limited interoperability by showing the divergence of prices of tokens represented on different platforms. Overall, the surprisingly high price variation across blockchains of stablecoins, which are intended to represent $1, points to broad violations in the singleness of money that are not observed for bank deposits. This suggests that limited interoperability contributes to price variation across stablecoins. See also Part 1: https://libertystreeteconomics.newyorkfed.org/2025/03/an-interoperability-framework-for-payment-systems/

The U.S. Federal Deposit Insurance Corp. (FDIC) will no longer instruct banks to get prior sign-off before they engage in crypto-related activities - a standard that was set in 2022 that effectively blocked FDIC-supervised institutions from engaging in such activities as they waited for approvals that never came. Earlier in March 2025, the Office of the Comptroller of the Currency (OCC) rescinded its similar 2022 guidance. https://www.fdic.gov/news/financial-institution-letters/2025/fdic-clarifies-process-banks-engage-crypto-related https://www.occ.gov/news-issuances/news-releases/2025/nr-occ-2025-16.html

The Central Bank of the UAE (CBUAE) unveiled the official symbol for its blockchain-based Digital Dirham central bank digital currency (CBDC). Issuance is expected to take place in the last quarter of 2025 for retail sector. The Digital Dirham, underpinned by Federal Decree-Law No. (54) of 2023, is set to become a legal tender, ensuring its acceptance across all payment outlets and channels alongside physical currency. https://www.centralbank.ae/media/ckkp3s3f/cbuae-unveils-new-dirham-symbol-en.p

Banco Central do Brasil (BCB) published a report on the main developments in the first phase of its Drex wholesale central bank digital currency (CBDC) proof-of-concept (POC) work, which took place between July 2023 and October 2024. (None of the Drex POC tests involved real clients or assets, but rather fictitious ones.) The report highlighted the trilemma of finding a solution that balances decentralization, programmability, and privacy issues at the same time, while being compliant to the Brazilian legal framework. I'm still digesting a Google Translate version (it's only available in Portuguese) of the 73-page report, and may come back with more detail later.

The Bank for International Settlements (BIS) Committee on Payment and Market Infrastructures (CPMI) published a brief that highlights key retail payment trends based on 2023 data collected from member jurisdictions. It demonstrates that the use, or volume, of cashless payment methods continued to grow in 2023 and that consumers increasingly choose to pay digitally for small value transactions. Although broad based, the growth in cashless payments was especially strong in emerging market and developing economies (EMDEs), driven by a sharp increase in the use of credit transfers (mostly fast payments) and e-money. It also finds that the uptake of fast payments is generally higher in jurisdictions with lower levels of cash in circulation and wider use of payment cards, especially for small payments. However, the demand for cash withdrawals generally remained stable compared with previous years.

Wyoming plans launch its own U.S. dollar-backed stablecoin as soon as July 2025. The WYST token will be fully backed by US Treasuries, cash and repurchase agreements, and maintain a statutory requirement of no less than 102% capitalization. The income generated through interest income on the reserve assets will be used to fund education and infrastructure. They have been tested on Avalanche, Solana, Ethereum, Arbitrum, Optimism, Polygon, and Base testnets. in collaboration with token issuance partner LayerZero. https://content.govdelivery.com/accounts/WYGOV/bulletins/3d8d97a

A paper published by Banco Central do Brasil (BCB) shows that instant payment systems (IPSs) may have the unintended consequences of increasing the banking sector's demand for liquidity. Using administrative banking data and transaction-level payment data from Brazil's Pix, one of the most widely adopted instant payment systems, it finds that banks increased their liquid asset holdings after the adoption of instant payments. These findings arise because the convenience of instant payments to consumers comes at the expense of banks' ability to delay and net payment flows. The inability to delay payments increases banks' demand for holding liquid assets over transforming illiquid ones.

U.S. Senator Ted Cruz introduced a bill on March 26, 2025 to prohibit the Federal Reserve from issuing a retail central bank digital currency (CBDC). The "Anti-CBDC Surveillance State Act," would prohibit the Fed from offering certain products or services directly to American individuals, a key component of any retail CBDC. The Texas Republican's bill is similarly worded to the bill introduced by Representative Tom Emmer to the House of Representatives on March 6. https://www.cruz.senate.gov/newsroom/press-releases/sen-cruz-introduces-bill-to-block-federal-reserve-from-issuing-central-bank-digital-currency

The Warwick University Business School Gillmore Centre for Financial Technology published its response the Bank of England's central bank digital currency (CBDC) consultation. One of its main points was that, even with a strong policy case, a digital pound will only fulfill its purpose if people adopt it. In the United Kingdom, relatively strong retail payments landscape would present a challenge in this regard. However, two particular pain points suggest a pathway to adoption; merchant frustration over high card payment costs and lack of alternatives, and clunky person-to-person (P2P) payments. A digital pound is not the only solution here, but perhaps these concerns suggest a pathway to adoption. However, most consumers don't directly bear payment costs (merchants) and prices typically remain the same regardless of the payment method, so there's little direct incentive for users to switch, complicating adoption. And anxieties around CBDC privacy are ironic in the context of widespread reliance on payment systems that are not private, but maybe a CBDC with cash-like attributes could carve out a unique niche. https://warwick.ac.uk/fac/soc/wbs/subjects/finance/gillmore/research/environment/the_gillmore_centre/

The SEC will return $75 million of the $125 million-court ordered fine paid by Ripple last year. The proposed settlement, which is subject to commissioner and court approval, comes just a week after the SEC agreed to drop its appeal of U.S. District Court judge Analisa Torres' 2023 ruling that Ripple's programmatic sales of XRP to retail exchanges did not violate federal securities laws. Torres found that only Ripple's institutional sales violated securities laws, ordering Ripple to pay the $125 million fine. Though hefty, the fine was a mere fraction of the nearly $2 billion in civil penalties, disgorgement and prejudgement interest the SEC initially requested. As part of the pending settlement agreement, Ripple has agreed to drop its cross-appeal of the SEC's appeal. Alderoty also said that the SEC will ask the court to lift the standard injunction imposed against Ripple. https://x.com/s_alderoty/status/1904587116488917053

Custodia Bank has partnered with Texas community bank Vantage to mint, transfer and redeem a deposit token on the Ethereum blockchain. The reason for using quotes around the term "stablecoin" is because deposit tokens on a permissionless blockchain appear similar to stablecoins, but if they are purely backed by deposits and issued by a bank, then legally they are different. They're simply a bank deposit using a different technology. With stablecoin laws progressing through Congress, both the House and Senate versions of the legislation exclude bank-issued tokens backed by deposits, precisely for this reason. https://x.com/caitlinlong_/status/1904523878195507299?s=46

"The costs of payment methods for consumers are difficult to determine, not recorded in a harmonised manner on an international level and consequently vary significantly from country to country. For this reason, a separate study is necessary for Germany. As part of a representative survey conducted in 2023, households were asked about the costs they incurred when using various means of payment. Financial costs were recorded, including fees for account management, ATM cash withdrawals or for payment cards, as well as the financial impact in the case of loss or fraud. Non-monetary costs in the form of the time required and the costs of data disclosure were also included." [Deutsche Bundesbank]

Digital fiat currency (DFC) is a tokenized, digital representation of a sovereign currency issued by an authorized public or private entity. When issued and distributed by a central bank or other monetary authority, it is a central bank digital currency (CBDC). If it is issued by a private entity, it may be e-money or another form of digital commercial bank money/private digital tokens/stablecoins, even if backed by central bank money.

The IMF now recognizes crypto-assets in its Balance of Payments and International Investment Position Manual. It divides cryptos into fungible and non-fungible tokens. Cryptos without backing liabilities are treated as non-produced nonfinancial assets under the capital account, which means cross-border transactions involving them will be tracked as acquisitions or disposals of non-produced assets. Stablecoins and other cryptos backed by liabilities are considered financial instruments. Platform-based cryptos, such as Ethereum and Solana, may be classified as equity-like instruments, reflecting ownership rights similar to traditional equities. The manual also addresses staking and crypto yield activities, which are to be treated as sources of income akin to dividends, depending on the holder's intent and scale of holdings. Additionally, services related to crypto mining and staking are now recognized as exportable computer services, aligning with broader trends in the digital economy.

The IMF published the results of a study that employs a two-sided market model to examine how payment systems might respond to new currencies. Numerical simulations indicate that the success of a new currency hinges on a large-scale launch. However, even unsuccessful attempts could disrupt existing systems, potentially resulting in the elimination of cash. If cash plays a critical role as a safeguard, regulatory and monetary authorities should give due consideration to ensure its continued availability when payment innovations are introduced.