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Weekly Global Stablecoin & CBDC Update
This Week's Stories
Bank of England Governor Andrew Bailey dramatically softened his historically critical stance on stablecoins, declaring it would be “wrong to be against stablecoins as a matter of principle” and announcing plans to grant widely used stablecoins access to Bank of England reserve facilities. Speaking through a Financial Times op-ed on October 1, 2025, Bailey outlined a regulatory framework treating systemic stablecoins like traditional banks with depositor protections, insurance schemes, and statutory resolution arrangements. The Bank of England will soon publish a consultation paper proposing ownership caps of £10,000 for individuals and £10 million for corporations to mitigate financial stability risks from rapid deposit outflows.
Key Takeaways:
- Bailey abandons previous skepticism, stating stablecoins could coexist with banks while driving payment innovation
- Proposed regulatory framework includes BoE reserve access, depositor protection, and ownership caps
- Consultation paper on systemic stablecoin regime to be published following years of cautious approach
- Framework aims to separate money holding from credit provision while maintaining economic stability
Why It Matters:
- Represents watershed moment for UK crypto policy potentially positioning London as competitive stablecoin hub
- Could accelerate institutional stablecoin adoption through regulatory clarity and central bank backing
- Demonstrates major central bank recognition of stablecoins as legitimate monetary instruments
- May influence other jurisdictions’ approaches to stablecoin regulation and central bank integration
Stripe CEO Patrick Collison predicted that the growing popularity of stablecoins will eventually force traditional banks to offer more competitive deposit yields or risk losing customers to yield-bearing crypto alternatives. Speaking at a fintech conference, Collison criticized banks’ reliance on low-interest savings accounts while stablecoin holders can earn higher returns through DeFi protocols and institutional money markets. He argued that stablecoins represent a more transparent and efficient form of money that could reshape traditional banking by providing consumers with better returns on their holdings. Collison’s comments reflect growing institutional recognition that stablecoins pose competitive pressure on traditional deposit-taking institutions.
Key Takeaways:
- Stablecoin adoption will pressure banks to raise deposit rates to remain competitive with crypto yields
- Traditional banking model criticized for relying on low-interest deposits while stablecoins offer transparency
- DeFi protocols and institutional money markets provide stablecoin holders with superior yield opportunities
- Competitive pressure could force fundamental changes in banking deposit pricing strategies
Why It Matters:
- Validates stablecoins as disruptive force in traditional banking rather than complementary technology
- Could accelerate consumer migration from bank deposits to stablecoin alternatives
- Demonstrates how crypto innovation challenges traditional financial institution business models
- Positions stablecoins as catalyst for broader financial system modernization and competition
Hedera announced its scheduled mainnet upgrade to version 0.66 on October 8, 2025, at 17:00 UTC, with the process expected to take approximately 40 minutes and potentially causing temporary network disruptions. The upgrade follows the successful September 25 testnet implementation and represents continued development of Hedera’s hashgraph consensus technology. Version 0.66 includes enhancements to decentralized application capabilities, improved network efficiency, and scalability features that distinguish Hedera’s hashgraph from traditional blockchain architectures. The systematic upgrade approach demonstrates Hedera’s commitment to enterprise-grade reliability through comprehensive testing before mainnet deployment.
Key Takeaways:
- Mainnet upgrade to version 0.66 scheduled October 8, 2025, at 17:00 UTC with 40-minute maintenance window
- Follows successful testnet implementation ensuring thorough validation before production deployment
- Enhancements focus on dApp functionality, network efficiency, and scalability improvements
- Hashgraph consensus technology continues differentiation from traditional blockchain approaches
Why It Matters:
- Demonstrates systematic approach to network upgrades prioritizing reliability over speed
- Positions Hedera for expanded enterprise adoption through improved performance and capabilities
- Validates testnet-to-mainnet development process reducing deployment risks
- Supports growing ecosystem of decentralized applications and enterprise use cases
At Sibos 2025 in Frankfurt, European Central Bank Deputy Director General Dimitri Pattyn provided concrete updates on Project Pontes, the ECB’s short-term initiative to enable DLT transaction settlement using central bank money by Q3 2026. Pattyn emphasized that despite being labeled a “pilot,” Pontes is a permanent solution designed to stay operational with continuous improvements. The project will utilize three trial solutions from French, German, and Italian central banks, with Germany’s Trigger solution and France’s wholesale CBDC connecting to the TARGET2 payment system as Pontes’ two central bank money options. A consultation paper will be published in Q1 2026, with full solution delivery targeted for Q1 2028.
Key Takeaways:
- Project Pontes confirmed as permanent solution, not temporary pilot, with Q3 2026 launch timeline
- German Trigger and French wCBDC solutions will provide central bank money connectivity to TARGET2
- Italian Hashlink interoperability solution enables connection to other DLT networks
- Q1 2026 consultation paper to guide industry feedback before Q1 2028 full deployment
Why It Matters:
- Positions ECB as leader in central bank digital currency infrastructure for wholesale markets
- Provides bridge between traditional financial systems and emerging tokenized asset ecosystems
- Could accelerate European tokenized securities adoption through central bank money settlement
- Demonstrates systematic approach to integrating blockchain technology with existing payment infrastructure
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