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Weekly Global Stablecoin & CBDC Update
This Week's Stories (So Far)
Federal Reserve Governor Stephen Miran delivered a speech at the BCVC Summit 2025 at the Harvard Club of New York City, arguing that widespread stablecoin adoption could substantially lower the U.S. neutral rate (r*), the policy rate that neither stimulates nor restricts economic growth. Miran emphasized that the Federal Reserve staff projects stablecoin uptake reaching between $1 trillion and $3 trillion by the end of the decade. He highlighted that dollar-pegged stablecoins are increasing demand for U.S. Treasury bills and other dollar-denominated liquid assets, particularly from foreign buyers. This additional demand for Treasury securities would lower borrowing costs but also put persistent downward pressure on the neutral interest rate, potentially requiring the Fed to maintain lower policy rates to avoid inadvertently slowing the economy. Miran framed stablecoins as potentially becoming a “multitrillion dollar elephant in the room” for central bankers globally.
Key Takeaways:
- Stablecoin growth projections ($1-3 trillion by 2030) could lower the neutral rate by pushing up demand for Treasury securities and other dollar assets
- Lower neutral rates would force the Fed to maintain lower policy rates than otherwise needed to support economic growth
- Stablecoins strengthen dollar dominance globally by providing easier access to dollar-denominated assets for international savers
- The GENIUS Act regulatory framework legitimizes stablecoins and ensures they are backed by safe, liquid U.S. dollar assets
- Potential 40 basis points of downward pressure on interest rates could result from widespread stablecoin adoption, comparable to one-third of the previous “global saving glut” impact
Why It Matters:
- Monetary Policy Implications: Central banks must now factor stablecoin adoption into forward-looking monetary policy decisions, potentially requiring different policy responses than in previous decades
- Global Capital Flows: Stablecoins are reshaping international demand for dollar assets, with foreign users as the primary growth driver, affecting the U.S. current account deficit and Treasury yields
- Financial Infrastructure: Miran argues U.S. financial infrastructure could benefit from stablecoin integration, potentially revolutionizing how dollars are held and transferred domestically and internationally
- Zero Lower Bound Risk: If stablecoins persistently lower the neutral rate, the Federal Reserve faces increased risk of hitting the zero lower bound during recessions, limiting its ability to stimulate the economy
- Dollar Dominance: The innovation reinforces U.S. dollar supremacy as the world’s preferred currency while potentially affecting currency stability in emerging markets
India officially recognized cryptocurrency as a legal property asset on November 9, 2025, representing a significant policy shift from the government’s previous positions on digital currencies. The legal designation brings cryptocurrencies within existing property law frameworks while maintaining restrictions on their use as payment instruments. The classification acknowledges crypto’s role in wealth accumulation and inheritance while distinguishing it from stablecoins and CBDCs, which remain subject to separate regulatory oversight. This development provides legal clarity for Indian crypto holders while the RBI continues promoting the digital rupee as the preferred digital currency option.
Key Takeaways:
- India recognizes cryptocurrency as legal property asset for inheritance and wealth purposes
- Classification distinguishes crypto from payment instruments and CBDCs in regulatory framework
- Legal designation provides certainty for crypto asset holders while maintaining payment use restrictions
- Development reflects pragmatic acceptance of crypto as wealth asset despite RBI’s digital rupee preference
Why It Matters:
- Represents major policy shift in India’s traditionally restrictive approach to cryptocurrencies
- Provides legal framework for crypto inheritance and wealth management in India
- Could influence other countries’ approaches to crypto property classification
- Validates pragmatic distinction between crypto as assets versus payment instruments
On November 10, 2025, the Bank of England published a comprehensive consultation paper outlining its proposed regulatory regime for sterling-denominated systemic stablecoins. The framework permits stablecoin issuers to hold up to 60% of backing assets in short-term UK government debt, with the remaining 40% held in unremunerated Bank of England accounts. For newly transitioning systemic issuers, initial backing may consist of up to 95% in short-term debt to support early viability. The Bank proposes temporary holding limits of £20,000 per coin for individuals and £10 million for businesses, with exemptions for large enterprises. Additionally, the BoE is considering central bank liquidity arrangements to backstop systemic stablecoin issuers during market stress. The consultation runs until February 10, 2026, with finalized rules expected in H2 2026.
Key Takeaways:
- Backing asset requirements: Up to 60% in short-term UK government debt; 40% in BoE unremunerated accounts
- Temporary holding limits: £20,000 per individual per coin; £10 million for businesses (subject to exemptions)
- Central bank liquidity backstop: BoE considering emergency arrangements to support systemic stablecoin issuers during stress
- Dual regulatory oversight: BoE regulates systemic stablecoins; FCA regulates non-systemic stablecoins and broader cryptoassets
- Consultation timeline: Public feedback until February 10, 2026; finalized rules expected H2 2026
Why It Matters:
- Provides regulatory clarity: Clear framework reduces uncertainty for stablecoin issuers and attracts institutional participation in the UK market
- Protects financial stability: Holding limits and BoE backing requirements mitigate risks to commercial banking and credit availability during transition period
- Balances innovation with safety: Allows stablecoin infrastructure development while maintaining safeguards against potential systemic risks
- Competitive positioning: UK establishes distinct regulatory pathway that could attract or repel international stablecoin platforms depending on business model alignment
- Central bank preparedness: BoE liquidity arrangements signal institutional readiness for widespread stablecoin adoption and market stress scenarios
Project Tamga, spearheaded by the BIS Innovation Hub Hong Kong Centre, explores validating regulatory proofs (licenses, attestations, and similar documents) across jurisdictions using pre-existing internet infrastructure like DNS and HTTPS. Instead of new platforms, Tamga embeds trust metadata in standardized web paths, allowing direct verification from issuer domains. The solution aims to automate compliance checks and supervision in real-time, improving efficiency and interoperability for global financial institutions, while guarding confidentiality and sovereignty. Ultimately, Tamga advances machine-readable trust without centralized databases or blockchain dependencies.
Key Takeaways:
- Enables cross-border verification of regulatory proofs, overcoming jurisdictional silos
- Utilizes existing internet standards (DNS, HTTPS) rather than new systems
- Trust metadata, such as cryptographic keys, discoverable via issuer’s website
- Real-time, automated validation embedded in digital workflows
- Maintains regulatory confidentiality and sovereignty
- Does not rely on centralized blockchain or registry solutions
Why It Matters:
- Cuts manual, jurisdiction-bound verification, streamlining global compliance
- Future-proofs supervisory processes as financial systems become more interconnected
- Supports instant, automated risk checks for institutions
- Reduces infrastructure costs using established global standards
- Potentially reshapes RegTech and SupTech for governments and the private sector
The UAE achieved a major milestone, completing its first government transaction using the Digital Dirham, the nation’s central bank digital currency. The Ministry of Finance and Dubai Department of Finance executed the transaction via the mBridge platform in less than two minutes. This pilot transaction represents the integration of the Digital Dirham into national financial operations and comes as part of the Central Bank of the UAE’s Financial Infrastructure Transformation (FIT) Programme. The transaction was overseen by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, and signifies the UAE’s progress toward a comprehensive digital economy where the Digital Dirham will eventually be used for both government and private sector transactions.
Key Takeaways:
- First government Digital Dirham transaction completed in under 2 minutes via mBridge platform
- Executed by Ministry of Finance and Dubai Department of Finance (DOF) on November 10, 2025
- Part of Central Bank of the UAE’s Financial Infrastructure Transformation (FIT) Programme pilot phase
- Demonstrates operational readiness for broader Digital Dirham deployment in government and private sectors
- Reinforces UAE’s position as a global financial innovation hub with demonstrated CBDC capability
Why It Matters:
- Validates CBDC operational feasibility: Demonstrates that digital currencies can function efficiently in real-world government transactions, reducing settlement times from days to seconds
- Accelerates financial inclusion: Digital Dirham enables faster, more transparent government payments and strengthens the UAE’s integrated digital economy
- Strengthens cross-border connectivity: mBridge participation positions the UAE within a multi-central bank digital currency system, facilitating international settlements
- Advances financial transparency: Government use of Digital Dirham establishes audit trails and operational efficiency benchmarks for private sector adoption
- Global precedent-setting: As one of the first CBDCs to complete tangible government transactions, the UAE demonstrates regulatory clarity and institutional commitment to digital currencies
Coinbase announced on November 11, 2025, that it has ended acquisition discussions with UK-based fintech BVNK following a mutual agreement to terminate negotiations. The deal, valued at approximately $2 billion, had advanced to the due diligence stage with an exclusivity agreement entered in October, preventing BVNK from entertaining other offers. Coinbase provided minimal detail, stating that both parties “mutually agreed” to walk away without disclosing specific reasons for the termination. BVNK, which facilitates stablecoin payments and cross-border transfers using digital currencies like USDC and Tether, remains one of the most valuable private fintech firms in the cryptocurrency sector.
Key Takeaways:
- Deal termination: Coinbase and BVNK mutually ended $2B acquisition talks after reaching due diligence stage
- Timing: Exclusivity agreement was signed in October 2025; termination announced November 11, 2025
- BVNK valuation: Approximately $2 billion, positioning it as a major stablecoin infrastructure player
- Competing acquisitions: Mastercard is in parallel discussions to acquire Zerohash for $1.5-2 billion for similar stablecoin infrastructure capabilities
- Market context: Modern Treasury acquired stablecoin startup Beam for ~$40 million in October 2025, showing continued M&A activity
Why It Matters:
- Signals stablecoin M&A caution: Major crypto firms exercising due diligence discipline despite sector enthusiasm and significant valuations
- Regulatory uncertainty: Potential underlying concerns about stablecoin regulatory frameworks may have contributed to withdrawal, especially given recent Bank of England and global regulatory developments
- Competitive dynamics: Mastercard’s parallel Zerohash negotiations indicate traditional payments incumbents are moving aggressively into stablecoin infrastructure as crypto-native firms reassess
- Valuation questions: $2B price for BVNK may have been challenged during detailed financial and regulatory review, suggesting market corrections possible
- Strategic pivot: Coinbase may redirect $2B capital allocation toward other acquisition targets or organic stablecoin/payment infrastructure development
The BIS publishes “Competing Digital Monies,” comparing bank deposits, platform-issued digital tokens, and CBDCs as they vie for a role in retail payments. The theoretical analysis uses two-sided market economics to show that public infrastructure (fast payment systems or CBDCs) is key for interoperability, greater financial inclusion, and improved welfare. While both solutions diminish exclusion, they also engender disintermediation, where incumbent payment intermediaries lose ground to newer players. Ultimately, retail CBDCs and advanced fast payment systems have nearly equivalent effects, so countries with strong systems shouldn’t expect radical change from a retail CBDC. The findings guide future regulatory, technical, and policy strategies
Key Takeaways:
- Retail payments now feature bank deposits, platform tokens, and CBDCs as contenders.
- Interoperable public payment systems or CBDCs can eliminate financial exclusion.
- “Walled garden” payment networks lead to inefficiently low trade volumes and access.
- Both fast payment systems and CBDCs may disintermediate incumbent banks.
- The public solutions foster competition and financial inclusion, but may change fee structures for merchants.
Why It Matters:
- Reframes payment system design for policymakers and regulators.
- Offers insight into big tech and fintech’s growing role in consumer payments.
- Highlights trade-offs between financial inclusion, competitive dynamics, and market structure.
- Informs jurisdictions about the similar benefits of fast payment systems versus CBDCs.
- Explains how digital transformation can upend traditional retail banking dominance.
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