Stablecoin News for the week ending Wednesday 14th December.

Here is our pick of the 3 most important stablecoin stories during the week.

CBDC’s are coming but what type? 

This week we saw more announcements on CBDC’s research and experiments, but it is unclear if we will get a Retail (direct account with the Central Bank) or Wholesale (direct account with a Bank and regulated by the Central Bank) or both.

First, the ECB is running a digital euro prototyping exercise. The goal of this exercise is to allow market participants to develop front-end prototypes that can be integrated with the back-end infrastructure developed by the Eurosystem.

Not clear and not decided if this will be retail or wholesale.

Documents for the digital euro prototyping exercise

Then, the BIS came out with a major study on wholesale CBDC’s and how regulations would function in a multi jurisdictional cross border context.

Traditionally cross-border payments have relied on a mutually trusted central entity. Distributed ledgers, blockchain and smart contracts (together dubbed “distributed ledger technologies” or DLT) could provide an alternative to that approach. However, different DLT applications in the cross-border payments context come with legal challenges. Hence, it is necessary to analyse the extent to what financial law and regulation is fit to deal with DLT-based payments.

We find that financial law traditionally assumes that functions are concentrated in a single entity. Hence, the distribution of functions in DLT comes with the need for additional agreements, ongoing coordination across, and governance arrangements among each participant. Further, in a cross-border context, multiple regulators and courts of various countries will be involved. All of these must decide whether for compliance with the law and regulations they look at DLT as a whole (‘ledger perspective’) or each individual DLT participant (‘node perspective’). On that basis we analyse the extent to which the ledger or the node perspective should prevail, resulting in policy recommendations for regulators.

DLT-based enhancement of cross-border payment efficiency – a legal and regulatory perspective

And finally, Spain’s central bank, the Bank of Spain (BDE), said it intends to launch an experimental program to begin testing wholesale central bank digital currencies (CDBCs) and is seeking collaboration proposals from local finance and technology institutions.

The bank will focus on three main areas with the program that seeks to simulate the movement of funds, experiment with the liquidation of financial assets, and analyze the benefits and drawbacks of introducing a wholesale CBDC to its current processes and infrastructure, according to a translated Dec. 5 statement.

Spain’s central bank to experiment with wholesale CBDCs (

So in summary, this week we saw more evidence of work being done on CBDC’s with the wind seemingly blowing in the direction of wholesale and not retail implementations.


Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.  

Twitter @Alan_SmartMoney

We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.

For context on stablecoins please read this introductory interview with Alan “How stablecoins will change our world” and read articles tagged stablecoin in our archives.