The pilot is being implemented by the Puducherry government, the RBI, the Public Financial Management System (PFMS) and Canara BankCurrently being piloted in Puducherry, the Centre plans to expand the initiative to three to four states and UTs, including Chandigarh and Dadra and Nagar Haveli, “soon”Beneficiaries will get digital coupons in their CBDC wallets, which can then be used to redeem the entitled quantity of foodgrains at merchant outletsThe Centre yesterday rolled out a central bank digital currenc ...

The bank, which reported the swindle on Sunday, plunged 16.2% on the BSE to end at Rs 70 on Monday. “We are watching the developments. There is no systemic kind of issue,” Malhotra said at a joint press conference with FM Nirmala Sitharaman after the RBI’s Central Board meeting on Monday.IDFC First Bank said Sunday that employees at Chandigarh branch were involved in the fraud. Malhotra said RBI will release fresh retail inflation estimates before the April policy review, when asked about the impact of the ...

Core Viewpoint - The European Central Bank (ECB) emphasizes the urgency of advancing the digital euro project as cash usage declines significantly, with cash accounting for only 24% of daily transactions by value in 2024, down from 40% five years ago [1][3]. Group 1: Digital Euro Necessity - ECB's Piero Cipollone warns that Europe cannot afford to delay the digital euro while waiting for private-sector solutions, highlighting the increasing reliance on non-European providers for digital transactions [2][5]. - E-commerce now represents over one-third of daily transactions by value, yet central bank money is not usable for these purchases, necessitating the digital euro to adapt to changing payment habits [3][4]. Group 2: Technological and Geopolitical Context - The ECB's push for a digital euro is partly driven by geopolitical tensions that expose vulnerabilities in Europe's payment systems, where foreign control can be weaponized [2][3]. - Cipollone acknowledges that the rapid decline in cash usage and the shift towards digital payments represent an accelerating change in consumer behavior, necessitating a fully European-controlled payment system [3][4]. Group 3: Implementation Timeline - Technical preparations for the digital euro are complete, with the ECB having finished a two-year preparation phase in October 2025, and pilot transactions could begin by mid-2027, with the first issuance possible in 2029 if legislation is approved [5][6]. - The ECB has rejected calls from some European Parliament members to wait for the banking sector to develop alternatives, asserting that private sector solutions are insufficient [6].

Core Insights - Pakistan's stance on cryptocurrency has shifted from opposition to integration, reflecting a broader global trend towards acceptance of digital assets [1][2] Group 1: Agreement and Integration - Pakistan signed an agreement with a company affiliated with World Liberty Financial (WLFI) to integrate its USD1 stablecoin into the regulated payments system [2][3] - The deal, executed through SC Financial Technologies, represents a significant partnership between a decentralized finance firm and a sovereign state [3][4] Group 2: Regulatory Oversight and Objectives - The USD1 stablecoin is expected to operate under regulatory oversight, coexisting with Pakistan's emerging digital finance infrastructure [4] - The initiative aims to enhance cross-border payments, particularly remittances, which are crucial for Pakistan's economy [5][6] Group 3: Economic Impact - Overseas Pakistanis send over $30 billion annually, and the integration of a regulated stablecoin is anticipated to lower fees, accelerate settlement times, and improve transparency in these transactions [6][7] - Pakistan is also pursuing broader reforms, including drafting comprehensive virtual asset regulations and preparing for its own central bank digital currency (CBDC) [6]

Core Viewpoint - Coinbase CEO Brian Armstrong raised concerns about the competitiveness of dollar-pegged stablecoins following China's decision to pay interest on its central bank digital currency (CBDC), the Digital Yuan [1][2]. Group 1: Competitive Landscape - Armstrong highlighted that China's move to offer interest on the Digital Yuan provides it with a "competitive advantage" over U.S. stablecoins [2][3]. - He emphasized that rewards or interest payments on stablecoins could benefit ordinary people, similar to community lending, and urged for a market-driven approach [2]. Group 2: Legislative Challenges - The potential for yield payments on stablecoins is a significant barrier to the passage of the cryptocurrency market structure bill, which is supported by industry leaders like Armstrong [4]. - Concerns from Democrats revolve around the possibility that interest on stablecoin balances could divert deposits from traditional banking systems, particularly affecting community banks [4]. Group 3: Market Reactions - Following Armstrong's comments, Coinbase shares experienced a slight increase of 0.19% in after-hours trading, after a regular session decline of 1.85%, closing at $245.93 [5]. - Over the past year, Coinbase's stock has decreased by 5.42% [5].

Core Insights - China is intensifying efforts to promote the use of its digital currency, with major banks offering interest to digital yuan holders [1][4] - The initial annual interest rate for the digital yuan is set at 0.05%, aimed at increasing user engagement [2] - A stricter identity verification process is required for holders to claim interest payments, ensuring compliance with anti-money laundering regulations [3] Banking Participation - Ten of China's largest banks, including WeBank and Mybank, are participating in this initiative, alongside prominent traditional banks like the Industrial and Commercial Bank of China and the Agricultural Bank of China [1][4] - The interest payments will be issued by the banks themselves rather than the central bank, marking a shift in liability from the central bank to commercial banks [5] Regulatory Context - The move to allow banks to pay interest on the digital yuan contrasts with stablecoin regulations in the US, which prohibit interest payments on stablecoins [5][6] - Globally, 135 countries are at various stages of developing their own central bank digital currencies, indicating a broader trend in the financial landscape [6] Investment Opportunities - Financial experts suggest that pilots are being developed to enable the use of the digital yuan for purchasing traditional financial assets like securities and bonds [7]

Core Viewpoint - The U.S. risks losing its competitive advantage in the stablecoin market if it mishandles the debate over allowing rewards on dollar-pegged stablecoins, as highlighted by Coinbase's policy chief Faryar Shirzad [1][2]. Group 1: Legislative Context - The U.S. enacted the GENIUS ACT in July, which provides guidelines for stablecoin issuance and prohibits issuers from sharing profits with holders through interest payments [4]. - Banking groups are urging lawmakers to close loopholes in the GENIUS Act, citing concerns over deposit flight risks to community banks that could impact their lending capabilities [5]. Group 2: Competitive Landscape - The People's Bank of China announced it would start paying interest on digital yuan holdings, effective January 1, as part of its strategy to promote the adoption of its Central Bank Digital Currency (CBDC) [3]. - There are concerns that if the U.S. does not adapt its regulations, non-U.S. stablecoins and CBDCs could gain a significant competitive edge, particularly in light of China's interest rate on demand deposits being at 0.05% [2][3]. Group 3: Industry Reactions - The Blockchain Association argues that claims regarding stablecoin rewards harming community banks lack evidence and warns that changes to the GENIUS Act could undermine the regulatory certainty typically associated with Congressional actions [6]. - As negotiations for the Senate's market structure legislation progress, there is optimism from White House officials that the legislation will advance, despite previous delays [7].

Core Viewpoint - China's digital yuan has transitioned to an interest-bearing currency, marking a significant shift from the global consensus that central bank digital currencies (CBDCs) should not accrue interest [1][4]. Group 1: Global CBDC Principles - The global CBDC community generally agrees that retail CBDCs should act as digital cash equivalents, not as interest-bearing savings instruments [2]. - The European Central Bank (ECB) has explicitly stated that no interest will be paid on digital euro holdings to prevent it from becoming a savings vehicle that could drain bank deposits [2][3]. - The Federal Reserve has raised concerns that an interest-bearing CBDC could disrupt the US financial system by leading to bank disintermediation, where households might prefer central bank deposits over traditional bank accounts [3]. Group 2: China's Digital Yuan Policy - China's digital yuan is being repositioned from an M0 instrument (cash in circulation) to an M1 instrument, which includes demand deposits [4]. - The People's Bank of China (PBOC) has implemented this policy through its "Action Plan for Strengthening Digital Yuan Management and Financial Infrastructure," which applies to verified wallets and follows demand-deposit rules with quarterly interest settlements [5]. - The definition of digital yuan has been revised to include "the related payment system," indicating its evolution beyond a simple cash substitute [6].

Core Viewpoint - Coinbase has expressed concerns that new restrictions on stablecoin rewards in the U.S. could undermine its competitive position in digital payments, especially as China enhances its digital yuan to attract users [1][2]. Group 1: U.S. Regulatory Environment - The GENIUS Act, signed into law in July, establishes the first comprehensive framework for stablecoins in the U.S., setting reserve and compliance standards while prohibiting direct interest payments [4]. - Ongoing Senate negotiations on broader market structure legislation could further tilt the competitive landscape in favor of non-U.S. stablecoins and central bank digital currencies (CBDCs) [5]. Group 2: China's Digital Yuan Developments - The People's Bank of China announced a framework allowing commercial banks to pay interest on digital yuan wallet balances starting January 1, 2026, enhancing the digital yuan's role beyond just a cash substitute [3]. - By November 2025, the digital yuan had processed 3.48 billion transactions worth approximately $2.34 trillion across 230 million personal wallets and nearly 19 million corporate wallets [7]. Group 3: Industry Perspectives - Coinbase's chief policy officer highlighted that limiting rewards could diminish the attractiveness of dollar-backed stablecoins in international markets [1][2]. - Stablecoin platforms argue that sharing returns with users through rewards is essential for maintaining product appeal [6].

Group 1 - Chinese investors have invested over $188 million into digital yuan-related stocks following the PBOC's decision to allow interest on digital yuan wallets, with the top ten shareholders in these firms holding a combined market value of 1.89 billion yuan ($265 million) [1][2] - Seven CBDC-related stocks attracted net inflows exceeding 100 million yuan from major investors on December 29, with Lakala leading at 371 million yuan ($52 million) [2] - The PBOC's decision to permit interest earnings on digital yuan wallets represents a fundamental shift in the CBDC's value proposition, creating a "win-win situation" for enterprises, individuals, and commercial banks [3] Group 2 - Starting January 1, 2026, banks will independently manage assets and liabilities within digital yuan wallet balances under the central bank's action plan covering 2026 to 2030 [3] - The wallets deployed in pilot zones function offline and automatically update balances when connecting to internet-enabled devices [4] - Shandong Province has launched a digital yuan loan program for entrepreneurs, offering startup funding capped at 200,000 yuan (approximately $28,000) [5] Group 3 - The PBOC Digital Currency Research Institute has issued warnings about fraudsters exploiting the new interest features to steal personal and financial data [5][6] - Scammers are creating fake chat rooms and hosting events to convince individuals to "convert" digital yuan through unofficial channels, involving phishing links and counterfeit apps [6]