The Bank for International Settlements (BIS) says Project Aurum Phase 2 is an early-stage test built on its earlier Aurum code. The BIS Innovation Hub developed it with the Hong Kong Monetary Authority and other institutions. It combines several privacy tools like encryption and zero-knowledge proofs, which let a payment be verified without revealing the names tied to the transaction or the amount.

BIS considers ZK proofs for privacy

Under the design, people would still sign up through their regular banks. Those banks will verify their identity and keep their records, without the central bank having access to any of that information. Personal details will only be provided if the law demands it. This is a notable shift in tone from 2020, when BIS general manager Agustín Carstens said a central bank digital currency (CBDC) would give the issuer “absolute control on the rules and regulations” governing its use.

He remarked on an IMF panel, and conspiracy theorists later seized on it. In August 2026, a European Central Bank board member, Piero Cipollone, said the planned digital euro would deliver the maximum level of privacy of any current technology, insisting the Eurosystem could not structurally link people to their transactions.

Civil society groups, including an Austrian digital rights organization called Epicenter.works, wrote a joint statement, warning that legislative promises regarding the digital euro can be reinterpreted or broken. A research paper by Jeff Nijsse and Andrea Pinto looked at 20 CBDC projects and found that privacy features promised in early proposals usually get watered down by launch.

However, Project Aurum is yet to be released or used commercially. The BIS report also admits that stronger privacy can make transactions slower, make programmable features harder to build, and make lost wallets difficult to recover.

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However, he cautioned that talks were at a very early stage. “Various options are on the table, but it is still at the discussion stage, including CBDCs (central bank digital currencies) and linkages of fast payment systems,” he said. The governor stated that the appeal was in terms of cost saving: “Cross-border payments are an area of interest for all of us, including the BRICS, because we feel there is a lot of scope for reducing cost.” CBDCs are digital forms of countries’ official currencies, issued directly by their central banks.

BRICS nations discuss new CBDC linkage plans

Creating a channel between these currencies could let payments travel more directly and with much more ease between nations. This will cut out layers of intermediaries that money usually passes through and lower what each transfer costs. The route of payment with linked CBDCs will work differently, but aim at a faster way for consumers and businesses to send money abroad through the domestic pathways they already use.

These paths are also expected to widen the reach of the Indian rupee. RBI governor Malhotra said the central bank will keep working to internationalize the rupee and to promote local currencies for trade and payments across borders. India is hosting this year’s BRICS summit, an annual gathering that brings together five countries, which include Brazil, Russia, India, China and South Africa.

The RBI had previously asked the Indian government to place a CBDC-linking proposal on the summit’s agenda earlier in 2026. The country’s goal to internationalize its currency is a major reason to continue to push to link CBDCs amongst the BRICS countries.

The governor also spoke at the event about Indian banks and financial institutions and their use of AI. He asked them to catalogue every AI model already running within their institutions and to adopt AI governance policies approved by their boards.

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In his statement, Cipollone said the trend adds to the pressure lenders already face from mobile payment platforms that have chipped away at payment revenues and customer data. According to Cipollone, the idea of the digital euro by the ECB is the solution. The warning has special significance for smaller banks, which depend on deposits from people in order to finance local loans. If clients start to keep their money in stablecoins held in digital wallets rather than in their bank accounts, banks will need to substitute this source of income with more expensive wholesale borrowing, and this may lead to an increase in lending rates in the economy.

ECB executive discusses stablecoins and digital banking

According to Cipollone, the deposit risk is simply the latest step in the ongoing process of moving away from traditional banking. He stated that mobile payments are already covering more than 10% of the point-of-sale transactions in Ireland, the Netherlands, and Finland. Banks usually receive higher fees for mobile payments than they receive for debit card fees, but they also typically lose access to valuable customer transaction data that comes with those payments.

According to Cipollone: “If the use of stablecoins increases in the future, the banks will also lose retail deposits.” The ECB emphasizes the dependence of Europe on foreign payment infrastructure. Approximately two-thirds of euro area card transactions are processed using non-European networks. Further, 13 out of the 21 eurozone countries lack a domestic card facility, thus proving the need for a European-controlled payment system.

Stablecoins are cryptocurrencies tied to fiat currencies, with the US dollar being the most common. Most of the market is rooted in Tether’s USDT and Circle’s USDC stablecoins, both of which are issued from outside the EU, which contributes to the ECB’s worries. EU legislation regulates euro-denominated stablecoins under the Markets in Crypto-Assets (MiCA) framework but leaves US-dollar-pegged stablecoins mostly outside the framework’s direct oversight.

Notably, euro stablecoin issuers must, under MiCA, keep at least 30% of their reserve assets in the form of bank deposits, with that figure rising to 60% for issuers valued as “significant.” These requirements, while helping banks operate under normal conditions, might lead to sudden bank outflows during mass redemptions activity. Several ECB officials have voiced similar worries to Cipollone’s, including board member Isabel Schnabel.

Schnabel stated in June that stablecoins pose a risk to both financial stability and monetary sovereignty and equated their emergence to the use of money-market funds that diverted banks’ deposits in the 1970s. The ECB highlights that the digital euro will protect public funds in an increasingly digital economy while avoiding any dangers for commercial banks. The suggested central bank digital currency (CBDC) will not pay interest and will limit the amount of money each individual can keep in an account so as to prevent major withdrawals.

Meanwhile, banks will still provide this service instead of customers doing it directly with the ECB. Cipollone also said that the digital euro would both preserve the role of public money and ensure banks remain involved in the payments ecosystem while continuing to meet their customers’ needs. The ECB has recently made many remarkable moves to implement the plan by selecting 36 payment service providers, including Deutsche Bank, UniCredit, and Revolut, for a 12-month pilot involving 19 national central banks.

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The ECB selected 36 payment service providers (PSPs) to take part in the digital euro pilot in order to check the technical functionality of its central bank digital currency (CBDC). In a press release on Tuesday, shared on social media, the eurozone’s monetary policy regulator emphasized that the “exercise is crucial” for testing operations and refining user experience. The pilot is expected to begin in the second half of 2027 and continue for 12 months.

It will support preparations for the potential launch of a digital version of the single currency. The European CBDC has been in the making for several years now. It comes to reduce dependence on U.S. payment systems and curb the spread of dollar-pegged stablecoins, among other stated goals. The project cleared a key hurdle last month, as reported by Cryptopolitan, when it got the approval of the European Parliament’s important Committee on Economic and Monetary Affairs (ECON).

ECB kickstarts move to check functionality of its CBDC

The ECB revealed it received more than 50 applications after issuing a call for interested parties in March of this year and evaluated them against multiple criteria. It insisted the approved participants, from across the euro area, will ensure representative testing. The list includes both banks and non-bank service providers, of various sizes and business models. Among them are giants such as Germany’s Deutsche Bank and Italy’s UniCredit.

In addition to those, there are also smaller banks from other countries, as well as Revolut, the popular neobank which operates in the region from Lithuania. Quoted in the official announcement, one of the ECB’s top executives, Piero Cipollone, noted: “The strong market interest in the pilot shows the private sector’s readiness to engage actively and quickly advance with the digital euro project to strengthen the European payments landscape.”

He added that the Frankfurt-headquartered authority hopes for even deeper engagement that will help develop a “secure, efficient and inclusive digital euro” in collaboration with payment companies. Cipollone is a prominent member of the European Central Bank’s Executive Board and chairs the High-Level Task Force on the digital euro. Besides the ECB, the pilot will be hosted by 19 of the 21 national central banks in the area, as the participants may provide services in jurisdictions other than the one in which they are based.

The island nation of Malta, as well as Bulgaria, which only recently adopted the euro, are the only two eurozone countries that will not be represented in the upcoming trials. A beta version of the digital euro will be used in the testing. It will function like the original and use the same technology but will not have the status of a legal tender. Eurosystem employees will be given access to a range of digital euro services, again in beta mode, including the options to set up their own accounts and spend or receive CBDC.

The pilot will also involve staff from participating national central banks as well as e-commerce platforms and merchants offering everyday services, such as cafeterias and restaurants. Those who act as regular users will be able to make P2P (person-to-person) and P2B (person-to-business) payments through the tested digital euro system. Transfers between individuals can be initiated either online or offline, while payments to retailers will be accepted at a physical point of sale or through mobile devices.

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The move slowed crypto policy momentum, including the CLARITY Act.

Trump delays housing bill over voter ID demand

Trump said on Truth Social that the signing ceremony for the 21st Century ROAD to Housing Act was “hereby cancelled” until Congress passes the “desperately needed” SAVE AMERICA ACT. He described the issue as a National Emergency.

The SAVE America Act would require proof of citizenship and photo identification for voters in federal elections. The measure has stalled in the Senate because it lacks Republican support.

Trump has anchored any bill signing to progress on the voters’ reform act. Source: Truth Social

The housing bill cleared Congress with bipartisan backing. It passed the House by 358-32 and the Senate by 85-5. Karoline Leavitt described it as “one of the most significant pieces of housing affordability legislation in American history.”

CBDC ban remains in procedural limbo

The housing package contains language barring the Federal Reserve from issuing, creating, or distributing a central bank digital currency until at least December 31, 2030. Crypto industry supporters backed the provision because it aligned with Trump’s January 2025 executive order blocking the government from developing a digital currency.

Republican lawmakers have argued that a Federal Reserve digital dollar could become a surveillance tool. Tom Emmer previously described CBDCs as a “weaponized surveillance tool.”

The CBDC provision was added after Senate Banking Chair Tim Scott negotiated with ranking member Elizabeth Warren. The effort included coordination with House Financial Services members.

Without Trump’s signature, the CBDC restriction remains tied to the unsigned housing bill. House Speaker Mike Johnson defended the delay and said Trump was using “a little bit more” of the time available before a signing deadline. Johnson said he expected the President to act within 10 days.

NBC News reported that one unnamed House Republican called the decision “Crazy crazy crazy.” Senate Minority Leader Chuck Schumer said Congress could override if Trump refuses to sign. The Constitution also allows a bill to become law without the President’s signature after 10 days if Congress remains in session.

CLARITY Act timeline faces new pressure

The delay has raised concerns about the Digital Asset Market Clarity Act. The Senate has five weeks before summer recess, while the bill still requires negotiations and a floor vote.

Jaret Seiberg of TD Cowen wrote Wednesday that the SAVE America Act has no viable path to law because Senate Republicans would need to eliminate the filibuster. He said they had rejected that step. NBC News reported that House Republicans, led by Anna Paulina Luna, pledged to block other floor votes until the SAVE Act passes.

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Senate adds CBDC ban to housing legislation

Legislative summaries and committee releases say the measure would stop the Federal Reserve from issuing, creating, or indirectly distributing any central bank digital currency “widely available to the general public” until December 31, 2030. The provision was included in the 21st Century ROAD to Housing Act, which passed the Senate Monday by an 85 to 5 vote.

Republican lawmakers argue that CBDCs could enable state surveillance and have sought to prevent the United States from following European or Chinese frameworks. If the House approves the bill and President Donald Trump signs it, the CBDC language would become federal law with the housing package.

Temporary digital dollar restriction follows Trump order

The restriction would not be permanent. If enacted, it would expire at the end of 2030. In January, Trump directed his administration not to pursue a CBDC, saying it could threaten privacy rights and financial system stability.

Trump allies in Congress added an amendment to the housing bill that would block the Federal Reserve System from creating a CBDC or similar digital asset through financial intermediaries. The Federal Reserve has said a U.S. digital currency remains only a theoretical research subject.

That position contrasts with Europe and China, where government-backed digital currency projects have advanced further. Europe is preparing to test a digital euro next year before a full launch in 2029. China has continued developing its digital yuan under the People’s Bank of China.

Former Fed Chair Jerome Powell said any digital dollar would be issued through private banks, countering Republican concerns about direct government control. New Fed Chair Kevin Warsh told lawmakers during his nomination hearing that he does not support a U.S. CBDC, calling it a “bad policy choice.” House lawmakers could approve the package as early as Tuesday.

South Korea and Europe advance CBDC work

South Korea is moving its CBDC work into a second phase led by the Bank of Korea. The pilot now focuses on placing deposit tokens inside banking systems after earlier retail tests.

Participating banks will add e-wallets, voucher tools, and blockchain functions to core banking operations. Authorities want to test whether central bank-guided tokens can handle payments and settlements within the banking infrastructure.

The European Parliament approved the digital euro in February, calling it “necessary” for monetary independence and smoother retail payments. The ECB spent March and April on technical work for the digital euro and tokenized cash systems, with launch dependent on legislation.

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Chief Executive Officer of HKMA Eddie Yue shared the plans in his latest article, which featured the achievements that the agency had made so far in its “Fintech 2025” strategy. Yue also talked about the future direction of the initiative, which looks to establish Hong Kong as a global fintech leader.

Hong Kong set to advance its CBDC strategy

According to Yue, “Financial infrastructure is a highway, enabling capital and financial assets to travel safely and efficiently through our economy.” He also pointed out the need to build this financial infrastructure, stating, “For Hong Kong’s digital economy to thrive, not only do we need the above-mentioned ‘soft infrastructure,’ robust financial ‘hard infrastructure’ is equally crucial.

Presently, Hong Kong does not lack the needed infrastructure, with the country currently running the Real Time Gross Settlement (RTGS) system, which operates across four currencies. In addition, its Faster Payment System (FPS), which was launched in 2018, has become a platform for daily transactions. FPS is not limited to Hong Kong, as it is being used across systems in Thailand and Mainland China, creating a cross-border payment network that allows transfers between economies.

While the leadership acknowledges that the need to build stronger infrastructures in Hong Kong does not mean the present ones are bad, it is a call to action to build infrastructures that are ready for the future and have digital finance as a main feature. The city has been working on building on the already established infrastructure, and one such development is the digital Hong Kong dollar, or e-HKD, which the HKMA has been exploring since 2017.

The authority recently completed an e-HKD pilot program, and it is now looking to introduce it in retail scenarios for the general public. The e-HKD, issued directly by the HKMA, carries no credit risk and is being tested for wholesale payments, particularly in international trade settlements. One of the successes of the program was the project mBridge, a cross-border initiative linking the e-HKD with the CBDCs of mainland China, Thailand, and the United Arab Emirates. The project hit the viable product stage in 2024, and it has already reduced the time needed for cross-border transactions from days to seconds.

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The agency praised the progress in the rollout of the Digital Dirham (CBDC) project, as well as its proactive stablecoin regulations. The IMF statement called for modernization efforts to continue, including careful assessments of risks while promoting local capital market development. When it came to crypto, the IMF statement noted that while the UAE is growing as a global hub for virtual assets, this should be supported by continued strong coordination among regulators to monitor risks and developments.

“Ongoing efforts to continue alignment with international regulatory standards and strengthen supervisory capacity are welcome and will be critical to safeguarding financial stability while promoting responsible innovation. We welcome the major efforts under the National AML/CFT Strategy and Action plan that resulted in the recent removal of the UAE from enhanced monitoring under the Financial Action Task Force and encourage continued progress,” the IMF said.

IMF praises UAE’s digital Dirham project

The IMF praised the UAE’s resilience against global uncertainty and regional tensions, noting that the financial sector remains strong and sound. It emphasizes that the UAE should monitor external shocks, real estate price developments, and cybersecurity, which is needed. As per the statement, the UAE is projected to grow strongly, well above the global average.

In 2025, GDP is projected to expand by 4.8 percent 2025, driven by robust non-hydrocarbon growth and a rebound in hydrocarbon output as OPEC+ production increases, accelerating further to 5.0 percent in 2026. It also noted that expansion in tourism, construction, and financial services continues to underpin growth, supported by major infrastructure projects. Inflation is projected at 1.6 percent in 2025 and around 2 percent over the medium term.

Housing costs are expected to be the primary source of price pressures, raising potential concerns about affordability, while tradables remain subdued. The IMF also noted that the UAE’s financial sector remains strong and sound, with banks remaining profitable, while the UAE banks’ exposure to the sector has gradually declined to about 18% percent of risk-weighted assets.

In September 2025, Cryptopolitan reported that the United Arab Emirates (UAE) Ministry of Finance signed a Multilateral Competent Authority Agreement (MCAA) and joined the global Crypto-Asset Reporting Framework (CARF). The UAE framework is scheduled to roll out in 2027, after which the UAE is expected to begin sharing data with international tax authorities in 2028.

CARF provides an international standard for the automatic exchange of crypto-asset-related information between tax authorities and is part of the global standards in the exchange of information for tax purposes. Close to 70 jurisdictions have committed to implementing CARF, with most preparing for their first information exchange in 2027 or 2028.

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The recent development was announced by the Ministry of Finance. “The first budget payment in digital rubles has been successfully completed,” the department stated in a press release published on its website on Wednesday. “The Russian Treasury has made the first salary payment in digital rubles to an individual holding a government position in the Russian Federation.”

Russia pays salaries in digital rubles

According to the department, the experiment to introduce the sovereign coin into the budgetary process is being carried out jointly with the Central Bank of Russia (CBR), the issuer of the token. This means that starting from January 1, 2026, the Minfin and the CBR will enable transactions between digital ruble accounts, the ministry said.

As mentioned in the announcement, the digital variant of the national fiat will be used for intra-budgetary transfers and to make various payments from the federal budgets as well. The ministry added that payment in digital rubles will be made only at the request of the recipient. However, it failed to reveal the first person who asked for their wages in the CBDC.

Meanwhile, the media in Russia quickly did their findings and discovered that the first digital ruble salary was paid to Anatoly Aksakov, chairman of the Committee on Financial Markets at the State Duma, the lower house of the Russian parliament. Aksakov had been involved in legislative efforts to regulate digital financial assets in Russia and create the legal basis for the country’s own digital currency.

The lawmaker received the money in his wallet on the CBR’s dedicated platform and then joined the testing of the digital Russian ruble by making some payments, his press service mentioned. The deputy transferred funds to the Life Line foundation for children with illnesses and to the SOS Children’s Villages charity for orphans. He also used some of the CBDC to place an order at a Teremok restaurant, a fast food chain that offers native russian meals.

Digital ruble set for debut in 2026

The Bank of Russia began developing its CBDC in 2021. Two years later, the Russian parliament adopted the necessary legislation to introduce it. The CBR started trials later that same year, inviting a limited number of participants, including commercial banks, companies, and private individuals. The launch had been initially planned for 2025, but the monetary authority moved it to next year.

Following a call from President Vladimir Putin for its wide adoption this summer, the regulator scheduled it for September 1, 2026. The state-issued digital currency will be introduced in several stages. The dates were also approved by Russian lawmakers with a special law, which Putin signed in July. In June, the Moscow Metro, the subway system of the Russian capital, announced it had made its first digital ruble payment.

Last month, Russia registered the first real estate deal sealed using the government cryptocurrency, as reported by Cryptopolitan. This month, St. Petersburg’s Pulkovo Airport, Russia’s second busiest, accepted digital rubles from a visitor who paid for parking, using his smartphone to scan a QR code. The air transit hub plans to introduce the CBDC payment option for other services in the future.

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Bessent’s position comes as most federal agencies have embarked on researching the viability of a CBDC. Assuming it happens on January 20, as now tentatively planned, his confirmation could markedly alter the course of the government’s digital currency research and development efforts.

Opposition to CBDCs in line with republican criticism

Bessent termed such a move a bad idea, which marks most Republicans’ opinion about the seemingly encouraging idea of a U.S. CBDC. Ex-President Donald Trump had asserted as a presidential candidate in 2020 that he would not allow the adoption of a CBDC due, once again, to concerns over the invasion of privacy. Back in November 2023, Trump nominated Bessent, a famous investment manager, for the post of Treasury Secretary.

Similarly, opponents of CBDCs have also dealt with what is similar to the sentiment of the Anti-Surveillance State Act that the House of Representatives approved in May 2023. The bill aims to ban the Fed from issuing or operating a digital dollar because a CBDC is believed to threaten individuals’ privacy and heighten the government’s domination of transactions.

Contrasts with global CBDC trends

These remarks of Bessent suggest a stark divergence from worldwide developments involving central bank digital currencies. Statistics from the Atlantic Council indicate that 134 countries with 98 percent of the world’s Gross Domestic Product are researching CBDCs. For instance, China has launched and uses the digital Yuan, especially in trial scenarios like the Beijing Winter Olympics 2022. Several governments deem CBDCs to be developments that facilitate reform of the payment system and expand access to finance.

However, Bessent countered that a CBDC is most useful in ill-favored investment environments, which he said are ineffective opportunities for the U.S., the world’s largest economy. These comments may portend a wholesale scrubbing of digital currency projects in the incoming government.

Potential shift in U.S. policy

If true, Bessent’s potential leadership at the Treasury might turn the tide for federal research on CBDCs. Even though organizations like the Federal Reserve have been exploring the advantages and disadvantages of digital currencies, his words signal the lack of backing for further development of this technology. This could end with a reduction of the CBDC project or withdrawal in the United States, but other states will preserve and continue their work on such programs.

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