ECB advances digital euro, with pilots from 2027 and potential issuance in 2029

The European Central Bank (ECB) has approved the next phase of its digital euro project, marking a key milestone in Europe’s efforts to modernise payments and strengthen monetary sovereignty. The decision follows the completion of the Eurosystem’s preparation phase, launched in late 2023, which laid the groundwork for a potential central bank digital currency (CBDC) for the euro area.

The move aligns with calls from European leaders to accelerate progress on the initiative, following renewed support for digital finance at the October 2025 Euro Summit. The ECB said its work will proceed “flexibly” to ensure readiness for issuance once the legislative framework is complete.

If European co-legislators adopt the proposed regulation in 2026, pilot transactions could begin as early as mid-2027, with a potential first issuance targeted for 2029. The final decision to launch, however, will depend on the legal and political process.

ECB president Christine Lagarde said the digital euro is intended to preserve the role of public money in an increasingly cash-light economy. As digital transactions continue to grow across Europe, the central bank aims to provide a secure, privacy-protecting alternative to private payment systems. “The euro, our shared money, is a trusted sign of European unity,” said Lagarde. “We are working to make its most tangible form - euro cash - fit for the future, redesigning and modernising our banknotes and preparing for the issuance of digital cash.”

Unlike cryptocurrencies or privately issued stablecoins, the digital euro would be a direct liability of the Eurosystem, offering citizens and businesses a state-backed means of payment for online and in-person transactions.

The Eurosystem will now focus on three priorities: technical readiness, market engagement, and legislative support. Work will include developing the system’s architecture, testing prototypes with payment providers, and finalising the rulebook for its operation. The ECB will also continue providing technical input to European policymakers as the legislative framework advances.

Executive board member Piero Cipollone, who chairs the ECB’s High-Level Task Force on the digital euro, described the project as “a collective effort to future-proof Europe’s monetary system”, adding that it will “enhance the resilience of Europe’s payment landscape, lower costs for merchants, and create a platform for private companies to innovate and compete”.

The ECB estimates total development costs at around €1.3bn up to the first issuance, with annual operating expenses of about €320m thereafter. These would be borne by the Eurosystem, similar to the cost of printing and distributing banknotes. The ECB expects the investment to be offset by seigniorage income, even if digital euro holdings remain modest.

Safeguards such as holding limits are being designed to prevent risks to financial stability. The ECB has also stated that implementation costs for banks will be comparable to those under the EU’s Payment Services Directive.

Over the coming year, the ECB will refine the technical design and expand user testing, with particular focus on small merchants and vulnerable consumers. A separate report released alongside the announcement highlights demand for a “simple, reliable and secure” payment experience.

While legislative approval remains pending, the ECB’s decision signals growing momentum behind the digital euro, a project that could reshape how Europeans pay and interact with public money in the decade ahead.

 

Fed delivers another rate cut as growth moderates and risks tilt toward jobs

The Federal Reserve has cut interest rates by 25 basis points (bps), lowering the target range for the federal funds rate to 3.75-4%. The decision, which comes amid signs of slower growth and rising labour market risks, marks the central bank’s second rate cut in as many meetings as it seeks to balance persistent inflation pressures with a softening economy.

In its latest policy statement, the Federal Open Market Committee (FOMC) said that “economic activity has been expanding at a moderate pace” but that “job gains have slowed this year” and the unemployment rate has “edged up.” Inflation, while down sharply from its 2022 peak, “remains somewhat elevated.”

The Fed cited “a shift in the balance of risks” as justification for the move, noting that downside risks to employment had increased in recent months. The Committee reiterated its commitment to achieving maximum employment and returning inflation to its 2% target over the longer run.

The decision was not unanimous. Two members dissented, with one preferring a deeper 50 bps cut, the other favouring no change at all. This highlights the continued division within the Fed about how far and how fast to ease policy.

The Fed also announced plans to conclude the reduction of its aggregate securities holdings on 1 December, effectively ending its balance sheet runoff programme. This move signals a further step toward a more supportive policy stance after two years of quantitative tightening.

Chair Jerome Powell and his colleagues face a delicate balancing act as inflation stabilises but economic momentum weakens. With borrowing costs still high and consumer spending cooling, the central bank appears to be positioning itself to cushion the economy against a potential downturn without reigniting inflation.

The latest inflation readings suggest price pressures have eased but not disappeared, driven by moderation in goods prices and housing, but with services inflation still sticky. Wage growth has slowed but remains above pre-pandemic levels, and labour market data for September are expected to confirm a steady but slower pace of hiring.

Market participants had largely priced in the 25bp reduction, but attention is now shifting to whether the Fed will continue easing into 2026. Futures markets indicate expectations for at least one additional cut by early next year, depending on incoming data.

“The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the statement said, reaffirming that future moves will depend on inflation, employment, and broader financial conditions.

For corporate treasurers and CFOs, the Fed’s latest action suggests a continued easing bias that could lower short-term funding costs and stabilise credit conditions into 2026, even as uncertainty around inflation and growth persists.

 

Swift promotes AI tool to support ISO 20022 postal data compliance

Swift has released an open-source artificial intelligence (AI) model to help financial institutions meet one of the most complex requirements of the ISO 20022 migration: converting unstructured postal addresses into structured formats. The move aims to support banks, payment service providers, and technology partners as they prepare for the November 2026 deadline, when unstructured postal data in certain payment messages will no longer be accepted.

The rule change applies to institutions using ISO 20022 High-Value Payment System (HVPS+) guidelines, including those handling MT 103 and pacs.008 payment messages. From 2026, address fields in these messages must follow a structured format with separate components for elements such as town and country. Failure to comply could result in rejected payments, processing delays, or even regulatory penalties.

Structured postal data, a key feature of the ISO 20022 standard, enhances accuracy, supports anti-money laundering controls, and improves interoperability across the global payments ecosystem. But the transition poses a major challenge for institutions whose legacy systems still rely on free-text address fields that are inconsistent and difficult to interpret.

To simplify the process, Swift’s AI model automatically extracts and standardises address components from unstructured data, helping users convert legacy records and messages into ISO-compliant formats. Using Natural Language Processing (NLP) techniques, the model identifies towns and countries from free-text inputs, assigns confidence scores to its predictions, and offers alternative suggestions for review.

The AI system, which Swift is making freely available to the financial community, can be integrated into existing systems or used as a standalone batch processor. It is designed to pre-process and clean address data within payments files, whether stored in client databases or received via corporate channels. The tool has already been validated in pilots with customers across more than 200 countries and territories, demonstrating strong geographic coverage and accuracy.

Swift describes the model as a “lightweight NLP-based AI system” that uses probabilistic graphical modelling to handle interdependent outputs, in this case, town and country fields. It is optimised for structured prediction tasks at scale, with configurable regional tuning options to account for local address conventions.

The organisation said the AI release marks its first open-source contribution to the ISO 20022 transition, reflecting a growing emphasis on collaboration and transparency across the payments industry. Beyond compliance, Swift argues that the move to structured data represents a long-term opportunity for banks to improve data quality, reduce operational risk, and enhance automation in payments processing.

As ISO 20022 adoption accelerates globally, the structured postal data requirement has emerged as one of the most pressing milestones. With less than a year before testing begins, Swift’s AI model is intended to give institutions a practical head start, turning what could have been a technical headache into a chance to modernise data management across payment networks.

 

HKMA pivots e-HKD focus toward wholesale payments following pilot success

The Hong Kong Monetary Authority (HKMA) has completed Phase 2 of its e-HKD Pilot Programme and signalled a shift in focus toward wholesale applications of its potential central bank digital currency (CBDC). The decision follows a year of pilot testing across 11 industry groups, which explored use cases for the e-HKD in retail settings and compared its performance with tokenised bank deposits.

The Phase 2 pilots evaluated e-HKD’s commercial viability and scalability in three key areas: settlement of tokenised assets, programmability, and offline payments. The results confirmed that both e-HKD and tokenised deposits can enable more cost-efficient, programmable, and resilient transactions. However, the HKMA noted that the public saw little difference between the two instruments, given the high trust in Hong Kong’s banking system and robust regulatory safeguards.

A key conclusion from the study is that the e-HKD, as a direct liability of the HKMA and free from credit risk, may be better suited to large-value and wholesale applications. As a result, future development will focus on supporting the city’s growing tokenisation ecosystem and enhancing cross-border payments infrastructure, particularly in trade settlement.

“The two phases of the e-HKD Pilot Programme have yielded insightful findings that shape our understanding of the future of digital money,” said Eddie Yue, Chief Executive of the HKMA. “We are encouraged to see the e-HKD gradually being used in more wholesale applications, and we will continue to ensure Hong Kong is well-prepared for the potential future extension of the e-HKD in retail scenarios.”

The HKMA plans to complete the policy, legal, and technical groundwork for a potential e-HKD rollout by the first half of 2026. Any decision to extend the CBDC into retail use will depend on global developments, market demand, and technological progress.

As part of its next steps, the HKMA will publish a set of common token standards developed through the e-HKD Industry Forum. These are intended to facilitate the broader adoption of programmability in digital money and provide a foundation for future e-HKD integration across financial and corporate systems.

Launched in 2017, the e-HKD project is part of the HKMA’s wider digital finance strategy, which also includes cross-border initiatives such as the mBridge multi-CBDC platform. The authority said it remains committed to working closely with industry participants to explore how distributed ledger technology can enhance efficiency, resilience, and innovation in Hong Kong’s payments and settlement systems.

 

Islamic finance market tops US$5.5tn as corporates eye new capital sources

Islamic finance has become one of the fastest-growing segments of global banking, with assets now exceeding US$5.5tn across more than 80 countries, according to a new report by Standard Chartered. The study, ‘Islamic Banking for Corporates: Broadening Horizons’, highlights both the scale of opportunity and the knowledge gap still holding back wider corporate participation.

While 65% of corporates express interest in Shariah-compliant solutions, most lack prior exposure to Islamic finance. The report identifies limited product familiarity as a key barrier preventing companies from accessing capital pools expected to reach US$7.5 trillion by 2028.

Corporate issuance of Sukuk (Shariah-compliant bonds) has nearly doubled since 2020, with volumes up 38% to US$58.8bn in 2024. Investor appetite for sustainable Sukuk is particularly strong, with average oversubscription rates of 4.3 times compared with 3.1 times for conventional Sukuk, underscoring the alignment between Islamic finance and environmental, social and governance (ESG) priorities.

Digital innovation is also reshaping the sector. Tokenised Sukuk, blockchain settlements, and AI-powered Shariah-compliance tools are improving efficiency and transparency while lowering issuance costs. These advances are helping connect issuers and investors across borders, supporting the emergence of more integrated and accessible Islamic capital markets.

The report notes that Islamic finance provides strategic access to high-growth trade corridors spanning the Gulf Cooperation Council, Southeast Asia, South Asia, and Africa. Together, these regions form the US$5.7 trillion South–South Corridor, which now represents almost a quarter of global trade. The Halal economy alone accounts for around US$2.2 trillion, creating new opportunities in sectors ranging from food and manufacturing to logistics and healthcare.

Standard Chartered says rising awareness, sustainability-linked demand, and AI-driven innovation are set to propel the next phase of Islamic finance growth worldwide.

 

UK firms lag on identity verification ahead of new transparency law

With less than three weeks until mandatory identity verification begins under the UK’s Economic Crime and Corporate Transparency Act (ECCTA), more than half of international companies operating in the country are still unprepared, according to a survey by Vistra. The poll of 100 company directors found that 52% of organisations have yet to comply with the new identity verification requirements, which come into force on 18 November. Companies House data indicates actual compliance may be even lower: only around 800,000 of the estimated seven million individuals required to verify their identity have done so.

The ECCTA represents the most significant reform to UK corporate transparency since Companies House was established in 1844. It requires all directors, Persons with Significant Control (PSCs), LLP members, and anyone filing on behalf of a company to verify their identity. Failure to do so before the next confirmation statement or relevant filing can lead to fines, restrictions on company filings, and possible disqualification from the register.

Yet awareness remains patchy. One in three respondents were unaware of the ECCTA’s requirements or deadlines, and only 56% felt confident they had correctly identified all PSCs within their organisations.

Compliance with another recent measure, the Failure to Prevent Fraud offence, which took effect on 1 September, was also low. Here, just 53% of eligible firms confident they met the criteria. The offence applies to companies meeting two of the following thresholds: turnover above £36m, assets above £18m, or more than 250 employees.

Vistra’s survey found UK-based firms were the least prepared globally. Only 72% of UK directors were aware of the ECCTA, compared with 90% in Asia-Pacific and 100% in the US. Just 38% of UK respondents said they were compliant, versus 65% in the US.

Despite these shortfalls, global sentiment remains positive. Two-thirds of directors surveyed said the ECCTA’s tougher standards make them more likely to approve new UK subsidiaries, reinforcing the UK’s reputation as a transparent and well-regulated market.

 

Stanford University Wins the AFP 2025 Pinnacle Awards

Stanford University was named the winner of the AFP 2025 Pinnacle Awards Grant Prize for excellence in treasury and finance. Sponsored by Truist, the Pinnacle Awards were presented during AFP 2025 in Boston. The Grand Prize was chosen through a vote by treasury and finance professionals. As part of the Grand Prize, Truist donated $10,000 to Stanford University’s charity of choice.

Stanford University’s submission focused on its development of UniRev, a secure, scalable and cost-effective payments platform that modernises how more than 300 campus merchants handle transactions. By automating processes, improving compliance and unifying merchant services across departments, UniRev has already delivered more than $1.3m in annual savings while restoring confidence in central finance operations.

As a Center of Excellence that seamlessly integrates with the university’s branding and backend systems, the solution scales across a wide range of users. It is now also being licenced to other universities and nonprofits.

“AFP is proud to recognise Stanford University with the 2025 Pinnacle Awards Grand Prize,” said Pat Culkin, President & CEO of AFP. “Transforming not only its own processes but also those of other organisations, Stanford’s forward-looking solution is an inspiration to the broader treasury and finance community.”

The runners-up for the Grand Prize were American Airlines and the World Bank. Along with Stanford University, these organisations were selected as finalists for their ability to demonstrate innovative solutions that advance both their organisations and the treasury and finance profession.

 

Scotiabank modernises US cash management to boost North American connectivity

Scotiabank has launched its modernised US cash management platform, built on the cloud-based ScotiaConnect system, in a move to unify and streamline treasury operations across North America’s US$1.4 trillion (C$1.9 trillion) cross-border trade corridor. The platform expands Scotiabank’s US cash management offering with a range of deposit solutions including savings, operating and term products, along with ACH, wire transfer and account transfer capabilities. It is designed to help businesses manage liquidity and payments more efficiently across borders.

Through ScotiaConnect, corporate clients gain real-time visibility into account balances and transaction activity. The online portal offers a simplified interface for self-service, while direct host-to-host connectivity allows companies to integrate their own treasury systems with Scotiabank’s. This supports greater automation and consistency in payment and receivable operations.

Scotiabank said the platform was developed in collaboration with clients to address operational challenges and create a more streamlined experience. The US rollout follows an earlier deployment in Mexico, with further expansion planned across the bank’s footprint.

By enhancing its digital infrastructure, Scotiabank aims to improve how businesses manage cash and liquidity across North America. The launch reflects a wider effort by the bank to deliver practical, technology-led tools that help corporates operate more efficiently in an increasingly connected regional trade environment.

 

XDC Ventures acquires Contour Network 

XDC Ventures, the investment arm of the XDC Network, has acquired Contour Network, a blockchain-based platform for digitised letters of credit (LCs) originally backed by a consortium of global banks. The move revives the platform and aims to bridge traditional finance with Web3 technologies.

The acquisition strengthens XDC Network’s focus on institutional cross-border trade finance and real-world asset tokenisation. XDC Ventures plans to expand Contour’s reach through new investment commitments and broader adoption among banks and corporates, while maintaining compliance and regulatory standards.

The group will also launch a Stable-Coin Lab to advance the use of digital settlement in trade finance. The lab will pilot regulated stable-coin issuance and settlement with financial institutions, develop APIs for stable-coin-based LC settlement, and explore ways to shorten processing times from days to near real-time.

Contour will integrate the XDC Network as its settlement and tokenisation infrastructure, enabling faster, lower-cost cross-border transactions. Circle’s recent support for USDC on XDC provides a regulated stable-coin option for settlement, with efficient on- and off-ramps via global partners.

Contour’s platform has previously reduced LC processing times from five to ten days to a few hours for live trades in commodities and manufacturing. Combined with the XDC Network, operational since 2019, the integration is expected to support compliant digital settlements and improve liquidity in global trade.

Initial priorities include establishing the Stable-Coin Lab, launching pilots with consortium members, rolling out API-based LC settlements on XDC, integrating XDC with Contour’s workflows, and engaging with regulators in the US, EU, GCC and Asia under the Genius Act.

 

U.S. Bank upgrades digital treasury platform

U.S. Bank has launched an enhanced version of its treasury management platform, designed to help businesses manage liquidity, cash flow, and financial risk with greater efficiency. The upgrade forms part of the bank’s ongoing investment in digital connectivity and open-banking solutions.

The platform serves as a central hub for businesses managing payables, receivables, liquidity, fraud protection, and foreign exchange. The new version introduces greater automation and analytical tools to reduce manual workloads and provide clearer operational visibility.

Key updates include configurable dashboards tailored to different user roles, automated workflows for payments and reconciliation, and self-service onboarding tools aimed at cutting administrative delays. Reporting functions have been consolidated into a single interface, enabling users to search, download, and group account data more efficiently.

Payment workflows now support multiple payment methods, including faster payments and foreign exchange, with enhanced tracking and approval controls. Fraud prevention and authorisation processes have also been strengthened through new embedded safeguards and automated checks.

The upgraded system supports integration through APIs, allowing companies to connect the platform to existing systems. The interface has been redesigned for consistent performance across desktop and mobile devices.

U.S. Bank said the updates were informed by direct client feedback and form part of its broader strategy to modernise treasury services, improve user experience, and support operational efficiency for business clients across its markets.