This paper documents the distinction between stablecoins and money market funds (MMFs), namely their "different response to crypto and U.S. monetary policy shocks since 2019."

Drawing on a new series of crypto market shocks and a standard measure of monetary policy shocks, the paper shows that crypto shocks are "inconsequential for MMFs and traditional financial markets" but "negatively affect stablecoins."

In contrast, U.S. monetary policy shocks "significantly affect MMFs... and stablecoins, but in opposite directions. While prime MMF assets grow after contractionary monetary policy shocks, stablecoin market capitalization significantly declines." 

The results of the analysis show that, "while consumers may initially prefer to use more traditional payment methods, a design tailored to their specific needs could significantly increase CBDC uptake. Raising awareness and capitalising on network effects could also boost demand for CBDC."

Following the last update from January 2024, the report provides a detailed overview of the comprehensive feedback that RDG members – representing consumers, retailers and payment service providers – gave on a preliminary draft of the digital euro rulebook, which was shared within the RDG for an interim review at the end of last year.

The report also provides an update on the seven new workstreams launched in May 2024 to focus on key areas of the rulebook, including minimum user experience standards and risk management, which were not included in the interim draft commented on by RDG members earlier in the year.

The ECB aims to improve its understanding of market, technical, and business aspects of such a deployment, to facilitate a timely and seamless rollout of the offline digital euro solution.

The discussions will focus on typical technical methods for deploying applets on embedded Secure Elements, as well as the business considerations involved, including the setup and the roles of actors in this process.

The talks are expected to take place between 1st – 15th October. The talks will be held bilaterally at expert level as closed sessions with members of the ECB’s digital euro project team. Observers from National Central Banks may also join.