A library of snippets
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There are $50 billion of $100 notes in circulation – almost 20 for every Australian. Given most people rarely see one, the suspicion is they are used and hoarded by criminals.
From: Why cash has made an unexpected comeback in Australia: new study – Cash Essentials.
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A respected Oxford physicist has published, in a serious journal, a theory predicting that quantum computers hit a fundamental ceiling of at most 1,000 useful qubits which is comfortably below what breaking RSA requires.
From: Quantum Computers Will Never Break RSA, Says Oxford Physicist. But I Say Migrate Anyway.
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There are $50 billion of $100 notes in circulation – almost 20 for every Australian. Given most people rarely see one, the suspicion is they are used and hoarded by criminals.
From: Why cash has made an unexpected comeback in Australia: new study – Cash Essentials.
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Compared with traditional authentication methods, Mastercard recorded a 17% improvement in authentication rates when passkeys were used.
From: Passkeys face a new test in agentic commerce | Frontier Enterprise.
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PayPal has deployed FIDO-based authentication on its platform for the past 12 to 13 years. Since introducing PayPal passkeys, the company has recorded a higher customer conversion rate among passkey users than among those relying on traditional authentication methods.
From: Passkeys face a new test in agentic commerce | Frontier Enterprise.
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For central banks, three priorities follow from moving towards a tokenised financial system.
First, anchor singleness on programmable rails. Central banks can provide or enable access to central bank money on tokenised platforms – whether through links to existing reserve accounts or tokenised reserves – to preserve par settlement and elasticity.
Second, promote interoperability and integrity. The aim is to support common technical standards, governance frameworks and data rules that let networks interoperate safely, domestically and across borders. Central banks can also strengthen cross‑border supervisory cooperation and information‑sharing to close gaps around illicit finance. Admittedly, this is generally an area for other authorities, such as financial intelligence units. And we must acknowledge that addressing financial integrity risks in decentralised ecosystems remains challenging. New tools and approaches may be needed to effectively apply AML/CFT objectives to this environment.
Third, take a holistic, system‑wide perspective. We must continue to assess how design choices affect credit supply, financial stability and monetary transmission. For advanced economies, widespread stablecoin adoption could raise bank funding costs and shift intermediation towards non‑banks, potentially making credit provision more procyclical.
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Speech by Mr Pablo Hernández de Cos, General Manager of the BIS, at the Jackson Hole Economic Symposium, 28 August 2026.
Let us now turn to interoperability. Most fiat‑referenced stablecoins circulate as bearer-like instruments on public, permissionless blockchains. Yet these blockchains are fragmented across base networks and scaling layers. Therefore, even the “same” stablecoin on different chains is not interoperable without risky or costly workarounds. Tokenised deposits, by comparison, typically circulate on permissioned platforms. These platforms are also not genuinely interoperable. However, by introducing tokenised central bank reserves as a safe settlement asset, tokenised deposits become more fungible across banks, ensuring greater interoperability.3
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Even with payment rails and a funding method in place, a wallet cannot simply be handed to an agent without safeguards. Strict controls are needed to prevent unintended overspending or exposure to malicious activity.
The mechanism that limits an agent to spending within a defined scope, rather than granting it unrestricted authority, is known as a delegation framework. To maintain smooth and secure control, a delegation framework verifies three main elements.
Identity: verifies who is making the payment. It identifies the owner of the requesting agent and assesses its trustworthiness, using mechanisms such as Know Your Agent (KYA) checks and decentralized identifiers (DID), to prevent identity theft and misuse.
Permissions: sets detailed rules for how the agent can spend funds, including the specific platforms it can use, the maximum amount per transaction, and the validity period.
Settlement: through smart contracts or on-chain rules, funds are finalized atomically only when the conditions set above are fully met, which removes the risk of disputes at the source.
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As AI agents extract only the data they need and move on, the banner advertising model is breaking down, and platforms are shifting toward charging agents directly.
To handle the vast number of automated micropayments agents generate, fee-free stablecoins and on-chain payment standards such as x402 are emerging as essential infrastructure.
As happened with payments in the music streaming market, the per-transaction price will fall, but the sheer volume of machine-driven usage will outweigh that decline, making the overall market substantially larger.
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Sebastien Taveau, then the CTO of Validity Inc., was kind enough to quote me in his review of 2012:
He coined the following statement that has become my favorite of the year.
“Identity is the new money”.
It is simple, powerful and summarizes exactly where the ecosystem is going.
[From
Looking Back Forward | Validity Inc. | Biometric Sensors for Mobile Devices
]
Seb is much too kind. I may well be guilty of popularising the aphorism in the context of payments and organisational strategies towards secure electronic transactions in the retail space, but I didn’t invent it. I heard it for the first time a few years ago in connection with the ill-fated UK national identity card scheme. I was at the time a member of the Home Office’s Advisory Forum and was interviewed by Sir James Crobsy, who had been called in by the then-Chancellor Gordon Brown to prepare a report on the scheme. It was Sir James who brought the phrase to my attention.
If, as Sir James Crosby said in his report on the U.K. ID card scheme, “identity is the new money”, then banks should already have generated strategic plans to accumulate the former, now that they’ve run out of the latter.
[From
Digital Identity: I’m sure banks have a strategy for this kind of thing
]
As time has gone by, I have become more convinced that there is a deep truth in the apparently simple statement and I’d like to explain why. But to do that, we have to first explore what money means. One of the problems that always comes up when discussing money is that the word means several different things. I want to focus on just two here: money as a generalised means of exchange between buyer and seller and money the subset of means of exchange that do not involve credit. In other word, cash. Identity changes the requirements for and use of both kinds of money.
If you know who all of the counterparties to a transaction are, and can establish their “credit” then there is no need for cash. Identity substitutes for cash: when I go into Waitrose and pay with my John Lewis MasterCard, it’s an identity transaction. The terminal in Waitrose establishes that I have access to a line of credit that means that Waitrose will be paid. No actual money moves between my card and the Waitrose till. On the other hand, when I buy an apple from a market stall and pay for it with a pound coin, the stallholder doesn’t need to waste any time or money trying to establish who I am, because he doesn’t need to trust me. He just needs to trust the pound coin, which he self-assays. It’s not that there are no counterfeit pound coins, because there are, but that there are too few of them to disrupt commerce (and, to be honest, if you give the smallholder a counterfeit coin and he later detects the fraud, he will probably just palm it off on someone else).
As a thought experiment, then, imagine that cash vanishes and we interact through identity. In that case, identity becomes the key to transactions and a crucial individual resource that needs to be looked after by responsible organisations. This is the idea behind the Digital Asset Grid put forward by the Innotribe team at SWIFT, the worldwide interbank messaging service, at last year’s SIBOS. Whether you think DAG is the right specific approach or not, there’s something to be said for begin strategic planning around the transition to identity-based transactions.
What does all this mean at a macro level? It means that the action in the payments world will shift further toward identity over the coming year. One of the reasons why the Single European Payment Area (SEPA) hasn’t transformed cross-border commerce in the way that had been hoped is that a great deal of cross-border commerce rests on identity, which is undoubtedly why the Commission has switched its attention and proposed new rules to enable cross-border and secure electronic transactions in Europe.
The proposed Regulation will ensure people and businesses can use their own national electronic identification schemes (e-IDs) to access public services in other EU countries where e-IDs are available. It also creates an internal market for e-Signatures and related online trust services across borders, by ensuring these services will work across borders and have the same legal status as traditional paper based processes.
[From
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You can see where they are coming from. The UK, however, does not have a national e-ID and is unlikely to have one for the foreseeable future. We’ve taken another path, using a framework approach and private sector identities, so a pan-European solution will have to work with public and private sector identities in a single framework. This line of thinking suggests that a fruitful line of enquiry might be to look into a pan-European trust framework that these identities can belong to.
In digital identity systems, a trust framework is a certification program that enables a party who accepts a digital identity credential (called the relying party) to trust the identity, security, and privacy policies of the party who issues the credential (called the identity service provider) and vice versa
[From
What is a Trust Framework? | Open Identity Exchange
]
Let’s hope that the Commission can help something like this to develop, because the real barrier to cross-border trade within the Single Market is not money, but identity.
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