Monetary McFly 🪰

Buzzing around the banking system and the monetary ledgers - especially the digital ones 🏦🔜📱

[Monetary McFly 🪰 @Monetaryguy589]

A Bank called Continuous Linked Settlement 🏦

When you change dollars into yen, two payments have to happen. You send dollars. They send yen. If one side pays and the other side dies mid-wire, you are out the money.

That gap has a name from 1974: Herstatt. A German bank was shut while New York was still open. Marks had been sent. Dollars never came back.

CLS - Continuous Linked Settlement - is the lock a few of of large banks came up with to stop that 🔒

It is a special bank in New York. About 75 of the world’s large banks have an account there. Each morning they send in only the net they owe in each currency from the day before. CLS holds both sides and releases them together. Both legs or neither - “PvP”

Roughly $8 trillion a day gets processed this way. CLS is only open for a few hours when every major payment system is awake.

Eighteen currencies get passed that lock. There are more than 180 others that do not. Most of Latin America, most of Africa, most of ASEAN. Those pairs still settle the old way: one bank pays, then waits.

You have never heard of it because you are not one of the 75. There are thousands of banks that are not members. A Thai bank, a credit union in Milwaukee, a Nairobi wallet - they do not call CLS. They call JPM or Citi, and those banks call CLS. No seat, no key 🔐

The name is American. The stack is not. CLS Bank International sits at 32 Old Slip under a New York Edge Act charter. The Fed watches it like a bank. That is where the lock lives - the multi-currency accounts and final ledger “both legs or neither.”

Above the edge act bank is London. A UK intermediate owns the New York charter. Sister companies in London run the pipes: they take the SWIFT instructions, match the two sides of the trade, build the morning net for each member in each currency, time the pay-in window to every central bank’s RTGS, and keep the session from breaking.

The money does not sit in London. Instructions and the timetable does. FX pricing is at market

Above London is CLS Group Holdings AG in Lucerne. Swiss private company. Not a listed stock. The shareholders are the same large banks that settle on the New York books - JPM, Citi, Barclays, HSBC, Deutsche, MUFG, and the rest of that member list.

They get a vote and a board seat mix. They do not get a dividend. It is a “mutual utility”: built by the club, owned by the club, run for the club.

The Fed still treats the Swiss parent as a bank holding company and is the primary overseer of the whole group. Other central banks watch the currencies they issue. A U.S. license, Swiss cap table, London plumbing.

That lock only works for money that still lives on a bank’s books - deposits

A reserved PPSI payment stablecoin is cash that can leave. It does not have a CLS account. It does not wait for morning. It does not close on Friday at 8 o’clock.

Eighteen flags and 75 doors were the whole design. Everything else was always outside the lock.

@Monetaryguy589

[Monetary McFly 🪰 @Monetaryguy589]

If we are going to tokenized sovereign assets and currencies, there must be a way to transfer those intrinsic values with settlement finality from one soverign to another (something that doesn't really occur today).

Blockchain technology allows countries to circumvent correspondent dollar rails and the concept of expanded nostro balances - it also allows both parties to extinguish claims (settle) with a neutral permissionless clerk and auto FX if so desired.

The U.S. response was to go first - via segregated and fully reserved high security payment stablecoins - "digital cash". Dollars that are not bank deposits and whose claims can be extinguished against another similar sovereign claim (with a native crypto asset as the settlement layer between the two soverign claims)

While not conceding the dollar reserve status, I would assume the U.S. is definitely concerned about these new technologies - hence the ongoing narrative from Treasury about the expansion of dollar stables and how they will preserve this status.

[Monetary McFly 🪰 @Monetaryguy589]

Yes - nominal growth and earnings are a real part of the equity story. They sit next to a second fact that matters more. QT did not shrink the Fed Layer the way the headline balance sheet suggests.

The Fed's total assets peaked at $8.97 trillion on April 13, 2022, bottomed at $6.54 trillion on December 3, 2025, and were $6.75 trillion on November 4, 2026 - a $2.2 trillion decline. Almost all of that was offset, for the banking system, by runoff of the overnight RRP facility, which fell from a $2.37 trillion peak in September 2022 to essentially zero.

Securities minus the TGA minus RRP was $5.59 trillion when QT started in June 2022 and $5.52 trillion in September 2026 — nearly unchanged, and still about $2.1 trillion above February 2020.

The deposits-minus-loans gap is still $5.54 trillion, versus $3.28 trillion just before COVID. The stock of deposits that can bid for assets was not taken away.

[Monetary McFly 🪰 @Monetaryguy589]

They told you QE was "money printing" and that it would show up in your grocery bill.

Look at the order it actually happened in:

1️⃣ 🟦Reserves +104% YoY, May 2020
2️⃣ 🟧Nasdaq +69%, Mar 2021 (10 months later)
3️⃣ 🟩Home prices +20.8%, Mar 2022 (12 months later)
4️⃣ 🟥CPI 9.0%, Jun 2022 (3 months later)
5️⃣ 🟪Rents 8.8%, Mar 2023 (9 months later)

That's 34 months from the Fed “printing it” until it hits your rent.

Reserves never reach the public. They sit on the balance sheets of the largest domestic and foreign banks, outside M2, and the first thing they inflate is asset prices. Consumers feel it last, through housing.

Since 2008 reserves are up 65x while bank loans are up only 2.1x. CPI averaged 1.6% from 2009 to 2019. The money didn't go into productive loans into the economy. It went into the asset base.

Powell went on TV and said "we print it digitally" without explaining any of this. The affordability crisis isn't a mystery. It's the Fed Layer, and the people selling you the money printing story are skipping over it

[Monetary McFly 🪰 @Monetaryguy589]

@blindpig_1966 @LukeGromen There is no reason to tokenize things if intrinsic value can't settle across borders.

[FINTECH.TV @FINTECHTVglobal]

Moody’s has rated Ripple USD (ethereum:0x8292bb45bf1ee4d140127049757c2e0ff06317ed), the first stablecoin to receive a rating from a major credit agency.

Rajeev Bamra of @moodysratings joins @RemyBlaireNews to discuss how stablecoin credit fundamentals aren’t going away, with the risks relocating into the digital wrapper.

[Handre @Handre]

Central Banker tier list.

[Monetary McFly 🪰 @Monetaryguy589]

I fully expect the U.S. to have tokenized gold and/or tokenized gold convertible interest bearing bonds.

The trick will be, once countries do this, how will that intrinsic value transfer digitally across borders without moving the physical.

If you own a U.S. gold backed token, will it be accepted elsewhere, and if so, how will that intrinsic value settle outside U.S. jursidiction.

[Monetary McFly 🪰 @Monetaryguy589]

Agreed on the physical goods comment, but to your USD stablecoin comment, its important to understand we don't have OCC approved PPSI's yet (lots of new applicants however)

Also, I don't see how we move away from Treasuries as the best form of base financial collateral. Interest bearing collateral is what makes the system work and allows for easy expansion 🤔

[Monetary McFly 🪰 @Monetaryguy589]

It will be interesting to see what happens if/when we get FIAT pegged payment stablecoins backed by gold or other commodities whose values can float - and FIAT pegged payment stablecoins backed sovereign cash/bonds without interest (GENIUS type not floating) and how these may interoperate and settle

[BRICS News @BRICSinfo]

JUST IN: 🇨🇳🇹🇼 Chinese President Xi Jinping says China is ready to discuss reunification with Taiwan.

[ΛRMIN @Arminn_Ai]

Jensen Huang in the Matrix, learning how Chinese spies work

Wait till the end 👀

[Monetary McFly 🪰 @Monetaryguy589]

Cash Money 🤑

As of last week, there was $2.89T of dollar denominated currency printed by the Federal Reserve

About $400B sits in Federal Reserve Banks. Of the $2.49T in circulation, 45% ($1.1T) is located outside the United States

83% ($2.1T) of all currency is denominated in $100 bills

[Monetary McFly 🪰 @Monetaryguy589]

@noritaka_okabe Deposits extend claims, Stablecoins extinguish them.

Agents with sovereign currencies need to settle

[Monetary McFly 🪰 @Monetaryguy589]

With the recent hike in IORB up to 3.9%, the Fed is now paying about $900M per week in interest on approximately $1.2T of Reserve balances held by Foreign Bank Branches in New York district #2.

These Foreign Banks don't make loans to U.S. consumers and are not FDIC insured.

[Monetary McFly 🪰 @Monetaryguy589]

They told you QE was "money printing" and that it would show up in your grocery bill.

Look at the order it actually happened in:

1️⃣ 🟦Reserves +104% YoY, May 2020
2️⃣ 🟧Nasdaq +69%, Mar 2021 (10 months later)
3️⃣ 🟩Home prices +20.8%, Mar 2022 (12 months later)
4️⃣ 🟥CPI 9.0%, Jun 2022 (3 months later)
5️⃣ 🟪Rents 8.8%, Mar 2023 (9 months later)

That's 34 months from the Fed “printing it” until it hits your rent.

Reserves never reach the public. They sit on the balance sheets of the largest domestic and foreign banks, outside M2, and the first thing they inflate is asset prices. Consumers feel it last, through housing.

Since 2008 reserves are up 65x while bank loans are up only 2.1x. CPI averaged 1.6% from 2009 to 2019. The money didn't go into productive loans into the economy. It went into the asset base.

Powell went on TV and said "we print it digitally" without explaining any of this. The affordability crisis isn't a mystery. It's the Fed Layer, and the people selling you the money printing story are skipping over it

[a16z @a16z]

Agents now make up the majority of web traffic, write more than half of new articles published online, and generate most of the code pushed to production.

This is what the early stage of a platform shift looks like: adoption is measurable, but the business models it enables mostly aren’t visible yet.

Welcome to the agent economy.

https://t.co/Y4aT9wibgb

[XRP @XRP]

Built on a network made for speed and efficiency, it settles in 3-5 seconds for less than a penny.

Doing its job since 2012.

[Stronghold Japan @strongholdjapan]

🌐 日本のクロスボーダー決済インフラマップ

日本発着の国際決済レールは、レガシー規格の刷新と分散型台帳（DLT）の実用化が同時に進展しています。

🔗 XRPL / クリプト流動性ルート（SBI Remit）：
・日本 ⇄ フィリピン、ベトナム、インドネシア：XRPをブリッジ資産として活用する送金ソリューションを展開。コルレス銀行網を介さない低コスト・高速な送金ルートとして定着。
🏦 国内発ステーブルコイン・預金トークン構想：
・ProgmatやDCJPYなどの規制準拠基盤を中心に、貿易決済や企業間送金の効率化に向けた国内外でのPoC（概念実証）が継続。
・海外金融当局（シンガポールMASのProject Guardian等）との相互接続性に関する共同研究も前進。
🌐 CBDC・統合台帳（ホールセール実証）：
・BIS Project Agorá：日本銀行が主要中央銀行および民間金融機関とともに参画。ホールセールCBDCとトークン化預金を結ぶクロスボーダー決済の効率化を実証中。
📊 基幹レールのモダナイゼーション：
・主要行におけるSWIFT ISO 20022（CBPR+）への対応が進展し、決済電文のリッチデータ化が完了段階へ。
・既存レールとデジタル資産インフラの接続が進み、中継銀行依存の解消と即時決済への移行が加速。

インフラの骨組みは整いました。次の焦点は、法制度と企業オペレーションへの実装スピードです。

日本のクロスボーダー決済の最新情報は @strongholdjapan をフォローしてください。

[Monetary McFly 🪰 @Monetaryguy589]

@uptownsaul @business Sovereign Countries want to use their own currencies for payments. Fully reserved Stablecoins (not bank deposits) make this an option for everyone.

Until then, we don't have cross border settlement, we continue to have an extension of dollar claims.

[RWA Foundation @RWAFoundation_]

.@Ripple led stablecoin market cap growth over the past 24 hours, +$39.1M

Data: @tokenterminal