Currency pressure and inflation shaped policy across Asia and Africa this week, with central banks in Indonesia, India and Nigeria all moving on rates or intervention. China held its loan prime rates for a twelfth consecutive month. In the United States (US) and United Kingdom (UK), regulators continued building structural frameworks for stablecoin supervision and tokenised settlement.

Read more on the week's key developments:

1. FDIC proposes stablecoin compliance baseline, estimating five to 30 banks could qualify

The US Federal Deposit Insurance Corporation (FDIC) Board approved a proposed rule on 22 May implementing Bank Secrecy Act and sanctions compliance standards for permitted payment stablecoin issuers under the GENIUS Act. The rule applies to issuers operating as subsidiaries of insured state non-member banks and state savings associations, requiring them to comply with FinCEN and OFAC requirements covering anti-money laundering, sanctions screening and reporting. It follows a separate April proposal covering reserves, capital, redemption and risk management requirements. The FDIC estimates that between 5 and 30 supervised institutions could be approved to issue payment stablecoins through subsidiaries in the framework's first few years.

2. Federal Reserve proposes limited payment accounts for qualifying non-banks

The Federal Reserve Board published a proposed rule on 20 May that would create a new category of limited-access payment accounts for legally eligible non-bank institutions. If adopted, holders would be able to clear and settle through Fedwire and FedNow but would not access the discount window, intraday credit or interest on balances. Reserve Banks were directed to pause master account decisions for Tier 3 institutions, including state-chartered crypto banks and other uninsured, non-federally supervised firms, pending finalisation. The proposal opens a defined route to Federal Reserve payment rails for qualifying non-banks without a bank sponsor.

3. Commerzbank board rejects UniCredit offer as voting rights near 40% threshold

Commerzbank held its annual general meeting on 20 May in Wiesbaden, with UniCredit's takeover bid dominating proceedings. The meeting approved a EUR 1.10 (approx. $1.27) per share dividend for 2025, a 69% increase, plus a buyback mandate of up to 10% of share capital. The management and supervisory boards each secured shareholder approval above 98%. UniCredit's voting rights stand at 38.87% through direct equity and total return swaps, per its mandatory disclosures under the German Securities Trading Act. The initial acceptance period runs until 16 June, with an additional acceptance period expected to run until 3 July, per UniCredit's offer document.

4. Bank of England targets 2028 tokenised settlement service in joint call with FCA

The Financial Conduct Authority and the Bank of England published a joint call for input on 19 May on tokenised securities in wholesale financial markets. The paper targets 2028 for launch of a live synchronisation service, allowing tokenised equivalents of eligible assets to be used as collateral at central counterparties and in central bank operations. The Prudential Regulation Authority issued accompanying Dear CEO letters on prudential treatment of tokenised asset exposures and innovations in deposits, e-money and stablecoins. To date, 16 firms are active through the Digital Securities Sandbox on live issuance and settlement. The response deadline is 3 July.

5. RBA's Project Acacia delivers first wholesale CBDC pilot on public and private ledgers

The Reserve Bank of Australia and the Digital Finance Cooperative Research Centre (DFCRC) released the Project Acacia final report on 19 May, with support from the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority and the Treasury. The project tested 20 wholesale tokenised asset use cases across fixed income, private markets, trade receivables and carbon credits, with settlement tested through a pilot wholesale central bank digital currency, tokenised bank deposits and stablecoins. DFCRC described the issuance of pilot wholesale CBDC onto both public and private distributed-ledger infrastructure as a world first.

6. PBOC holds loan prime rate for a 12th month as new loan rates ease to 3.1%

The People's Bank of China (PBOC) held the one-year loan prime rate at 3.0% and the five-year rate at 3.5% on 20 May, the twelfth consecutive month without a change, according to data from the National Interbank Funding Center. Effective lending rates have continued to ease through other channels, with the weighted average rate on new corporate loans at 3.1% in April 2026, 20 basis points lower than a year earlier, and the new personal housing loan rate at 3.1%, six basis points lower, according to PBOC data. Consumer inflation rose to 1.2% year on year in April, while producer-price inflation accelerated to 2.8%, per the National Bureau of Statistics.

7. Singapore frames AI-finance positioning as DBS report ranks city-state behind only New York and San Francisco

DBS Group Research published "The Trusted AI Financial Hub" report on 20 May, introducing a Global AI Financial Hub Index (GAIFHI) that ranks Singapore third among 15 financial centres, behind New York and San Francisco, and identifies it as the open-market hub closest to combining AI capability with institutional trust at scale. The report was launched at the DBS Leaders Dialogue in Singapore. Deputy Prime Minister Gan Kim Yong told the event that "if we slow AI adoption, we will weaken our competitiveness and ultimately hurt workers more, not less," urging financial firms to use AI to create new roles rather than only to cut costs. DBS chief executive Tan Su Shan described AI as a potential "great multiplier" for Singapore's limited workforce.

8. Bank Indonesia delivers first rate hike in 25 months to defend rupiah

Bank Indonesia raised its benchmark BI-Rate by 50 basis points to 5.25% on 20 May, the first increase since April 2024, following its Board of Governors meeting on 19 and 20 May. The Deposit Facility rate was raised to 4.25% and the Lending Facility rate to 6.00%, both by 50 basis points. Governor Perry Warjiyo described the move as "a further step to strengthen the stabilisation of the rupiah exchange rate against the impact of heightened global volatility" and a "pre-emptive measure" to keep inflation within the government's target range of 2.5% plus or minus 1% in 2026 and 2027. The rupiah remained under pressure through the rest of the week following the decision.

9. Reserve Bank of India announces $5 billion swap as rupee touches new low of 96.96

The Reserve Bank of India (RBI) announced on 20 May a $5 billion USD/INR buy/sell swap auction with a three-year tenor, scheduled for 26 May 2026, the second such operation in five months. The RBI said the auction was intended "to meet the durable liquidity needs of the system." Participating banks will sell US dollars to the RBI at the spot rate on 29 May 2026 and buy back the same amount plus a premium at the maturity date of 29 May 2029. The rupee fell to a record low against the dollar around the same time, before recovering ground later in the week. Analysts have revised forecast ranges for the rupee upward, with the INR 95 to 100 range now widely anticipated for the rest of 2026.

10. Central Bank of Nigeria holds at 26.5% as inflation rises for second consecutive month

The Central Bank of Nigeria's Monetary Policy Committee left the Monetary Policy Rate at 26.5% on 20 May, three months after cutting the rate by 50 basis points. The committee said headline inflation rose marginally for a second consecutive month, to 15.69% in April from 15.38% in March, largely driven by food prices. The committee described the increase as transitory, citing spillovers from the Middle East conflict through energy, transport and logistics costs. It said prior reforms had muted the passthrough and conditions remained in place for a return to disinflation.

What to watch: Bank of Korea Monetary Policy Board meeting (28 May); European Central Bank rate decision (5 June); Reserve Bank of India Monetary Policy Committee meeting (3 to 5 June); Bank of Japan Monetary Policy Meeting (15 to 16 June)

The Asian Banker Weekly Brief is a roundup of the biggest macroeconomic, industry and regulatory developments affecting banking globally.