Preheat oven to 350°F. Line a 12-cup (or 2 6-cup) cupcake pan with cupcake liners.
In a small microwave safe bowl, heat white chocolate and hot water in the microwave on high for 30 seconds. Stir and continue heating for 10 seconds at a time as needed until completely melted. Set aside.
In a medium mixing bowl combine flour, baking powder and salt. Set aside
In a small mixing bowl, whip egg whites until stiff but not dry. Set aside.
In a the bowl of an electric mixer, beat sugar and butter until creamy and lemon-yellow colored.
Beat in egg yolks and vanilla. Add the cooled chocolate mixture.
Mix in half of the flour mixture, then mix in the milk until incorporated, then the remaining flour.
Lightly fold in the beaten egg whites.
Fill the cupcake cups ¾ full with batter. Bake at 350°F until golden, about 15-20 minutes.
Remove from oven let cool for 5 minutes in pan the move cupcakes to cooling rack to cool completely.
Frosting
In a small bowl combine the coffee grounds and boiling water. Let steep about 5 minutes. Strain the mixture through a strainer lined with a coffee filter.
In a medium mixing bowl beat together powdered sugar and butter. Thin to desired consistency with strained coffee.