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The Bank of England announced plans to consult on opening access to its balance sheet to new payment providers. Allowing all payment providers to store funds overnight in interest-bearing accounts at the central bank would help achieve the goal that similar activities should be regulated consistently.
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Regulators and central banks should immediately address the real problems Facebook has identified. Central bank digital currencies would quite easily do so. Governments have been remiss by dragging their feet on this — in part because of deference to the established banking industry; but they no longer have any excuse to do so.
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The White Paper vows that the Libra Association will move to a permissionless system, but the commitment is weak—just an intent to begin the transition within five years. But Facebook Chief Economist Christian Catalini notes that for now, no one knows how to build such a thing at a global scale
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Facebook got in touch with the FT citing factual errors in Jemima Kelly’s story on the basis of her interpretive analysis which critiqued the notion that libra was actually a blockchain or a cryptocurrency. “
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Libra type systems face different kinds of difficulties in low and high interest rate environments. In high rate environments, the opportunity cost of holding the currency is high, which leads to lower quantity demanded. In low rate environments, the revenue stream may be insufficient to cover the costs incurred by the intermediaries. This creates an incentive for asset substitution, i.e., to allow backing the currency with higher risk assets (with higher yields) thereby increasing insolvency and run risks.
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UK-based Paysend Group is launching a new global digital currency, Pays XDR. This stable coin is 100% backed by cash reserves and the reserves are matched in the exact proportion of the IMF’s Special Drawing Rights.
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This year, in the EY third biennial FinTech adoption trends survey, 96% of the 27,000 consumers surveyed (across 27 global markets) reported they were at least aware of a FinTech transfer or payments service – and 75% had used one.
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Facebook’s Libra may not be available in India due to the current ban of blockchain-based currency transactions. Apparently, Facebook has not applied for approval with the Reserve Bank of India to operate its digital currency in the country.
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A new initiative plans to make six of Europe’s smartphone wallets interoperable with each other, creating a total network of 5 million users in 10 European countries. Notably, they are working with Chinese fintech giant Alipay to develop a unified QR code.
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The Coinbase Card will be available in Spain, Germany, France, Italy, Ireland and the Netherlands. The card allows users with Coinbase accounts to spend cryptocurrencies in stores and online at any merchant that accepts Visa.
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QuadrigaCX’s Gerald Cotten, who *apparently* died last December, transferred millions of dollars in crypto out of customer accounts and into other exchanges, with the funds being used to furnish his personal lifestyle and trading habits.
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On June 21, the Financial Action Task Force will publish a note to clarify how participating nations should oversee virtual assets. The new rules will apply to businesses working with tokens and cryptocurrencies, such as exchanges and custodians and crypto hedge funds.
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According to CME, bitcoin (BTC) open interest spiked on June 17 with an all-time high of 5,311 contracts totalling 26,555 BTC, or approximately $246 million.
