This document reports on the work done by an internal Banque de France central bank digital currency (CBDC) taskforce led by Christian Pfister.
WhatsApp will finally be able to roll out its payments services in a phased manner in India after it submitted a revised proposal regarding compliance in January, according to sources.
Kraken Security Labs, part of the San Francisco-based Kraken bitcoin and cryptocurrency exchange, has warned the widely-used Trezor bitcoin hardware wallet has a “critical” flaw—with hackers able to extract the wallet’s private keys in just 15 minutes.
Mobile banking firm Varo Money is now set to receive the first “de novo national bank charter” ever given to a fintech startup, with approval from the Federal Deposit Insurance Corporation for deposit insurance. The Office of the Comptroller of the Currency first awarded Varo preliminary approval in September 2018. Varo Bank is now on track to obtain its final national bank charter pending completion of organizational requirements and meeting the conditions of both the OCC’s and FDIC’s Federal Reserve membership. Upon full charter approval, Varo plans to expand to additional types of services including credit cards, loans, and additional savings products. https://www.fdic.gov/regulations/laws/bankdecisions/depins/varo-bank-na-draper-utah.pdf
The real question is whether any P2P lender can overcome a key problem that plagues unsecured consumer lending in a competitive market: adverse selection. As the probability of default rises, a lender will require a higher interest rate to compensate for the risk. But, higher interest rates attract borrowers who are worse risks. Put differently, the pool of willing borrowers at a high interest rate shifts adversely relative to the universe of those wishing to borrow at a rate they expect to pay.
“Improving the experience of an extinct (or soon-to-be extinct) product is like installing an escalator on a horse buggy. It may add convenience for existing users, but there are better places to put your money. Yet, that’s exactly what banks and credit unions are doing.”
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The Kiffmeister is a former Senior Financial Sector Expert at the International Monetary Fund.
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