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The Riksbank is conducting a pilot project with Accenture aimed at developing a proposal for a technical solution for a digital krona (“e-krona”). The technical solution will be based on Distributed Ledger Technology.
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The judge assured Telegram’s lawyer Alexander Drylewski that he is mindful of the looming April 30 deadline. A clause in the Gram purchase agreements specifies that ICO participants can claim a refund on their investment should Telegram fail to launch the TON before that date. However the date was originally set for October 2019.
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Castel reserved judgment on the preliminary injunction and assured Telegram’s lawyer Drylewski there would be a judgment in the case before April 30, when gram investors expect to see the TON blockchain launched. Telegram consented to prolonging the preliminary injunction after Castel explained that not consenting would mean the court would make a decision immediately.
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Banco Central do Brasil will roll out PIX, an instant, 24/7 payments system enabled via QR codes, in November 2020. It will allow users to send and receive payments instantly via cell phone. The PIX’s centralized and sole settlement infrastructure is the Instant Payment System (SPI)—to be operated and managed by BCB.
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The Paxos Settlement Service has gone live, allowing for the simultaneous exchange of cash and a select number of U.S.-listed securities on Paxos’ own private version of ethereum.
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Fake? “Bet on the coronavirus pandemic by investing on CoronaCoin, the more the virus spreads the more valuable the token becomes. CoronaCoin (NCOV) is a ERC20-compliant token. The total supply is based on the world population (7,604,953,650 NCOV) and the token will be burnt once every 48 hours depending on the number of infected people and fatalities, so the token is deflationary and also non-mintable.tags: Fintech CryptoAssets
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“The high level of market concentration typically observed in BigTech may get carried into financial services, with potentially adverse impacts on consumer prices and financial stability,” the European Securities and Markets Authority, or ESMA, said of Big Tech companies entering finance, as part of its 2020 Trends, Risks and Vulnerabilities report.
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The EU cannot work out exactly what Libra is according to a memo by European Commission executive vice-president, Valdis Dombrovskis. Dombrovskis refers to the “need to ensure clarity” about what Libra is, but that the information provided by Facebook is not sufficient. Libra is descibed as a “moving target” that does not easily within existing EU law.
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“According to data from Skew.com, a leading cryptocurrency data provider for derivatives, over $120 million worth of BitMEX long positions were liquidated in this massive flash crash lower.”
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“We analysed over 5 million (5,190,257) Fintech related posts from 1st Feb 2019 to 31st January 2020. We then identified the top 100 most influential individuals leading the discussion on social media. Below you can see a network map of the online conversation around Fintech, the top influencer Spiros Margaris is at the centre. This map was created using the Onalytica platform. The ranking analyses a variety of personas from industry experts, to social amplifiers and content creators as well as journalists and politicians so there’s quite a mix of influencers that have been identified.”tags: Fintech
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Evading sanctions, internal monitoring and dealing with cash shortages…
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In the enterprise platforms space where the development and the results outcomes usually happen slowly and over a few years, the blockchain ecosystem is moving at a blazing speed. Alongside the other popular segments of the crypto and blockchain space like exchanges, wallets and custodian services, the enterprise blockchain platforms are seeing a lot of investments which will help deliver products and go-to-market rollouts faster. Overall, it’s net positive for the blockchain space as the technology matures and proves itself indispensable in solving real business problems.tags: Blockchain Fintech
Month: February 2020
Kiffmeister’s Fintech Daily Digest 02/19/2020
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“”Many cryptocurrency enthusiasts predict that either a global cryptocurrency or a national digital currency could undermine the U.S. dollar,” the U.S. Office of the Director of National Intelligence wrote in a job listing earlier this month, calling for two researchers to evaluate the impact of the U.S. dollar losing its status as the world reserve currency.” https://www.zintellect.com/Opportunity/Details/ICPD-2020-02tags: Fintech CryptoAssets
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Coinbase has become the first pure-play crypto company to be approved as a Visa principal member. Coinbase launched its Visa debit card in 2019 allows users to spend cryptocurrency as cash anywhere Visa is accepted. It is available in 29 markets with 10 cryptocurrencies supported. As a principal members of Visa Coinbase could issue cards to other crypto companies, though it’s not clear if it plans to use that power immediately.
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Following a request by the New York Southern District Court, a division at the U.S. CFTC has filed a letter with the court expressing its views on the complicated case involving Telegram’s digital currency Gram. According to the letter a “digital currency like Gram is a commodity” instead of a security. https://www.docdroid.net/okmUUBS/cftc-letter-in-telegram-case.pdf
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The proposal should consider better protections for retail consumers and the seemingly unlimited ability to fundraise during the three-year exemption period. This amounts to a three-year look back option for the projects without sufficient remedies or consequences for investors.
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Online credit marketplace LendingClub is buying Radius Bancorp in a cash-and-stock transaction valued at $185 million. The acquisition of Radius, which has $1.4 billion in assets, will give LendingClub greater regulatory clarity and a less-expensive form of funding for its loans.
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“The Forbes second annual Blockchain 50 represents enterprises embracing the technology underlying cryptocurrencies like bitcoin and using it to speed up business processes, increase transparency and potentially save billions of dollars. To qualify, Blockchain 50 members must be generating no less than $1 billion in revenue annually or be valued at $1 billion or more.”
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Announced Tuesday alongside JSE’s launch of a tokenized Initial Public Offering platform, Blockstation’s new tool, called the Smart Listing Accelerator Process (SLAP), is designed to streamline the filing of required regulatory disclosures and prospectuses.
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“In a new paper we discuss a fundamental vulnerability that arises in payment channel networks as part of the construction of trustless multi-hop payments. We present two modes of attack: the first aims to lock as many high liquidity channels as possible for an extended period, and the second isolates hubs from the rest of the network. In this post, we present the evaluation of these attacks over the Lightning Network. “
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The Financial Stability Board published a letter from its Chair Randal K. Quarles to G20 Finance Ministers and Central Bank Governors ahead of their meetings in Riyadh later this week. The letter notes that the global financial system is constantly facing new challenges. Technology is changing the nature of traditional finance; the non-bank sector has grown and requires deeper understanding and coordination among the supervisory and regulatory community. Pressures that can lead to market fragmentation exist. Concurrently, important supervisory and regulatory issues require attention, including stablecoins, cross-border payments, and “Tech” (particularly BigTech, RegTech, and SupTech).
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The European Systemic Risk Board (ESRB) has today published a report on cyber incidents, such as cyberattacks. The report, which also summarises the latest estimates of the costs of cyber incidents, shows that a cyber incident could indeed evolve into a systemic cyber crisis that threatens financial stability. The ESRB has therefore identified cyber risk as one of the sources of systemic risk to the financial system which could have serious negative consequences for the real economy.
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Following the World Bank’s experience of blockchain bond transactions, South Korea’s central bank is reportedly working on its own blockchain-based bonds.
Kiffmeister’s Fintech Daily Digest 02/18/2020
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The status of the U.S. dollar as a global reserve currency, the stable demand for U.S. bank notes, and the mature, developed nature of the U.S. financial system are all distinguishing factors that would need to be taken into account when considering the benefits vs. the costs of central bank digital currency in the U.S.
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“Earlier this month, I proposed a securities law safe harbor for token distributions. My motivation was the fear that many crypto entrepreneurs have: that a token distribution might be deemed by my agency – the SEC – to be a securities offering. How, then, is a would-be network supposed to mature into a functional or decentralized network?”
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“A “safe harbor” that made it more difficult for retail investors to distinguish bona fide projects like Blockstack from known scams like OneCoin for a three-year period would likely undo much of the progress towards mainstreaming crypto adoption that has been made to date, which has seen large institutional players like Bakkt or Fidelity Digital Assets enter the space.”
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This paper shows that cryptocurrency markets are plagued by pump-and-dump manipulation. Unlike stock market manipulators, cryptocurrency manipulators openly declare their intentions to pump specific coins, rather than trying to deceive investors. Puzzlingly, people join in despite negative expected returns.
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65% of cross-border payment messages by Swift members were sent using gpi, with transmission corridors now numbering over 1,900.
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Blocknox, a subsidiary of the second largest German stock exchange Boerse Stuttgart, is expanding its cryptocurrency custody service to institutional players.
Kiffmeister’s Fintech Daily Digest 02/17/2020
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How do we give the general public access to a non-cash financial instrument that is as safe and liquid as cash and which provides a similar degree of privacy, finality and instantaneity? That is the key question of CBDC… Either the central bank itself issues e-money, or it merely safeguards the funds that commercial e-money issuers collect from their customers. The latter option is much easier to implement while delivering practically the same outcome. In effect, the central bank would become not just a central bank but also a kind of central e-money institution.
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“In principle, individuals should have the ability to interface directly with the central banks as they do with physical money and not be forced to use commercial banks. Even if consumers voluntarily choose to perform a majority of their financial interactions through commercial banks, the option to exit the relationship should be maintained. Otherwise, the government would be removing consumer choice and mandating patronage of a highly concentrated sector.”
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This paper analyzes remittance operations with and without cryptocurrency and blockchain technologies in general and present pros and cons of Libra for cross-border payments and money transfers. We also present a brief discussion on challenges posed by global cryptocurrencies to central bank governing bodies all over the world and policy implications arising out of potential conflicts between sovereign currencies and future of global cryptocurrencies such as Libra.
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This paper presents a model where persistent trade shocks and search frictions create demand for a basket-backed stablecoin, such as Mark Carney’s “synthetic hegemonic currency” or Facebook’s recent proposal for Libra.
Kiffmeister’s Fintech Daily Digest 02/16/2020
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The People’s Bank of China has ordered commercial banks to take used bank notes out of circulation and disinfect them to fight the spread of COVID19. The disinfected fiat cash will also need to be kept in quarantine for a period of 7 to 14 days before it can be reintroduced to the public.
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MoneyGram recently announced FastSend, a new service that allows its customers to send money in real-time to a phone number via a dedicated website or mobile application. Still, the firm’s answers to Cointelegraph’s inquiries revealed that surprisingly MoneyGram’s latest product does not make use of Ripple’s technology.
Kiffmeister’s Fintech Daily Digest 02/15/2020
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For better or worse, the FATF guidance has at least prompted several member nations to advance cryptocurrency regulation. Arguably — even at its worst — regulation adds assurances that can help bolster industry legitimacy. While a few remain diametrically opposed to what they consider ill-fitting guidance, the positive impact on the industry could conceivably outweigh the short-term drawbacks.
Kiffmeister’s Fintech Daily Digest 02/14/2020
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The digital Bahamian dollar will be rolled-out throughout all islands during the 2020 second half after being introduced to Abaco by the end of February.
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IMF economist Marco Gross and Oxford University researcher Christoph Siebenbrunner emphasise the importance of thinking about how loans would be granted in a world of central bank digital currencies (CBDCs). They argue that a CBDC, if paying interest, could lead us at least partially towards the kind of “full money” system envisioned in the Chicago Plan of the 1930s, in terms of its implications for central banks’ control over the economy.
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The U.S. Office of the Director of National Intelligence (ODNI) wants to sponsor a post-doctoral researcher to study what would happen if the U.S. dollar lost its status as the world’s reserve currency.
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Bitcoin mixers, or tumblers, have been around for years. The way they work is you send bitcoin to a service and the service scrambles your bitcoin with other bitcoins, so that in the end, it’s difficult to know the source of the funds—even though the transactions are visible on the blockchain.
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Undeterred by the U.S. Securities and Exchange Commission’s lawsuit against Telegram, developers and investors in the company’s blockchain project have formed a nonprofit for community governance.
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No electricity means no bitcoin transactions and no mining. Although people have gotten creative and sent transactions which initially do not require internet, cellular data, or electricity other than batteries, ultimately the system depends on a power source and network connectivity to function long term. So when it comes to the complete lights out scenario collapsitarians are envisioning, crypto would indeed seem to be a largely useless appendage.
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In a move to lure more institutional money into the space, U.S. crypto exchange Coinbase just completed two major security audits for its custody solution. Coinbase Custody, the exchange’s custody subsidiary, recently underwent its SOC1 Type 2 and SOC2 Type 2 compliance certifications for the second half of 2019.
Kiffmeister’s Fintech Daily Digest 02/13/2020
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In testimony before Congress this week, Powell was asked whether the Fed had any “visibility” into China’s progress developing a central bank digital currency (CBDC). “Yes, we certainly have that,” Powell said. “But they’re in a completely different institutional context. For example, the idea of having a ledger where you know everybody’s payments, that’s not something that would be particularly attractive in the United States context. It’s not a problem in China.”
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“The Libra Project represents a bold new proposition to create financial infrastructure in this new global ecosystem.”
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The U.S. is joining regulators around the globe in moving to enforce tougher cryptocurrency anti-money laundering policies. At a hearing before the Senate Finance Committee, U.S. Treasury Secretary Mnuchin warned that the Financial Crimes Enforcement Network (FINCEN) is getting ready to put out “significant new requirements” around virtual currencies.
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The ECB and BoJ suggest that a single trusted source, either an existing DLT component or a credible third party, could provide the necessary information to the auditor. But the introduction of such a model would also increase risks to the network. “While reliance on … [a single] source of information has obvious benefits for auditing from all three perspectives, it may become a single point of failure in the auditing arrangement,” the authors say. If there was a single entity storing all transaction information, the central banks conclude, a potential security breach could result in a leak of the transactional details of all participants.
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The European Central Bank and the Bank of Japan have conducted a joint research effort on how to balance confidentiality and auditability in a distributed ledger technology (DLT) environment. This collaboration marks the fourth phase of a joint project called Stella, which started in December 2016 and aims at exploring DLTs through conceptual studies and practical experimentation.tags: Fintech Blockchain
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Coinbase Pro, the cryptocurrency trading platform arm of U.S.-based exchange Coinbase, has unveiled 3x margin trading for select customers.
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A DTCC white paper said participants in the financial sector should work to establish a set of “agreed-upon standards” that could address some of the security concerns surrounding the tech.”
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Assuming Quadriga did use Crypto Capital, the only question that remains is, was the payment processor holding any Quadriga funds when the exchange went belly up? (Remember, Quadriga didn’t keep any books, so it’s up to Miller Thomson and court appointed trustee Ernst & Young to piece things together.) And if so, is there any chance in hell of getting those funds back?
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Cross-border P2P payments and money transfers firm MoneyGram launched MoneyGram FastSend, a new service through which consumers can send money quickly and easily to their friends’ mobile phone number via the MoneyGram website and mobile app.
Kiffmeister’s Fintech Daily Digest 02/12/2020
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The team behind Celo, C Labs, is combining the ethereum and Libra models with a $30 million war chest from the likes of Polychain Capital and Andreesen Horowitz (a16z).
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According to the Financial Times, China’s central bank has filed 84 patents relating to its plans to launch a digital currency electronic payments DCEP system. The number of CBDC-related patents by the PBOC came after an investigative study by the U.S. Chamber of Digital Commerce.
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IOSCO published a report that describes the issues and risks associated with crypto-asset trading platforms and sets out key considerations to assist regulatory authorities in addressing these issues.
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Mnuchin told a Senate Finance Committee hearing that the department’s Financial Crimes Enforcement Network is preparing rules that will improve transparency and prevent cryptocurrencies from being used as “secret bank accounts.”
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Blockchain forensic company Chainalysis today announced that Tether is now using its AML compliance solution dubbed “Know Your Transaction Token.” The solution monitors the full lifecycle of a token from issuance to redemption. This is interesting, because we have yet to learn of one person who has actually redeemed their tethers for cash, but let’s put that aside for now. “
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The introduction of a central bank digital currency (CBDC) allows the central bank to engage in large-scale intermediation by competing with private financial intermediaries for deposits. Yet, since a central bank is not an investment expert, it cannot invest in long-term projects itself, but relies on investment banks to do so. We derive an equivalence result that shows that absent a banking panic, the set of allocations achieved with private financial intermediation will also be achieved with a CBDC. During a panic, however, we show that the rigidity of the central bank’s contract with the investment banks has the capacity to deter runs. Thus, the central bank is more stable than the commercial banking sector. Depositors internalize this feature ex-ante, and the central bank arises as a deposit monopolist, attracting all deposits away from the commercial banking sector. This monopoly might endangered maturity transformation.
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Major Canadian investment fund manager 3iQ and blockchain firm Mavennet co-launched a new regulated stablecoin pegged to the Canadian dollar (CAD). Developed by Canada Stablecorp, a joint venture between 3iQ and Mavennet, QCAD is the latest CAD-based stablecoin and was officially launched on Feb. 11.
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German Bank von der Heydt, which was established in 1754, made on Monday the announcement that it’s developing a special-purpose Euro stablecoin. The aim of this stablecoin will be to make tokenized securities private placements easier for investors.
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“A couple things all our Fintech 50 2020 picks have in common: they’re private companies with operations or customers in the U.S., and they’re making it easier, faster and cheaper to use financial services.”tags: Fintech
Kiffmeister’s Fintech Daily Digest 02/11/2020
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JPMorgan Chase & Co is in talks to merge its marquee blockchain unit Quorum with Brooklyn-based startup ConsenSys, according to people familiar with the plans, according to sources.
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Telegram has been locked in a fierce legal battle with the US SEC, which wants to block the company’s initial coin offering and halt the launch of its Telegram Open Network, or TON, blockchain. But that hasn’t stopped the social network from pushing ahead with the technical details of its project. On Feb. 3, Telegram issued the latest version of its whitepaper for its TON blockchain.
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Hedera Hashgraph chose Google Cloud Platform as its preferred cloud provider for deploying its public networks. Google commends Hedera for the choice, while revealing that it is taking an active stake in the project’s governance.
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Ghana has the highest mobile penetration in West Africa and already outperforms many of its regional peers. By the end of 2019, mobile adoption stood at 55 per cent, higher than the regional average which is at 44.8 per cent. This means a huge number of people can be served through digital services, positively impacting the growth of the digital economy.tags: Fintech Infrastructure
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Built on the Ethereum blockchain, the QCAD stablecoin is the work of Canada Stablecorp, a joint venture between Canada’s largest cryptoasset manager 3iQ and blockchain player Mavennet Systems.
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Australia’s competition watchdog has finalised the rules governing Consumer Data Right regulations, paving the way for the introduction of Open Banking in the country.
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BaFin, Germany’s Federal Financial Supervisory Authority, has received more than 40 applications from German banks seeking permission to become Bitcoin custodians.