Kiffmeister’s Fintech Daily Digest (04/20/2020)

Libra Association adds nonprofit aimed at ending world hunger as latest member
Heifer International, a nonprofit organization focused on global hunger and poverty issues, has joined the Libra Association, citing the project’s potential to help poor farmers access credit.

Payments Shifts with COVID-19
Without much fanfare, COVID-19 has just sped up the shift we have all been experiencing in payments.  Instead of the slow march to digital, we are seeing five years of change condensed into a couple months.  Shifting to online commerce, contactless transactions, digital wallets, and even fraud attacks have all made significant moves.

The Cambridge Judge Business School Global Alternative Finance Market Benchmarking Report
In 2018, the global alternative finance industry facilitated $305 billion in transaction volume, a 27% annual decline from 2017. However, this drop stems primarily from a sharp decline in activities in China. Excluding the Chinese market, the global alternative finance market volume actually grew by 48% year-on-year to $89 billion.

Safe-Haven Performance in the Age of Bitcoin
In past periods of financial stress, investors seeking “safe havens” have shifted toward government bonds and gold. In recent years, some have questioned whether Bitcoin could also serve as a safe haven. This Kansas City Fed paper compares the behavior of government bonds, gold, and Bitcoin from January 1995 through February 2020 and finds that the 10-year Treasury note behaved like a safe haven consistently, gold occasionally, and Bitcoin never. During March 2020, however, none of the assets can be classified with confidence as a safe haven.

Why MakerDAO Should Consider Negative Interest Rates for Dai
Since COVID-19 smashed into markets on March 12 the price of Dai skyrocketed as high as $1.50. It has since retreated to a range of $1.01 – $1.03, but it has now spent a full month above its $1 peg – and shows no signs of returning. A negative stability fee would encourage more people to become indebted to the Dai system. This would increase the supply of Dai, and in doing so reduce upwards pressure on the peg.

The Next Advance in Cryptocurrency: Emin Gün Sirer Launches Ava
As first envisioned in a 2018 white paper by the pseudonymous “Team Rocket,” the Avalanche protocol uses random network sampling to reach consensus. But it is AVA Labs’ ( ambition in building new infrastructure for the financial markets that now drives the firm forward.

XRP Army Shrinks as Liquidations Passed $263M in 2019
While Ripple was forced to liquidate many of its XRP holdings to stay cash flow positive, online XRP Twitter engagement fell by 16% Q1 2020 and the number of users in the “XRP Army”has declined 82% since January 2018.

Data protection – report on the General Data Protection Regulation
The European Commission has requested feedback from the public on its implementation of the General Data Protection Regulation. The feedback period is from April 1 to April 29.

The Jamaican FSC To Expand Regulatory Functions
The Jamaican Financial Services Commission will be looking to expand its regulatory functions this year, to include domestic and international trust service providers and virtual asset service providers.

COVID-19-related highlights from the Milken Institute’s Fintech in Focus:

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