Kiffmeister’s FinTech Daily Digest (05/31/2020)

Some IMF staff oppose Marshall Islands cryptocurrency, but microstate presses on
Manrique Saenz, IMF Mission Chief to the Marshall Islands, in an email to Decrypt, reiterated some IMF staff’s opposition to the Marshall Island’s forthcoming SOV national digital currency. She said none of their initial concerns have been allayed, despite new developments in the digital currency sphere. However, Barak Ben-Ezer, co-founder of SFB Technologies, said that the SOV will be issued this year.

Reasons Fostering or Discouraging the Implementation of Central Bank-Backed Digital Currency: A Review
This study analyses the current debate around central bank-backed digital currency (CBDC). A comparative study was carried out considering countries for and against implementing a CBDC and their reasons, looking for common causes, differences, etc. The conclusion was that there are opposite tendencies between defenders and detractors of establishing a CBDC.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/30/2020)

Fintech and Payments Regulation: Analytical Framework
This IMF working paper proposes a fintech payment services analytical framework based on a four-step process; (i) identifying payment activities, (ii) licensing entities and designating systems, (iii) analyzing and managing risks, and (iv) promoting legal certainty. As payment activities evolve and potential systemic risks heighten, adherence to international standards and additional regulatory requirements should be warranted.

Innovation in Payments and Fintech: A comparison of the Chinese and Indian ecosystems
According to this World Economic Forum paper, Chinese and Indian payment system providers (PSPs) demonstrate that payment platform success is a non-linear function of the number of users it can attract, including both consumers and merchants. For Indian PSPs, interoperability of infrastructures has been essential for mass adoption of digital payments and creating a level playing field across players. Also, in both markets, the difference between online and offline was blurred from the beginning, from the moment smartphones were the defining factor and not the card.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/29/2020)

Digital Dollar Project Publishes its US Central Bank Digital Currency White Paper
The Digital Dollar Project white paper calls for a tokenized US dollar that will operate alongside existing fiat currency and commercial bank money, and maintain the current two-tiered banking system. It will support a balance between individual privacy rights and necessary compliance and regulatory processes. The technological architecture will offer the flexibility to adapt configurability based on policy and economic considerations, and possibly (but not necessarily) be based on distributed ledger technology.

What Goldman Gets Wrong About Bitcoin (From Someone Who Used to Work There)
Jill Carlson argues for the need for the crypto industry to do more to quiet the noise and work harder to lift up the voices that make an honest and compelling investment and use cases for crypto-assets. She points out that the weakness of Goldman’s anti-bitcoin thesis is due primarily to the weakness of the industry around bitcoin in articulating the defining attributes and uses of this paradigm-shifting technology.

National Bank of Georgia Sets Regulatory Sandbox
The National Bank of Georgia has approved regulations on the establishment and use of a regulatory sandbox, that will allow representatives of the financial sector to test innovative services and products in real time after internal testing.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/28/2020)

The U.S. Digital Dollar Project’s White Paper will be published tomorrow (Friday, May 28) on, making the case and setting up framework for U.S. CBDC through an iterative public/private process. Chris Giancarlo will be discussing it with @DBTreat and @CodeXCoasts at at noon.

Fintech Adoption and Innovation in the Hong Kong Banking Industry
A research arm of the Hong Kong Monetary Authority published a detailed report, based on an industry-wide survey, on overall Fintech adoption and the latest technological advancements in the banking sector. Banks see Fintech development more as an opportunity than a threat to their business operations, with risk management services having the greatest potential. Meanwhile, 86% of banks have adopted or plan to adopt Fintech solutions across all types of financial services. Preliminary results also show that increased cost efficiency and improved profitability are associated with more extensive Fintech adoption by banks.

Lithuania’s Central Bank Completes Blockchain Regulatory Research
The Bank of Lithuania has finished the research phase of its blockchain-related project, LBChain. In the next phase, it will create a sandbox that mixes technological and regulatory infrastructure for the technology. Among the projects mentioned, LBChain included a solution for blockchain-based regulatory reporting, a blockchain platform for green bond issuance, and a blockchain-based digital bank.

Grayscale Is Now Buying 1.5 Times the Amount of Bitcoin Being Mined
Crypto fund manager Grayscale Investments is accumulating Bitcoin at a rate equivalent to 150% of the new coins created by miners since the May 11 block reward halving. According to data published by independent crypto researcher Kevin Rooke, Grayscale has added 18,910 BTC to its Bitcoin Investment Trust since the halving, while only 12,337 Bitcoins have been mined since May 11.

Russia’s Central Bank to Launch Blockchain-Powered Digital Mortgage Platform
The Bank of Russian is reportedly developing a digital mortgage platform powered by a domestically developed blockchain called Masterchain. Masterchain is reportedly the first blockchain platform in Russia to be certified by the Federal Security Service. It is a permissioned, Ethereum-based blockchain that was launched in 2017.

Antigua’s Crypto Regulation Bill Passes Lower Parliament
Antigua and Barbuda’s House of Representatives passed a crypto-asset regulation bill, which will require all digital asset businesses operating in the country to obtain a license for issuing, selling, or redeeming virtual coins, operating as a payment service or electronic exchange, providing custodial wallet services, among others.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/27/2020)

I’ve updated my retail central bank digital currency (CBDC) explorer tabulation. China has now been “upgraded” to pilot status, and Ecuador has been “downgraded” to a less active status.

TON Doesn’t Stand for ‘Telegram Open Network’ Anymore
TON once stood for “Telegram Open Network,” but has changed its name to reflect the messaging giant’s departure from the blockchain project. The project will simply be known as “The Open Network” going forward. Telegram officially terminated its involvement in Telegram Open Network in mid-May 2020. Although Telegram’s version of TON is no longer moving forward, it has given rise to other projects like Free TON and NewTON.

How WeChat Pay Determines If You Are Trustworthy With Their Credit Score
China’s WeChat Pay has told its users that it will be giving them a credit rating, called “Payment Points.” The system leverages artificial intelligence and uses users’ data collected from the platform including personal and credit records, spending habits and other factors to determine a user’s “credibility.” Tencent hopes the system will be adopted by small commercial institutions including banks for personal credit evaluation.

Coinbase Expands Institutional Services With Tagomi Purchase
Coinbase has announced plans to acquire Tagomi, an advanced crypto-asset brokerage platform specifically targeted at professionals and institutional investors. Tagomi’s platform is able to automate crypto trades valued at millions of dollars that many other firms still execute manually. Customers include family offices and crypto funds such as Pantera Capital, Bitwise and Multicoin Capital.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/26/2020)

Facebook’s Calibra Rebrands to Novi
Libra’s wallet provider Calibra has now been rebranded to Novi – a portmanteau of the Latin root words, “novus” meaning new and “via” meaning way. The first wallet product from the firm is intended to hold Libra’s various digital currencies, once the Facebook-led initiative goes live.

China’s central bank governor says there is no timetable for digital currency launch
People’s Bank of China Governor Yi Gang said that the central bank doesn’t yet have a timetable for the official launch of digital yuan. He also confirmed that the PBOC has been internally testing its digital currency, known as Digital Currency/Electronic Payment (DC/EP), in four cities – Shenzhen, Xiong’An New Area, Chengdu, and Suzhou – since April. Yi also confirmed that DC/EP might see use during the 2022 Beijing Winter Olympics “to verify theoretical reliability and system stability.”

Spike in BTC Exchange Inflow Preceded Bitcoin Price Correction to $8.6K
Data from CryptoQuant suggests that miners are most likely behind the recent bitcoin sell-off. Some large Chinese miners may be selling because bitcoin is well above their breakeven costs. For large miners in Sichuan, China, the current rainy season will allow them to negotiate lower electricity rates. This means some mining centers will be able to secure a $0.03/KW rate which will bring down the cost of mining to about $6,000. Also, over-leveraged or small miners outside of China, whose profit margins have been significantly impacted by the May 11 halving, may be capitulating or simply selling to cover operating expenses.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/25/2020)

Telegram Quits Court Fight With SEC Over TON Blockchain Project
Telegram withdrew its appeal over a previous court decision that backed the SEC in prohibiting the issuance of Gram tokens to investors both in and out of the U.S. The new document filed with the U.S. Court of Appeals for the Second Circuit states: “The parties in the above-referenced case have filed a stipulation withdrawing this appeal pursuant to Local Rule 42.1.” The rule means that the parties have filed an agreement for dismissal of the case without prejudice. As such, the case is over for now, but not necessarily forever.

Nearly 10% of Bitcoin’s Current Supply is Dormant; Why This Matters
Data shows that nearly 10% of Bitcoin’s total circulating supply is dormant, meaning that it has not been touched for over 10 years. This data boosts the narrative regarding Bitcoin’s scarcity, as its actual supply may be far lower than previously thought. The heightened scarcity this provides Bitcoin also bolsters the cryptocurrency’s macro outlook, as economic models that rely on the crypto’s scarcity suggest that it will soon see some significant upside.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/24/2020)

Not Even a Pandemic Can Slow Down the Biggest Tech Giants
With an abundance of cash and business lines that fit well with the COVID-19 demands, BigTechs are doubling down on acquisitions and research and development, steering clear of distracted regulators as they grow larger. Since U.S. lockdowns commenced, Apple bought a NextVR, Facebook bought Giphy, Amazon bought DataRow, Alphabet bought Pointy and AppSheet, and Microsoft bought Metaswitch Networks, Softmotive and Affirmed Networks. In Q1 2020 total research and development spending at these five big BigTechs was up 17 percent from Q1 2019. However, although the individual share prices are near or at all-time highs, they are all facing scrutiny from anti-trust authorities.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/23/2020)

JPMorgan Says Central Bank Digital FX a Danger to U.S. Power
JPMorgan analysts don’t see the U.S. dollar being toppled as the world’s reserve currency anytime soon, but “more fragile” aspects of dollar dominance, including in trade settlement and the SWIFT messaging system, could be at risk. “Offering a cross-border payments solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy,” they said. “For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.”

CDBC should be blockchain-based, interoperable and programmable by design
“A CBDC 2.0 will be issued and decentrally governed either on a national or on a supranational level, across multiple jurisdictions. This implies a different set of legal, monetary, and fiscal policies, some of them automated, required to be codified and put in place across nations… Decentralized governance will result in fast and cheap cross-border transactions, pseudonymity, personal data protection, and international operability. CBDC 2.0 will be interoperable at the protocol level so that data exchange and functionality should be easily accessible and transferable… The currency should be interoperable on a supranational level, meaning that emerging economies could suffer less from purchasing power inequality.”

Chris Brummer on Ether Futures
ErisX launched the first U.S. futures contracts for ether. It’s the first time a futures product has been devised and sanctioned by the CFTC for a crypto-asset besides bitcoin. Equally notable is that the listing is happening with a product whose operational underpinnings are generally understood to be more complex than bitcoin’s. But perhaps the truly interesting thing about the launch is the relative absence of criticism concerning what is effectively the financialization of the risk of the (digital) asset.

Nearly $5 billion in Tethers were issued since January. Why?
Bitcoin’s price is determined by the total dollars, both fiat and Tether, in the system. Nicholas Weaver, a researcher at the International Computer Science Institute in Berkeley, believes that actual dollars in the system are depleted as Bitcoin miners need cash to pay their electricity costs. If the amount of real dollars in the ecosystem hits zero, Bitcoin will collapse, he argues. (Exchanges, typically those that lack links to traditional banking, use Tether in lieu of real dollars as a way to bring liquidity to the crypto markets and hedge against volatility.)

Full Reserve Banking, “Narrowbanks” for Digital Currency and the China Model
On May 26 (9am EDT) Jeremy Allaire (Circle), Michael Kumhof (Bank of England), Tommaso Mancini-Grinffoli (IMF), and Dr. Chuanwei David Zou (Wanxiang, PBOC) will discuss the concept of, “Full reserve money, the implications of a digital currency and the future of the international monetary system.”

Average Bitcoin transaction fees up over 2,000% in 2020
Average Bitcoin transaction fees increased 2,213% since January 1. Since the date of Bitcoin’s block reward halving, fees continued to increase by 144%. Over 94MB Pending transactions in the Bitcoin mempool means the network is now as clogged as it was in January 2018.

Posted from Diigo:

Kiffmeister’s FinTech Daily Digest (05/22/2020)

Presidio Principles: Foundational Values for a Decentralized Future
The World Economic Forum’s “Presidio Principles: Foundational Values for a Decentralized Future” lays out sixteen principles aimed to protect users and preserve the values of the technology so that all can benefit, in a “Bill of Rights” style document. Rights are grouped into four broad pillars; (i) transparency and accessibility (the right to information about the system), (ii) privacy and security (the right to data protection), (iii) agency and interoperability (the right for individuals to own and manage their data), and (iv) accountability and governance (the right for system users to understand available recourse).

Cardano is Working on a Microchip That Would Give Crypto a Cash-like Experience
Cardano is working on a crypto-native microchip that would enable crypto transitions without the internet access, potentially delivering a cash-like experience. The private key from one chip would be transferred to another, and it would provide the proof of erasure, making sure that the key only exists on the new device.

The Stellar Signer Card to improve the security of Stellar Network transactions
The Stellar Signer Card uses multisignature technology to maximize the security of digital assets issued on the Stellar network. It connects to smartphones with near-field communication (NFC) technology which provides an instant connection. In the LOBSTR Vault app the user chooses any transaction and holds the card under the smartphone. A signed transaction will then be sent to the Stellar network automatically.

Albanian Parliament Signs New Crypto Law
The Albanian parliament signed a new bill into law to implement a legal framework for crypto-assets to regulate conditions for licensing and regulating all crypto-asset operators and stock exchanges. Severe fines are stipulated for anyone who violates the provisions of the new law.

Mobile Money transactions grow by 450% in 3 months
In Rwanda the value of funds transferred via mobile money grew by 450% between January and April data reportedly from the Rwanda Utilities Regulatory Authority shows. The central bank and local telcos temporarily removed charges on transfers between bank accounts and mobile wallets, mobile money transfers, and merchant fees on payments for all contactless transactions to reduce chances of COVID-19 transmission.

Posted from Diigo: