Kiffmeister’s FinTech Daily Digest (05/19/2020)

Designing central bank digital currencies
This article, based on a 2019 IMF working paper, proposes a framework for analyzing central bank digital currency design tradeoffs to mitigate bank disintermediation risk while maintaining diverse payment instruments. Currency that closely competes with deposits would likely depress bank credit, while cash-like currency could lead to the disappearance of cash. It concludes that making CBDC interest-bearing may help alleviate this trade-off.

The Digital Euro and the Role of DLT for Central Bank Digital Currencies
This paper discusses the forms and advantages of a DLT-based digital Euro. It analyzes current CBDC projects and explains the intentions behind the respective CBDC projects. In addition, possible threats for the financial system caused by a CBDC introduction, such as financial stability and data protection concerns, are discussed, and possible solutions are outlined.

The Global Impact of COVID-19 on Fintech Adoption
The spread of COVID-19 and related government lockdowns have led to a 24% to 32% increase in the relative rate of daily downloads of finance mobile applications in the 74 countries surveyed. Preliminary analysis suggests that market size and demographics, rather than level of economic development and ex-ante adoption rates, drive differential trends across countries.

Bakkt grows custody business above 70 clients, says it has partnered with major financial institutions
Bakkt has expanded to custody business to cover more than 70 clients, who can now purchase $500 million worth of insurance coverage via insurance broker Marsh. The firm – which is set to release a consumer app this summer – has also partnered with two major financial institutions.

The State of Bitcoin Network Security After the Halving
The BTC mining rewards halving will cause some miners to exit the network which, in the short term, may leave the network more exposed to 51% attacks. Also, a re-entry of a significant number of formerly-offline S9s have been turned back on, which poses a another security threat to the network. While the amount of hashpower that could be created by offline S9s is nowhere near enough to 51% attack the network, the change to the network’s security dynamics caused by their presence is significant.

Oliver Wyman Survey Shows Accelerating Change in Payments
Oliver Wyman’s Shopping Outlook Survey tracks evolving consumer sentiment during the pandemic. It reveals an acceleration of e-commerce, greater consumer demand for mobile and contactless payments, the need for effective and inclusive digital servicing, more flexible business-to-business and government-to-consumer payment options, and a replacement for static fraud models.

PayPal rolls out QR Code payments to 28 markets worldwide
PayPal has launched payment by QR codes in the UK and 27 other markets around the world, providing a touch-free way for businesses to receive payments and for consumers to make purchases during Covid-19.

Celo Mainnet Goes Live Following $10 Million Dutch Auction
The Celo Foundation has announced its mainnet is live, almost two and a half years since the team began working on the project. The launch of the mainnet means users who participated in the network’s $10-million auction can now transfer their cGLD tokens on-chain.

ABN Amro shelves Kendu investment app
ABN Amro is to put its Kendu investment app out to pasture after failing to gain sufficient traction with customers. Kendu, an app allowing users to make investments from as little as EUR50, was introduced in April 2019. Kendu never caught on enough to continue operating viably.

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