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.

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Central Bank Digital Currencies Highlight Bitcoin’s Value Proposition
CBDCs are sometimes viewed as synonymous to, or as replacements for, digital currencies like Bitcoin, but according to Grayscale Investments they represent a meaningful departure from the decentralized protocols inherent to many cryptocurrencies. CBDCs attempt to upgrade payment infrastructure while Bitcoin is an attempt to upgrade money. If CBDCs gain traction, they may actually bolster the value proposition for Bitcoin and other digital currencies.

Coronavirus: Case for Digital Money?
This paper discusses the pros of adopting government-issued digital currencies as well as a supranational digital iCurrency. One such pro is to get rid of paper money (and coinage), a ubiquitous medium for spreading germs, as highlighted by the recent coronavirus outbreak. It sets forth three policy recommendations for adapting mobile devices as new digital wallets, regulatory oversight of sovereign digital currencies and user data protection, and a supranational digital iCurrency for facilitating international digital monetary linkages.

How Are Cryptocurrencies Classified In GAAP Financials?
In the absence of crypto-specific rules from the U.S. Financial Accounting Standards Board, a working group formed by the American Institute of Certified Public Accountants has published a Digital Asset Practitioner Guide addressing how to classify cryptocurrencies in financial statements, specifically, on the balance sheet.

Crypto hedge funds struggle to recover from ‘bloodbath’
Price discrepancies between the same assets on different exchanges, which have long been arbitraged away in stock and bond markets but still exist in crypto, also offer traders a way to make money. But achieving those returns has often proved a bumpy ride for hedge fund investors. A 39 per cent drop in the price of bitcoin on March 12 caught many funds by surprise, leading to large losses and some fund closures, particularly among those running high levels of risk.

The Atrium – A UN Blockchain Platform designed by the UN, for the UN
The Atrium, a United Nations (UN) inter-agency blockchain platform designed to boost collaboration and accelerate blockchain innovation launched the Practical Guide to Blockchain. The Atrium is a UN-only platform that provides the foundational blockchain underlayer that will enable members to build their own blockchain-based apps.

This stablecoin lets you invest in the entire cryptocurrency market
This fall digital asset management firm Cryptex will launch TCAP, a decentralized stablecoin that’s pegged to the entire crypto market.

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Banque de France announces first successful test of a wholesale digital euro
On May 14 the Banque de France completed a test of a blockchain-based wholesale digital euro to settle a securities trade with Societe Generale. The French central bank will continue to run more experiments involving sending the digital euro between other banks.

Facebook’s Libra Adds Firepower To Its Leadership
The Libra Association announced Robert Werner as General Counsel. He adds more regulatory and financial compliance firepower to the Facebook inspired stablecoin and blockchain project. This executive change comes just after the announcement of Libra’s new CEO, Stuart Levey, who recently stepped down from HSBC Holdings as Chief Legal Officer.

Plaid launches exchange to help banks share data with fintechs
Plaid is launching a new service to help banks, especially small ones, quickly develop application programming interfaces for sharing their account data with third parties. The company already works with 3,000 other fintechs to help them access customers’ bank account data. But Plaid Exchange will enable banks to be in the driver’s seat of data-sharing efforts.

Raiffeisen Bank International (RBI) to Pilot Digitized National Currency
Billon and Raiffeisen Bank International are extending a successful proof-of-concept of a national currency tokenization platform into a pilot project, which will include selected RBI corporate and institutional clients. This pilot will lever a new form of national currency tokenization using Billon’s distributed ledger technology, successfully tested during RBI’s Elevator Lab acceleration program earlier this year.

Bitcoin Mining Difficulty Drops by 6% In First Adjustment After Halving
The hash rate drop after the halving has significantly outrun the hashing sprint prior to it. As such, Bitcoin’s mining difficulty, which measures how hard it is to compete for block rewards, decreased 6% to 15.14 Trillion at 2:00 UTC on Wednesday in the network’s first biweekly difficulty adjustment since the halving. As the halving drew closer, miners in China did a sprint run of mining, even with older generation machines, to make most of the last days of the higher block rewards.

Grayscale Buys 33% of All Bitcoin Mined in Last Three Months
Grayscale Investments bought up to 33% of all newly minted bitcoin over the last three months, as the asset manager continues to stockpile major crypto-assets. In April 2020, Grayscale reported that the it was holding about 1.7% of all of Bitcoin’s supply. Grayscale’s total assets under management hit $3.8 billion up 80% since May 2019.

Ghana launches three new policies to speed up digital payments
The government of Ghana has launched three new policy initiatives designed to deepen financial inclusion and accelerate digital payments in line with government’s vision of building a payment system that accelerates economic development.

Iran Proposes Crypto Exchange Licensing Under Existing Laws
A bill reportedly moving through the Iranian parliament would include digital currencies in the existing “currency smuggling” and foreign exchange regulations. If passed, the law would make it mandatory for crypto-asset exchanges to obtain a license from the country’s central bank.

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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. https://www.bakkt.com/blog/company/bringing-digital-assets-mainstream

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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A special shout out to the Milken Institute’s @jackson_mueller not just for his excellent bi-weekly FinTech in Focus from which I’m always picking up new FinTech news, but for drawing readers to my tabulation of central banks that are kicking digital currency tires!

DTCC experiments with asset tokenisation and DLT
DTCC has unveiled two new projects to experiment with asset digitalisation, distributed ledger technology and asset tokenisation for post-trade settlement in the public and private markets. Project Ion is an extension of DTCC’s ongoing efforts to modernise its core clearing and settlement processes. Project Whitney is a prototype focused on exploring the potential for asset tokenisation and digital infrastructure to support private market securities, from issuance through secondary markets.

Kabbage rebounds after accessing US loan programme
Kabbage said it had processed more than $3.5bn in Paycheck Protection Program loans, six weeks after shutting its lending operation in the middle of the Covid-19 crisis. The turnround follows a lobbying push by Kabbage and other fintech lenders for approval to help disburse $660bn of government funding earmarked for US small businesses.

App Users Say Plaid Collects Bank Logins Without Consent
Data aggregator Plaid, whose software is used by apps including Venmo, Coinbase, Square, and Stripe, accesses user bank accounts and collects detailed financial information without consent, a new class suit filed in federal court claims. Plaid’s software is used by more than 2,000 apps to link consumer financial accounts, and about 1 in 4 people in the U.S. have an account linked via Plaid, the suit says.

The Evolution of the Fintech Narrative: Analyzing Opportunities in Capital Markets
The Securities Industry and Financial Markets Association published a report covering FinTech and opportunities in capital markets. On RegTech, the report states that market participants “are focused on adding fintech applications to existing compliance systems. Additionally, market participants indicate the need for standardization before moving into optimization, a longer-term strategy.

The State Of Fintech Q1’20 Report: Investment & Sector Trends To Watch
According to CB Insights, VC-backed FinTech funding was $6.1 billion across 404 deals, marking the worst Q1 for funding since 2017 and worst for deals since 2016. Seed and Series A rounds have been hit the hardest, with FinTech startups raising $1.1 billion (a 9-quarter low) across 228 deals (a 13-quarter low).

Quarterly InsurTech Briefing Q1 2020
According to Willis Towers Watson, COVID-19 “has had an enormous impact on global markets and global InsurTech investments… [W]e are reporting a 54% drop in total funding for this quarter when compared with the record highs of last quarter.”

Kenya’s CMA says it may be time to transform capital markets
Kenya’s Capital Markets Authority says it “may also be the right time to start thinking about completely transforming capital markets transactions into e-mobile where clients are on-boarded, trade and receive cash through their mobile handsets.”

Visa gives Kenya’s Safaricom ‘missing link’ for global payments
Visa and Safaricom have agreed a deal which will connect the Kenyan telecom operator’s M-Pesa financial services platform with Visa’s global network of merchants and cards.

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Is Central Bank Currency Fundamental to the Monetary System?
This Bank of Canada paper discusses whether the ability of individuals to convert commercial bank deposits into central bank money is fundamentally important for the monetary system. This is a significant question since the use of cash—the only form of central bank money that the public currently has access to—is declining rapidly in many countries. The question is also highly relevant to the discussion around whether central banks need to issue a retail central bank digital currency. The paper concludes that depositors’ need for control could be a reason why cash or a CBDC is essential, even in countries with strong measures safeguarding commercial bank money.

Trading Crypto-Assets in Myanmar to be Subject to Imprisonment, Fines or Both
The Central Bank of Myanmar announced that trading crypto-assets shall be subject imprisonment, or a fine, or both.

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Trolly McTrollface’s theory on what’s backing Tether — loans to Bitcoin miners, backed by bitcoins.
Bitcoin miners need cash to pay their electricity bills. They could sell their rewards on exchanges which someone would have to buy, to prevent BTC from crashing. Tether and Bitfinex have real money from those who trade on its exchange, but why would they buy miners’ BTC, when they can loan them the money instead? And if a miner defaults, it’s not Tether the company that takes the hit, but USDT holders. Maybe that’s the real reason why Tether/Bitfinex don’t want an audit. Not because USDTs aren’t backed, but because they’re backed by miners’ BTC. And because Tether controls the miners, they also control Bitcoin.

Majority of TON Investors Reportedly Choose to Quit for 72% Refund
Prior to abandoning its involvement in the Telegram Open Network and GRAM token, Telegram offered TON investors in its 2018 $1.7 billion initial coin offering an immediate 72% refund, or a 110% refund  in 12 months. However, the majority of TON investors purportedly decided to get their money back as soon as possible, choosing the 72% option.

New S$6 Million Grant Scheme to Support Singapore FinTech Firms
The Monetary Authority of Singapore, Singapore FinTech Association, AMTD Group and AMTD Foundation announced the launch of a S$6 million MAS-SFA-AMTD FinTech Solidarity Grant to support Singapore-based FinTech firms amid the challenging business climate caused by the COVID-19 pandemic.

Monetary Authority of Singapore Posts Responses to Consultation Regarding Derivatives Contracts and Payment Tokens
Respondents to the Monetary Authority of Singapore’s November 2019 consultation were broadly supportive of its proposals on regulating payment token derivatives offered by an “Approved Exchange” as well as to not regulate at non-approved exchanges. The MAS said regulating non-approved exchanges would confer “misplaced confidence” – especially for retail investors.

BITSTAMPS is rolling out a limited-edition line of individually certified Lambo stamps
BITSTAMPS is a new blockchain-based digital stamp platform. A set of stamps based on Lamborghini cars has just launched. Each digital stamp is tokenized and tracked on blockchain.

Libra Association adds three new members, including Singapore investing giant Temasek
The Libra Association added 3 new members to its ranks; Singapore government-owned investment giant Temasek and U.S.-based venture capital firms Slow Ventures and Paradigm.

CoinMarketCap removes evidence of wash trading on Binance
CoinMarketCap has now introduced a default metric that puts new owner Binance on top of its trading volume league table. The site has removed a metric that previously indicating high levels of wash trading at Binance. On April 3, the day after Binance acquired CoinMarketCap, the exchange was ranked 15 on the site. The data provider listed Binance’s claimed exchange volume as $6.7 billion. But it put its adjusted volume, a metric designed to remove any suspicious activity, at $2.1 billion.

Forget BTC Price, It’s Now Possible to Trade Bitcoin Hash Rate Futures
Derivatives platform FTX launched a futures product which tracks Bitcoin’s hash rate. The contracts track the average difficulty of the Bitcoin network each day from the start to the end of each quarter. The difficulty is used because measuring hash rate accurately is impossible, but given that difficulty adjustments attempt to maintain 10m block times, over long periods of time the average hashrate will be proportional to the average difficulty. https://help.ftx.com/hc/en-us/articles/360043631671-Hashrate-Futures-Specs

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China’s Central Bank Proposes a Blockchain-Based Trade-Finance Platform
The PBOC and three other official entities proposed the development of a blockchain-based trade finance platform to finance the construction in the Guangdong-Hong Kong-Macao Greater Bay Area. The platform is intended to help participating banks securely share information pertaining to cross-border trades. (http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4023428/index.html)

Visa Applies For Digital Dollar Blockchain Patent
Visa has filed a patent application to create “digital fiat currency” on a centralized computer using blockchain technology. The computer generates digital currency for the denomination requested and links it to a serial number, and records it on a blockchain.

World Economic Forum shares its vision for a decentralized, global economy
The World Economic Forum Global Blockchain Council “Presidio Principles” project is intended to lay out a foundational set of principles to to balance trust and power among creators and users of applications which build on or incorporate some decentralized pieces. They are requesting feedback from those on the front lines of building decentralized systems.

Stablecoin Supply Breaks $10B as Traders Demand Dollars Over Bitcoin
Almost every exchange offers the choice to trade assets priced in different quote currencies, usually dollars or bitcoins, which determine the value of alternative cryptocurrencies. Altcoin traders have historically preferred to use bitcoin or even ether as the currency that prices other tokens. But during the past two years, that trend has shifted significantly. Now they mostly trade against stablecoins.

Most bitcoin investors on Coinbase end up buying altcoins during bull runs
Bitcoin investors tend to buy altcoins during bull runs, according to Coinbase data. Coinbase said “as people feel good about their initial crypto investments (into Bitcoin), they branch out to find other possible categorical winners”.

Brazilian digital wallet PicPay reaches 20 million customers
Brazilian digital wallet PicPay hit 20 million clients in early May, reaching a goal previously expected for December as social isolation measures to combat the coronavirus accelerates the search for digital financial services.

UN Launches Blockchain Group
The United Nations has launched a Blockchain Group and published a Practical Guide to Using Blockchain Within the United Nations and for country policymakers with definitions, decision-making #tools and use cases from across the UN.

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Major bank haul: Coinbase, Gemini break into JPMorgan Chase
U.S. crypto-asset exchanges Coinbase and Gemini, both known for aggressively seeking regulatory approval, have been accepted as JPMorgan Chase customers, breaking through an important glass ceiling in the financial industry. This is the first time any major U.S. bank has accepted clients from the crypto world since they began shunning the Bitcoin business several years ago.

Cambodia’s New DLT Payments Network Aims to Undermine US Dollar
The National Bank of Cambodia will launch a DLT-based network to enable greater interoperability in the country’s payments sector and to mitigate dollarization. Consumers will be able to make near instant payments via the platform, currently in pilot mode, using a mobile app and QR codes. The NBC is also developing a remittance-focused cross-border payment project with Malaysia’s Maybank.

Accredited Investors on CoinList Pour $10M Into Celo Token Sale in Roughly 12 Hours
Silicon Valley blockchain startup cLabs just raised $10 million for the Celo project through a token sale to accredited investors on the CoinList platform. Roughly 109 investors from dozens of countries participated in the auction, paying an average of $5 per Celo Gold (cGold) token. The average buyer spent $519 on these tokens and often earned 50 bonus tokens for referrals.

The role of blockchain in banking
In this digital report, OMFIF and CCBU investigate the effects of blockchain and distributed ledger technology on financial institutions’ business models. It finds that payments solutions are set to become the dominant use case, though banks still face regulatory and scalability issues. Regulatory approaches to blockchain in financial services are incomplete, and significant upgrades are required, both at global and domestic level.

Central bank digital currency can be safe and private, claims CipherTrace
Blockchain forensics firm CipherTrace wants to expand its business to central banks. A new initiative aims to help central banks launch their own digital currencies in a safe, private, and regulatory compliant manner. CipherTrace, funded by DARPA, already works with banks and governments around the world.

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