Kiffmeister’s FinTech Daily Digest (06/04/2020)

I will soon be publishing an update to my central bank digital currency explorer tabulation but FYI here’s a CBDC Tracker ( that covers similar territory. The main difference is that it includes wholesale CBDC and some initial sovereign offerings (ISOs) such as the Marshall Islands SOV and Venezuelan Petro. Also it includes projects that are arguably simply central bank run blockchain-based payment rails (eg Cambodia’s Project Inthanon). Finally, as far as I can tell, the tabulation doesn’t include links to the official (or unofficial) sources of the information. But, on the other hand, it includes some useful information that doesn’t fit my more compact presentation, like announcement date, status, technology, and programmability.

Bank of Ghana Works On Establishing Digital Currency
The Bank of Ghana, says the bank is working on establishing a sandbox to promote innovation in the financial market and also test some concepts including the establishment of a Central Bank Digital Currency.

Measuring Bitcoin’s Trading Volume
The fragmentation of trading volume in the Bitcoin ecosystem prevents a straightforward assessment of its market size. Institutions considering entering the space should first survey the landscape and make a determination of which exchanges, markets, and assets they feel comfortable transacting in. Critical decisions such as whether they would be willing to transact in stablecoins such as Tether or use derivatives such as perpetual futures contracts can have a material impact on evaluation of trading volume and liquidity. Regardless of these decisions, all facets of Bitcoin’s trading volume have experienced exponential growth and, if sustained, will grow to levels similar to major asset classes.

Designing regulation for digital platforms: Why economists need to work on business models
This VoxEU column asks how economists can contribute to rationally progressing the debate on digital platform-focused regulation and legislation, so that it is not based on subjective priors, but uses applied theory to make testable predictions, and data to discriminate between theories. It suggests that business models matter fundamentally when one is evaluating the dual role of platform owners as umpires and players in their ecosystem.

Bitcoin Stares at Another Big Plunge as Mining Difficulty Hints Dropping 10.25%
The Bitcoin network undergoes a self-correcting phase that decides how difficult it is to mine bitcoin after every 2016 mined blocks. A drop in the difficulty makes it easier to confirm and add transactions on the blockchain every 10 minutes. Bitcoin’s network difficultly could drop by as much as 10.25% on June 4. It would be the most significant downward adjustment since Bitcoin’s third halving on May 11. The first took place on May 20 with a mere 6% plunge.

Federal Reserve Endorses Ethereum-Backed Alternative To Libor
Federal Reserve Board Chairman Jerome H. Powell provided a statement on May 28, 2020, regarding the suitability of AMERIBOR as a replacement to LIBOR. AMERIBOR is a reference rate created by the American Financial Exchange (AFX) based on a cohesive and well-defined market that meets the IOSCO principles for financial benchmarks. AMERIBOR uses a permissioned version of Ethereum blockchain to capture the interbank lending rates. AFX will mint two non-fungible tokens for each party in a transaction. Unlike bitcoin, which is fungible, meaning every token is the same, these non-fungible tokens, compliant with the ERC-721 token standard, contain information about the transaction and the counterparty. The tokens are automatically minted by the AFX Blockchain when a transaction begins, and, using the parity smart contract language, are automatically settled when the transaction ends.

EU Fintech market overview: EMI and PI licenses obtained between Jan-May 2020, compared to 2019
The pandemic has had a major impact on the issuance of E-money and Payment Institution licenses in the European Economic Area. Advapay compared the number of E-money and Payment Institution licenses issued between January-May 2019 and 2020. According to the data, PI licenses have declined 75 percent in 2020 compared to 2019. For E-money licenses, a decrease of 45 percent was recorded.

Fintech Innovation in the Western Balkans
This report produced by the World Bank and the Cambridge Center for Alternative Finance delves into the fintech ecosystem within six Western Balkan jurisdications. It finds that, despite high growth in the use of card and digital payments, there remains unexplored potential for other fintech services due to high mobile and internet penetration and a skilled IT workforce. In order to explore these opportunities further, the region will need to address limited access to capital and finance, high cash use, low access to payment and information systems, and regulatory barriers, amongst others.

Crypto-Friendly Arival Bank Is Launching Today for Those Willing to Disclose Their Bags
After two years of laying the groundwork, crypto-friendly Arival Bank is launching in beta. With a team of 20 with offices in Singapore, Puerto Rico and Saint Petersburg, Fla., it plans to provide banking accounts to crypto startups via its sponsor bank, Puerto Rico-based San Juan Mercantile Bank and Trust. But to bank with Aival clients have to show what’s in their wallet, because Arival is using tools from Elliptic to scan the crypto addresses that onboarding clients provide and see if there are any suspicious transactions.

Dubai SME allocates AED 20 million to guarantee capital for SMEs through The Fund & Beehive partnership
In the UAE, Dubai SME has allocated AED20 million “for the capital guarantee scheme launched by its financial arm, The Mohammed Bin Rashid Fund (The Fund), in partnership with Beehive, the first regulated peer-to-peer (P2P) lending platform in the Middle East & North Africa (MENA) region.”

Jack Ma’s Open Banking Strategy Gets a Boost From Lockdown
Ant Financial Services Group has seen a surge in banks interested in its digital technology. The number of customers paying for Ant to help them build mobile apps and provide cloud computing power jumped by 175% in the two months through April, and it’s now working with more than 200 lenders, according to the company. Inquiries to collaborate with the tech giant increased by 400% over the period.

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