Kiffmeister’s FinTech Daily Digest (06/15/2020)

South Korea to Review Legal Issues Surrounding Potential CBDC Launch
The Bank of Korea (BOK) has formed a legal advisory group to evaluate issues surrounding a potential central bank-issued digital currency launch. The group includes six experts; three professors, two lawyers and one BOK official. The panel will reportedly operate until May 2021, although the BOK’s CBDC plans are not set in stone.

Sanches (202006) Central Bank Digital Currency: Is It a Good Idea?
The Philadelphia Fed’s Daniel Sanches discusses how the merits of central bank digital currency have led economists to rethink the central bank’s role in the provision of liquidity and intermediation services. Based on a review of the CBDC literature, he finds that there are many aspects of the CBDC impact on the monetary system that require additional research, such as the impact on the framework for the implementation of interest-rate policy for business-cycle adjustments.

Facebook’s WhatsApp brings digital payment to users in Brazil
Facebook’s WhatsApp messaging service rolled out a system across Brazil on that will allow users to send money to individuals or local businesses within a chat. WhatsApp is working with Cielo, Brazil’s largest credit and debit card operator, to process the payments. The company has over 120 million individual users in Brazil, its second-largest market behind India, where WhatsApp has been testing a similar system since 2018.

Visa Partners to Launch Payments on WhatsApp in Brazil
Facebook is also working with Visa to power the new payments feature on WhatsApp in Brazil. Payments on WhatsApp are made possible by Visa Direct, Visa’s real-time push payments technology, and newly launched Visa Cloud Tokenization, that protects and removes sensitive payment information by converting the data to tokens and storing them securely.

CCAF, World Bank and the World Economic Forum investigate Covid-19’s impact on global fintech
The University of Cambridge Centre for Alternative Finance is partnering with the World Bank Group and the World Economic Forum to launch a Global Covid-19 FinTech Market Rapid Assessment Survey. The empirical data collected will be used to understand Covid-19’s impact on the FinTech markets, how the global FinTech industry has responded and some of the immediate regulatory and policy implications.

Why a small town in Washington is printing its own currency during the pandemic
In a bid to lessen the blow of COVID-19, the town of Tenino has started issuing its own wooden dollars that can only be spent at local businesses. Tenino is setting aside $10,000 to give out to low-income residents hurt by the pandemic. But instead of using federal dollars, they are printing the money on thin sheets of wood designed exclusively for use in Tenino, using a 130-year-old newspaper printer from a local museum.

Bitcoin Transaction Fees Fall 91%, Back to Pre-Halving Levels
The average fee for a transaction on the Bitcoin network has fallen roughly 91% from $6.56 on May 20th to just $0.56 on June 14th, reaching back below $1. Bitcoin transaction fees typically increase when the network is experiencing periods of heavy usage; because the Bitcoin network can only process between 3.3 and 7 transactions per second, a backlog of transactions can easily form during periods of high trading volume.

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