Kiffmeister’s FinTech Daily Digest (06/17/2020)

Venezuela Is a Testing Ground for Digital Dollarization (and Zelle Doesn’t Like It)
Venezuelans are digitally dollarizing using  Zelle, a U.S.-based payments network that allows anyone with a U.S. bank account to instantly transfer funds to another U.S. bank account for free. Although Zelle is meant for U.S. usage only, Venezuelans have repurposed the network as a way to make dollar payments among each other. Large Venezuelan supermarket chains have enabled Zelle as a form of payment, and cafes, restaurants and taxis accept it. But business and commercial use infringes on Zelle’s terms of service, which specifies that its network is intended only for personal use. Wells Fargo has notified many Venezeulan account holders their connection to Zelle will be terminated, so the game may soon be over.

Central Bank Digital Currencies and the New World of Money and Payment Systems
This paper considers the policy issues and choices associated with cryptocurrencies, stablecoins and sovereign (central bank) digital currencies. It argues that, in the COVID-19 crisis, most central banks should focus not on rolling out novel new forms of blockchain-based money but rather on transforming their payment systems: this is where the real benefits will lie both in the crisis and beyond. Looking forward, neither the extreme private nor public model is likely to prevail. Rather, we expect the reshaping of domestic money and payment systems to involve public central banks cooperating with (new and old) private entities which together will provide the potential to build better monetary and payment systems at the domestic and international level.

Deloitte’s 2020 Global Blockchain Survey
Deloitte’s 2020 Global Blockchain Survey revealed increased sentiment, investments, and more strategic talent sourcing and requirements for blockchain initiatives. 39% of global respondents have already incorporated blockchain into production (versus 23% in 2019) and 55%
view blockchain as a top strategic priority (versus 53%). 82% are hiring staff with blockchain expertise or plan to do so within the next 12 months (versus 73%). The results are based on a poll 1,488 senior executives and practitioners in 14 countries and territories.

Cryptocurrencies and US securities laws: beyond bitcoin and ether
According to ex-CFTC Commissioner Christopher Giancarlo, under a fair application of the Howey test and the U.S. SEC’s expanding analysis, XRP should not be regulated as a security, but instead considered a currency or a medium of exchange. The increased adoption of XRP as a medium of exchange and a form of payment in recent years, both by consumers and in the business-to-business setting, further underscores the utility of XRP as a bona fide fiat substitute.

Amazon joins Mastercard tokenization initiative
Amazon customers in 12 countries will have their stored MasterCard card credentials tokenized. By replacing a consumer’s physical card number with a token, payment information is unique to each individual transaction and can be used only by the merchant that requested it.  The Mastercard Digital Enablement Service (MDES) tokenization technology keeps cards seamlessly up to date, because network tokens do not expire. When consumers receive a new physical card from their bank, their credentials are automatically updated.

Silvergate, Visa-Baked Anchorage Partner on Crypto Leverage Trading
Silvergate Bank, a crypto-friendly lender that counts major crypto exchanges like Coinbase and Kraken as clients, is expanding its SEN Leverage service. The product, which was first launched in 2017, allows the bank’s customers to obtain US dollar loans collateralized by their bitcoin holdings at some crypto exchanges that Silvergate is currently serving. To do so, Silvergate partnering with the digital asset custodian Anchorage, which recently raised $40 million in a Visa co-led series B fundraising.

The Mauritius FSC issues Guidance Notes with respect to Security Token Trading Systems
The Mauritius Financial Services Commission (FSC) issued guidance notes providing for the implementation of a common set of standards for the licensing of security token trading systems. They highlight financial integrity and data protection laws and codes, and the implementation of good market practice for an efficient, transparent and integrated financial market. The FSC is is expecting to receive several applications for these specific licenses in the upcoming months.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech