Banks in US Can Now Offer Crypto Custody Services, Regulator Says
According to the U.S. Office of the Comptroller of the Currency (OCC) national banks may provide cryptocurrency custody services on behalf of customers, including by holding the unique cryptographic keys associated with cryptocurrency. The OCC also reaffirmed that national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, so long as they effectively manage the risks and comply with applicable law. JP Morgan is one such national bank which provides banking services to crypto companies (eg Gemini and Coinbase).

Visa Blog Post Hints at Future Digital Currency Projects
Three key values will now steer Visa’s digital currency playbook: maintaining robust data protection standards; remaining network and currency agnostic; and partnering with projects that align with the payments firm’s existing expertise. Already a crypto bridge for tens of millions of merchants, Visa cast its digital currency partnerships as critical to preserving what it said was six decades of innovation. Visa is also working directly with policymakers and non-governmental organizations to help shape the dialogue around digital currencies, including central bank digital currency.

Hot Money Credits to Kick-Start a Stalled Economy?
A “hot money credit” (HMC) program is like a regular cash transfer program, except that the money comes with an expiration date. The idea is not new – Silvio Gesell proposed the idea in the 1890s – and it is closely related to negative interest rate policy (NIRP). The goal of both policies is to incent a coordinated private spending effort to kick-start a stalled economy. The resistance against NIRP stems in large part from the fact that it constitutes a tax on accumulated money balances which, whereas an HMC policy’s “threatened tax” applies only to newly created money distributed as a gift. As such, a well-designed HMC policy implemented through U.S. Treasury authority would eliminate the need for NIRP implemented through the Federal Reserve.

The WFE calls to address development of global stablecoins with a taxonomy
The World Federation of Exchanges encourages global standard-setting bodies to generate a taxonomy for all global stablecoins (GSCs) and crypto-assets. In adopting the use of a global taxonomy, a common understanding would develop of whether a GSC or crypto-asset fits a certain classification or definition (eg do the features of the crypto-asset meet the definition/classification of a security) which would, in turn, reduce the variance in application of regulation, to GSCs/crypto-assets, between jurisdictions. Whilst differences might remain across the globe in securities regulation itself, the fragmented approach to the type of GSC/crypto-asset which falls under that regulation would potentially be reduced. This results in a more universal application of regulation, especially if the principle of ‘same business, same risk, same rules’ is applied and is focused on regulatory objectives and outcomes.

Vitalik Buterin Warns High Fees Threaten Ethereum’s Security
Vitalik Buterin has called for reform to the Ethereum’s fee system, warning that rising transaction fees could undermine network security. The idea is based on a paper that suggests miners’ increasing reliance on transaction fees may incentivize selfish mining practices in a bid to extract greater profits, risking disruptions to how transactions are processed. Buterin is advocating for the implementation of Ethereum Improvement Proposal (EIP) 1599 to reform Ethereum’s fees. It involves burning base fees to reduce miners’ reliance on transaction tariffs.

Pennies as state failure
A society with a broad range of opinions about the monetary system (many of which are erroneous conspiracies and lies) is going to be much harder to change than a society that is neutral or uninterested about the monetary system. In the U.S., a fix as simple and smart as removing the penny will inevitably be misinterpreted (often willfully so) by crowds of monetary populists. And so any wise bureaucrat or legislator who wants to remove the penny will have to expend huge amounts of extra time combating misinformation. So maybe they won’t bother. And thus the state has failed Americans, and they are stuck with the penny. But we trusting (and perhaps naive) Canadians have been saved.

Korean Government Proposes Tough New 22% Tax on Crypto Trading
The Korean Ministry of Economy and Finance tabled a proposal to introduce a 22% tax –including the 2% local income tax – on crypto trading profits above KRW 2.5 million. If approved by Korea’s National Assembly, the tax rule will come into force in October 2021.
The new tax rule will also apply to non-residents and foreign companies who trade on Korean exchanges.

Russian Lawmakers Finally Pass Country’s Major Crypto Bill
Russia’s new crypto and digital asset legislation passed third and final reading. It is expected to be officially adopted in Russia on Jan. 1, 2021. The bill provides a legal definition to digital assets and legitimizes crypto-asset trading in Russia. However, the bill prohibits the use of crypto-assets as a payment method.

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SEC Commissioner Pierce Blasts Regulator’s Action Against Telegram
U.S. Securities and Exchange Commissioner (SEC) Hester Pierce criticized her agency’s decision to penalize Telegram’s initial coin offering. In her view, Telegram’s decision to sell Grams under a “Simple Agreement for Future Tokens” offering structure should have protected the project from securities violations. However, the SEC successfully convinced a court that the agreements for future Gram tokens counted as securities. She again called for a “safe harbor” to give certain token projects three years to experiment while regulators retooled their frameworks.

Russia to Treat Crypto as a Taxable Property
A new draft of Russia’s new crypto and digital asset legislation passed second reading. The previous draft would make any business issuing or trading crypto using Russia-based infrastructure illegal. There are three rounds of hearings for any bill to pass, but after the second one, the text of a bill is considered final. The new draft suggests that crypto is a kind of property that cannot be accepted as a means of payment. Any lawsuits related to crypto ownership can only be considered by the courts if plaintiffs report their crypto holdings and deals for tax purposes. 

Why coins are scarce and what government, banks are doing about it
US federal regulators and financial industry representatives are expected to release recommendations on how to jump-start the circulation of coins, which has slowed to a crawl during the coronavirus pandemic. Meanwhile, a number of banks are offering consumers bonuses for change brought in, stockpiling coins and strategically moving coins among branches. For example, the Community State Bank in Wisconsin has launched a Coin Buyback Program that pays a 5% premium for change.

Crypto Exchange Group Eyes ‘Bulletin Board’ System for FATF Compliance
A working group including U.S. crypto exchanges Bitgo, Bittrexis, Coinbase, Gemini and Kraken, are working on a joint solution for complying with Financial Action Task Force rules on sharing customer information via a peer-to-peer “bulletin board.” Participants would share addresses on the board and, if another member claims an address, the two entities could then share data P2P to keep personal information out of the reach of hackers.

The MAS proposes new stricter rules for the crypto sector
The Monetary Authority of Singapore (MAS) has proposed new stricter rules for crypto businesses, in line with the Financial Action Task Force (FATF) standards. The regulator wants to have enhanced powers to prohibit any unsuitable entity from conducting business in Singapore and wants to regulate and license crypto businesses that provide services outside of Singapore. The MAS will adopt a risk-proportionate approach, taking into account the nature, severity and impact of the misconduct. The MAS has also proposed raising the maximum penalty for contravening technology risk requirements to SG$1 million.

FDIC Seeks Input on Voluntary Certification Program to Promote New Technologies
The U.S. Federal Deposit Insurance Corp. is seeking comment about a potential set of standards and a certification program intended to make it easier and less costly for financial institutions to partner with technology firms. The request for information will address several matters. For instance, it seeks comment on the idea of the FDIC partnering with a standards-setting organization that would develop best practices for technology firms that want to work with banks. The standards-setter would focus on areas such as credit underwriting models. The FDIC is also exploring the possibility of a voluntary certification program that would assess a technology company’s compliance with the standards.

Philippines Launches Blockchain App to Distribute Government Bonds
The Philippine Bureau of the Treasury, UnionBank and the Philippine Digital Asset Exchange launched a blockchain-enabled mobile application for distributing government treasury bonds. The app will allow citizens to easily invest in retail treasury bonds for as little as 5,000 Philippine pesos. App users will be able to make instant payments using internet payment services such as InstaPay, GCash and Paymaya. They can also pay through internet banking or over-the-counter payment through their UnionBank accounts.

China Adds a New City to Their Fintech Pilot Initiative
The People’s Bank of China (PBOC) has reportedly added Chengdu to the list of regions carrying out fintech innovation supervision pilots. The city is reportedly focusing on big data, artificial intelligence, cloud computing, and blockchain technologies. The other eight regions participating in the pilot program are Beijing, Shanghai, Chongqing, Shenzhen, Xiongan New District, Hangzhou, Suzhou, Guangzhou.

The old and the new of fintech
This article reflects on the effects of technological change on financial intermediation, distinguishing between innovations in information (data collection and processing) and communication (relationships and distribution). Both follow historic trends towards an increased use of hard information and less in-person interaction, which are accelerating rapidly. The article point to more recent innovations, such as the combination of data abundance and artificial intelligence, and the rise of digital platforms. It argues that in particular the rise of new communication channels can lead to the vertical and horizontal disintegration of the traditional bank business model. Specialized providers of financial services can chip away activities that do not rely on access to balance sheets, while platforms can interject themselves between banks and customers. We discuss limitations to these challenges, and the resulting policy implications.

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BOJ creates new team to look into central bank digital currencies
The Bank of Japan (BoJ) reportedly is creating a new team in its Payment and Settlement Systems Department to look more closely into central bank digital currencies. The team will follow up on the BOJ’s efforts so far on central bank digital currencies (CBDCs), including joint research it has been conducting with other major central banks since January.

Japanese Financial Giant MUFG to Launch Digital Currency in 2020
Mitsubishi UFJ Financial Group (MUFG), is set to issue a digital currency in the second half of this year. The cryptocurrency will be issued in collaboration with Recruit Group, a major Japanese holding firm that operates restaurant-finding service Hot Pepper Gourmet and many more. The digital currency will be initially utilized in a smartphone payment app for member companies. Recruit has around 1 million member stores.

Banque De France selects 8 potential partners for CBDC experiment
The Banque De France has selected eight potential partners, including HSBC, Accenture, and Seba Bank, in its hunt to modernize interbank settlement via a central bank digital currency (CBDC). The Banque De Ferance also laid out the specific criteria for the CBDC proposals, noting that they aim to “explore new methods of exchanging financial instruments,” but specifically excluding crypto-assets such as Bitcoin. The experiments will also test CBDC regulations to improve the execution of cross-border payments, and revisit methods of making central bank money available.

Mastercard expands cryptocurrency program to allow more firms to issue cards on its network
Mastercard has signed a deal with Wirex that makes the London-based firm the first “native” cryptocurrency platform to gain principal membership. The move highlights a deeper push from one of the world’s biggest financial services companies in the still nascent cryptocurrency industry. Cryptocurrency payment cards aren’t new though — Coinbase launched its own Visa card last year, while Wirex also offers a Visa card.

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The Bank of Jamaica Opens Door to Central Bank Digital Currency
The Bank of Jamaica is inviting interested central bank digital currency (CBDC) providers to develop and test potential CBDC solutions in its recently established Fintech Regulatory Sandbox. Households and businesses would be able to use the proposed CBDC to make payments and store value, as they do now with cash. However the Bank is assuring the public that it will continue to issue bank notes and coins. The CBDC would be  issued to licensed deposit taking institutions on a wholesale basis just as now being done with physical currency, which makes it sound like possibly a synthetic CBDC.

Digital Yuan CBDC Momentum Grows as More Chinese Firms Get to Testing
Meituan Dianping, the China’s largest wholesale and delivery platform, is the latest firm to to join the People’s Bank of China’s central bank digital currency (CBDC) pilot that launched in April. They join DiDi Chuxing, China’s Uber counterpart, and streaming platform Bilibili. The total number of customers of the three services combined is over 1 billion people within China. The CBDC pilot is reportedly being conducted in four cities: Shenzhen, Suzhou, Chengdu and Xiong’an. Other pilot participants include four state-owned banks, including the Agricultural Bank of China, and a number of large companies, including Huawei, China Telecom, China Mobile and China Unicom.

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Communication collapse: Inside Facebook’s tussle with Brazil’s central bank
This is a nice chronicle of how Facebook tried to exploit a loophole in Brazilian payments regulations to launch a WhatsApp-based payment service. First, in order to not be classified as a financial services company and be subject to capital reserve requirements and strict regulations, WhatsApp used Visa and Mastercard, which already had central bank licenses, to carry out the money transfers. (Visa and Mastercard did not notify the central bank they planned to perform transfers for WhatsApp because they thought they already had the required licenses.) WhatsApp was also looking to make use of a provision in payments regulation allowing companies to start services without a license until they reached certain transaction volume thresholds. However, the provision was aimed at encouraging small businesses to enter the market as opposed to a BigTech like WhatsApp with 120 million Brazilian users, so the central bank changed this provision on June 23 to allow it to suspend companies covered by it. In a further twist, the central bank is itself planning to roll out a fast-payment system in November, Pix, which uses consumers’ checking accounts, and WhatsApp has said it is open to integrating its service with Pix.

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Bank of Thailand CBDC rolled out for businesses before public debut
The Bank of Thailand (BOT) has started using its central bank digital currency (CBDC) for financial transactions with some big businesses. The BOT is also thinking about expanding its use to the general public, but it will conduct a comprehensive study must be completed before taking such action. It mentioned that CBDC may have negative impacts on commercial banks by removing the need for a middleman in financial transactions, although, on the positive side, it would reduce the cost of financial transactions. In June the BOT had announced that it will develop a prototype of a CBDC-based payment system for businesses that will integrate CBDC with the procurement and financial management systems of the Siam Cement Public Company and its suppliers.

Japan puts central bank digital currencies on policy roadmap
Japan will look closer into whether to issue central bank digital currency (CBDC), the government reportedly said in its annual policy roadmap. In its first-ever reference to digital currency in the annual plan, the government urged the Bank of Japan (BOJ) to liaise with other countries to jointly examine its feasibility. “The BOJ will coordinate with other countries to consider CBDCs by examining and verifying technological tests,” according to the document, which serves as guidance for the government’s long-term economic and fiscal policies. The BOJ has said it has no immediate plans to issue a digital currency, it is conducting research with other central banks on the issue.

Anchorage Finance seeks safer crypto-asset loans
Anchorage has announced its users will be able to access crypto-backed loans—without their funds having to move anywhere. The new Anchorage Financing division is set to over a “seamless user experience” as borrowers will now be able to obtain loans and pay them back in one place. Anchorage has entered into a partnership with Silvergate Bank, which can fund loans and process repayments 24/7. The platform also offers a price monitoring system that automatically alerts borrowers whenever the value of their collateral approaches pre-established thresholds, preventing their positions from being liquidated. Meanwhile, live tracking means collateral coverage ratios can be monitored in real time.

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The comfort of cash in a time of coronavirus
Americans are using less cash but they are holding more, which presents a challenge for the Federal Reserve and other central banks around the world. They have to maintain a vast network of secure printers and depots to deliver cash to where it is needed. As people use less cash, each piece of this infrastructure becomes more expensive to operate. But central banks will not be able to wind it down completely, for two reasons. First, the poor are more likely to still use cash, exacerbating the “digital divide”. And second, in a crisis, everyone wants a fistful of dollars.

Retail Central Bank Digital Currencies: means of payment vs store of value
This paper discusses how different CBDC attributes (anonymity, remuneration, value-added services or caps on the holdings) can limit the substitutability between bank deposits and CBDCs in different situations. CBDC holding caps seem the most obvious solution but this may face practical difficulties such as how to impose the limits when an individual holds CBDCs in wallets offered by different providers or what to do with payments to accounts that exceed the caps. Another possibility is to set different tiers of CBDCs holdings, with a penalizing interest rate above a certain threshold. This may function in normal times, but would probably require extremely penalizing (negative) rates in a crisis or a bank run, which may create problems from the point of view of the central bank objective of preserving the value of money. Even if the CBDC is non-interest bearing, the substitutability between deposits and CBDCs will still depend on the extent to which regulation and competition dynamics allow banks and other financial intermediaries to compete with CBDCs, and in a crisis situation their value-added services may become irrelevant as compared to the safety of central bank money.

GSMA mobile money regulatory response to COVID-19 tracker and analysis
The Global System for Mobile Communications (GSMA) released a COVID-19 response tracker that monitors mobile money-specific regulatory policy, government and provider interventions globally, collated using both primary and secondary sources and updated weekly. The tracker is intended to support mobile money providers and regulators with a mobile money-specific policy response database and learnings from other markets, in order to effectively tailor policy responses for their market. The tracker collates data from 32 countries, spread across Sub-Saharan Africa (17), East Asia & Pacific (7), South Asia (4), Middle East & North Africa (3), and Latin America & Caribbean (1). An interim analysis of the data collated in the tracker showed preferred policy response instrument, regional variations, and the validity period of these instruments.

Swiss Crypto Bank SEBA to Offer Token Securitization on Corda Network
Switzerland’s licensed crypto-first bank SEBA is partnering with Corda-based Digital Asset Shared Ledger (DASL) to let the bank offer asset securitization services on Corda’s public network. It will complement SEBA’s Custody, Asset Management and Trading product. SEBA will create a wallet for onboarded custody customers, issue digital securities and distribute them to wealth management and other investor networks.

South Africa takes steps to regulate Bitcoin and other cryptocurrencies
South Africa’s Ministry of Finance proposed amendments to the Financial Intelligence Centre Act (FICA) for public comment. They aim to align FICA with the current International Standards of the Financial Action Task Force (FATF) as well as with recent legislative amendments. This will include new rules around virtual asset service providers (VASPs) including further responsibilities around which information they have to maintain and conducting due diligence on customers.

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The Block Presents: Central Bank Digital Currencies – Design, Policy & Implementation
On July 17th at 11:30am ET The Block will host a panel with leading Central Bank Digital Currency (CBDC) experts to discuss The Block’s soon-to-be-launched report exploring CBDC history, motivations, policy designs and technological implementations. The panelists will be Carmelle Cadet (Emtech), @Kiffmeister (International Monetary Fund), and Sheila Warren (World Economic Forum).

Using CBDC and other instruments to get funds to those in need and enabling access to money during COVID-19
Through CBDC, governments could send direct payments much more rapidly than through checks or tax refunds and could provide geographically and temporally targeted relief. The CBDC supporting infrastructure would also enable fund receivers to make payments and transfers seamlessly to other CBDC holders and/or non-CBDC holders, anywhere and anytime across the economy. CBDC could reinforce the resilience of a country’s retail payment services, especially in those cases where private sector infrastructures are disrupted, due to technical problems, personnel unavailability, or inability of service providers to operate. The ‘programmability’ of CBDC could be used to monitor and control how, when, and where recipients utilise the funds. Finally, CBDC could enable people to substitute for cash and in-person payment methods when social distancing is required, or if the use of cash plummets as people worry about germs. Still, CBDC projects will take time to materialise, and meanwhile existing infrastructures could be improved to facilitate transfers and payments.

UK’s Revolut bank brings cryptocurrency offering to the US
U.K. digital bank Revolut expanded its cryptocurrency services to the United States, where it launched fiat banking services in March 2020. Customers in 49 states can now purchase, store, and sell Bitcoin and Ethereum through the Revolut app. It is using Paxos’ plug and play brokerage service (see below) with Paxos handling all the regulatory matters, since the U.S. trust company also acts as Revolut’s crypto-asset custodian.

Paxos Presents Paxos Crypto Brokerage Service, Revolut as First Customer
Paxos Trust Company launched Paxos Crypto Brokerage that will enable companies to integrate crypto-asset buying, selling, holding and sending capabilities into their own applications. Paxos Crypto Brokerage is an API-based solution that provides access to the crypto-asset market while managing the underlying regulatory and technological complexity. Revolut US is the first partner to leverage Paxos Crypto Brokerage for US customers of its consumer banking application (see above).

Hong Kong Citizens Turn to Stablecoins to Resist National Security Law
Trading volume between Hong Kong dollars and the U.S.-dollar pegged stablecoin USDT saw a surge in early June on the fiat-crypto trading platform TideBit. The surge followed the decision to strengthen Hong Kong’s national security law, which was unveiled by Chinese legislators during the Two Sessions, the largest annual political gathering in mainland China. The second trading surge on the exchange followed the enactment  of the new law on June 30.

NYDFS Chief Calls Industry Reaction to BitLicense Changes ‘Beyond Positive
Linda Lacewell, superintendent of the New York Department of Financial Services (NYDFS) reported that the crypto space has reacted positively to the new changes made to the BitLicense. These included the creation of a conditional license designed not to burden startups with the heavy costs of applying for a full BitLicense. Instead, they can partner with existing licensed entities to legally operate in New York.

Grayscale sees $900 million in Bitcoin, Ethereum flow into its trust
Greyscale investments inflows reach a record-breaking $900 million in Q2, 85% of inflows coming from institutional buyers. $135.2 million was committed to the Grayscale Ethereum Trust.

Bond Veteran Harnesses Blockchain to Digitize Credit Trading
LedgerEdge, which is planning to launch in 2021, aims to use blockchain technology to further digitize the bond market, where electronic trading has yet to breach much more than 30% of total volume. Traders have grown fairly comfortable doing small, routine transactions via platforms like MarketAxess, Tradeweb and Trumid, but they still hit the phones when trying to buy or sell bonds in large quantities. On the new platform, banks and investors would share their bond inventories and what they’re looking to buy or sell. R3’s Corda blockchain will be used to limit information leakage to the wider market. A main target is the vast majority of corporate debt that doesn’t trade much beyond the first few days after being issued.

Spanish banks complete tests of programmable payments for smart contracts
Banco Sabadell, Banco Santander, Bankia, BBVA and CaixaBank have successfully completed a proof-of-concept test to enable the execution of payments triggered by smart contracts in blockchain networks. The initiative, coordinated by Iberpay, the company that manages the Spanish Payment System (SNCE), confirmed the viability of employing blockchain technology to the payments sector. The first business case tested deployed a smart contract for the management of bank guarantees to automate the issuing, registering, executing and cancelling customer bank guarantees. Additionally, the case incorporated a ‘notary participant’ that simulates a State or Court injunction that may approve the execution of the guarantee when the established conditions are met, automatically triggering its associated payment.

Shariah-Compliant P2P SME Lending Platform Qardus Launches in the UK
UK-based Qardus has launched a Shariah-compliant P2P SME lending platform, offering unsecured loans of up to £100,000 in the form of a “murabahah,” which is a commodity and a type of Islamic financing structure through which buyers and sellers both agree to the cost and mark-up of a particular asset. Qardus charges borrowers a 2 to 5% fee, and borrowers are required to have been operating a business for three years or more, and they must have a turnover or assets worth £100,000. Also, borrowers must operate in “recession-proof” industries including food and beverages, food manufacturing and pharmaceuticals.

The evolving role of central bank money in payments
Changes in technology and user preferences during the last 20 years have led to fewer ‘areas of exclusivity’ and more ‘areas of overlap’ between central and commercial bank money settlement as well as with new entrants. However, the ‘multiple-issuer-/one-currency’ paradigm underpinning the current monetary system should, and will, remain. The reluctance of central banks to compete with commercial banks makes it likely that new forms of co-operation will emerge. Much has been written on potential substitution effects in the event of a CBDC being offered and ways to contain them. But there has not been enough on possible co-operation models to offer CBDC or on how central banks will preserve the value of payment data privacy in the 21st century.

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Enhancing cross-border payments: building blocks of a global roadmap
This CPMI report, and its accompanying technical background report, represent the output of Stage 2 of the three-stage process coordinated by the Financial Stability Board (FSB) to develop a global roadmap for enhancing cross-border payments. It identifies 19 “building blocks” where further joint public and private sector work could enhance cross-border payments, and supports a global approach to addressing the underlying frictions identified in the Stage 1 report published by the FSB. The 19 building blocks are arranged into five focus areas, four of which (focus areas A to D) seek to enhance the existing payments ecosystem, while focus area E is more exploratory and covers emerging payment infrastructures and arrangements. The report concludes with a set of considerations around these building blocks that support the Stage 3 work to develop the roadmap.

Central Bank of the Bahamas Lessons from Hurricane Dorian
In the Hurricane Dorian aftermath, the Central Bank of the Bahamas Project Sand Dollar demonstrated one major benefit: rapid payments system restoration after a disaster. On Abaco and to a lesser extent Grand Bahama, local banking services closed as the branches and ATMs were destroyed or rendered nonfunctional. Restoring these physical assets required weeks to months, and in some cases are not yet in place. Mobile phone coverage, by contrast, was generally restored with a few days after Dorian. Sand Dollar’s mobile phone functionality will mean that the financial recovery aspects of a hurricane can progress more quickly and more safely than would otherwise be the case.

CoinMetrics Reports on the Rise of Stablecoins
CoinMetrics has produced an in-depth research report on the rise of stablecoins following the March 2020 crypto crash. Stablecoin supply has exploded in 2020 but it’s unclear exactly why. After it took 5 years for stablecoin supply to reach 6 billion, it only took another 4 months for it to grow from 6 billion to 12 billion following the March 12th crypto crash.

McKinsey warned Wirecard a year ago to take ‘immediate action’ on controls
McKinsey warned Wirecard more than a year before the payment group’s collapse that it should take “immediate action” to deal with an absence of controls at its largest business. The consultancy told the company in June 2019 that “risks related to business partnerships or third parties” were one of its main vulnerabilities. In August 2019, McKinsey gave a full presentation to the two boards at an off-site meeting in Austria, where it warned that “non-existent” controls over the third-party business had created a “significant risk”.

How Google’s balloons are bringing internet to new parts of Kenya
In partnership with Telkom Kenya, Google’s Loon technology has now launched with 35 balloons in constant motion above eastern Africa delivering mobile internet speeds of up to of 4.74 mbps uplink, and downlink speed of 18.9 mbps, and a latency of 19 milliseconds for everything from emails, web browsing, voice calls via WhatsApp and YouTube with up to 35,000 early users connected, according to the partners. There are still limits to the availability of the new Loon service as it is subject to vagaries of wind speeds and directions among other things, but Loon is promising its advanced machine learning algorithms will soon be able to overcome some of these challenges as well as be boosted by the addition of more balloons for the region. But for now this means there may be service disruptions. Also, because the service is solar-powered, it’ll only be available between 6am to 9pm local time.

South African data privacy laws come into force
South Africa’s data privacy laws went into force, giving anyone processing personal information in the country a 12-month grace period to ensure that they comply with the requirements of the Protection of Personal Information Act (PoPI). From July 1, 2021, any non-compliance with PoPI will have consequences. Enforcement mechanisms under PoPI include penalties up to R10m ($590,500) civil proceedings instituted by data subjects, and criminal offences and fines in some circumstances.

Zopa granted full UK bank license as it gears up to launch savings account and credit card
Back in June, UK PSP lender Zopa was awarded a full U.K. bank licence, as it gears up to launch a fixed-term savings account, followed by a credit card. Dubbed “Zopa  Bank,” the new challenger bank will sit alongside its existing peer-to-peer lending business, under Zopa Group, creating what the veteran fintech previously described as the first hybrid peer-to-peer and digital bank offering.

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MAS’s Project Ubin’s final phase highlights commercial potential, paving way towards live adoption
The Monetary Authority of Singapore (MAS) and Temasek today jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin. The report provides technical insights into the blockchain-based multi-currency payments network prototype that was built and describes how the network could benefit the financial industry and blockchain ecosystem. It confirmed that an international settlement network, modelled after this payments network prototype, could enable faster and cheaper transactions than conventional cross-border payments channels. It also validated the use of smart contracts in use cases such as delivery-versus-payment (DvP) settlement with assets on private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.

Will smart contracts usher in a new wave of financial inclusion?
A World Bank report looked at the role smart contracts could play in improving financial services in poorer nations. It found that smart contracts will not alleviate a variety of common impediments to financial inclusion, including credit risk and income irregularity, distance and inaccessibility, limited awareness and financial literacy, and cultural factors. However, they could assist in determining whether a particular insurance product was suitable as well as increasing trust in the product amongst stakeholders. And on short-term loans, smart contracts could increase efficiency with the different phases of a loan cycle, but those phases are already highly automated, so the new technology would be redundant.

FCA ban on Wirecard UK left vulnerable without access to food
The UK Financial Conduct Authority forced Wirecard Card Solutions to halt all regulated activity after its German parent company collapsed into insolvency, before lifting the restrictions the following week. However, the move, announced with only a few hours’ notice, left millions of customers unable to use payment cards issued by WCS or access cash stored in their accounts. Some of the hardest hit included victims of human trafficking and modern slavery who rely on funds from a government scheme that was an indirect Wirecard customer, according to representatives for these individuals.

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