Kiffmeister’s #Fintech Daily Digest (08/17/2020)

Money That Rots Like Potatoes, Money That Rusts Like Iron, Hot Money And CBDCs
If CBDCs existed, stimulus payments could have been made with the proviso that they would become worthless within a certain period unless spent on food, rent or other targeted needs. Since CBDCs are programmable, this can be done through a multi-token standard, where the stimulus payments would carry an expiry date and strict control on where the stimulus can be spent. Such forms of money exist today, like food stamps in the US or gift cards that expire. Distributing stimulus to the poor who do not have access to stored cash in a time of unemployment ensures that they spend it.
Central banks should not rush into digital currencies
According to the Financial Times editorial board, central bank time and effort would be better spent on upgrading existing payment networks rather than pursuing digital currencies that, for all their innovation, could create more problems than they solve. In some states, however, digital currencies now look unavoidable. With Libra no longer an imminent threat, central banks should not rush them out. [On the other hand, there are some problems that upgraded payment systems can’t solve, that CBDC may.]
Central bank digital currencies in the interconnected future
With many countries moving towards central bank digital currencies (CBDCs), we can begin to imagine a future where all countries utilise national currency networks, each interconnected to facilitate exchange and trade, as well as many new use cases yet to be developed. While the goals of introducing CBDC networks may vary from country to country, a number of common elements apply, including the synergistic effects of having multiple CBDC networks integrated with one another despite the geopolitical and economic specifics of the countries involved.
Digital Currencies: Public and Private, Present and Future
This paper from Singapore’s DBS Bank takes stock of the latest developments in the world of digital currencies, public and private. Integral developments in the system of payment and settlements are examined. A list of resources on the latest expert-level thinking is provided at the end of the report. We plan to publish quarterly updates on this game-changing field.
The National Bank of Cambodia boosts financial inclusion with Hyperledger Iroha
The National Bank of Cambodia (NBC) partnered with Soramitsu to modernize the country’s legacy retail payments using the Hyperledger Iroha blockchain framework. The project, called Bakong, allows users to transfer money and buy from merchants with a simple smartphone app. Merchants gain a fast, cashless, and secure payments system. And banks can do interbank transfers at much lower cost. A pilot project went live in July 2019 and ran successfully with more than 10,000 users. The next step is to let everyone in the country know that the system is available and working, and launch country-wide later in 2020.
American Express is buying Kabbage, the rising-star fintech startup for small businesses
American Express is acquiring the team and technology of online small business lender Kabbage. Financial terms were not disclosed. The firm’s pre-existing loan portfolio is not included. Its products include lines of credit, online bill payment, cash flow visualisation tools, e-gift certificates, and the ability to centralise funds through a recently launched business checking account. Kabbage has been battered by the Covid-19 crisis, laying off staff and suspending credit lines for some of its customers. However, Kabbage was the second-largest Paycheck Protection Program lender by application volume; it had close to 300,000 approved applications, worth more than $7 billion.
Exploring the potential of supervisory technology
European supervisors are exploring the potential of supervisory technology (suptech) and developing new tools aimed at enhancing everyday supervision. Supervisors are interested in suptech’s potential to make supervision more efficient and proactive, for example by speeding up data collection and analysis. Its emerging importance had become even more evident in the current crisis situation, which has substantially increased remote collaboration and off-site supervision.
Posted from Diigo: