Kiffmeister’s #Fintech Daily Digest (09/08/2020)

Sistema de Dinero Electrónico (2014–2018) — Ecuador’s sort-of CBDC

Ecuador’s Sistema de Dinero Electrónico (SDE) had a limited launch in late 2014, and a full public launch in 2015, but the system failed to take off and was shut down in March 2018. This was arguably a central bank digital currency (CBDC), because it was issued by the Banco Central del Ecuador (BCE). However, the currency was the U.S. dollar, which has been the national currency since March 2000. Ecuadorians could get an account at the BCE with an identity card and a mobile phone, after which they could go to an authorized outlet and deposit cash into the account. Each dollar in SDE was backed by a dollar stored at BCE, so this was more like e-money or a central bank-backed stablecoin. 

On the other hand, it does seem to fit the definition of a central bank digital currency (CBDC) that I use as eligibility for my running tabulation of CBDC explorers

Central bank digital currency (CBDC) is a digital representation of sovereign currency that is issued by a jurisdiction’s monetary authority and appears on the liability side of the monetary authority’s balance sheet.

Bank of Canada 2019 Cash Alternative Survey Results

The Bank of Canada’s latest Cash Alternative Survey (CAS) found that Canadians’ cash holdings remain stable, and crypto-asset adoption remains limited and concentrated among few demographics. It found that only 5% of Canadians own crypto-assets (5%), though 85% had heard of them. 8% of people classed as having low financial literacy said they own crypto-assets, compared to 4% among those classed as having high financial literacy. But 90% of people with high financial literacy are aware of crypto-assets, versus only 72% of those with low financial literacy. 

Tracking Mobile Money Regulatory Responses to COVID-19

The GSMA has updated its analysis of the impact of COVID-19 regulatory responses on mobile money operators. Countries that have established emergency COVID-19 social cash transfer schemes are increasingly using mobile money to distribute money to vulnerable groups. There is also a preference for mobile money as a distribution tool for donor agencies involved in COVID-19 related social cash transfers. However, COVID-19 regulatory measures have since lapsed for a majority of the countries in accordance with the official communication issued by the regulatory authorities, particularly the waiver of mobile money fees. However, many regulators are moving to permanently maintain higher transaction and balance limits, and more flexible know-your-customer (KYC) and on-boarding. 

Hyperledger Capital Markets SIG

The Hyperledger Capital Markets Special Interest Group (CMSIG) represents industry professionals working together to study how Hyperledger DLTs interact with Capital Markets use cases. This covers issuance and trading of instruments to continued market-making, management of risk, program-trading, regulations, capital requirements, traceability, post trade settlement, custody including corporate actions and more. This group also explores architecture, identity and performance related considerations specific to Capital Markets and DLTs. 

Citibank/Imperial College London Digital Money Index

The adoption of digital money has tangible benefits for governments, businesses and consumers alike. To understand these opportunities, Citi and Imperial College London developed a Digital Money Index six years ago to track the development of digital money readiness across 84 countries. It measures readiness across four pillars; supportiveness of institutional environment, financial and ICT infrastructure, digital money solutions from government and private sector, and enthusiasm from consumers and businesses.  

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