Kiffmeister’s #Fintech Daily Digest (09/23/2020)

 How to Build a Stablecoin: Certainty, Finality, and Stability Through Commercial Law Principles

This article spells out how to build a USD stablecoin legal basis by leveraging the core commercial law principles of (i) focusing on the principles of settlement finality, (ii) rules for adverse claims, (iii) discharge of the underlying obligation, and (iv) the concept of a security entitlement. It maps out how these principles are embodied under the U.S. commercial laws of investment securities (UCC Article 8) and of payments (UCC Articles 3, 4, and 4A). The goal in doing so is to show how innovators can incorporate novel, technology-driven market practices and business models into the existing financial law framework in a proven and effective way. 

TransferWise reports accelerating revenue growth to 70% in its March, 2020 fiscal year

Money transfer service Transferwise posted strong growth, continued profit and new customer records in the fiscal year ending in March. Revenue was up 70% from fiscal 2019 at £302.6 million, and it managed a fourth year of consecutive profitability, generating £21.3 million in net profit after tax. Transferwise now has 8 million worldwide customers versus 6 million in the preceding fiscal year. The annual numbers exclude much of this year’s performance, and therefore wouldn’t truly convey the COVID-19 impact on its business, but CFO Matt Briers said that the crisis has been “financially positive” for the firm due to the shift to online services. 

Digital Solutions for Small Businesses in the Middle East and North Africa

Small and medium-sized enterprises (SMEs) dominate the business landscape in the Middle East and North Africa region, yet they face impediments to growth, being handicapped by limited access to credit, unfavorable business environments, and talent gaps. Digital technologies present new opportunities for these businesses to achieve faster growth. To increase demand for digital services, governments should develop digital literacy and awareness programs as well as foster consumer trust by strengthening frameworks for cybersecurity, digital identification, data privacy, and consumer protection. The digital strategy must be underpinned by financial sector and business environment reforms, particularly strengthening financial infrastructures and business support. 

Meet OUSD: The First Stablecoin That Earns A Yield In Your Wallet

Peer-to-peer commerce company Origin launched Origin Dollars, or OUSD, a stablecoin whose reserves leverage decentralized finance (DeFi) so that balances grow wherever it resides, no staking or account required. OUSD will be backed one-for-one by the three big stablecoins on Ethereum: Tether’s USDT, Circle and Coinbase’s USDC and MakerDAO’s DAI. Users can mint OUSD by depositing any of those three into Origin’s new app, or they can just buy it on Uniswap. Either way, the OUSD will just start growing in their wallet, no further action needed. 

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