Kiffmeister’s #Fintech Daily Digest (10/04/2020)

The ECB’s digital euro: anonymous or not?

The European Central Bank’s recent report exploring the idea of issuing a retail central bank digital currency (CBDC) claims that “regulations do not allow anonymity in electronic payments and the digital euro must in principle comply with such regulations”. In fact, the Fifth EU Anti-Money Laundering Directive (AML5) exempts issuers of e-money/prepaid cards from collecting customer information if user holdings do not exceed EUR50 (EUR150 for non-rechargeable stored value cards). Why did the EU build an anonymity exemption into payments law but now chooses to avoid exploiting it in potential CBDC designs? 

The 2020 State of Mobile Internet Connectivity Report

The GSMA published a comprehensive overview of the trends in global connectivity to inform progress towards closing the coverage and usage gaps and the key challenges. The report accompanies the fifth annual update of the GSMA Mobile Connectivity Index, a tool which measures the performance of 170 countries, representing 99% of the global population, against the key enablers of mobile internet adoption: infrastructure; affordability; consumer readiness; and content and services. The Index was developed as part of the mobile industry’s commitment to drive mobile internet connectivity and accelerate digital inclusion. Some of the key take-aways are:

  • The coverage gap is now 7% (down from 10% in 2018) and stands at just under 600 million people, compared to 750 million in 2018. This reduction was driven primarily by South Asia – particularly India, where almost 99% of the population is covered by 4G, and by upgrades of 2G sites to 3G and 4G across Sub-Saharan Africa. 
  • Approximately 3.4 billion people who live in areas covered by a mobile broadband network do not use mobile internet. This usage gap is now six times larger than the coverage gap.
  • A lack of literacy and digital skills persists as the main barrier to use among mobile users who are aware of mobile internet in low- and middle-income countries (LMICs) surveyed. 
  • Smartphones have become more affordable, but handset affordability remains the main barrier to mobile ownership in many LMICs. 
  • Mobile data is becoming increasingly affordable but is still a significant challenge for the poorest in society. 

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