Kiffmeister’s #Fintech Daily Digest (10/07/2020)

BOK to virtually test distribution of digital currency next year

The Bank of Korea (BOK) is reportedly planning to start testing the distribution of blockchain-based central bank digital currency (CBDC) next year. It announced in April that it had launched a 22-month pilot program that would run through December 2021. The distribution and circulation test is the final part of the three-step pilot program. Phase 2, which focuses on analyzing related processes and seeking outside consulting, started recently. Phase 1, designing and checking the technology, ended in July. Blockchain technology will be used to keep track of digital currency transactions. 

Sibos 2020: What percentage of cross-border payments could be made in CBDCs?

43% of delegates at SWIFT’s Sibos 2020 conference think that central bank digital currency (CBDC) will see widespread adoption in the next five years. Another 43% said they would take off within ten years and 14% said they would do so within the next year. However, only 5% thought that cross-border payments would be conducted using CBDCs in five years’ time, the vast majority citing limitations of FX and non-harmonised financial integrity regulations, which would remain even when using CBDCs. (Sibos was previously known as SWIFT International Banking Operations Seminar and is organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT)). 

SWIFT gpi: driving a payments revolution

Using “unique end-to-end tracking reference” (UETR) data from Q2 this year, SWIFT demonstrates how its “global payments initiative” (gpi) payments are fast: 92% of cross-border payments are credited to the beneficiary’s account within 24 hours and 40% within just 30 minutes. But for payments between mature markets without currency controls, compliance stops or legacy systems, performance is comparable to many domestic payment systems: for example, 72% of payments from the UK to the US arrive within 30 minutes and 95% within six hours. There are fewer intermediaries in a payments chain than expected and that the number of agents has little or no impact on transaction speed.  Speed is largely driven by other factors, such as regulatory barriers, capital controls, legacy systems and time zones.   

Ripple scores big win over weekend

A major ruling in the class-action suit against Ripple came out and it was a clear victory for the San Francisco-based blockchain payments firm, a clean win on two of the three issues before the judge, plus a near-win on the third. The class action suit made several claims, all based on two main allegations. First, that XRP is an unregistered security. And second that the company and its CEO, Brad Garlinghouse, had used unfair or fraudulent business practices, including false advertising. In late March, with it looking increasingly like courts were going to rule that XRP was not a security, the plaintiffs amended their claim to add an additional claim “under the alternative theory that XRP is not a security.” 

Inside the Marshall Islands’ New Cryptocurrency: The SOV

If the Republic of the Marshall Islands’ state-sponsored SOV cryptocurrency takes off SFB Technologies, the software company building the coin, would become incredibly wealthy. SFB Technologies would receive 7.5% of the coin’s supply, which it could use after five years of its launch—which could be at any point after the 18-month-long presale begins, if the government implements the idea. The SOV Foundation, the non-profit overseeing the development of the project, will hold its presale for SOV in the next couple of months, just in case the Marshall Islands’ government, which is still deliberating whether to issue the coin, goes ahead with the project. The SOV will be built on the Algorand blockchain. 

CBDC, KSICash and our Partnership with the Estonian Central Bank

Digital Currencies have always been on Guardtime’s agenda. Indeed, our first conversations about building a digital cash system with Central Banks started in the early 2000s. Although there was no clear market opportunity then, we continued to do fundamental research. Over the last 5 years our research efforts intensified, leading to the invention of KSICash, a full stack infrastructure for CBDC built on KSI Blockchain. Over the weeks and months ahead we will have a lot to say about KSICash, its properties and why we think it can be a strong candidate for a CBDC, meeting the scalability, performance, security and resilience requirements that central banks will demand. 

Capgemini 2020 World Payments Report 

Before the pandemic started, payment volumes reached new heights, which are predicted to continue but at a pace reflecting both the increased reliance on non-cash transactions and the effect of a dampened global economy. Global non-cash transactions surged nearly 14% from 2018-2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade. Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader at 243.6 billion. The increase was driven by increasing smartphone usage, booming e-commerce, digital wallet adoption and mobile/QR-code payments innovations, led by China, India and other SE Asian markets (31.1% growth). 

75 crypto exchanges have closed down so far in 2020

As least 75 crypto exchanges have closed down due hacks, scams or simply disappeared for unknown reasons so far this year. According to the Crypto Wisser Exchange Graveyard five of the exchanges were labelled as scams, and four including Altsbit, and Nerae, were flagged as being hacked. In total 31 were shut down voluntarily while 34 were labeled as ‘MIA’ for disappearing with no explanation. The growth of DeFi and the rise of decentralized exchanges in 2020, increasing regulatory pressures, and hacks and scams were cited as factors. 

Colombian fintechs fill Latin American banking gaps

A 2019 Ernst & Young report found Colombia has the highest “fintech adoption” rate in Latin America, with 76% of its population using fintech services and the industry growing at about 120% a year. Investors have poured more than $1 billion into the industry in the past three years, $300 million of which came during the first five months of the pandemic, according to Fintech Colombia. Investors find Colombia attractive because it is a large market with a history of stable macroeconomic policy. Also, national authorities focused on boosting start-ups for at least 10 years, including Colombia setting up Latin America’s first regulatory sandbox. 

Ethereum browser and wallet app MetaMask now offers token swap functionality

Ethereum toolkit MetaMask now allows users to swap tokens from within the app itself. MetaMask owner ConsenSys said saying that the new feature would request token prices from decentralized exchanges and aggregators so that users can get the best prices. MetaMask will support Uniswap, Airswap, Kyber, 0x API,,, Paraswap, Totle, and private market makers for the feature. This approach means that users won’t need to navigate these platforms individually to find the optimal price. The feature is initially available to users of the MetaMask extension on the Firefox browser and will be rolled out soon to other browsers and MetaMask Mobile. 

From Beta to Beyond: Trade Finance Blockchain Platform ‘Contour’ Is Live

Contour, the blockchain trade finance initiative owned by eight major banks: Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Standard Chartered, SEB and Citi, has officially left its beta phase. Contour, formerly called Voltron, has an initial focus on Letters of Credit, which historically have involved a very paper based process. Pilots on the platform have demonstrated it reduces the average processing time from ten days to 14 hours. 

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