Kiffmeister’s #Fintech Daily Digest (10/17/2020)

Cross-Border Payments—A New Beginning

On Monday, October 19, starting at 8:00am ET, the IMF will convene a panel of high-level policymakers will discuss the advent of new digital currencies and the future of cross-border payments. The focus will be on macro-financial effects on monetary policy, financial stability, capital flows, financial inclusion, and the international monetary system. To what extent, and how, should policymakers collaborate to maximize social benefits and limit costs and risks? It will be followed by two sessions devoted to private and public sector perspectives on the topic, and will wrap up with a presentation by the co-chairs of the Financial Stability Board Cross-border Payments Coordination Group (CPC) on its roadmap to improve cross-border payments. 

Xfers launched a Singapore dollar-pegged XSGD stablecoin

Xfers launched a Singapore dollar-pegged XSGD stablecoin. Xfers has a Monetary Authority of Singapore (MAS) Major Payment Institution (MPI) e-money issuance license. All XSGD tokens are backed 1:1 with Singapore Dollars held in Xfers’ reserve held in segregated accounts with a fully regulated MAS-approved bank. Xfers claims that XSGD is the world’s first stablecoin to be be compliant with the Financial Action Task Force’s travel rule, so financial institutions can use it for cross-border money transfers as well. 

Money and legislation need to be adapted to digitalisation

Riksbank Governor Stefan Ingves presented his views on what needs to be done to ensure the central bank can continue to carry out its tasks in the future. There shall be enough cash in case the electronic systems break down. There shall be a national, state-issued ID card with e-identification. There shall be digital state money as legal tender, an e-krona, issued by the Riksbank. It shall be possible to make instant payments in Swedish krona, using state money, and between currencies across borders, 24/7. 

Spain’s Central Bank Prioritizes Digital Currency Research

Banco de España, in its strategic plan from 2020 to 2021, is prioritizing research into the implications for the financial system and the economy as a whole of the introduction of a central bank digital currency, considering various design proposals and including aspects relating to digital identification. 

Programmable Money and Programmable Payments

This article argues that it is important to distinguish between programmable money and programmable payments because they have different use cases. The example of the e-car is a good use case for a programmable payment. However, the programmability of money is not necessary in this case. Instead, programmable money can be used, for instance, to implement targeted aid payments during crises such as COVID-19. By giving the money paid out to citizens an inherent logic, the government could ensure that the subsidies are spent in a timely fashion and only for predefined things such as food, medicine, or clothes. 

Five mega exchanges hold 10% of Bitcoin’s entire supply

Roughly 10.6% of Bitcoin’s (BTC) circulating supply is currently held on just five centralized exchanges, according to data published by More than 1.96 million BTC is currently held between the major exchanges Coinbase, Huobi, Binance, OKEx, and Kraken. Likely owing to its custody services, Coinbase holds by far the most, with 944,904 BTC currently spread across approximately 4.39 million different wallet addresses. Huobi ranks second with 323,665 BTC held in roughly 901,600 unique wallets, followed by Binance with 289,961 BTC across nearly 2.7 million addresses. OKEx has 276,184 BTC in 339,000 wallets, while Kraken holds 126,510 Bitcoin among 672,000 addresses.