Kiffmeister’s #Fintech Daily Digest (11/05/2020)

Crypto-powered prediction market flourish during US presidential election

The 2020 U.S. presidential election has driven significant action across crypto-powered predictive markets. The election markets on major crypto-asset derivatives exchange FTX saw wild volatility in the wake of election day. For example, TRUMP tokens, redeemable for $1 each should the incumbent president secure re-election, swung from $0.38 prior to the close of polls to less than $0.09 the next day. Ethereum-powered decentralized predictions platform Augur also saw significant action, as did Matic-powered decentralized prediction platform Polymarket.  

South Korea Will Ban Domestic Circulation of Privacy Coins

South Korea’s Financial Services Commission (FSC) will ban anonymous digital currencies that possess a high-risk of money laundering. Furthermore, the FSC will mandate KYC and AML policies on all domestic crypto-asset exchanges. Additionally, the exchanges need to report their operational activities with the regulator. The new rules will come into force in March next year, barring all domestic crypto-asset exchanges from offering services with such privacy coins. 

Blockchain and DLT in Trade: Where Do We Stand?

The World Trade Organization and Trade Finance Global have published their latest taxonomy of blockchain projects in international trade. Many projects that were at an exploratory stage a year ago have matured and reached the production stage. This publication maps 44 projects related to trade finance, insurance, know your customer, shipping/logistics and supply chain, digitalization of trade documents and trade processes, among others, and assesses their level of maturity. A new section provides an overview of projects that work towards creating digital standards relevant for trade to drive digital interoperability. 

The dawn of fintech in Latin America: landscape, prospects and challenges

A BIS paper took stock of how Latin America fintech is transforming financial services in the region. It found that fintech has quickly gained traction in Latin America, mainly in the areas of payments and alternative finance. Second, it showed that fintech regulation in the region takes an activity-based approach rather than an entity-based one, except in Mexico. Finally, it presented the challenges that fintech faces in becoming a game changer for the region. The paper concluded that fintech can be a strong catalyst to improve financial and social conditions in Latin America by incorporating the unbanked into the financial system and providing alternative sources of finance to firms.