Norges Bank published a third report on central bank digital currency (CBDC) and the Bank will publish another report early next year, after which it will decide how to proceed with its CBDC work. However, the prospective introduction of a CBDC is still some way off. The lack of urgency reflects the Bank’s view so far that there is no acute need to introduce it. The latest paper considers the potential impact on the stability of the financial system through the effect of CBDC issuance on bank funding markets. It concludes that CBDC has the potential to substantially crowd out bank funding instruments due to its superior safety features.
Facebook is rolling out its WhatsApp payment service for users in India after receiving approval from the National Payments Corporation of India (NPCI). It will use India’s Unified Payments Interface (UPI) multi-bank real-time payment system. The UPI allows interoperability between different apps and is also used by Walmart’s PhonePe and Google Pay that control around 40% of the market. However, WhatsApp can only expand its UPI user base in a graded manner starting with a maximum registered user base of 20 million.
The NPCI also said that with the UPI reaching 2 billion transactions a month and with potential for future growth, it has issued a cap of 30% of total volume of transactions processed in UPI, applicable on all Third Party App Providers (TPAPs). It will help to address the risks and protect the UPI ecosystem as it further scales up. The existing TPAPs exceeding the specified cap, will have a period of two years from January 2021, to comply with the same in a phased manner.
The U.S. Justice Department has sued to block Visa’s $5.3 billion acquisition of bank data sharing startup Plaid, citing competition concerns. It claims that “Visa is a monopolist in online debit transactions, extracting billions of dollars in fees annually from merchants and consumers. Plaid, a financial technology firm with access to important financial data from over 11,000 U.S. banks, is a threat to this monopoly: it has been developing an innovative new solution that would be a substitute for Visa’s online debit services. By acquiring Plaid, Visa would eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers.
The Eurosystem published the oversight framework for electronic payment instruments, schemes and arrangements (“PISA framework”) for public consultation. The Eurosystem establishes oversight requirements in the form of generic principles to assess the safety and efficiency of the entities that fall within the scope of its oversight and to induce change where shortcomings are identified. The PISA framework sets out those oversight principles in a single, future-proof and harmonised manner for electronic payment instruments, schemes and arrangements.
Fidelity began researching blockchain technology and digital assets in 2014. Following its preliminary exploration, it invested in a mining operation and developed wallet and custody solutions for bitcoin. In 2018, Fidelity Digital Assets launched to build an enterprise-grade custody and execution solution for institutional investors. Its team now consists of more than 100 professionals and it is now planning to hire more than twenty engineers across the full spectrum of its technology stack to capitalize on increased market demand and to expand its overall capabilities.
Investigations by Brave New Coin (BNC) indicate that the current issues with OKEx customers being unable to withdraw their assets are not a criminal scam or hack – but instead are a show of force by the Chinese Communist Party – designed to ensure China’s new wave of billionaire entrepreneurs tow the party line. BNC thinks it unlikely that the Chinese state will seize user’s funds. Although China’s attitude to crypto has been mostly negative, it has never moved to mass confiscation before.