Kiffmeister’s #Fintech Daily Digest (03/16/2021)*

Bank of Japan governor says CBDC preparation can’t wait until hour of need

Although it still has no immediate plan to issue central bank digital currency (CBDC) the Bank of Japan continues to “carefully consider the way in which we should provide central bank money.” And “from the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems… [it] consider[s] it important to prepare thoroughly to respond to changes in circumstances in an appropriate manner.”  The Bank of Japan will begin experiments in spring 2021.

Optimal Countries for CBDC Implementation

This article analyzes the current central bank digital currency (CBDC) landscape. A sample of potential candidate countries for establishing a CBDC was selected, motives for implementing a CBDC were collected, and variables were assigned to these motives. Statistical methods were applied to obtain a sample of the countries with the highest correlation with three CBDC “pioneer” countries (Bahamas, China, and Uruguay). The results show that the Baltic Sea area (Lithuania, Estonia, and Finland) is a good CBDC candidate, in South America it’s Brazil, and in Asia, China and Malaysia show high correlations with the three pioneer countries. In Africa, South Africa stands out as an optimal area for CBDC implemention. 

JPMorgan Is Eyeing Bitcoin And Crypto Clearinghouse Options Amid Huge Price Rally

JPMorgan is reportedly exploring crypto-asset clearinghouse options, looking for a middleman to sit between over-the-counter (OTC) desks and traders to guarantee the enforcement of a trade and create liquidity in the market. Clearinghouses, designed to sit in between trades in order to guarantee payment in the event either counter party defaults, ensure trading desks are able to handle orders. 

Crypto Bank Sygnum Offering Yield on Its Swiss Franc Stablecoin

Swiss crypto bank Sygnum is reportedly launching a yield product based on its own stablecoin, DCHF. The three-month fixed-term deposit product will generate 0.75 percent yield per year. Sygnum claims to be the first regulated bank to offer returns on its own stablecoin. 

ESMA consultation on draft crowdfunding technical standards

The European Securities and Markets Authority (ESMA) launched a consultation on draft technical standards on crowdfunding under the European crowdfunding service providers regulation (ECSPR). The new Regulation on crowdfunding regulates for the first time at the EU level lending-based and equity-based crowdfunding services. It introduces a single set of requirements applicable to crowdfunding service providers (CSPs) across the EU, including strict rules to protect investors. 

Are quantum computers good at picking stocks? This project tried to find out

KPMG, together with a team of researchers from the Technical University of Denmark (DTU) and a yet-to-be-named European bank, has been piloting the use of quantum computing to determine which stocks to buy and sell for maximum return (“portfolio optimization”). The researchers ran the model on D-Wave’s 2,000-qubit quantum annealing processor, finding that it performed better and faster than other methods, while being capable of resolving larger problems – although the study also found that D-Wave’s technology comes with some programming and scalability issues. 

* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.