Month: April 2021

Kiffmeister’s #Fintech Daily Digest (04/30/2021)*

~ kiffmeister

National Bank of Georgia Considering Launching a Retail Digital Gel

The National Bank of Georgia (NBG) is considering launching a digital version of its national currency, the Lari (Gel). The NBG will use its Open Regulatory Framework tools, to facilitate the retail central bank digtital currency (CBDC) development process. Rapid live testing in a controlled environment should enable the agile development of CBDC technology and an impetus to develop underlying technology to full potential, enhancing risk management and user experience. Interaction with the RegLab should also help NBG to develop its regulatory approach and update legal framework to enable smooth and sustainable CBDC technology operation. 

China Orders Tech Giants to Unbundle Financial Services

The People’s Bank of China (PBOC) and four other regulatory agencies summoned 13 domestic internet platform companies including Tencent, JD Finance and ByteDance for talks on their financial businesses. The firms were urged to bring their online lending and deposit-taking businesses in line with regulatory requirements, and to to refocus on their payment service business, enhance their transaction transparency and break any information monopolies.  

Principles for CBDC Technical Implementation

This paper from Digital Asset Holdings co-written by Stanford University’s Darrell Duffie provides a high level overview of some central bank digital currency (CBDC) principles and key factors supporting them that should be considered when choosing and implementing a suppporting technology. The challenge of creating and implementing CBDC is large and complex, requiring addressing current challenges, while facilitating future innovation and support yet-to-be known requirements and opportunities. The ability to start small, facilitate wide adoption, evidence controls, and maintain flexibility to maximize growth are essential. The paper particularly emphasizes the key requirements of privacy protection and interoperability. 

MAS commits $42 million to RegTech grant scheme

The Monetary Authority of Singapore (MAS) announced a new Regulatory Technology (RegTech) grant scheme and an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption in the financial sector.  MAS will commit $42 million for the RegTech grant scheme and enhanced DAG scheme. The RegTech grant scheme, aims to promote the adoption and integration of technology solutions in Singapore-based financial institution (FI) risk management and compliance functions. The DAG helps smaller FIs and FinTech firms adopt digital solutions to better cope with the impact of COVID-19, and to position themselves for subsequent recovery and growth. 

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks: https://www.diigo.com/user/kiffmeister/Fintech

Kiffmeister’s #Fintech Daily Digest (04/29/2021)*

~ kiffmeister

A new way to buy crypto on Coinbase using PayPal

Coinbase’s U.S. customers can now buy crypto on the exchange via debit cards and bank accounts linked to PayPal. Such purchases are limited to $25,000 per day. Customers will have to click on “add a payment method” and select PayPal, which whisks them off to a PayPal login screen, after which a debit card or bank account linked to the customer’s PayPal account is selected. It seems that the last steps are to block customers from funding crypto purchases with PayPal-linked credit cards.

Singapore and Thailand Launch World’s First Linkage of Real-time Payment Systems

The Monetary Authority of Singapore (MAS) and the Bank of Thailand (BOT) launched the linkage of Singapore’s PayNow and Thailand’s PromptPay real-time retail payment systems. Customers of participating banks in Singapore and Thailand will be able to seamlessly and securely transfer funds of up to S$1,000 or THB25,000 daily across the two countries, using just a mobile number. The fees will be affordably priced and transparently displayed to senders prior to confirming their transfers. 

EIB issues its first ever digital bond on a public blockchain

As reported a few days ago, the European Investment Bank (EIB) launched a €100 million digital bond issuance on an Ethereum-based public blockchain platform. The EIB has now confirmed that it paid the three underwriters (Goldman Sachs, Santander and Societe Generale) using Banque de France-issued wholesale central bank digital currency (CBDC). Societe Generale – FORGE provided the end-to-end services to issue and manage the digital-native security tokens.

SEC pushes decision on VanEck Bitcoin ETF until June

The U.S. Securities and Exchange Commission (SEC) extended the original 45-day window to approve (or disapprove) VanEck’s Bitcoin exchange-traded fund (ETF) from May 3 to June 17. “The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received.”  

BaFin cracks down on crypto exchange Binance’s ‘stock tokens’

Germany’s  Federal Financial Supervisory Authority (BaFin) warned investors that Binance has probably violated securities rules over its launch of trading in tokens that track the movement of shares in Tesla, Coinbase and MicroStrategy. The warning said that such tokens represent securities requiring a prospectus that has not yet been issued.  

Tether Releases Most Recent Independent Assurance Opinion

Tether made available its (pretty much useless) Consolidated Reserves Report for March 31, 2021 and an accompanying assurance opinion by Moore Cayman attesting that the information is accurate. It is Tether’s plan to release these documents, intended to show that it USDT stablecoin is fully backed by U.S. dollar assets, on a quarterly basis. However, they provide no information on the composition of the reserves.

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks: https://www.diigo.com/user/kiffmeister/Fintech 

Kiffmeister’s #Fintech Daily Digest (04/28/2021)*

~ kiffmeister

Bank of Korea CBDC Experiments Planned for Second Half of 2021

According to its 2020 Payments and Settlement Report, the Bank of Korea will conduct simulation experiments for its CBDC in the second half of 2021.

Bank of Jamaica launches a contest to name its CBDC

The Bank of Jamaica seeks interested persons to propose a suitable name, tagline, logo and image for its new central bank digital currency (CBDC). “The logo and representative design should be distinctive, attractive, and adequately represent the CBDC as a safe and convenient digital alternative to cash.” 

European Investment Bank to price €100 million in bonds on Ethereum: report

The European Investment Bank (EIB) plans to issue and price €100 million of two-year notes in the Ethereum network, overseen by Goldman Sachs, Banco Santander, and Societe Generale. 

Mastercard and digital currency exchange Gemini to launch crypto rewards credit card

Mastercard and U.S. crypto-asset exchange Gemini will launch the first credit card that gives users digital currency rewards on purchases this summer. Users of the no-fee card will receive up to 3% in bitcoin or other crypto-assets on their purchases, with the digital currency deposited in the cardholder’s Gemini account. The card will be issued by WebBank, a Utah-based digital lender.

Turkey Cryptocurrency Exchange Bust Spurs Move for Regulation

The Turkish government is reportedly planning to establish a central custodian bank to eliminate counterparty risk following the collapse of the Thodex and Vebitcoin exchanges last week. Authorities are also pondering a capital threshold for exchanges and education requirements for executives at such firms, although the plans haven’t been finalized yet.

U.S. Bank details new cryptocurrency offerings

U.S. Bank Global Fund Services will offer a new cryptocurrency custody product for customers with the engagement of a sub-custodian for fund servicing. U.S. Bank has been selected to administer NYDIG’s ETF bitcoin fund, pending U.S. Securities and Exchange Commission (SEC) approval. 

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks: https://www.diigo.com/user/kiffmeister/Fintech

Kiffmeister’s #Fintech Daily Digest (04/27/2021)*

~ kiffmeister

Iran’s central bank says officially mined crypto can be used to pay for imports

The Central Bank of Iran is reportedly authorizing banks and licensed foreign exchange shops to use crypto-assets as payments for imports, to mitigate the impact of economic sanctions imposed by the United States. The crypto-assets must derive from mining operations officially licensed by the Iranian  Ministry of Industry, Mine and Trade.   

MAS report on critical infrastructure for an inclusive digital economy

The Monetary Authority of Singapore (MAS) published a report on the foundational digital infrastructure necessary for an inclusive digital economy and seamless cross-border transactions around the world, in collaboration with Mastercard and the central banks of Brunei Darussalam, Cambodia, Ghana, and Kenya. The report highlighted four key pillars; digital identity, authorisation and consent, payments interoperability and data exchange standards. 

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks: https://www.diigo.com/user/kiffmeister/Fintech

Kiffmeister’s #Fintech Daily Digest (04/26/2021)*

~ kiffmeister

Ant Group and Tencent work with China’s central bank to push forward digital yuan

The Digital Currency Research Institute of the People’s Bank of China (PBOC) reportedly signed a technical strategic cooperation agreement with Ant Group to move forward with the development of the digital yuan based on Ant Group’s database, Ocean Base, and the mobile development platform, mPaaS. Tencent is also supporting and participating in digital yuan design, research, development and operational work. 

What Triggers Consumer Adoption of CBDC?

This De Nederlansche Bank surveyed a representative panel of Dutch consumers to determine public preferences regarding central bank digital currency (CBDC) demand. It found that roughly half would open a CBDC current or savings account, suggesting that consumers perceive CBDC as distinct from accounts offered by traditional banks. The amount respondents want to deposit in the CBDC savings account depends on the interest rate offered. Intended usage of the CBDC current account is highest among people who find privacy and security important, and have low trust in banks in general. 

Tether’s market cap tops $50 billion, supply on Tron surpasses Ethereum

The market capitalization of Tether (USDT) stablecoin has crossed the $50 billion mark, with the supply on Tron’s blockchain ($26 billion) exceeding that on Ethereum’s ($24.4 billion), because transaction fees are lower, and confirmation times faster on Tron. Most of the Tron-based Tether’s supply is on the lightly-regulated Binance, Huobi, and OKEx platforms. USDT remains the largest stablecoin by market capitalization, with about 66% market share, followed by USDC (17%) and BUSD (9%). 

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks: https://www.diigo.com/user/kiffmeister/Fintech

Kiffmeister’s #Fintech Daily Digest (04/24/2021)*

~ kiffmeister

Paxos Gets Federal Bank Charter From OCC

The U.S. Office of the Comptroller of the Currency (OCC) has granted Paxos provisional approval for a federal bank charter that will allow it to conduct business across state lines. It only allows Paxos to operate as a trust bank, which can’t lend customer deposits. This is the third such charter granted to a crypto company, after custody firm Anchorage in January, and trading and lending firm Protego in February. 

A Fourth Ethereum ETF Hits Canada—Eighth Crypto ETF in North America

Toronto-based 3iQ Corp in partnership with CoinShares launched of an Ethereum exchange-traded fund (ETF) on the Toronto Stock Exchange (TSX). It’s the fourth Ethereum ETF to launch this week in Canada and the eighth crypto ETF now trading in the country. The US Securities and Exchange Commission (SEC), which has yet to approve a crypto ETF, currently has nine Bitcoin ETF applications to either approve or decline. 

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks: https://www.diigo.com/user/kiffmeister/Fintech

Kiffmeister’s #Fintech Daily Digest (04/23/2021)*

~ kiffmeister

Coinbase lists tether, the world’s dodgiest stablecoin

“Coinbase… [will be] listing tether (USDT), the world’s dodgiest stablecoin. Tethers… are a stand-in for real dollars, used mainly on offshore crypto exchanges that can’t get proper banking… Coinbase only supports ERC-20 USDT, a reference to the nearly 24 billion tethers that live on the Ethereum blockchain. (Another 26 billion are on Tron, with a smattering on Omni, Algorand, EOS, Liquid, SLP, and Solana.) At the moment, you can only transfer USDT onto Coinbase; you cannot move tethers off the exchange.” For more on what all of this means see Amy Castor’s excellent summary here. 

DAOs Are Now Officially Recognized as a New Type of LLC in Wyoming

The U.S. state of Wyoming has officially recognized decentralized autonomous organizations (DAOs) as a new type of limited liability company, or LLC. DAOs are governed by the terms of smart contracts, without the hierarchical control structure seen in traditional companies. The new law solves several important legal issues, such as joint-and-several liability for all participants in a DAO, provided it is considered a partnership by court. 

Algorand pledges carbon-negative blockchain

Algorand plans to achieve a carbon-negative network by implementing a “sustainability oracle” in partnership with ClimateTrade in a move that could make blockchain adoption more environmentally friendly. The partnership enables Algorand to notarize its on-chain carbon footprint and then lock the equivalent amount of carbon credits into a so-called green treasury. 

*For those interested in intra-day updates and news that didn’t make the Daily Digest cut, please check out my Diigo fintech bookmarks here: https://www.diigo.com/user/kiffmeister/Fintech

Kiffmeister’s #Fintech Daily Digest (04/22/2021)

~ kiffmeister

Ethereum’s price has hit new all-time-highs as they broke through the $2,600 level as bitcoin dominance plummets (see bottom of post). 

Norges Bank will test technical solutions for central bank digital currency

In line with the recommendations of an internal working group, Norges Bank will test various technical solutions for a central bank digital currency (CBDC) over the next two years. One of the aims of technical testing is to find a preferred solution if it becomes relevant to introduce a CBDC in Norway. Any introduction of a CBDC will still lie some time in the future. The consultative report is currently available in Norwegian only, but an English translation will be published soon.

Bitkòb, the name of Haiti’s prospective central bank digital central currency

Bitkòb is the name of the prospective central bank digital currency (CBDC) of the Bank of the Republic of Haiti, which was unveiled on March 26, 2021. The central bank has been working on this project since 2019.

DEX volumes reached over $217 billion in Q1 2021

Decentralized exchange (DEX) volumes are up 236% from Q4 2020, Uniswap leading the way as volumes continue to rise in lockstep with asset prices. 

Bitcoin Peer-to-Peer Trading Up 27% in Nigeria Since Crypto Ban

No duh! Three months after Nigeria’s central bank restricted financial institutions from dealing with anything crypto-related, peer-to-peer (P2P) Bitcoin trading in the country is having a heyday. According to analytics platform UsefulTulips, Bitcoin P2P trading in Nigeria has surged by 27% since restrictions were introduced by the country’s central bank (CBN). 

Kiffmeister’s #Fintech Daily Digest (04/21/2021)

~ kiffmeister

US House Passes Bill to Require Financial Regulators to Set Up Digital Assets Working Group

The U.S. House of Representatives passed the Eliminate Barriers to Innovation Act of 2021 (H.R. 1602) which includes a section on digital assets. The legislation seeks to set up a digital asset working group with representatives from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). The overarching goal is to clarify when the SEC has jurisdiction over digital assets, in the case of when they are deemed securities and when the CFTC has a final say, in the case of when digital assets are classified as commodities. 

Kiffmeister’s #Fintech Daily Digest (04/20/2021)

~ kiffmeister

PayPal’s Venmo now allows users to buy and sell crypto

Venmo’s “Crypto on Venmo” starts to roll out today and will be available to its 70 million customers directly in the Venmo app within the next few weeks. The service will let its users buy, hold and sell crypto-assets (BTC, ETH, LTC and BCH) within its mobile app, using funds from their balance with Venmo, or a linked bank account or debit card. Similar to its parent company’s (PayPal) app, Crypto on Venmo is enabled through a partnership with Paxos, which facilitates the transactions behind the scene.  

Deutsche Telekom Invests in Celo’s Crypto Network

Deutsche Telekom is purchasing Celo tokens in “significant” size, and investing in infrastructure to support the Celo network, which is working to build a decentralized version of Venmo-style peer-to-peer payment platforms. Celo maps user mobile phone numbers to the public key for a blockchain wallet, which simplifies access to crypto. Deutsche Telekom sees a variety of opportunities using Celo, including remittances. 

WeWork Starts Utilizing Cryptocurrency As Form of Payment

WeWork has partnered with BitPay to accept crypto-assets (BTC, ETH, USDC,PAX and several others) in payment for its workspaces. WeWork will also hold the crypto-assets on its balance sheet, and pay landlords and third party partners in crypto-assets where applicable through Coinbase, a WeWork member. In addition, Coinbase will be the first WeWork member to use crypto-assets to pay for its WeWork membership. 

TIME Offers Cryptocurrency as a Form of Payment for Digital Subscriptions

TIME will begin accepting crypto-assets as a form of payment for digital subscriptions through a new partnership with Crypto.com, only in the U.S. and Canada for now, with global access to roll out in the next several months.  

Circle Selects Signature Bank for USDC Integration and Reserve Balances

Circle has partnered with Signature Bank to hold billions of dollars in reserve deposits related to USD Coin. The two companies also committed to a long term roadmap that will start with the integration of Circle into Signet, the Bank’s blockchain-based digital payments platform. 

Dogecoin Beats Tether, DOGE Enters Top 5 Cryptocurrencies

Dogecoin (DOGE) became the 5th most valuable crypto-asset today after the total market cap of DOGE crossed $50 billion. DOGE received substantial support on social media from different celebrities, including Tesla CEO Elon Musk and rapper Snoop Dogg. Dogecoin became a trend on Twitter yesterday amid massive support from retail traders.