Kiffmeister’s #Fintech Daily Digest (05/13/2021)*

Tesla Suspends Accepting Bitcoin Citing Environmental Issues

CEO Elon Musk announced Tesla has suspended accepting bitcoin for vehicle purchases. The company cited concerns “about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” As a result crypto-asset markets tanked, with Bitcoin’s price plummeting from $54,800 to a low of $46,294, before rebounding slightly to trade around the $50,000 level.

Diem Announces Partnership with Silvergate and Strategic Shift to the United States

Facebook’s Diem project is shifting its main operations from Switzerland to the United States, and withdrawing its application for a license from Switzerland’s Financial Market Supervisory Authority (FINMA). Diem will partner with California state-chartered Sivergate Bank who will become the exclusive issuer of Diem’s USD stablecoins and will manage the USD reserve. And Diem Networks US will register as a money service business (MSB) with the U.S. Financial Crimes Enforcement Network (FinCEN). Novi, which is the operating arm of Diem, will also need to have a money transmitter license in all of the U.S. states in which it wants to operate. So far it has 37 (see table below) but their are notable gaps (e.g., California, Florida, New York, etc.).

Hybrid Banknotes Can Bridge Cash and Crypto

It seems only logical that an ideal payment instrument would combine the advantages of banknotes and digital currencies. A hybrid banknote would use a universally accepted and robust payment technology – cash – to deliver the cutting-edge benefits of digital money. A hybrid banknote – for instance, a bill with a chip embedded – could routinely function as a banknote does currently, but have the ability to access an electronic network to transfer value. 

*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