Kiffmeister’s #Fintech Daily Digest (05/19/2021)*

Crypto-asset markets crashed as USDT struggled to maintain its peg against the US dollar (see below) with today being the deadline for Tether to submit its detailed breakdown of USDT reserves to the New York Attorney General (NYAG). Tether published a couple of skimpy-with-detail pie charts last week that they may have thought met the NYAG’s standards, but… At one point today, the price of Bitcoin hit $30,202, down 30% from yesterday’s $42,909 close and off 53% from the $64,829 all-time high of April. And while it was spiking down the major exchanges were experiencing outages, again shining a light on the immaturity of the trading infrastructures, and possibly their USDT dependency.

But markets have since rebounded and Bitcoin appears to be heading back close to yesterday’s close, but the day is still young!

European Central Bank castigates banks over instant payment fees

European Central Bank (ECB) board member Fabio Panetta warned that the charges levied by banks for instant payments are proving a barrier to uptake. “While the cost for service providers of using TIPS is 0.20 eurocent per instant payment transaction, instant payments are sometimes offered to consumers for €1 per transaction. This must change. For instant payments to become the new normal, they must be cheap and easy to use. 

Central Bank Digital Currency (CBDC) Privacy and Transparency: Not So Black and White

Don’t forget to check out the new blog post I wrote with Sonja Davidovic on the nuances of managing privacy trade-offs in central bank digital currency (CBDC) design. It’s not so black and white! For example, the recent digital euro public consultation found that, although potential users place a high value on transaction privacy, they don’t support full anonymity. Ultimate design choices will depend on the motivation for CBDC issuance, country specific circumstances and user preferences. 

CBDC Workshop for Caribbean and Central American Central Banks

The CBDC Think Tank is offering a free intensive and hands-on central bank digital currency (CBDC) course exclusively for Caribbean and Central American central bankers looking to understand and position for CBDCs. The course runs over three consecutive Tuesday mornings starting June 15 at 10am (ET). The workshop is a mix of lectures from CBDC experts and hands-on exercises. Scheduled lecturers John Kiff (ex-IMF), Ashley Lannquist (World Economic Forum), David Andolfatto (St. Louis Fed), Jamiel Sheikh (Columbia University), Sonja Davidovic (IMF), Arthur Rossi (IMF) and Jacques Francoeur (Security Inclusion Now). 

*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