Kiffmeister’s #Fintech Daily Digest (05/31/2021)*

Marshall Islands reconsiders issuing SOV crypto-assets as legal tender

International Monetary Fund (IMF) staff concluded that the issuance of the SOV crypto-asset by the Republic of the Marshall Islands (RMI) as a second legal tender (in addition to the US dollar) would raise risks to macroeconomic and financial stability as well as financial integrity. Also, SOV issuance could jeopardize the RMI’s last US dollar corresponding banking relationship. This combined with anti-money laundering and combatting the financing of terrorism risks, could disrupt external aid and other important financial flows, resulting in significant economic drag. Now, as a result, the government has conducted a comprehensive due diligence study on the SOV based on which the Parliament is considering repeal of the 2018 SOV Act under which the SOV would be issued. 

US Court Denies SEC Access to Ripple’s Legal Communications

Ripple received another favorable ruling in its legal battle against the Securities and Exchange Commission (SEC). The regulator filed a motion seeking access to ‘all communications constituting, transmitting, or discussing any legal advice Ripple sought or received as to whether its offers and sales of XRP were or would be subject to federal securities laws’. Ripple successfully challenged the motion saying that the SEC’s requested communications are protected by the attorney-client privilege, which has not been waived. Judge Sarah Netburn elaborated that the attorney-client privilege should be ‘strictly confined within the narrowest possible limits consistent with the logic of its principle’. 

Cardano rebounds 15% as Alonzo smart contact testnet launches

Cardano launched the first testnet for its smart contract platform, Alonzo, that will be rolled out in three phases, each named after a different color. The current blue phase will be followed by Alonzo White and Alonzo Purple, each aiming to include more users and add functionality to the network. The phases are to be rolled out at 30-day intervals, with Alonzo Purple expected to launch by the end of August. Alonzo also will support an ERC20 converter, allowing ETH tokens to run on Cardano, making its proof-of-stake network a serious competitor to Ethereum. 

FSB seeks feedback on its proposals for quantitative targets for enhancing cross-border payments

The Financial Stability Board (FSB) published a public consultation on global targets for addressing the four challenges of cross-border payments. The quantitative targets proposed are a foundational step in the G20 Roadmap for Enhancing Cross-border Payments, which was endorsed by G20 Leaders in November 2020. The proposed targets set goals for improving cost, speed, transparency and access for cross-border payments in the coming years through the actions taken under the Roadmap. They will play an important role in defining the ambition of the work and creating accountability. They are intended to provide a common vision for the improvements that are being sought in cross-border payments services through the collaborative work of the private and public sectors. 

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