To carry out its plan to make Bitcoin legal tender, El Salvador will rely on partners like Zap Solutions, whose digital wallet Strike is already being used by some Salvadorans. Although Strike has the technology to help El Salvador embrace Bitcoin, it appears not to have the US money transmitter licenses needed to make it useful for sending remittances from the United States. This could make many cash and crypto transfers to El Salvador using Strike potentially illegal.
The Smart Payment Association (SPA) has warned that the bottlenecks that are currently hitting the production of semiconductors is trickling down to some payment card manufacturers, who are facing difficulties securing the components they need to produce the items. With the shortage showing no sign of ending for another year at least, this could cause some major issues for consumers. “If the situation does not improve, there are going to be millions of cards missing and this will have a direct impact on consumers worldwide who will not be able to get a bank card or the renewal of their bank card. Without a card, you cannot pay in store, nor online, nor withdraw cash.”
I’ve set out my definition of what is and isn’t a retail central bank digital currency (CBDC) in a new post. It may be obvious to most, but you’d be surprised how many people misspecify various privately- and sovereign-issued crypto as CBDC. My current definition, borrowed from the BIS is a “broadly available general purpose digital payment instrument, denominated in the jurisdiction’s unit of account, that is a direct liability of the jurisdiction’s monetary authority.” A suggestion has been made to add: “subject to the same rules and regulations as imposed on the jurisdiction’s other units of account.” More comments welcome!
*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