Kiffmeister’s #Fintech Daily Digest (08/25/2021)*

Thai SEC proposes new rules for digital asset custodians

The Thai Securities and Exchange Commission is seeking public comments on additional amendments to the regulations on custody of clients’ assets in digital asset businesses, which includes keeping custody of fiat money and seeking benefits from the clients’ assets for the clients’ interest. They look to prohibit crypto companies from using investor assets for the “benefit of another client or other persons,” or seeking benefits from both investors’ fiat money and digital assets, including digital lending to other persons. “Seeking benefits from clients’ fiat money shall be prohibited except in the form of deposit with commercial banks”. 

The Impact of Fintech on Central Bank Governance

This IMF paper reviews how central banks have been reacting to the challenges posed by fintech to the legal foundations of their governance. It finds that fintech calls for reconsidering the adequacy of the legal formulation of currency issuance and payment systems functions and powers. Fintech may impact the functional autonomy for some key central bank functions. For example, the role claimed by governments in designing CBDC will be an important issue to consider; the legal framework will need to carefully delineate the respective roles and responsibilities between the government and the central bank. The authors suggest that central bank law reform must be sufficiently broad to achieve appropriate levels of “agility” to provide a “future-proof ” legal framework. For instance, legislation (and by extension the legal framework to which the central bank is subject) should to the maximum extent possible be technology-neutral. 

Facebook Rolls Out Birthday Gifting Via Facebook Pay

Facebook is launching a new birthday gifting option using Facebook Pay. Messenger users in the U.S. can send and receive cash gifts directly through the chat platform. Gift recipients will be notified via Messenger and on Facebook with their virtually wrapped gift message and balloons. Once users confirm their Facebook Pay information, the cash gift will be instantaneously deposited into the recipient’s bank account.

Klarna’s losses soar as credit defaults double

Credit losses at Klarna, the Swedish “buy now, pay later” company, more than doubled in Q2 2021. Klarna said that credit losses tended to increase when it entered new markets such as recent launches in New Zealand, France, and Spain. It added Poland last week. Klarna has faced controversy in some countries as critics have argued it encourages younger people to spend money that they do not necessarily have and then pay back in instalments. Klarna positions itself as an alternative to credit cards and their high rates that drive economic inequalities, with those who can afford to pay off their balances each month reap rewards through loyalty schemes while those who can’t afford to simply get into more debt. 

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