What does digital money mean for emerging market and developing economies?

The Bank for International Settlements (BIS) published a paper that assesses the supply and demand factors that may determine in which countries innovations, such as crypto-assets, stablecoins and central bank digital currencies (CBDCs), are more likely to be adopted in emerging market and developing economy (EMDE) countries. It also compare these proposals with digital innovations such as mobile money, retail fast payment systems, new products by incumbent financial institutions and new entrants such as specialized cross-border money transfer operators. The paper finds that, while stablecoin initiatives may achieve adoption in certain EMDEs, they may also pose particular development, macroeconomic and cross-border challenges for these countries and have not been tested at scale. It concludes that fast-moving fintech innovations that are built on or improve the existing financial plumbing may address many of the issues in EMDEs that both private stablecoins and CBDCs aim to tackle. [Read more]

The state of mobile internet connectivity in Sub-Saharan Africa

But some basic infrastructure needs to be improved to make any of these payment innovations work in many EMDE countries. For example, the GSMA reports that at the end of 2020, only 28% of the Sub-Saharan African population was connected the internet, and 19% live in an area without mobile broadband coverage – an estimated 210 million people. More concerning though, is the usage gap, which is widening year after year and now stands at 53%. In other words, across the region, more than half of the population is still not using mobile internet, despite living in an area with mobile broadband coverage. To close the usage gap, handsets need to be more affordable for consumers and be available for purchase in rural areas, but unless data also becomes more affordable, people may not be able to take advantage of all that mobile internet has to offer. [Read more]

This also underscores the need to consider payment solutions that work completely offline!

MAS names Global FinTech Hackcelerator finalists

The Monetary Authority of Singapore (MAS) announced the 20 finalists for the Harnessing Technology to Power Green Finance  Global FinTech Hackcelerator. The finalists will pitch their solutions at the Global FinTech Hackcelerator Demo Day during the November 8-12 Singapore Fintech Festival. All finalists will receive a S$20,000 and be eligible for a fast-tracked application process to receive S$200,000. The top three winners will receive a total of S$150,000 in prize money. [Read more]

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