Kiffmeister’s #Fintech Daily Digest (11/08/2021)

Fake news alert regarding Banco Central do Brasil partnering with Labs to launch CBDC trial

In the November 5 edition of the Fintech Digest I warned that the report that Banco Central do Brasil (BCB) is partnering with Seattle-based KaJ Labs, to launch the trail of its CBDC was possibly fake news. There was no mention of it on the BCB website, and the Kaj Labs press release made it sound more like the firm has merely initiated discussions with the BCB. As it turns out, reliable sources have told me it is indeed fake news.

Interoperability in payments: for the old and the new?

The Singapore Centre of the BIS Innovation Hub (BISIH) announced that it will start a proof-of-concept of its Project Nexus cross-border payments platform with the Monetary Authority of Singapore, the Bank of Italy and the Central Bank of Malaysia, as well as with BCS in Singapore and PayNet in Malaysia. Project Nexus aims to enable and speed up the process of linking fast payment systems by standardizing the way that these systems connect to each other. Rather than a payment system operator building custom connections for every new country that it connects to, the operator can make one connection to the Nexus platform. This single connection allows a fast payments system to reach all other countries in the network. This provides a more scalable way to build up instant cross-border payment networks. [Read more]

This is separate from Project Dunbar, which is also being run out of the BISIH Singapore Centre, which uses central bank digital currency (CBDC) to achieve similar ends. Dunbar creates a common platform on which multiple central banks would issue wholesale CBDC. Each commercial bank would be able to hold multiple CBDCs, even if the bank does not have a branch or presence in the country issuing that CBDC. Banks can then use these CBDCs in multiple currencies to make payments directly to each other with no intermediaries. The Dunbar platform will also need to be interoperable with other payment systems – and, in particular, with each central bank’s domestic payment systems, such as its real-time gross settlement or even future retail CBDC systems. [Read more about Project Dunbar]

BSP and MAS to Pursue Cross-Border Payment Linkages

The Bangko Sentral ng Pilipinas the Monetary Authority of Singapore signed an enhanced FinTech Cooperation Agreement facilitate interoperable payments between the Philippines and Singapore. It will facilitate the linkage of both countries’ real-time and QR payment systems, to facilitate instant, seamless, and low-cost cross-border payments. This is a significant initiative given the sizeable remittance flows between the Philippines and Singapore, which totaled 2.15 billion  in 2020. [Read more]

CBUAE and Bank Indonesia sign MoU to promote cooperation in payment systems

Central Bank of the UAE and Bank Indonesia signed a memorandum of understanding, to boost mutual co-operation. It covers digital innovation in payment and financial services to facilitate more efficient and secure transactions, cross-border payment systems including retail payments, and frameworks of anti-money laundering and combatting the financing of terrorism. [Read more]

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