Kiffmeister’s #Fintech Daily Digest (01/13/2022)

Derivatives are coming to Coinbase, following purchase of FairX

Coinbase intends to enter the derivatives trading markets, having acquired the FairX derivatives exchange. FairX is a Designated Contract Market derivatives exchange regulated by the Commodity Futures Trading Commission. FairX only launched in May 2021, but it has already secured brokerage partnerships with TD Ameritrade and E*Trade, and 18 others. Coinbase said the acquisition is a “key stepping stone on Coinbase’s path to offer crypto derivatives to retail and institutional customers in the US.” [Read more]

Central bank digital currencies (CBDCs) in Latin America and the Caribbean

The Bank for International Settlements (BIS) published a paper that examines the views toward CBDCs Latin American and Caribbean (LAC) region central banks , drawing on their responses to a survey conducted by the BIS in late 2020 and early 2021. It also examines whether the engagement of LAC central banks with CBDCs can be explained by the structural characteristics of their economies. Thirdly, it reviews the long list of potential benefits, costs and risks of CBDCs, focusing on their relevance to the LAC economies. Finally, the paper reviews the design choices that central banks face and the actual choices made by a number of central banks in the region. [Read more]

BIS, SNB and SIX successfully test integration of wCBDC settlement with commercial banks

The BIS, the Swiss National Bank and SIX successfully tested the integration of wholesale (wCBDC) settlement with the core banking systems of five commercial banks. The experiment explored the settlement of interbank, monetary policy and cross-border transactions on the test systems of SIX Digital Exchange, SIX Interbank Clearing (the Swiss real-time gross settlement system) and the core banking systems of Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg and UBS. The test was part of Project Helvetia, an ongoing investigation into the settlement of tokenised assets with wholesale CBDC. [Read more]

Visa Partners With ConsenSys to Help Bridge CBDCs With Traditional Finance

Visa has teamed up with Ethereum scaling firm ConsenSys to help central bank digital currency (CBDC) networks bridge the gap with traditional financial institutions. Visa has created a CBDC Payments Module to serve as an on-ramp for CBDCs to existing payment networks. Banks and issuer processors will be able to plug into the module and integrate their existing infrastructure. Customers will eventually be able to use their CBDC-linked Visa card or digital wallet anywhere that Visa is accepted globally. Visa is currently in the process of integrating the Module with the ConsenSys Codefi CBDC sandbox powered by ConsenSys Quorum. [Read more]

USDF Consortium Launches to Enable Banks to Mint USDF Stablecoins

The USDF Consortium, an association of FDIC-insured financial institutions, launched, with a mission to build a network of banks to further the adoption and interoperability of a bank-minted USDF stablecoin. USDF will be minted exclusively by U.S. banks and will be redeemable on a 1:1 basis for cash from a Consortium member bank. The Consortium’s founding bank members include New York Community Bank, NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank. [Read more]

Funds Lost to DeFi Hacks More Than Doubled to $1.3B in 2021: Certik

Certik reported that the amount of money lost in decentralized financed (DeFi) project hacks more than doubled to $1.3 billion in 2021, with centralization the most common vulnerability. According to DefiLlama data, the total value locked (TVL) in DeFi protocols at end-2021 was $243.88 billion, up from $18.29 billion the year before, meaning the lost funds shrank to 0.5% of TVL last year from 2.78% in 2020. [Read more]

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Central Bank Digital Currency Workshop, hosted by the CBDC Think Tank 

The Central Bank Digital Currency Think Tank (CBDCTT)  is hosting an in-person CBDC Workshop in Washington DC on February 24. It’s an intensive and hands-on CBDC course for central bank leadership and staff that are looking to understand and position for CBDCs. The workshop is a mix of lectures from CBDC experts and hands-on exercises. Certification of completion will be provided by the CBDCTT. Note that it is open only to central bank staff and finance ministries! [Register here]