Kiffmeister’s #Fintech Daily Digest (20220504)

Reserve Bank of Zimbabwe Continues to Plan CBDC Launch

The Reserve Bank of Zimbabwe reportedly decided to issue central bank digital currency (CBDC). The central bank is currently still at the research stage, and will be moving to the design stage shortly, although they have yet to decide whether it would be retail or wholesale. [Read more]

Cash and COVID-19 in Canada: What happened in 2021

The Bank of Canada provided an update on the impact of COVID-19 on the demand for cash and the use of methods of payment in April and August 2021. Cash in circulation remained high, driven mainly by demand for large-denomination notes. Canadians’ holdings of cash on hand (median $70/$80 in April/August) were comparable to results seen in 2020. Other cash holdings reported by Canadians remained elevated, with a median value of $260 in August. In August, 62% of Canadians used cash for payments, and indicators of merchant acceptance of cash improved in both the April and August surveys. A large majority of Canadians (around 80%) in 2021 continued reporting that they have no plans to go cashless in the next five years. [Read more]

Big Techs, QR Code Payments and Financial Inclusion

Bank for International Settlements staff, using a dataset of around half a million Chinese firms that use the AliPay QR code-based mobile payment system, found that (i) the creation of a digital payment footprint allows firms to access credit provided by the same big tech company; (ii) transaction data generated via QR code generate spillover effects on access to bank credit; and (iii) there are positive effects of access to big tech credit on sales, including during the Covid-19 shock. The findings suggest that access to innovative payment methods helps micro firms build up credit history, and that using big tech credit can ease access to bank credit. [Read more]

Upcoming events I’m affiliated with:

Satoshi Capital Advisors is hosting a virtual workshop on wholesale CBDC, stablecoins and digital capital markets on May 24 (starting at 08:00 EST). [Register here with the passcode: CBDC]

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24, each session starting at 7am EST and running for 3 hours. [View list of papers and register here]