Kiffmeister’s #Fintech Daily Digest (20220520)(Revised)

New experiments pave way for international payments using CBDCs

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) published a paper outlining how the financial transaction messaging platform is preparing to interact with the cross-border use of central bank digital currencies (CBDCs). SWIFT is teaming up with Capgemini to test ways to link multiple CBDC networks, as well as CBDC and traditional currency networks, as a proof of concept. [Read more]

Building regional payment areas: the Single Rule Book approach

A Bank for International Settlements working paper analyzes regional payment integration projects across the world to identify key lessons for future cross-border payment enhancements on regional and global level, focusing on the role of technology, law and regulation. It finds that ach border adds to the costs of a cross-border payment if crossing the border means entering into a different technological, regulatory and legal environment, with different systems, regulators, and courts. At the global level, mismatches between the inter-institutional framework on the back-end and the contractual relationship with clients on the front-end represent potential costs for the payment services provider and increase legal risk, prompting costly legal, due diligence manual adjustments in payments processes.  The paper concludes that globally coordinated action is needed to develop a comprehensive “single rule book” framework to guide and support regional payment integration. [Read more]

DLT-based enhancement of cross-border payment efficiency – a legal and regulatory perspective

Another BIS working paper published today concludes that financial law traditionally assumes that functions are concentrated in a single entity. Hence, the distribution of functions in distributed ledger technology (DLT) DLT with the need for additional agreements, ongoing coordination across, and governance arrangements among each participant. Further, in a cross-border context, multiple regulators and courts of various countries will be involved. All of these must decide whether for compliance with the law and regulations they look at DLT as a whole (‘ledger perspective’) or each individual DLT participant (‘node perspective’). On that basis the paper analyzes the extent to which the ledger or the node perspective should prevail. [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 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]

One thought on “Kiffmeister’s #Fintech Daily Digest (20220520)(Revised)

  1. I’ve revised the link to the SWIFT press release. It had been pointing incorrectly to an old 2021 one.

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