Kiffmeister’s #Fintech Daily Digest (20220522)(Revised)

G7 Finance Ministers, Central Bank Governors Issue Statement on CBDCs (Link revised)

G7 Finance Ministers and Central Bank Governors have issued a statement that, among other things, highlighted the opportunities and implications of central bank digital currencies (CBDCs) and their potential role in future payment transactions. “[It encouraged] jurisdictions exploring CBDCs to examine the international dimensions of CBDCs, in particular their cross-border use. CBDCs with cross-border functionality may have the potential to spur innovation and open up new ways to meet users’ demand for more efficient international payments, but continued international cooperation will be important to understanding and minimizing any negative spillovers to the international monetary and financial system.” [Read more]

Tether’s accountant waves red flag

The language used by Tether’s accountant in the latest quarterly attestation report suggests it’s worried about the future existence of the stablecoin. MHA Cayman used ‘going concern’ language, a form of words that implies a business is stable enough to meet its obligations for the time being, but which suggests the accountant is taking a step back in judging the business as viable. The accountant added other new language to Tether’s attestation, suggesting significant uncertainty with respect to the valuation of Tether’s assets and its exposure to possible counterparty risks (see red parts in the except below). (Read more)

Circle to Issue Weekly USDC Reserve Reports

Circle CEO Jeremy Allaire announced that company will now provide weekly attestations concerning stablecoin USD Coin (USDC) reserves and liquidity. According to the latest week’s figures, all $52.9 billion USDC in circulation are fully backed by cash ($12.8 billion) and short-dated U.S. Treasury securities ($40.2 billion expressed in terms of fair market value) held at U.S. regulated financial institutions on behalf of USDC holders. This weekly reporting is in addition to the the monthly attestation reports which, like Tether’s, are published with long lags.  The last one (covering the accounts as of March 31, 2022) was published at the end of April. [Read more]

US Considers Legislation on Mandatory Acceptance of Cash

The U.S. House Financial Services Committee passed the Payment Choice Act that, if enacted, would require applicable retail businesses to accept cash for transactions of less than $2,000 and prohibit them from charging cash-paying customers a higher price relative to customers not paying with cash. Retail businesses would retain flexibility to accept payments through any other means. Exceptions are provided in the event that a retailer temporarily has insufficient cash on hand to make change, or experiences a systems failure that temporarily prevents it from processing cash payments. Enforcement of alleged violations would be by a civil action brought by any injured person in state or federal court. [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]