Kiffmeister’s #Fintech Daily Digest (20221004)

Financial Stability Oversight Council Releases Report on Digital Asset Financial Stability Risks and Regulation

The Financial Stability Oversight Council (FSOC) released its report on the financial stability risks and regulatory gaps posed by various types of digital assets and provides recommendations to address such risks. To address regulatory gaps, the FSOC recommends the passage of legislation providing for rulemaking authority for federal financial regulators over the spot market for crypto-assets that are not securities; steps to address regulatory arbitrage including coordination, legislation regarding risks posed by stablecoins, legislation relating to regulators’ authorities to have visibility into, and otherwise supervise, the activities of all of the affiliates and subsidiaries of crypto-asset entities, and appropriate service provider regulation; and study of potential vertical integration by crypto-asset firms. [Read more at the FSOC]

Mastercard launches new crypto fraud protection tool

Mastercard is launching Crypto Secure to help banks assess the risk of crime associated with crypto merchants on its network. The service, powered by Mastercard-owned blockchain security startup CipherTrace, combines applies artificial intelligence to blockchain data and public records of crypto transactions, along with other sources, to determine crime-related risks of crypto exchanges within the Mastercard network. On the Crypto Secure platform, banks and other card issuers are shown a dashboard with color-coded ratings representing the risk of suspicious activity, with severity of risk ranging from red for “high” to green for “low.” [Read more at CNBC]

Fraud and scams are becoming more commonplace on P2P payment service Zelle

According to a report by from the office of U.S. Senator Elizabeth Warren, fraud and scams are a growing problem on peer-to-peer (P2P) payment service Zelle, and the banks that run the platform are not refunding the vast majority of defrauded consumers, breaking their promises to their customers and potentially violating federal law. A response by the industry acknowledged that Zelle,  like every instant P2P payment service, is not entirely free from those who seek to defraud users, but expanding the bank liability framework would have adverse impacts on consumers choice, the cost of the service, and on small financial institutions for whom the costs related to the potential for unlimited liability would be too onerous. [Read more at Quartz]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.