Kiffmeister’s #Fintech Daily Digest (20221107)

Bank of Korea finds performance issues with CBDC blockchain tech

“The Bank of Korea completed the second phase of its retail central bank digital currency (CBDC) simulations in late June. While it was happy with some aspects of its digital won simulations, such as using CBDC for offline payments and cross border remittances, it found the overall performance of the Ethereum-based blockchain insufficient, including the scaling solutions and privacy technology that was tested. One of its tests simulated peak demand by sustaining 4,200 transactions per second (TPS) for 30 minutes. At that activity level, users sometimes had to wait up to a minute for a response (latency).” [Read more at Ledger Insights and the Bank of Korea]

Coinbase surviving on USDC interest as YTD losses top $2 billion

Coinbase’s year-to-date losses now total $2.1 billion after the company booked a net loss of $556.5 million in the three months ending September 30, 2022. This is only half the $1.1 billion in red ink reported in Q2, but worse than Q1’s $430 million loss. The lone bright spot was interest income, which shot up 213% to $101.8 million thanks in large part to the U.S. Federal Reserve hiking its lending rates. Those high rates benefit Coinbase via its holdings of the USDC stablecoin, which was developed by both Circle and Coinbase via the Centre consortium in 2018. [Read more at Coin Geek]

Is FTX insolvent? Why is Binance selling FTT?

Binance is selling their holdings of the FTX exchange’s FTT token following revelations about the relationship between FTX and hedge fund/trading firm Alameda, which was founded by FTX CEO Sam Bankman-Fried. Binance helped incubate FTX, which has become its biggest competitor. Binance exited its equity position in 2021, receiving $2.1 billion, split between the BUSD stablecoin and FTT. Alameda’s $14.6 billion of assets are 40% FTT, and there is minimal information about Alameda’s $8 billion of liabilities. There are also questions around conflicts of interest as Alameda is said to be funneling most of its  trades through FTX to bootstrap the exchange’s liquidity. [Read more at Coin Journal]

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.

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