Kiffmeister’s #Fintech Daily Digest (20221111)

FTX files for Chapter 11 bankruptcy

FTX announced that it has moved to file for Chapter 11 bankruptcy protection, along with FTX US, Alameda Research and approximately 130 additional affiliated companies. FTX Digital Markets, FTX Australia, FTX Expess Pay and LedgerX (which does business as FTX US Derivatives) are not included. [Read the press release here]

For those interested in following the trails and tribulations around the FTX exchange collapse, I’m collecting my favorite articles here on my Diigo social bookmarking page. See also below for an update on the impact on the pegs of the two biggest US dollar-pegged stablecoins, Tether’s USDT and Circle’s USDC.

New York Fed and Monetary Authority of Singapore Collaborate to Explore Potential Enhancements to Cross-Border Payments Using Wholesale CBDCs

The Federal Reserve Bank of New York’s New York Innovation Center (NYIC) and the Monetary Authority of Singapore (MAS) announced Project Cedar Phase II x Ubin+, a joint experiment to investigate how wholesale central bank digital currencies (CBDCs) could improve the efficiency of cross-border wholesale payments involving multiple currencies. Project Cedar Phase II x Ubin+ will enhance designs for atomic settlement of cross-border cross-currency transactions, leveraging wholesale CBDCs as a settlement asset. [Read more at the NY Fed]

Atlantic Council launches global cryptocurrency regulation tracker

The Atlantic Council published new research that categorizes and explains how the world’s largest economies are regulating cryptocurrencies. It looks at 25 countries—G20 member countries, in addition to countries with the highest rates of cryptocurrency adoption including Iran, Pakistan, Philippines, Thailand, Ukraine and Vietnam.  Each country is assigned one of three regulatory statuses: legal (where all activities are permitted), partial ban (where one or more activity is not permitted), and general ban (where all activity is limited). It breaks regulations down by tax policy, requirements to combat money laundering and terrorist financing, consumer protection rules, and licensing and disclosure obligations. [Read more at the Atlantic Council]

Realizing Programmability in Payment and Settlement Systems

The Bank of Japan (BoJ) published a paper that summarizes programmability and related concepts. It shows that programmability can be found in existing payment and settlement mechanisms, and that programmability does not necessarily depend on distributed ledger technology. It then discusses how programmability is paving its way to play more important roles in future payment and settlement systems, including via embedding the programmability into the money itself (“programmable money”). [Read more a the BoJ]

Major stablecoins destabilized as market volatility and redemptions surge

Significant market volatility this week induced by the collapse of the FTX exchange has impacted stablecoins with many of them depegging temporarily. Tether’s USDT temporarily declined to $0.97 on November 10 as redemptions reportedly surpassed $600 million over the previous two days. Circle’s USDC fell to $0.977 very briefly. Both rapidly regained their pegs. Yesterday I reported that USDT had spiked down and USDC spiked up, but different sources tell different stories. Yesterday’s USDC graphic sourced CoinMarketCap.com whereas CoinGecko.com tells a different story (see below). with USDC also spiking down like USDT did. In any case, lots of volatility! [Read more on CoinTelegraph]

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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