Kiffmeister’s #Fintech Daily Digest (20221119)

FSB outlines framework for monitoring progress toward the G20 cross-border payments targets

The Financial Stability Board (FSB) published its report to the G20 on the framework for monitoring progress toward meeting the targets for the G20 Roadmap for Enhancing Cross-border Payments, to achieve cheaper, faster, more transparent, and more accessible payments. The framework includes key performance indicators defined across the 11 targets for the three market segments – wholesale, retail, and remittances. Notably, the definitions of the wholesale and retail market segments have been adjusted to more clearly separate the differing use cases and end-user experiences and better align the definitions with those most typically used by the payments industry and end-users.

Wholesale transactions were defined as those between financial institutions, and retail transactions as those that were neither between financial institution end-users nor in the third market segment – remittances. Going forward, the wholesale market segment will include all payments with a value equal to or exceeding a specified threshold regardless of whether the end-users are financial institutions. The threshold will be set at a level that captures the use cases in this market segment, such as high-value corporate business-to-business. Relatedly, retail payments will be payments with a value less than the specified threshold, not including remittances. [Read more at the FSB]

Instant Payments: Regulatory Innovation and Payment Substitution Across Countries

The IMF published a paper that makes the case for instant payment systems as an alternative to retail central bank digital currency (CBDC). Instant, or fast, payments are credit transfers completed and settled within seconds or minutes. They have low costs, reduce payment risk, and have significantly replaced the use of cash, cards, or check and direct debit payments. The authors of the report note the role played by regulators in promoting instant payments and identify instances of significant payment instrument substitution across 12 advanced and emerging market economies. This substitution reflects the realized demand for attributes offered by instant payments. As these attributes are quite similar to those for CBDC, the demand for retail CBDC (if issued) may be less compelling. [Read more at the IMF]

State of Instant and Inclusive Payment Systems in Africa

The State of Instant and Inclusive Payment Systems in Africa report is an AfricaNenda’s initiative together with the World Bank and the United Nations Economic Commission for Africa. The report aims to inform payment actors in Africa and beyond about the developments in the instant retail payment system ecosystem on the continent. This first edition highlights the current landscape of instant payment systems, including an assessment of the inclusivity of such systems, through their accessibility to all end-users, their capacity to ensure fair access and design input opportunities for all licensed payment providers. The report also dives into end users’ experiences pointing to the fact that IPS are still far from meeting all consumers’ payment needs. [Read more at AfricaNenda]

Crypto-assets: evolution and policy response

De Nederlandsche Bank (DNB) published a paper intended underpin the central bank’s crypto-asset policy position. The study aims to: (i) deepen understanding of the functioning of crypto-assets and their attractiveness; (ii) revisit their main opportunities and risks, and (iii) summarize views on ongoing efforts regarding regulation, supervision and enforcement. [Read more at the DNB]

Digital Euro Association Digital Money Academy

I will be discussing global central bank digital currency (CBDC) developments at the Digital Euro Association’s Digital Money Academy on November 29. If you want to get into CBDCs, register for the Academy 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.

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