Kiffmeister’s #Fintech Daily Digest (20221121)

Grayscale refuses to share proof of reserves due to ‘security concerns’ as shares trade at a 45% discount to bitcoin

As I mentioned yesterday, the market value of Grayscale’s $10.5 billion Bitcoin Trust (GBTC) is trading at record low discounts to the price of Bitcoin (BTC). Grayscale has now said that it won’t share its proof of reserves with customers “due to security concerns.” Grayscale said each of its digital asset products is set up as a “separate legal entity” and reiterated that those digital asset products are “stored under the custody of Coinbase Custody Trust Company that the “laws, regulations, and documents that define Grayscale’s digital asset products prohibit the digital assets underlying the products from being lent, borrowed, or otherwise encumbered.”

Digital Currency Group (DGC) is the parent company of Grayscale, and Genesis. Last week, the lending arm of Genesis Global Trading paused new loan originations and redemptions. The lending arm of the bank serves an institutional client base and is known as Genesis Global Capital. At the end of its third quarter, it had more than $2.8 billion in total active loans. Peter Tchir speculates that some unwinding of the GBTC trusts could be worth exploring, but James Seyffart poured through the GBTC documentation and found language that makes it very difficult, plus it generates good fees for DGC which likely needs it badly. [Read more at CNBC]

Thailand and Vietnam launch QR payment linkage

The State Bank of Vietnam (SBV) and the Bank of Thailand (BOT) have launched a joint QR payment service as an alternative means of cross-border payments between the two countries, first announced in March 2021. The central banks in ASEAN have been actively working towards achieving true payment connectivity in the region. Most recently, Bank Indonesia, Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, and BOT had inked a MoU for cross border payments. [Read more at the SBV]

Easier said than done: why Italians pay in cash while preferring cashless

The Banca d’Italia published a paper that, based on data from a 2019 ECB survey of consumers, studies the determinants of Italian consumers’ payment choices at the physical point of sale (POS). The study also assesses the reasons why consumers mainly use cash for their payments although they would prefer to use other instruments, such as cards. The acceptance of cashless instruments at the point of sale and the value of the transaction are the main factors influencing payment choice. Men and residents in Northern and Central Italy pay with cards more than women and residents in Southern Italy, but these gaps narrow among people with digital skills. Consumers pay in cash, even though they would prefer to use a different payment instrument, due to a lack of acceptance of cashless instruments by merchants. [Read more at the Banca d’Italia]

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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