Kiffmeister’s #Fintech Daily Digest (20221122)

For those interested in following the details of the trials and tribulations around the FTX exchange collapse, I’m collecting my favorite articles here on my Diigo social bookmarking page. Meanwhile, here are a couple that surfaced today.

Crypto brokerage Genesis Is said to warn of bankruptcy without funding

Digital-asset brokerage Genesis is struggling to raise fresh cash for its lending unit, and it’s warning potential investors that it may need to file for bankruptcy if its efforts fail. The rush for funding was precipitated by a liquidity crunch at the lender after the sudden collapse of FTX, Genesis halted redemptions shortly after revealing on November 10 that it had $175 million locked in an FTX trading account. [Read more at Bloomberg]

CoinMarketCap launches proof-of-reserve tracker for crypto exchanges

CoinMarketCap launched a proof of reserves (PoR) tracker that details the total assets of the most active crypto-asset exchanges, and their affiliated public wallet addresses, along with the balances, current price and values of the wallets, updated every 5 minutes. [Read more on Coin Telegraph]

Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths

For fans of “straw man” arguments, the Cato Institute published a digital dollar takedown. Most of the report is actually quite good, and I agree with most of the things the authors say about the dubious case for a US Fed-issued central bank digital currency (CBDC). But starting on page 7, they go down the privacy/control rabbit hole by assuming that a digital dollar will be designed as a control/surveillance coin, completely ignoring the possibility that it could be designed to offer the same privacy and user control as physical cash (see my IMF F&D article here). Rather than completely diss CBDC, they could have made their paper a call for action to insist that at least one layer of the digital dollar offer complete offline usability and privacy, or lend support to the ECash Act. [Anyways, you can download the paper at the Cato Institute]

How is the “world’s most advanced central bank digital currency” progressing?

The LSE Business Review published an article by the Center for Evidence-Based Management’s Martin C. W. Walker that reviews the Central Bank of the Bahama’s Sand Dollar CBDC experience. He documents the Sand Dollar’s very low take-up and opines that it was aimed at solving a financial exclusion problem that was not really a major problem, and it didn’t do it very well. Also there did not seem to be an objective evaluation of alternatives solutions, such as encouraging greater use of bank issued debit cards and more efforts to educate the older generation in the use of electronic payments. [Read more on the LSE Business Review]

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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