Month: December 2023

Kiffmeister’s #Fintech Daily Digest (20231214)*

~ kiffmeister

Exploring blockchain-powered market infrastructures for traditional exchanges

Satoshi Capital Advisors CEO Josiah Hernandez and I have written a primer on blockchain-powered capital market infrastructures. It shows how they can increase the effectiveness and efficiency of the capital market(s) they operate within. However, there are notable challenges associated with implementing them, which the paper also covers. [Read more at SSRN]

Leaving the Wild West: Taming crypto and unleashing blockchain

And by coincidence, the IMF Managing Director Kristalina Georgieva spoke enthusiastically about the benefits of “new trading infrastructure using blockchain technology refined and popularized by the crypto boom”:

Today, banks create an asset in paper form, deposit it with a custodian, and message intermediaries so each may reconcile its version of who owns what. It works, but it’s expensive. Instead, imagine establishing the asset as an entry, or “token,” on a blockchain, and trading it by updating the blockchain. Potential gains could be large: The blockchain is accessible by all transacting parties, it is transparent and tamper-proof, and settlement is fast. Financial assets in token form can also be divided into parts to serve smaller investors. And transactions can be automated and bundled to occur simultaneously. This lowers the risk that counterparties or trades fail before an asset gets to its rightful owner.

Basel Committee consults on bank stablecoin exposure standards

The Basel Committee on Banking Supervision is proposing revisions to various elements of the prudential standard for bank exposures to crypto-assets published in December 2022. They flesh out the criteria on the composition of the reserve assets that back stablecoins, to be eligible for inclusion in the Group 1b category of crypto-assets, and thus benefit from a preferential regulatory treatment. For example, reserve assets should be comprised of central bank reserves, short-term marketable securities guaranteed by sovereigns and central banks with high credit quality, and short-term deposits at high credit quality banks. If longer-term assets are allowed, the issuer would have to overcollateralize the stablecoin holder claims. [Read more at the BIS]

Fnality launches DLT wholesale payment system in United Kingdom

London-based Fnality, launched its distributed ledger technology (DLT) based Sterling Fnality Payment System (£FnPS). This digital financial market infrastructure (FMI) and regulated payment system leverage an Omnibus Account held by £FnPS in the Bank of England real-time gross settlement (RTGS) service. The intent is to scale it up to create a seamless global liquidity management ecosystem for payment, payment versus payment (PvP), and delivery versus payment (DvP) transactions in both wholesale financial markets and emerging tokenized asset markets. This is arguably a wholesale central bank digital currency (CBDC) based platform, or at least a synthetic CBDC one, although I’m waiting for more architectural detail to make that determination. [Read more at Fnality]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231213)*

~ kiffmeister

CBDCTracker.org has updated its open-source central bank digital currency (CBDC) project database. [More details can be found in the LinkedIn post by Atakan Kavuklu]

Report of the Japan Ministry of Finance Expert Panel on CBDC

Japan’s Ministry of Finance (MOF) has published an English translation of the Report of the Expert Panel on CBDC. The Panel asks MOF to coordinate with relevant ministries and Bank of Japan (BOJ) on design, and to clearly explain the rationale behind CBDC to the public. The Panel also recommends that the government and BOJ maintain their commitment to supplying cash as long as there is demand from the public, and it found no strong reason for offline functions to be introduced at the outset considering risks of double spending and counterfeiting. Also, remuneration is not recommended for the time being as it could undermine the convertibility with cash at par. [Read more at the MOF]

S&P Global Ratings launches stablecoin stability assessment

S&P Global unveiled ratings for eight stablecoins. On a grading scale of one (very strong) to five (very weak) USDC, Pax Dollar (USDP) and Gemini Dollar (GUSD) scored all scored two strong), while Tether’s USDT scored a four (constrained). USDT was penalized for its lack of transparency and for holding some higher risk assets. The ratings are based on an assessment of asset quality risks, including credit, market value, and custody risks, the degree of any risk mitigants like overcollateralization requirements and liquidation mechanisms, governance, legal and regulatory framework, redeemability and liquidity, technology and third-party dependencies, and track record. [Read more at S&P Global]

JCB, IDEMIA extend offline digital currency project

Japanese card payments network JCB, identity firm IDEMIA and Malaysia’s Soft Space are exploring offline digital currency functionality. A first phase of the project demonstrated connectivity between existing card and payment infrastructures, and a potential [central bank?] digital currency, showing that current point of sale solutions don’t need adaptation. The new phase will test using mobile wallets to transfer digital currency between them without an internet connection using near field communications (NFC). Another scenario will test the offline use of stored value payment cards that transfer digital currency via mobile phones using NFC to transfer funds. [Read more at IDEMIA]

FASB confirms ‘fair value’ approach for corporate crypto holdings

The U.S. Financial Accounting Standards Board (FASB) published a standards update that will let corporations recognize “fair value” changes in crypto holdings. The move will benefit companies with crypto on their balance sheets, like MicroStrategy. Under the existing rulebook, companies have to report a loss if the crypto they hold is worth less than the purchase price, even if they haven’t sold the assets, but they couldn’t report gains when the crypto holdings are worth more. Under the new rules, both losses and gains on crypto holdings are to be recognized in net income. [Read more at FASB]

Coinbase Project Diamond platform for creating digitally native assets

“Project Diamond, a smart contract-powered platform designed by seasoned asset managers for institutions to seamlessly create, buy, and sell digitally native assets, has launched with the execution of the first debt instrument on the platform, in preparation to enter the Abu Dhabi Global Market (“ADGM”) RegLab sandbox. The platform leverages the Coinbase technology stack and Base to deliver secure, compliant, capital market activity that will continue to unlock institutional adoption of the global cryptoeconomy.” [Read more at Coinbase]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231212)*

~ kiffmeister

High-level technical requirements for a functional CBDC architecture

The Bank for International Settlements (BIS) published a report by the Consultative Council for the Americas (CCA) Consultative Group on Innovation and the Digital Economy (CGIDE) that outlines high-level technical requirements for a retail central bank digital currency (CBDC) architecture that will shape a future CGIDE proposal for a CBDC proof of concept. The technical requirements considered include interoperability, scalability, user-centric design, security and data privacy. The proposed CBDC architecture based on these technical requirements aims to serve as a general reference for central banks conducting research on CBDC or developing their own initiatives. [Read more at the BIS]

SC Ventures and G+D complete PoC on different types of CBDC systems

Standard Chartered and Giesecke+Devrient (G+D) completed a proof-of-concept (PoC) that tested the feasibility of conducting real-time multilateral cross-currency CBDC transfers on the Universal Digital Payments Network (UDPN), involving both distributed ledger technology (DLT) and non-DLT-based technologies. The PoC explored the indirect model, where commercial banks manage CBDC wallets and settlements directly on the UDPN, while the central bank handles wholesale settlement between commercial banks and keeps all transaction records. It also tested the direct model where central banks manage wallets and settlements within a centralized CBDC system. [Read more at Fintech News Singapore]

RBI approves Crunchfish Digital Cash for offline retail payments

Crunchfish in partnership with HDFC Bank and IDFC First Bank completed a joint project in the Reserve Bank of India (RBI) Regulatory Sandbox to demonstrate and pilot offline retail payments. The Crunchfish platform is implemented as a trusted application that uses certified virtual secure element as well as public key infrastructure (PKI), aiming to boost adoption of digital payments in areas of no or low network by enabling transactions without the need to have a network connection. According to an RBI statement on December 11, 2023, “the solution now may be considered for adoption by regulated entities subject to compliance with applicable regulatory requirements”. [Read more at the RBI]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231211)*

~ kiffmeister

Digital ruble pilot project will continue until end of 2024

The digital ruble launch will begin no earlier than 2025, after the completion of the retail central bank digital currency (CBDC) pilot that started on August 15, 2023. The first group of participants consists of 600 people drawn from employees of the Bank of Russia and clients of the 13 participating banks, plus 30 businesses in eleven cities. In 2024 the number of participants will expand, but will still remain limited. The pilot will continue at least until the end of 2024 and, if necessary, will be extended. The Bank of Russia also noted that, although there are no transaction fees to users, merchants pay a 0.3% commission fee for accepting payments in digital rubles. [Read more at TASS]

Reserve-backed tokens, and is it time for narrower banks?

Bank for International Settlements (BIS) staffer Tirupam Goel posted a paper discusses the pros and cons of reserve-backed tokens (RBTs) – stablecoins issued by well-regulated private entities that are solely and fully backed by central bank reserves. (The IMF calls them “synthetic CBDC”) They are safer than, and can crowd out, current stablecoins, they can adopt a more flexible design than retail CBDCs and thus foster greater competition and innovation, and compared to bank deposits, RBTs are immune to runs and unencumbered by legacy features. However, they could disintermediate commercial banks during normal times and exacerbate runs during stress periods. [Read more at SSRN]

How sustainable is payment by cash?

The European Central Bank (ECB) published an analysis of the environmental impact of euro banknotes as a means of payment based on the European Commission’s Product Environmental Footprint (PEF) methodology. It accounted for all the activities of a full cash cycle of banknotes, from raw material acquisition and manufacturing to the disposal of euro banknotes. It found that the average annual value of cash payments per euro area citizen in 2019 was 101 micropoints (µPt), equivalent to an driving a standard car for 8 km. [Read more at the ECB]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231210)*

~ kiffmeister

Tether introduces new policy to strengthen ecosystem security

Stablecoin issuer Tether initiated a new voluntary wallet-freezing policy designed to combat activity connected with Sanctioned persons on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List. This adds to the Sanctions controls Tether already enforces for wallets on its platform. Tether has taken additional precautionary measures, including freezing wallets previously added to the SDN List. “The primary objective behind this approach is to proactively prevent any potential misuse of Tether tokens and enhance security measures.” [Read more at Tether]

The dark side of the moon? Fintech and financial stability

The IMF published a paper that traces the development of fintech (excluding cryptocurrencies) and empirically assess its impact on financial stability in a panel of 198 countries over the period 2012–2020. The impact magnitude and statistical significance of fintech depend on the type of instrument (digital lending vs. digital capital raising). However, the overall effect turns out to be negative, albeit statistically insignificant, because of the overwhelming share of digital lending in the total. While digital capital raising is estimated to have a positive effect on financial stability in advanced economies, its effect is negative in developing countries. [Read more at the IMF]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231208)*

~ kiffmeister

Republic of Palau stablecoin program: Phase 1

The Republic of Palau Ministry of Finance (MOF) published the results of its Palau Stablecoin (PSC) proof-of-concept (POC) in which 168 government employee volunteers and three selected retailers tested the platform from June 30 to September 30, 2023. Ripple provided the underlying technology. After being paid in PSCs, retailers were then free to request a redemption of the PSC received for Fiat USD from the MOF custody funds. Both volunteers and retailers responded positively to the value proposition brought by the PSC as a digital payment system. If future phases are approved by the government, they will focus on building a robust ecosystem that integrates financial institutions, regulatory bodies, legal frameworks, businesses and users into the network. [Read more at the Palau MOF]

Taiwan continues work on wholesale, retail CBDC targeting tokenization

The Central Bank of the Republic of China (Taiwan) has completed a technical feasibility study for a wholesale central bank digital currency (CBDC) and is planning retail CBDC pilots to follow up on the proof-of-concept completed in 2022. Supporting tokenization is a main motivation for the wholesale CBDC work, including providing an anchor for tokenized deposits, stablecoins and a unified ledger, plus an additional payment option in a tokenized world. The retail CBDC work will include researching an offline solution. [Read more at the Central Bank of the Republic of China]

Basel Committee to consult on bank treatment of crypto, stablecoins

The Basel Committee on Banking Supervision reviewed various elements of the prudential standard for bank exposures to crypto-assets published in December 2022. It agreed to consult on potential targeted revisions related to the criteria for stablecoins to receive a preferential “Group 1b” regulatory treatment. The Committee will also consult on various technical amendments to help promote a consistent understanding of the standard. The Committee concluded that crypto-assets that use permissionless blockchains create risks that cannot be sufficiently mitigated at present and therefore agreed to retain the existing “Group 2” treatment for them (1,250% risk weight). A consultation paper will be published before end-2023. [Read more at the Bank for International Settlements]

UK FCA sets out new rules to maintain access to cash

The U.K. Financial Conduct Authority (FCA) proposed new rules to maintain reasonable access to cash for personal and business customers across the United Kingdom. Under the proposals, designated banks and building societies will need to assess gaps in access to cash. These assessments need to take into account local factors such as demographics and transport. Where firms identify gaps, they will need to act to address these needs, like delivering reasonable additional cash services to fill gaps, and ensuring they do not close cash facilities, including bank branches, until any additional cash services identified are available. [Read more at the U.K. FCA]

Cash is the most used payment method in Europe: Bearing Point

According to a BearingPoint survey across seven European countries, cash is the most used payment method overall with contactless debit cards second. Cash use is significantly higher in Austria (79%) and Germany (71%), but respondents from Switzerland (63%), Ireland (61%), the Netherlands (57%), and France (55%) also show a relatively high level of cash use. Finland has a significantly lower frequency of cash usage at 43%. [Read more at BearingPoint]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231207)*

~ kiffmeister

Chinese visitors to Singapore can use digital yuan

The Monetary Authority of Singapore (MAS) and People’s Bank of China (PBOC) have agreed to allow tourists from either country to use the pilot digital yuan central bank digital currency (CBDC). Visitors to China have likely been able to use the digital yuan for some time, so the innovation here is that Chinese visitors will be able to use it in Singapore. This follows increasing integration between the digital yuan and Hong Kong, enabling visitors in both directions to use the CBDC, but given China’s control over Hong Kong, that’s rather different. [Read more at the MAS]

Robinhood launches crypto trading services in Europe

Robinhood launched crypto trading services for over 25 crypto-assets on its platform for all eligible European Union customers. This comes just a week after the firm launched its stock trading application in the United Kingdom. The new crypto app charges zero trading fees, and customers will also receive a percentage of their trading volume back every month in Bitcoin. The new platform also prioritizes transparency, allowing customers to view the spread, including the rebate received by the company from sell and trade orders in the app. [Read more at Robinhood]

Cash usage grows for first time in a decade

Cash usage in the United Kingdom has grown for the first time in a decade, according to the British Retail Consortium (BRC) annual Payments Survey, with coins and banknotes accounting for 19% of transactions in 2022, , up from 15% in 2021. It’s the first time that the retailer lobby group has recorded any growth in cash uptake since it first began monitoring payments in 2013. Card payments were used for 76% of transactions (83% in 2021), with debit cards accounting for four-fifths of these transactions. [Read more at the BRC]

Coinbase rolls out crypto transfers via links sent on WhatsApp, Telegram (republished from yesterday)

Coinbase Wallet now allows for the transfer of crypto through a link that can be sent through popular social media sites and messaging apps apps like iMessage, Telegram, WhatsApp, Facebook, Instagram and TikTok. And there are no payment fee when sending USD Coin (USDC). Clicking the link will take the recipient to their device’s app store to download Coinbase Wallet — if not already downloaded — where they can create a wallet in one click. If the funds aren’t claimed within two weeks, they will be returned to the sender. [Read more at Coinbase]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231206)*

~ kiffmeister

Coinbase rolls out crypto transfers via links sent on WhatsApp, Telegram

Coinbase Wallet now allows for the transfer of crypto through a link that can be sent through popular social media sites and messaging apps apps like iMessage, Telegram, WhatsApp, Facebook, Instagram and TikTok. And there are no payment fee when sending USD Coin (USDC). Clicking the link will take the recipient to their device’s app store to download Coinbase Wallet — if not already downloaded — where they can create a wallet in one click. If the funds aren’t claimed within two weeks, they will be returned to the sender. [Read more at Coinbase]

Stablecoin proof of reserves proposals seek more details

The American Institute of Certified Public Accountants (AICPA) published proposed criteria for stablecoin issuers when they disclose their proof of reserves. It asks for more details than any stablecoin issuers currently provide in their disclosures. For example, the call for issuers to disclose the banks where they hold cash, the amount of redeemable stablecoins on each blockchain, and details about tokens that are not redeemable, either temporarily or permanently (e.g., pre-minted or blacklisted tokens). Plus proof of reserves will need to disclose the conditions required to redeem the stablecoin directly. [Read more at the AICPA]

State of stablecoins: Signs of returning liquidity

Coin Metrics published an update on stablecoin market developments, concluding that the expanding supply of stablecoins serves as a clear indicator of rising activity and usage within the digital asset ecosystem, with Tether on Tron leading the charge. Despite challenges in the U.S. regulatory environment and a complex political landscape, stablecoin liquidity has shown impressive resilience. The update attributes this to the wide utility of stablecoins, through avenues such as decentralized finance (DeFi) pools to exchanges and in diverse yield generating products. These trends also evidence the central role stablecoins play in the crypto-economy. [Read more at Coin Metrics]

Buy now, pay later: a cross-country analysis

The Bank for International Settlements (BIS) reviewed buy now, pay later (BNPL) payment schemes. It found that, BNPL is more widespread in countries with greater e-commerce penetration, higher inflation, more inefficient banking systems, and looser financial and consumer protection regulation. Versus traditional consumer credit, BNPL users are typically younger, with less education, more debt, lower credit scores and higher delinquency rates. BNPL schemes are accessible even to consumers without a credit history or stable income and do not typically affect their credit scores. Customers pay interest-free instalments, which are typically not reported to credit bureaus, while merchants pay fees to increase sales and shift credit risk to BNPL platforms. Relying primarily on those fee revenues, BNPL platforms have faced profitability challenges due to high operating costs and rising credit losses. [Read more at the BIS]

How AI is supercharging the CBDC world

Chavanette Advisor’s Hubert Knapp ran through some of the applications of artificial intelligence (AI) to central bank digital currencies (CBDCs). These include liquidity management at the micro and macro level, cross-border payments, and fraud detection. [Read more on LinkedIn]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231205)*

~ kiffmeister

HKMA plans second tokenized green bond issue

The Hong Kong Monetary Authority (HKMA) is set to issue a second batch of tokenized green bonds. In February 2023, the Hong Kong Government issued its first tokenized green bond, which shortened the settlement process from the typical five business days to one day. The HKMA facilitated clearing and settlement, utilizing a private blockchain network. The second tokenized green bond issuance will explore additional new features, possibly using blockchain technology for the full lifecycle of bond issuance, from creation to redemption. [Read more at the HKMA]

Launch of FPS x PromptPay Link between Hong Kong and Thailand

The HKMA and the Bank of Thailand launched the FPS x PromptPay Link for cross-border QR payment between Hong Kong and Thailand. This provides a fast, secure and easily accessible cross-border retail payment service to people travelling between Hong Kong and Thailand, who will be able to make retail payments by using their mobile payment applications to scan the Hong Kong FPS QR code and Thai PromptPay QR Code displayed by merchants respectively. Merchants will be able to receive their funds immediately. [Read more at the HKMA]

Canadians report a love-hate relationship with cash

According to Payments Canada, while the value of cash used in purchases has declined 41% from 2017-2022, only 13% of Canadians report having gone completely cashless. Of the 87% that still use cash, 31% use cash for day-to-day purchases, and 37% hold on to it for emergencies. While cash is used less often for point-of-sale purchases, the prospect of cashless stores is a concern for 52% of Canadians. And they are divided on the prospects of a central bank digital currency (CBDC), 36% finding it appealing and 30% not. One in four say they would not use a digital Canadian dollar, with 63% who would still use cash if a digital Canadian dollar was introduced. [Read more at Payments Canada]

The recent evolution of consumer payments in Australia

The Reserve Bank of Australia’s (RBA’s) Consumer Payment Survey showed that Australians making in-person payments with cash has dropped from 32% of total payments in 2019 to 16% in 2022. Just over half did not use cash at all in 2022, up from about one-third in 2019. However, around 5% use cash for all in-person payments, privacy and security or budgeting. 29% of Australians hold no cash on their person versus 22% in 2019. The share of people holding cash in other places was unchanged from 2019 at around 40%, consistent with precautionary or store-of-wealth demand. This is seen most in the growth of high denomination banknotes in circulation. [Read more at the RBA]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20231202)*

~ kiffmeister

MPs warn that Bank of England retail digital pound work should “proceed with caution”

The U.K. Parliamentary Treasury Committee urged the Bank of England and HM Treasury to address data privacy and financial stability concerns before considering the implementation of a retail central bank digital currency (CBDC) or ‘digital pound’. To mitigate financial stability risks, the Committee’s report suggested lowering the mooted £20,000 individual holding limit to £10,000. The report also urged the government to alleviate privacy concerns that organizations or the government could use a retail digital pound to monitor or control how users spend their money. These concerns could be mitigated through robust regulation and legislated protections related to the ability of any future government to access people’s data. [Read more at the U.K. Parliament]

First digital securities transactions commercially settled with real wholesale CBDC

December 1, 2023 saw the world’s first commercial settlements of digital securities transactions with real wholesale CBDC on a regulated distributed ledger technology (DLT) based financial market infrastructure (SDX). One was a CHF 105 million franc digital four-year bond issued by the Canton of Basel-Stadt, and the second was a CHF 100 million digital 11-year bond issued by the Canton of Zurich. The wholesale CBDC was issued by the Swiss National Bank as part of Helvetia III. In addition to the settlement on the SDX platform, part of the settlement took place on SIX SIS, the national central securities depository (CSD) of the Swiss financial market and an International Central Securities Depository (ICSD), which runs a node on SDX. [Read more from the SNB’s Thomas Moser on LinkedIn]

Interoperability aspects of CBDC across ecosystems and borders

The Journal of Payments Strategy & Systems published a paper by Gieseke+Devrient’s Lars Hupel that describes the state of the art for interoperability between different digital ecosystems, including bridges, exchanges and wrappers. The precise design of such solutions is highly context-dependent and requires careful analysis of use cases, stakeholders, and operational concerns. With regards to CBDC the challenges relate to the multiple connection points, and the absence of a single technological means to address all of them uniformly. The paper puts forward some suggestions around different CBDC design options and potential use cases, and discusses some case studies. [Download the paper on SSRN]

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work for a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]