Month: October 2024

Kiffmeister’s #Fintech Daily Digest (20241031)

~ kiffmeister

BIS hands over mBridge CBDC payment system (Ledger Insights)

The Bank for International Settlements (BIS) has handed the mBridge central bank digital currency (CBDC) based cross-border payments platform over to the central banks of China, Hong Kong, Saudi Arabia, Thailand and the United Arab Emirates (UAE). According to BIS General Manager Agustín Carstens, this was not because of “political considerations” but because after the project’s four years it is “at a level where the partners can carry it on by themselves”. This has happened already with other projects such as the Swiss National Bank’s Project Helvetia. By “political considerations”, Mr. Carstens was referring to stories that during discussions among central bankers and finance chiefs at the October 2024 International Monetary Fund and World Bank Annual Meetings, concerns were expressed about the fact that China is supplying the platform’s key technological backbone, and that China and the UAE are BRICS members. (In that regard it is notable that the U.S. Federal Reserve has not joined the project.) [Read more at the BIS]

ECB looking for innovation partnerships for the digital euro (ECB)

The European Central Bank (ECB) has established a digital euro innovation platform to collaborate with stakeholders. The main goal is to (i) demonstrate how conditional payments could be implemented on a technical level, (ii) provide the opportunity for participants to interact with simulated digital euro interfaces, and (iii) explore additional use cases, ideas and visions that stakeholders may have for the digital euro. The ECB is encouraging all interested stakeholders to contribute, and it will carefully consider all applications before making selections in early January 2025. Selected “visionaries” will be invited to half-day workshops to present their idea to the ECB, and will be asked to provide a summarizing outcome report. [Read more at the ECB]

Finding the “just right” level of decentralization (NIM)

The Nuremberg Institute for Market Decisions (NIM) published an article on the challenges of finding the “just right” level of decentralization in the digital platform economy. Blockchain platforms rely on a predefined, algorithmically encoded and publicly visible protocol that enables a network of peers to maintain the platform jointly, rather one central party consolidating all decision authority and control over the platform. However, complete decentralization is no panacea for reducing the power of intermediaries. It comprises several trade-offs, and many challenges are as yet unsolved. Although promising solutions are looming on the horizon, the article proposes that reintroducing some level of centralization might be a more reliable and available solution in the short run. [Read more at NIM]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241030)

~ kiffmeister

Digital Tenge pilot project streamlines VAT reimbursement for exporters (LinkedIn)

The National Bank of Kazakhstan (NBK) in collaboration with the State Revenue Committee (Tax Authority) of the Ministry of Finance has launched a Digital Tenge pilot project focused on value-added tax (VAT) reimbursement for exporters. This initiative leverages the programmability of central bank digital currency (CBDC) to automatically mark VAT in business-to-business (B2B) transactions. By doing so, the need for manual checks by tax authorities, is eliminated, significantly streamlining the reimbursement process. It reduced the reimbursement time from 70–75 working days to 10–15 days, with the goal of achieving instant reimbursement in the near future. In total, approximately 40 billion worth of Digital Tenge is now in circulation in the various pilot projects. [Read more on LinkedIn]

Circle raises fees for large near-instant USDC redemptions (Bloomberg)

Circle increased the fees it charges for near-instant cash outs of its USDC stablecoin on the Circle Mint platform for the second time in 2024. Circle Mint enables wholesale providers such as exchanges, institutional traders, wallet providers, banks, and large financial institutions to directly redeem USDC 1:1 for USD from Circle. Circle Mint is not available to individuals. All USDC redemptions used to be free and unlimited, but in February 2024 a 0.1% fee on near-instant redemptions above $15 million was imposed on Circle Mint customers. Under the new fee schedule, Circle Mint customers processing more than $2 million net in daily redemptions will incur a fee that starts at 0.03% and increases in tranches to as much as 0.10% for redemptions above $15 million. Basic redemption, which offers a fee-free option, regardless of transaction volume, remains available to all Circle Mint customers as well, but processing can take up to two business days. [Read more at Circle]

BTW Tether charges the greater of $1,000 or 0.10% per USDT redemption transaction, and there is a minimum $100,000 redemption amount. Tether reportedly aims to send the funds to the user’s bank account via wire transfer within 1-3 business days. [Read more at Tether]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241029)

~ kiffmeister

Digital euro sparks sovereignty battle between EU governments and ECB (Politico)

According to Politico, a battle is brewing between the European Central Bank (ECB) and several European Union national governments over the holding limits that would be applied to a potential digital euro. Under the European Parliament’s draft digital euro regulation, the ECB would decide on holding limits, consistent with a vision of the digital euro as an expression of European monetary sovereignty. However, at least nine countries, including Germany, France and the Netherlands, are reportedly concerned that allowing the ECB to set the limit would leave the institution with exclusive influence over a new tool that could have outsized effects on banking stability. [Read more at Politico]

BIS debates ending the mBridge cross-border payments project (Bloomberg)

According to Bloomberg, the Bank for International Settlements (BIS) is debating whether to shut down its wholesale central bank digital currency (CBDC) based mBridge cross-border payment project. The platform initially was developed by the central banks of China, Thailand, Hong Kong and the United Arab Emirates under the BIS’s Innovation Hub, and recently reached the minimum viable product (MVP) stage. The U.S. Federal Reserve has not joined the project. During discussions among central bankers and finance chiefs at the October 2024 International Monetary Fund and World Bank Annual Meetings, concerns were reportedly expressed about the fact that China is supplying the platform’s key technological backbone. [Read more at Bloomberg]

The consumer value proposition for a hypothetical digital Canadian dollar (BOC)

The Bank of Canada (BOC) published a paper that explores the consumer value proposition of a hypothetical digital Canadian dollar. It employs a methodology that allows participants to interact with research prototypes of increasing complexity to reveal their preferences, constraints, and adoption influences. Qualitative insights are corroborated using quantitative, large-population surveys and contrasted with results from a Bank of Canada open online public survey. The results show that most participants would support the issuance of a digital dollar, but broad early adoption is unlikely given that available payment methods meet most user needs. Important considerations for appeal and adoption include universal merchant acceptance, low costs, easy access, simplified online payments, shared payment features, budgeting tools, and customizable security and privacy settings. Participants cited these features far more often than offline functionality and the ability to make anonymous payments. The results also show that certain groups may strongly resist a digital dollar if they conflate its launch with the end of cash issuance. [Read more at the BOC]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241028)

~ kiffmeister

HKMA partners with Banco Central do Brasil and Bank of Thailand on tokenization initiatives (HKMA)

The Hong Kong Monetary Authority (HKMA) has established new cross-border partnerships with Banco Central do Brasil (BCB) and the Bank of Thailand (BOT) to explore cross-border payment-versus-payment (PvP) and delivery-versus-payment (DvP) settlement use cases in areas such as trade finance payments and carbon credits. In the HKMA-BCB case the HKMA will link its Project Ensemble central bank digital currency (CBDC) sandbox to the BCB Drex CBDC pilot platform. In the HKMA-BOT case, the HKMA will link the Ensemble sandbox to the BOT’s Project San experimental tokenization platform, and test linking the two platforms with distributed ledger technology (DLT) based financial market infrastructures (FMIs). The BOT’s Project San, an internal initiative started in June 2024, aims to build and test a prototype for the tokenisation ecosystem. This includes a wholesale settlement engine, EVM-compatible ledgers supporting tokenised private money and assets, and interoperability mechanisms. [Read more at the HKMA here (on the HKMA-BCB part) and here (HKMA-BOT)]

HKMA provides updates on its fintech-related initiatives (HKMA)

Along with the aforementioned Project Ensemble collaborations, the HKMA provided updates on its other initiatives to spearhead fintech development in Hong Kong. The HKMA will collaborate with other members of the Linux Foundation Decentralized Trust on interoperability aspects of DLT-based FMIs in the Ensemble Sandbox. Also, the HKMA has completed the initial phase of six tokenization use cases across four main themes under Project Ensemble and will publish a report detailing the results of the experimentation in 2025. The HKMA is working closely with the People’s Bank of China to establish a cross-boundary linkage between Hong Kong’s Faster Payment System (FPS) and the Mainland’s Internet Banking Payment System (IBPS). This linkage will support 24/7, instant, small-value, cross-boundary remittances using account proxies like mobile numbers. A pilot launch is expected to be around mid-2025 tentatively. [Read more about these and other initiatives at the HKMA]

Project Mandala proves viability of upfront compliance for digital asset transactions (Ledger Insights)

The Bank for International Settlements Innovation Hub (BISIH) has completed the Project Mandala proof of concept (PoC), which aims to bring efficiencies to anti money laundering (AML), sanctions and capital flow management (CFM) compliance. It uses a compliance by design approach to streamline cross-border compliance processes for financial institutions and explores real-time policy and regulatory compliance monitoring for central banks and other regulators. The project preserves the existing regulatory framework whereby it encodes existing jurisdiction-specific regulatory requirements measures into the system, and maintains the current model, in which financial institutions are responsible for interpreting and applying official regulatory measures. [Read more at the BISIH]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241027)

~ kiffmeister

Bank of England to press on with digital currency (Reuters)

According to Governor Andrew Bailey, the Bank of England (BOE) is pressing on with work on a potential retail central bank digital currency (CBDC) as it sees risks that commercial banks are failing to keep up with digital payment system innovations. “Absent innovation in commercial bank money, central banks may be left as the only game in town insofar as retail payments innovation is concerned, the central bank is indifferent as to whether retail payments are made in central bank or commercial bank money. However, during a 2021 House of Lords Economic Affairs Committee meeting, Bailey and then-Governor Jon Cunliffe implied that they would prefer not to see retail payments fully shift to nonbank payment instruments such as stablecoins. [Read more at the BOE]

G20 Crypto-asset policy implementation roadmap status report (FSB)

The Financial Stability Board (FSB) published a status report on progress made in taking forward the IMF-FSB crypto-asset policy implementation roadmap. Jurisdictions have made progress in implementing the policy and regulatory responses developed by the IMF, FSB, and standard-setting bodies (SSBs). Nearly all FSB member jurisdictions have plans in place to develop new or revise their existing regulatory frameworks for crypto-assets and stablecoins, or they already have those frameworks in place. However, inconsistent implementation of the FSB Framework may hinder its effectiveness and lead to regulatory arbitrage. Cross-border crypto-asset activities that originate from offshore jurisdictions present elevated regulatory and supervisory challenges for authorities. [Read more at the FSB]

Risk-based capital for stable value tokens (Circle)

Circle published a paper that introduces Token Capital Adequacy Framework (TCAF), a risk-based capital framework designed for stable value tokens, including stablecoins, deposit tokens, and tokenized cash. TCAF assesses the capital requirements by considering both financial and non-financial risks that issuers face. TCAF quantifies the capital needed to absorb losses stemming from technological, infrastructure, and operational risks, particularly in an environment marked by rapid innovation and limited historical loss data. The framework is applied to past stress events involving stablecoins to demonstrate that TCAF is a more effective prudential tool compared to fixed-ratio or single factor capital frameworks. [Read more at Circle]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241025)

~ kiffmeister

Russian banks baulk at digital ruble implementation costs (Bitcoin.com)

Russian banks, particularly smaller ones, are reportedly unhappy about the high cost (between 120 million and 200 million rubles) of integrating with the central bank’s digital ruble platform. The Bank of Russia has mandated that the 13 systemically important banks must offer clients the ability to use the digital ruble starting July 1, 2025. Universal banks (around 208) are expected to follow suit on July 1, 2026, while banks with basic licenses will begin on July 1, 2027. Despite these reservations expressed by some banks, the Bank of Russia is proceeding with the established timeframes and has vowed to fine institutions that fail to abide by the set deadlines. [Read more on Kommersant]

Improving cross-border payments by interlinking fast payment systems (ECB)

The European Central Bank (ECB) will launch initiatives to help improve cross-border payments within the European Union (EU) and beyond, building on the Eurosystem’s TARGET Instant Payment Settlement (TIPS) service. This will include allowing instant payments originating in one TIPS currency to be settled in another TIPS currency and in central bank money, starting with euro, Swedish kronor and Danish krone. The project will also explore linking TIPS with other fast payment systems, include developing links with partners outside the EU. [Read more at the ECB]

Tokenized money-market funds seek to take on Tether (Bloomberg)

BlackRock is pushing to have its money-market digital tokens more widely used as collateral for crypto derivatives trades, as Wall Street firms push deeper into digital asset markets. WisdomTree is also in conversations with prime brokerages, trading desks and crypto exchanges about the use of its fund tokens as collateral. If this type of usage takes off, it could reduce the reliance on unremunerated stablecoins like Tether among crypto traders. Users of such money-market fund tokens can earn interest rates of 4% to 5%. [Read more at Bloomberg]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241024)

~ kiffmeister

Bank of Ghana eCedi CBDC pilot project report (BOG)

The Bank of Ghana (BOG) published the results of its recent eCedi retail central bank digital currency (CBDC) pilot project. The pilot, which used Giesecke+Devrient’s (G+D’s) Filia CBDC platform, involved individuals and merchants of diverse demographic and socioeconomic backgrounds, using mobile applications, smart cards and point-of-sale (POS) terminals for four months. Offline functionality, using smartcards and Filia Connect devices, was successfully tested in a carefully chosen off-grid location, with person-to-business (P2B) being the primary focus. Post-pilot surveys indicated a strong possibility of all participants adopting the eCedi if it were to go live. However, the BOG has no immediate plans to fully launch the eCedi, given the more pressing need to prioritize economic stabilization. [Read more at the BOG]

Transactional and network analysis of Thailand’s retail CBDC pilot (BOT)

Bank of Thailand (BOT) staff published a paper that analyzes end-to-end transaction data from the central bank’s seven-month 2023 retail CBDC pilot. The pilot’s three financial service providers (FSPs) appeared to engage in asymmetric behavior between issuance and redemption of CBDC. They generally front-loaded CBDC to absorb uncertainty of future demand and pursued an adaptive strategy to adjust the level of their CBDC reserve balance following retail transaction observed to minimize the opportunity cost of holding unremunerated CBDC. Retail users tended to use CBDC as a means of payment but not as story of value, managing their CBDC holdings to meet the demand for making payments to minimize the opportunity cost of holding CBDC. [Read more at the BOT]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241023)

~ kiffmeister

Norges Bank on track to deliver CBDC recommendation in 2025 (Bloomberg)

Norges Bank Deputy Governor Pal Longva says that the central bank remains on track to finalize a recommendation in 2025 on whether it should introduce a central bank digital currency (CBDC). He said there’s “no urgency” to accelerate the decision-making process, which is looking at both retail and wholesale versions, with increasing weight being put on the latter. Longva’s remarks come less than a month before a November 15, 2024 deadline for a government task force to submit a report on ensuring safe and simple payments. [Read more at Bloomberg]

The Bank of Japan’s third CBDC Forum Plenary meeting (Medium)

Medium published an English language summary by Norbert Gehrke of the October 17, 2024 meeting of the Bank of Japan’s (BOJ’s) CBDC Forum Plenary. There have been three such meetings, the last one being in January 2024. The BOJ is conducting proof-of-concept (PoC) experiments in stages to verify the technical feasibility of CBDC. Currently, the BOJ’s experiments are focusing on performance, scalability, and privacy considerations. The system is designed to avoid handling personal information within the ledger management section, to ensure that user information and transaction details remain confidential. [Read more at Medium]

Global payments in 2024: simpler interfaces, complex reality (McKinsey)

McKinsey published its 2024 Global Payments Report which documents the continuing displacement of cash and checks by instant payments, especially in developing markets with low credit and debit card penetration. Despite the underwhelming uptake of retail central bank digital currencies (CBDCs) where they have been launched or piloted, McKinsey foresees them setting the minimum base level of functionality, cost, and services that users can expect from a digital currency, providing an alternative to help keep the price of commercial offerings in check, and serving as an alternative to large private-sector stablecoins. [Read more at McKinsey]

Guidelines on ART and EMT redemption plans under the MiCAR (EBA)

The European Banking Authority (EBA) published its final Guidelines on the orderly redemption of token holders in case of crisis of the issuer. The Guidelines, which are addressed to competent authorities designated under the Markets in Crypto-Assets Regulation (MiCAR), cover issuers of asset-referenced tokens (ARTs) and of e-money tokens (EMTs). The Guidelines specify the content of the redemption plan to be developed in going concern, including the liquidation strategies of the reserve of assets, the mapping of critical activities, the content of the redemption claims, the main steps of the redemption process, and the elements that may lead to the trigger of the plan. [Read more at the EBA]

Occasional paper on decentralized finance (Banco de Portugal)

Banco de Portugal published a paper that provides an overview of the underlying components of the decentralized finance (DeFi) ecosystem, as well as its associated risks from the perspective of a financial supervisory authority. While DeFi inherits the risks present in traditional finance, some of these risks could be amplified due to the lack of a clear regulatory framework and the intrinsic features of the DeFi space. Therefore, this paper also takes a closer look at the regulatory challenges involved, including the promise of self-regulation, and explores potential avenues for addressing these challenges without stifling the innovation that DeFi can foster. [Read more at Banco de Portugal]

Avalanche launches the Avalanche VISA card (Avalanche)

Avalanche is launching a Visa Card that will allow cardholders to spend their digital assets directly from their wallets without the need to convert the assets into fiat currencies. The card will allow owners to complete payments using digital assets in any location or jurisdiction accepting Visa. It will come in the form of a self-custody wallet with a unique address per asset, in come in both physical (card) and virtual (app) form factors. The Avalanche Card will initially be available only to individuals that are residents of countries in Latin America and the Caribbean, except residents or citizens of Cuba, Nicaragua and Venezuela. Citizens of Russia, North Korea, Syria, Iran, along with the regions of Crimea, Luhansk and Donetsk are not eligible to sign up. [Read more at Avalanche]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241022)

~ kiffmeister

Tokenization concepts and implications for central banks (CPMI)

The Bank for International Settlements (BIS) published a Committee on Payments and Market Infrastructures (CPMI) report that sets out the concepts related to digital tokens and programmable platforms. Tokenization arrangements can change existing market structures by providing platform-based intermediation across the end-to-end life cycle of financial assets. While this could decrease transaction costs and enable innovative use cases, the potential of token arrangements to improve the safety and efficiency of the financial system will require sound governance and risk management. The risks typically associated with financial market infrastructures also apply to token arrangements, but they may materialize differently. Developments in tokenization offer an opportunity for central banks to reflect on the role of central bank money in the digitalizing financial system. [Read more at the BIS]

The financial stability implications of tokenization (FSB)

Meanwhile, the Financial Stability Board (FSB) published a report on the potential financial stability implications of distributed ledger technology (DLT) based financial asset tokenization. The report opines that many of the purported benefits of tokenization have yet to be fully proven, may not be uniquely achievable through tokenization, and may involve trade-offs that might negate the benefits. And several vulnerabilities are identified relating to liquidity and maturity mismatch; leverage; asset price and quality; interconnectedness; and operational fragilities. Tokenization could have implications for financial stability if the tokenized part of the financial system scales up significantly, if increased complexity and opacity of tokenization projects lead to unpredictable outcomes in times of stress, and if identified vulnerabilities are not adequately addressed through oversight, regulation, supervision, and enforcement. [Read more at the FSB]

Cash bill pay services and U.S. payment inclusion (Kansas City Fed)

The Federal Reserve Bank of Kansas City published an article by Franklin Noll on U.S. “cash bill pay” services that allow consumers to make digital (e.g., bill) payments with cash at participating retailers. A recent Atlanta Fed survey found that American consumer preferences to pay with cash remain pervasive for various reasons, including the costs and other impediments involved in moving to digital payments, lack of needed identification, former credit or banking problems, and the desire for privacy. Cash bill pay services provide cash payment options to such consumers. The article describes how the two main cash bill pay services (“walk-up” and “barcode”) work, and the costs that may make the service expensive for some. [Read more at the Kansas City Fed]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20241021)

~ kiffmeister

FSB urges stronger efforts to enhance cross border payments (FSB)

The Financial Stability Board (FSB) published (i) a consolidated progress report for 2024 reporting on a broad range of actions being progressed as part of the G20 Roadmap for Enhancing Cross-Border Payments; (ii) a progress report on the implementation of the Legal Entity Identifier (LEI); and (iii) an annual progress report on meeting the improved user experience targets for cross-border payments. While more than half of the planned actions set out by the G20 have been completed, the FSB’s key performance indicators which measure key aspects of the user experience in using payments services, suggest that further efforts are needed. The FSB emphasizes the importance of intensified effort and commitment from a range of stakeholders, including by domestic regulatory/oversight authorities and payments services providers. [Read more at the FSB]

Ban or tax “bitcoin” to support permanent government deficits (Minneapolis Fed)

The Federal Reserve Bank of Minneapolis published a paper that advocates for a legal prohibition or capital tax on “bitcoin” to support governments’ abilities to run permanent primary deficits. To be more accurate, the paper uses bitcoin as a metaphor for risk-free private-sector securities that are in fixed supply and that are not a claim to any real resources or “useless pieces of paper”. The analysis seems to be based on the idea that risk averse consumers are willing to hold government securities and bitcoin even when the real return on these securities is very low. The virtually impenetrable analysis suggests that the existence of “bitcoin” forces the government maintain a balanced budget, which some might view as a good thing. [Read more at the Minneapolis Fed]

The distributional consequences of bitcoin (SSRN)

The European Central Bank’s (ECB’s) Ulrich Bindseil and Jürgen Schaaf published a paper that argues that, if the price of bitcoin continues to rise, there will be a redistribution of wealth to early bitcoin adopters at the expense of consumption of the rest of society, assuming that bitcoin does not increase the productive potential of the economy. In a theoretical scenario of ever-rising Bitcoin prices, this wealth shift will be a lasting legacy, with early adopters’ luxury consumption financed by the diminished consumption of those who missed out. Moreover, the corresponding impoverishment of the rest of society, will endanger cohesion, stability and ultimately democracy. [Read More at SSRN]

Upcoming Speaking Engagements:

  • Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]

And 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 john@kiffmeister.com.