Crypto firms launch Paxos stablecoin-based global network (Paxos)

A consortium of fintech and crypto-asset companies launched the Global Dollar Network based on the U.S. dollar-pegged USDG stablecoin issued out of Singapore by Paxos. Paxos claims that USDG is “substantively compliant with the upcoming Monetary Authority of Singapore (MAS) stablecoin framework. Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos and Robinhood are the initial partners. What is unique about USDG, versus the dominant stablecoins, is that partners (financial services and blockchain firms) receive up to 100% of the revenues generated by USDG’s backing assets, and earn additional revenues for minting and acceptance. [Read more at Paxos]

Eurosystem and 5 Asian central banks advance Project Nexus implementation (BIS)

The five Project Nexus central bank partners (India, Malaysia, the Philippines, Singapore, and Thailand) established the Singapore-based Nexus Scheme Organization (NSO) managing entity, which will manage the project in its live implementation stages. Nexus was launched in 2021 by the Bank for International Settlements (BIS) Innovation Hub to enhance cross-border payments by connecting multiple domestic instant payment systems (IPS) globally. The European Central Bank (ECB) also joined Nexus as a special observer as part of exploratory work on linking its TARGET Instant Payment Settlement with other fast payment systems. While the BIS will not own or operate the NSO, it will continue its support by playing a technical advisory role. [Read more at the BIS]

MAS announces plans to support asset tokenization commercialization (MAS)

The Monetary Authority of Singapore (MAS) outlined its vision for how to take the next step from asset tokenization exploration to commercialization. Project Guardian, launched in 2022, convened over 40 financial institutions, industry associations and international policymakers across seven jurisdictions to carry out industry trials on the use of asset tokenization in capital markets. More than 15 industry trials were conducted in six currencies across multiple financial products. In order to achieve scale the MAS is creating the Guardian Wholesale Network Industry Group with the aim of forming commercial networks to deepen market liquidity, developing an ecosystem of market infrastructures, fostering industry frameworks, and enabling access to common settlement facility. [Read more at the MAS]

Security reference model for digital currency hardware wallet (ISO)

The International Organization for Standardization (ISO) announced that a security reference model for digital currency hardware wallets and requirements and recommendations regarding the security of digital currency hardware wallets has now advanced to the internal review phase. It includes security requirements for data management, communication, and access control requirements between different modules of the hardware wallets; security requirements for the running environment of the software operating in the hardware wallet; and security policies for service operation of the hardware wallet. The non-security aspects of digital currency hardware wallets, such as business processes and financial transactions are out of scope. [Unfortunately the draft isn’t available for download]

Refining the definition of the unbanked (SSRN)

A paper co-written by Federal Reserve Board (FRB) staffer Elena Falcettoni proposes to differentiate individuals without a bank account but would like to have one (the “unbanked”) from individuals that do not have a bank account and are not interested in having one (the “out of banking population”). While the unbanked mostly cite financial and past credit or banking history problems as reasons for not having a bank account, the out of banking population cites a growing mistrust toward the traditional banking system. The paper finds that the latter comprises over 70% of U.S. households without a bank account, and concludes that to bank the unbanked (the other 30%) policy interventions should be aimed at encouraging financial institutions to offer more accessible and affordable services. [Read more at SSRN]

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