Category: Crypto Assets

Kiffmeister’s #Fintech Daily Digest (20221031)

~ kiffmeister

India’s Central Bank to Start Wholesale CBDC Pilot November 1

The Reserve Bank of India [RBI] will launch a pilot wholesale central bank digital currency (CBDC) on November 1. The use case for the wholesale Digital Rupee is the “settlement of secondary market transactions in government securities” because it would reduce transaction costs. Nine prominent banks have been identified for participation in the pilot. A pilot of the retail version is planned for launch within a month in select locations in closed user groups comprising customers and merchants. [Read more at the RBI]

MAS Report on Potential Uses of a Purpose-Bound Digital Singapore Dollar

The Monetary Authority of Singapore (MAS) released a report detailing potential uses of a purpose-bound digital Singapore dollar (SGD) and the supporting infrastructure required, marking the successful completion of Phase 1 of Project Orchid. While MAS has assessed that the case for a retail CBDC in Singapore is not compelling for now, Project Orchid aims to build the technical capabilities and competencies necessary for MAS to issue a retail CBDC, should the need arise. Phase 1 explored the concept of purpose-bound digital SGD that enables senders to specify conditions, such as validity period and types of shops, when making transfers in digital SGD. Some of its use cases will be tested through trials with the public and private sector in 2022 and 2023. The next phase of Project Orchid will look at what the best ledger technology is and how this can be integrated with the existing infrastructure. [Read more at the MAS]

Speech by PBOC Governor YI Gang at the Hong Kong FinTech Week 2022

In a Hong Kong Fintech Week 2022 speech, Yi Gang, Governor of the People’s Bank of China (PBOC), described the “delicate balance between protecting privacy and combating illicit activities” in developing its  e-CNY central bank digital currency (CBDC).  “The e-CNY operates on a two-tiered system. At tier one, the PBOC supplies e-CNY to the authorized operators and processes inter-institutional transaction information only. At tier two, the authorized operators only collect the personal information necessary for their exchange and circulation services to the public. Transaction-related data is encrypted for storage. Sensitive consumer information is de-identified to non-transacting parties. Entities and individuals are prohibited from arbitrary inquiry or information usage without rigorous legal authorization. There are small-amount soft wallets and hard wallets to meet the need for small-value anonymous transactions, both online and offline.” [Read more at the PBOC]

Buy Now, Pay Later Drives Gen Z Into Debt

“Younger consumers of Buy Now Pay Later (BNPL) products, which require little or no credit history, now hold the most defaulted accounts in the programs. While 11% of all borrowers paid at least one late fee on the installment loans in 2021, 18% of those aged 18 to 29 fell behind on their payments, according to a Federal Reserve report. The programs, which gained popularity as the pandemic forced shoppers online, are now in the sights of credit bureaus. Equifax and Experian have said they’ll start including BNPL purchases on consumers’ credit reports — and that loans sent to debt collectors can also be reflected.” [Read more at Bloomberg]

New German regulations enable the issuance of securities on distributed ledger technology

The German government has published the regulation on requirements of electronic securities registers in the official journal Bundesgesetzblatt. It entered into force on October 29, 2022. This was the final missing regulation to clarify and enable the issuance of securities (only bearer bonds so far) and fund shares on distributed ledger technology (DLT) platforms in Germany. [Read more on LinkedIn H/T Kurt Zeimers]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.

The CBDC Think Tank is a New York-based technology- and vendor-agnostic digital currency knowledge-sharing hub for staff of central banks, international financial institutions (IFIs) and non-government organizations (NGOs). It runs webinars, workshops, and masterclasses to disseminate knowledge and facilitate communication. It also engages in advisory work, focusing on delivering impact that best aligns with the needs of its clients and the forward progress of human civilization. The CBDC Think Tank welcomes requests from central bank officials for CBDC advisory services.  [click here for more information].

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 (20221028)

~ kiffmeister

I’ve updated my tabulation of retail central bank digital currency (CBDC) explorers, mostly just updated links, and moving Israel and Norway up to the proof-of-concept (PoC) section. [Download it here]

Does the IMF have a vendetta against cryptocurrencies?

Is the International Monetary Fund (IMF) really hostile to crypto? Many in the cryptocurrency and blockchain space think so, according to this CoinTelegraph article. However, CoinTelegraph was kind enough to offer me and the Atlantic Council’s Josh Lipsky the chance to rebut. [Read the article at Coin Telegraph]

COVID-19 brought U.S. unbanked percentage to record low, FDIC says

Government COVID-related relief payments contributed to a drop in the number of unbanked households in the U.S. in 2021, according to the Federal Deposit Insurance Corp. (FDIC). Roughly 1.2 million more households are banked, compared with 2019 figures, with nearly half of newly banked households that received pandemic relief payments saying the payments contributed to their decision to open a bank account. But still an estimated 4.5% of Americans, representing 5.9 million households, lacked a bank or credit union account in 2021. [Read more at the FDIC]

SWIFT delays the start of ISO 20022 migration until March 2023

Since August 2022, all required ISO 2022 cross-border payments and reporting (CBPR+) capabilities have been deployed and institutions have been able to exchange messages on an opt-in basis.  However, in October the ECB decided to delay the Eurosystem ISO 20022 migration from November 21, 2022 to March 20, 2023, to ensure greater system stability and user readiness, as well as smooth transition to new platform. Hence, an overwhelming majority of SWIFT’s global community requested that SWIFT align the start of the global ISO 20022 migration for CBPR+ with the ECB’s updated timetable to ease implementation. [Read more at SWIFT]

PayPal Brings Back $2500 Penalty for Violations of Acceptable Use Policy

After claiming it was a mistake, PayPal has reinstated its $2500 penalty for each violation of its Acceptable Use Policy. Earlier. PayPal was lambasted for its authoritarian move and intolerance of free speech. While the wording of the policy has changed, it still gives PayPal the right to penalize users that violate the terms by “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory.” While certain aspects can be easily defined, others – such as intolerance – can be subjective depending upon individual beliefs. [Read more at PayPal]

Fed skeptical about bank-issued stablecoins on open permissionless DLT networks

U.S. Federal Reserve Board (FRB) Vice Chair for Supervision Michael Barr shot across the bow of any bank plans to issue dollar-denominated stablecoins on open permissionless distributed ledger technology (DLT) networks. “It remains an open question whether banks can engage in such arrangements in a manner consistent with safe and sound banking and in compliance with relevant law… [Banks] may not be able to track who is holding their tokenized liabilities, or whether they are being used in risky or illegal activity. [Read more at the FRB]

Under-researched areas of CBDC

The Société Universitaire Européenne de Recherches Financières (SUERF) published a briefing paper that highlights some of the under-researched trade-offs in central bank digital currency (CBDC) design. [Read more at SUERF]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.

The CBDC Think Tank is a New York-based technology- and vendor-agnostic digital currency knowledge-sharing hub for staff of central banks, international financial institutions (IFIs) and non-government organizations (NGOs). It runs webinars, workshops, and masterclasses to disseminate knowledge and facilitate communication. It also engages in advisory work, focusing on delivering impact that best aligns with the needs of its clients and the forward progress of human civilization. The CBDC Think Tank welcomes requests from central bank officials for CBDC advisory services.  [click here for more information].

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 (20221027)

~ kiffmeister

Some have asked me for a summary of my central bank digital currency (CBDC) position, but I’m not inclined to be so absolute and dogmatic about the topic, since it’s all so jurisdiction specific, but the Digital Euro Association (DEA) CBDC Manifesto comes pretty close to expressing my views on retail CBDC. Here it is in a nutshell:

  1. A retail CBDC should have a strong value proposition (SVP) and tangible benefits for citizens.
  2. A CBDC should provide the highest degree of privacy. In this context, a CBDC should supply technically guaranteed privacy by design and by default, without the need to trust the central bank to preserve privacy.
  3. A CBDC should not be designed in a way to do harm to society, e.g., via very negative interest rates, or via so-called programmable money that restricts the use of money for specific types of expenditures, or that expires after a certain amount of time.
  4. The development of a CBDC should follow a collaborative approach involving all stakeholders (central banks, financial institutions, associations, end-users, companies, researchers, etc.) and have a well-defined governance system. The design and development processes should be transparent, public, and open. Ideally, a CBDC should be open-source and use open-source technology to increase transparency.
  5. The CBDC should exhibit technical, regulatory and usage interoperability, both locally and globally.

For more detail and/or to sign it, if you agree with its principles, click here.

Kazakhstan to build central bank digital currency on BNB Chain

The National Bank of Kazakhstan (NBK) will test the Binance blockchain network BNB Chain for potential integration into the country’s Digital Tenge retail CBDC. This comes a week after the NBK completed a week of CBDC proof-of-concept tests, imitating an actual production environment with Digital Tenge wallets provided through local financial institutions’ interfaces, with 200 real central bank staffers and 4 merchants. [Read more about the BNB Chain testing here, and last week’s tests here]

Central Bank of Nigeria Marks First Anniversary of eNaira

This week, the Central Bank of Nigeria (CBN) commemorated the first anniversary of the launch of its eNaira retail CBDC, which was formally launched on October 25, 2021. The press release is notable, because until now, according to that official announcement in 2021, it was a pilot launch, so sometime in the last year it morphed into a full launch, which many of us (me included) suspected it was from the start, despite the use of the word “pilot”. [Read this week’s press release here and last year’s here]

UK Stablecoin Rules Approved by Lawmaker Committee

U.K. lawmakers agreed on new rules for stablecoins, as the government promised to consult on further crypto-asset regulations and a digital pound in coming weeks. The Financial Services and Markets Bill builds upon existing measures to broaden regulations of stablecoins and mentions “Digital Settlement Assets” (DSA) as a new term, moving away from the use of “crypto assets.” According to the U.K. government, “crypto assets use some form of distributed ledger technology (DLT),” whereas DSA includes stablecoins, “given their potential to develop into a widespread means of payment.” [Download the Financial Services and Markets Bill parliamentary discussions here]

Biden Administration Wants To Make It Easier To Seize Crypto Without Criminal Charges

“Buried deep in a 61-page recent report by the U.S. Attorney General, the Biden Administration called for a dramatic expansion in the federal government’s ability to seize and keep cryptocurrency. If enacted, the proposed changes would bolster both criminal forfeiture, which requires a conviction to permanently confiscate property, as well as civil forfeiture, which doesn’t require a conviction or even criminal charges to be filed.” [Read more on Forbes]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.

The CBDC Think Tank is a New York-based technology- and vendor-agnostic digital currency knowledge-sharing hub for staff of central banks, international financial institutions (IFIs) and non-government organizations (NGOs). It runs webinars, workshops, and masterclasses to disseminate knowledge and facilitate communication. It also engages in advisory work, focusing on delivering impact that best aligns with the needs of its clients and the forward progress of human civilization. The CBDC Think Tank welcomes requests from central bank officials for CBDC advisory services.  [click here for more information].

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 (20220921)

~ kiffmeister

Iran to start testing a digital rial this week

The Central Bank of Iran (CBI) will reportedly start a central bank digital currency (CBDC) pilot on September 22, 2022. The bank published a draft document outlining the “goals, dimensions, threats and opportunities for the development” of a digital rial in August 2022. The CBI’s current head, Ali Salehabadi, said earlier this month that the bank had the necessary infrastructure and rules in place for a launch. [Read more at Coindesk]

House stablecoin bill would put two-year ban on Terra-like coins

Legislation to regulate stablecoins being drafted in the U.S. House of Representatives would place a two-year ban on coins similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year. It would be illegal to issue or create new “endogenously collateralized stablecoins.” The definition would kick in for stablecoins marketed as being able to be converted, redeemed or repurchased for a fixed amount of monetary value, and that rely solely on the value of another digital asset from the same creator to maintain their fixed price. [Read more at Bloomberg]

US Treasury seeks public input on illicit finance, national security risks posed by digital assets

The U.S. Department of the Treasury filed a Request for Comment (RFC) to seek feedback from the American people on the illicit finance and national security risks posed by digital assets. The filing is pursuant to President Joe Biden’s recent Ensuring Responsible Development of Digital Assets Executive Order, and the subsequent Treasury Department Illicit Finance Action Plan. [Read more at the U.S. Treasury]

Nasdaq establishes new digital assets business

Nasdaq is launching “Nasdaq Digital Assets” which “will initially develop an advanced custody solution that will incorporate liquidity and execution services to address industry challenges around connectivity, availability, and efficiency. Nasdaq’s custody solution will bring together attributes of hot and cold crypto wallets which will provide a high degree of accessibility and scalability without compromising security. [Read more at NASDAQ]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20220609)

~ kiffmeister

Kansas City Fed Rescinds Master Account for Payments Firm, GOP Senator Says

The Federal Reserve Bank of Kansas City has reportedly revoked Reserve Trust’s master account that was controversially granted in 2018. Reserve Trust previously highlighted its master account prominently on its website. The Fed is currently reviewing how its regional branches should handle requests for such accounts amid an uptick in interest from banks with “special purpose” charters, particularly those focused on crypto-assets, which would allow them to avoid having to partner with traditional banks for such payment-system access. Meanwhile, Wyoming-based Custodia Bank is suing the Fed for its tardiness in evaluating its master account application. [Read more]

India’s central bank to allow linking credit cards with UPI

The Reserve Bank of India (RBI) is proposing to allow linking of credit cards on the United Payments Interface (UPI) platform beginning with RuPay credit cards. Rupay is India’s homegrown card network, which is promoted by the National Payments Corporation of India, a body of the RBI that also oversees UPI payments. The is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]

Kiffmeister’s #Fintech Daily Digest (20220608)

~ kiffmeister

New DFS Regulatory Guidance on the Issuance of U.S. Dollar-Backed Stablecoins

The New York State Department of Financial Services (DFS) issued new Regulatory Guidance, setting foundational criteria for USD-backed stablecoins issued by DFS-regulated entities. Such stablecoins will have to be fully backed by reserves consisting only of U.S. Treasury securities and deposits at U.S. federal or state chartered banks,  held in segregated accounts and marked to market daily. Also, redemption at par must be guaranteed for all stablecoin holders. [Read more]

Digital Currencies and Energy Consumption

An IMF paper explores the main components and technological options that determine digital currency (DC) energy profiles. It finds that the energy consumption of non-proof-of-work (non-PoW) distributed ledger technology (DLT) platforms is orders of magnitude lower than that of PoW platforms. Also permissioned networks that exercise more control over who can join as a validator, are more energy efficient than unpermissioned networks. The paper concludes that DCs could be designed to use infrastructures that are less energy intensive than the current payment system. [Read more]

Custodia Sues Federal Reserve, Demanding Decision On Master Account

Crypto bank Custodia is suing the Federal Reserve Board and the Kansas City Fed charging they have “unlawfully” delayed for 19 months acting on its application for a master account with the Federal. The Wyoming-chartered  “special purpose depository institution’’ says the master account would reduce its costs and is “vital” to its core mission of providing a bridge between digital assets and the U.S. dollar system. According to the suit, the Fed has a legal obligation to act within a year and the application was made in October 2020. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]

Kiffmeister’s #Fintech Daily Digest (20220607)

~ kiffmeister

Uganda Seeks CBDC Lessons from Nigeria

A delegation from Bank of Uganda (BOU) went on an “experience sharing tour” of the Central Bank of Nigeria (CBN) central bank digital currency (CBDC) e-Naira project. The BoU announced its intention to explore CBDC earlier in 2022, with key questions revolving around the rationale, for example “what issues it is going to help resolve.” [Read more]

However, the digital divide threatens eNaira’s mass adoption

According to a recent Ventures Africa poll only 4% of Nigerian respondents have used the eNaira, and 64% haven’t even heard of it. Retail merchants and traders felt the same way. Plus only 30% of merchants and traders interviewed had heard of the eNaira, and none had used it. One of the factors contributing to this may be Nigeria’s digital divide. According to the Alliance for Affordable Internet only 12% of Nigerians have access to 4G-like Internet speeds or the capacity to use the internet on a daily basis. Although the CBN has said that Nigerians without smartphone internet access will be able to transact in eNaira using basic featurephones, apps have been the predominant form of transaction. [Read more]

Blockchain scalability and the fragmentation of crypto

A new Bank for International Settlements (BIS) paper contends that the use of public blockchains results in fragmentation that means crypto could never be a suitable means of payment. As transactions per block get close to their limit, the cost of transactions rises, causing users to seek alternative blockchains, and this fragmentation means blockchains cannot harness the beneficial network effects associated with traditional money. [Read more]

Cecilia Skingsley appointed as Head of the BIS Innovation Hub

Cecilia Skingsley, First Deputy Governor of Sveriges Riksbank, has been appointed to head the BIS Innovation Hub. The Hub serves as a platform for central bank collaboration in building technological solutions to problems in the financial sector. Five Hub Centers are already operating in Hong Kong, London, Singapore, Stockholm and Switzerland. Two more, in Frankfurt/Paris and Toronto, are expected to open later this year. The Innovation Hub also has in place a Strategic Partnership with the Federal Reserve System. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]

Kiffmeister’s #Fintech Daily Digest (20220605)

~ kiffmeister

Initial steps towards a central bank digital currency by the Central Bank of Brazil

This Central Bank of Brazil (BCB) note discusses the development of its central bank digital currency (CBDC). The main objective is to provide entrepreneurs with a safe and reliable environment to innovate through the use of programmability technologies, such as programable money and smart contracts. In the context of a modern payment system, already available to the Brazilian population, a full-fledged CBDC must enable new functionalities, beyond those brought by an instant payment arrangement. Therefore, the innovation tool for which the BCB envisions the greatest potential is the development of a platform for smart payments. [Read more]

Are There Compelling Reasons to Consider a Central Bank Digital Currency for the U.S.?

A U.S. Richmond Fed article examines alternative arguments for considering a CBDC for the U.S. It points out that introducing a CBDC is unlikely to substantially improve the current U.S. money and payments system. A more compelling reason to consider a CBDC is to prepare the U.S. system against future threats, especially those associated with the rise of private and foreign digital currencies. Therefore, there appears no immediate need for the U.S. to issue a CBDC, but the U.S. needs to explore the CBDC technology now for potential future use. [Read more]

Jamaica’s Senate Approves Central Bank Digital Currency

The Bank of Jamaica has been given the authority to issue CBDC with the Senate’s passage of the Bank of Jamaica (Amendment) Act, 2022 at Gordon House on June 3, 2022. [Read more]

DLT Pilot regime released: EU is preparing for tomorrow’s digital securities market

Regulation 2022/858 of the European Parliament and of the Council on a pilot regime for market infrastructures based on distributed ledger technology (DLT) was published in the Official Journal of the European Union. Tokenization is expected to open up opportunities for efficiency improvements in trading and post-trading processes, but EU financial services legislation was not designed with such technology and crypto-assets in mind and contains provisions that could limit the use of blockchain technology. For these reasons, the DLT Pilot Regime is being introduced to allow for such technology to flourish, while accounting for potential risks at the same time. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]

Kiffmeister’s #Fintech Daily Digest (20220604)

~ kiffmeister

Reports show scammers cashing in on crypto craze

According to the U.S. Federal Trade Commission, since the start of 2021, approximately 46,000 Americans have lost more than $1 billion worth of digital assets in crypto scams. The fraudulent activities affected approximately 46,000 people. $575 million was lost in investment-related crypto scams, $185 million to romance frauds, and $93 million to business imposters. Because the vast majority of frauds are not reported, these figures are assumed to reflect just a small fraction of the public harm. [Read more]

How to Build Stablecoin Trust – Audits and Attestations

Circle’s Chief Financial Officer explains the difference between stablecoin audits and attestations. An audit is an assurance engagement that verifies the accuracy of financial statements and is typically performed annually by a public accounting firm. The audit verifies the accuracy, completeness and composition of the reserve and tests the internal controls over financial reporting that ensure financial statement accuracy. In an attestation – the accounting firm “attests” to the accuracy of a set of statements. It is different from an audit (it makes little sense to test financial controls monthly, for example), but it provides the same standards of assurance over the statements. [Read more]

Fintech, Female Employment, and Gender Inequality

Using a novel fintech dataset for 114 economies worldwide, this International Monetary Fund (IMF) paper shows that fintech adoption significantly improves female employment and reduces gender inequality, the effect being more pronounced in firms without traditional financial access. Fintech not only increases the number and ratio of female employees in the workforce, but also mitigates financial constraints of female-headed firms. Digital divide and poor institutions weaken such benefits. [Read more]

An Investor’s Guide to Crypto

This paper by Campbell R. Harvey and others provides practical insights for investors seeking crypto exposure. It discusses a wide variety of tokens, highlighting their functionality and investment properties. It critically compares popular valuation methods, and contrasts buy-and-hold investing with more active styles. Underlying crypto performance has been notoriously volatile, but volatility-targeting methods are effective at controlling risk, and trend-following strategies have performed well. Crypto assets display a low correlation with traditional risky assets in normal times, but the correlation also rises in the left tail of these risky assets. Finally, the paper details important custody and regulatory considerations for institutional investors. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]

Kiffmeister’s #Fintech Daily Digest (20220603)

~ kiffmeister

Japan Passes Stablecoin Bill That Enshrines Investor Protection

Japan’s parliament passed a bill that classifies stablecoins as digital money that must be linked to a currency that is legal tender and guarantee holders the right to redeem them at face value. The legal definition means stablecoins can only be issued by licensed banks, registered money transfer agents and trust companies. The new legal framework will take effect in a year, and Japan’s Financial Services Agency will introduce regulations governing stablecoin issuers in coming months. [Read more]

Central African Republic announces plan to tokenize country’s minerals

The Central African Republic (CAR) announced plans to offer tokenized access to mineral resources to crypto and digital asset projects that establish a presence in the country. The natural resource tokenization drive will come under the auspices of Project Sango. In addition to petroleum, CAR possesses cobalt, copper, diamonds, gold, limestone, manganese and rhodium. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]