Category: DigitalBanking

Kiffmeister’s #Fintech Daily Digest (10/04/2021)

~ kiffmeister

HKMA publishes technical whitepaper on retail central bank digital currency

The Hong Kong Monetary Authority (HKMA) released a technical whitepaper on retail e-HKD central bank digital currency (CBDC). Building on the model for retail CBDC that the HKMA is jointly investigating with the Hong Kong Centre of the BIS Innovation Hub, the Whitepaper explores potential technical design options for issuing and distributing retail CBDCs. It aims to explore technology solutions that address the problems of cross-ledger synchronization, over-issuance prevention, privacy-preserving transaction traceability, and different two-tier distributions models. [Read more]

Laos enlists Japan startup for study on digital currency

The Bank of the Lao People’s Democratic Republic is reportedly employing Soramitsu to study launching a CBDC. Soramitsu is the Japanese fintech firm behind Cambodia’s Project Bakong central bank-backed retail payment system. The Laotian central bank recently also reportedly signed a memorandum of understanding with the Japan International Cooperation Agency on studying the development of a CBDC. [Read more] 

Venezuela slashes six zeroes off its currency

On October 1 the Central Bank of Venezuela slashed six zeroes from the currency, effectively making 1,000,000 Bolivars just 1 Bolivar now, to make payments and currency handling easier. The measure was announced in August, where the central bank announced it was changing the name of the currency to the “Digital Bolivar,” which sparked speculation about a possible issuance of a central bank digital currency (CBDC) in the country. But the bank did not present any reports in this regard and instead announced the issuance of new bills to complement the redenomination plan. [Read more]   

Monzo abandons plan to acquire US banking license

Monzo has been forced to abandon its bid to acquire a US banking license following a fruitless two-year discourse with regulatory authorities. In a statement, the bank says: ‘Following recent engagement with the Office of the Comptroller of the Currency (OCC), we’ve decided to withdraw our banking license application for our US start-up. While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the US through existing partners and invest further in the UK.’” [Read more] 

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October 4-6 CBDC Conference

On October 6 I’ll chairing a session on lessons learnt from CBDC (pilot) projects at the CBDC Conference. Adolfo Sarmiento (Banco Central del Uruguay), Marius Jurgilas (Lietuvos Bankas) and Johan Schmalholz (Sveriges Riksbank) will be joining me on the virtual stage. You can register for this and the full three-day (October 4-6) event here: registration@cbdc-conference.com

Kiffmeister’s Global Fintech Monthly Monitor (February 2021)*

~ kiffmeister

In February the crypto-asset bull run continued, with Bitcoin hitting a new all-time high ($58,332) before settling back to close the month at $46,526 (+35.4%). The main driver continued to be increasing institutional investor interest, with some help from a few random Elon Musk tweets and the Tesla announcement that it had bought $1.5 billion of Bitcoin. Ethereum and other altcoins had a strong month on continuing interest in decentralized finance (DeFi). Bitfinex and Tether reached a $18.5 million settlement with the New York Attorney General over allegations that they hid the loss of commingled client and corporate funds and lied about Tether’s USDT reserves. India will reportedly go ahead with a complete ban on investment in crypto-assets, and the Central Bank of Nigeria banned all regulated financial institutions from providing services to crypto exchanges in the country.

For the complete story head over to the Global Fintech Intelligencer!

* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.

Kiffmeister’s #Fintech Daily Digest (01/03/2021)

~ kiffmeister

On the 12th anniversary of the mining of the first Genesis block, Bitcoin (BTC) hit another all-time high, briefly trading above $34,700 this morning (ET). “Analysts Decrypt spoke to attribute the boom to three things: retail investors, institutional investors balancing the books, and a single whale’s trade that set an army of algo-traders chomping in search of a profit.” But for contrarian views these year-end wraps from Amy Castor and David Gerard are well worth a read! 

And there’s this article that claims that bitcoin is a Ponzi scheme. A Ponzi scheme is a type of investment fraud with five features; (1) people invest into it because they expect good profits, (2) that expectation is sustained by such profits being paid to those who choose to cash out, but (3) there is no external source of revenue for those payoffs which come entirely from (4) new investment money, while (5) the operators take away a large portion of this money. Investing in bitcoin (or any crypto) checks all these items; the investors are all those who have bought or will buy bitcoins; they invest by buying bitcoins, and cash out by selling them. The operators are the miners, who take money out of the scheme when they sell their mined coins to the investors. The article rejects the idea that the stock market is a Ponzi, but there are those that differ, and some even so-characterize modern central banking.

LendingClub’s Acquisition of Radius Bank Approved by the OCC

The Office of the Comptroller of the Currency (OCC) approved LendingClub’s acquisition of Radius Bank. LendingClub had previously announced it would pay around $185 million to buy the bank. The merger is subject to certain conditions including day-one capital of $410 million, including a capital contribution from LendingClub of no less than $250 million. This marks the end of LendingClub’s transition from the P2P lending model under which the company was launched to a digital banking model.