Kiffmeister’s #Fintech Daily Digest (20230318)

March 18, 2023 ~ kiffmeister ~ Leave a comment

Measurement and Use of Cash by Half the World’s Population

The IMF published a paper that analyzes cash usage in 14 advanced and emerging market economies, using two measures; currency in circulation (CIC) and the value of cash withdrawn from ATMs. It finds that, while the CIC metric continues to rise, ATM withdrawals are declining rapidly. The main reason for this is that CIC includes cash used for payments, hoarding, and illegal use while ATM cash is focused much more on the use of cash for payments alone. As well, CIC is not adjusted for the turnover of cash for payments while ATM cash already includes it. The 14 countries in our sample account for half of the world’s population and two-thirds of its GDP. [Read more at the IMF]

Monetary Policy Implications Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems

The IMF published a paper on the potential impacts of central bank digital currency (CBDC) on monetary policy, through their effects on money velocity, bank deposit disintermediation, volatility of bank reserves, currency substitution, and capital flows. Countries most vulnerable are those with banking systems dominated by small retail and demand deposits, low digital payments usage, and weak macro fundamentals. Caps on CBDC holdings and zero remuneration can moderate disintermediation risks, but they are not sufficient. Jurisdictions with Islamic banking systems could be more vulnerable to deposit disintermediation because of the predominance of unremunerated deposits and retail deposits in banks. The underdeveloped nature of Islamic financial markets and Sharia’h compliant liquidity management tools could also limit the central banks’ scope to respond to liquidity shocks. [Read more at the IMF]

Central Bank Digital Currency and Financial Inclusion

The IMF published a paper that models the financial inclusion implications of introducing a retail CBDC through two key channels. First, CBDC issuance can increase bank deposits from the previously unbanked by incentivizing the opening of bank accounts for access to CBDC wallets. Second, data from CBDC usage allows for the building of credit to reduce credit-risk information asymmetry in lending. We find that CBDC can increase overall lending if (1) bank deposit liquidity risk is low, (2) the size and relative wealth of the previously unbanked population is large, and (3) CBDC is valuable to households as a means of payment or for credit-building. Even when overall lending decreases, households benefit from the value of using CBDC for payments, plus CBDC provides an alternative “safe” savings vehicle, and it generates greater surplus in lending by reducing credit-risk information asymmetry. If non-banks are part of the “two-tier” CBDC distribution, fewer funds may flow into bank deposit accounts from the unbanked because a bank account is no longer needed for CBDC access. However, if CBDC data is shared with banks, those without bank accounts may still build credit and access lower interest rate loans. This is welfare optimal if the gains from greater access to CBDC outweigh any lending contraction. [Read more at the IMF]

Upcoming conferences, webinars and speaking engagements:

I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register 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.

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 (20230317)

March 17, 2023 ~ kiffmeister ~ Leave a comment

A practical guide to offline payment security

Lipis Advisors in partnership with Crunchfish published a paper that outlines the key security aspects relating to offline digital currency payments. Unlike other offline payment platforms that operate in various devices’ secure elements, Crunchfish advocates a software-based approach that operates in a virtual secure elements on smartphones . The need for hardware-based digital cash (e.g., on cards, wearables and feature phones) is acknowledged, but as peripheral bearers that need to be able to exchange digital cash with the smartphone as the main bearer, even in full offline-mode. [Read more at Crunchfish and watch related videos and webinars here]

Wholesale central bank digital currency – the safe way to debt capital market efficiency

The European Stability Mechanism (ESM) published a paper that analyzes the usefulness of digital currencies for wholesale financial transactions in Europe. It identifies the risks impede broad adoption of distributed ledger technology (DLT), despite potential widespread debt capital market efficiency gains from DLT-based smart contracts. A wholesale central bank digital currency (CBDC) on a private permissioned blockchain could overcome these risks and impediments and lead to significant efficiency gains in the financial system. [Read more at the ESM]

Digital Africa: Technological transformation for jobs

The World Bank published a report that provides evidence that demonstrates that internet availability increases jobs and reduces poverty in African countries. To fully realize their potential, digital technologies need to become more affordable and easier to use. Governments should prioritize policies and investments that increase internet coverage, foster productive internet use, and enhance skills, jobs, and earnings. [Read more at the World Bank]

The world of open banking

Konsentus updated its open banking infographic/map (H/T Lauren Jones). It shows that nearly 40% of the globe has an active open banking program, and there is a key trend towards regulatory driven initiatives, although the depth and breadth of that regulation is market dependent. Also, Latin America and the Middle East are seeing an increased number of legislative frameworks. [Download the map at Konsentus]

Upcoming conferences, webinars and speaking engagements:

I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230316)

March 16, 2023March 16, 2023 ~ kiffmeister ~ Leave a comment

Federal Reserve announces July launch for the FedNow Service

The US Federal Reserve (FRB) announced that the FedNow Service will start operating in July 2023 and provided details on preparations for launch. FedNow will facilitate around the clock nationwide reach of instant payment services by US depository institutions — regardless of size or geographic location. Businesses and individuals will be able to send and receive instant payments at any time of day, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. [Read more at the FRB]

From the FedNow FAQ: “As with current Federal Reserve Bank services, the FedNow Service will be available to depository institutions eligible to hold accounts at the Reserve Banks under applicable federal statutes and Federal Reserve rules, policies, and procedures. Participants will be able to designate a service provider or agent to submit or receive payment instructions on their behalf. Participants will also be able to settle payments in the account of a correspondent, if they choose to do so. Merchants, consumers, or non-bank payment service providers can access the service through depository institutions as they do today with other payment systems. [Read more at the FRB]

In Ukraine, crypto finds a purpose

The United Nations High Commission for Refugees (UNHCR), the Stellar Development Foundation, USDC stablecoin issuer Circle, and cross-border money transfer company MoneyGram have rigged up a system for sending aid directly to Ukrainian refugees using crypto-assets. The UNHCR delivers USDC hosted on the Stellar network, to a digital wallet that can be accessed via smartphone, even to people without bank accounts. The recipient then exchanges their USDC for local currency at any MoneyGram facility. Because the USDC is hosted on decentralized infrastructure and in the custody of individual wallet owners, funds cannot be withheld. [Read more at WIRED]

The cash-use cycle in Australia

The Reserve Bank of Australia (RBA) published a paper on Australians’ cash usage. It finds that the use of cash for day-to-day transactions continues to decline. Although the acceptance of cash by merchants remains at a high level, it is a little lower than prior to the pandemic. Nevertheless, some communities, particularly in rural areas, are increasingly susceptible to a decline in cash access if there were to be further removal of cash access points. Furthermore, many merchants indicated plans to discourage cash payments at some point in the future. [Read more at the RBA]

Upcoming conferences, webinars and speaking engagements:

I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230315)

March 15, 2023March 15, 2023 ~ kiffmeister ~ Leave a comment

India and UAE to collaborate on developing digital currencies

The Reserve Bank of India (India) and the Central Bank of the United Arab Emirates (CBUAE) signed a memorandum of understanding (MoU) to explore the interoperability between the central bank digital currencies (CBDCs) of the two central banks. The banks will jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridges to facilitate cross-border CBDC transactions of remittances and trade. The MoU also provides for technical collaboration and knowledge sharing on matters related to Fintech and financial products and services. [Read more at the RBI]

Upcoming conferences, webinars and speaking engagements:

I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230314)

March 14, 2023 ~ kiffmeister ~ Leave a comment

Santander, HSBC, Deutsche and Others Still Willing to Serve Crypto Clients After Banking Failures, DCG Says

Digital Currency Group (DCG) is trying to find new banking partners for portfolio companies following the collapse of Silicon Valley Bank, Signature Bank, and Silvergate. Santander, However, CoinDesk reports that Bridge Bank, HSBC, Deutsche Bank, BankProv, Bridge Bank, Mercury, Multis, Series Financial, and Western Alliance are still willing to connect with crypto firms. On the other hand, those banks may restrict some services for crypto firms, for instance, brokerage and money market services and the ability to wire money to third parties. [Read more at CoinDesk]

Moody’s Downgrades Entire Banking Sector from Stable to Negative

Moody’s Investors Service has downgraded the entire US banking sector following the events around Silicon Valley Bank, Signature Bank, and Silvergate Bank. “While these three banks were unique in their focus on crypto and venture capital/private equity – areas of non-bank finance that grew quickly during easy monetary policy – it is increasingly evident that other US banks are also facing ALM strains… Some US banks also have demonstrated weak governance and oversight of ALM risk.” [Read more at CrowdFund Insider]

Banking Crisis in U.S. Likely to Push Crypto Firms Offshore

Some U.S. crypto firms are looking for bank accounts offshore. Sygnum in Switzerland and Bank Frick in Lichtenstein have seen an increase in requests to open accounts, and industry sources have pointed to SEBA Bank in Switzerland, FV Bank in Puerto Rico and Jewel Bank in Bermuda, EQIBank in Dominica, as well as Tether and FTX-tied Deltec in the Bahamas, as options for U.S. dollar-based banking. However, only crypto companies that are regulated and have proper compliance and governance will likely be able to access non-U.S. banks. [Read more at CoinDesk]

NAB completes world-first with cross-border stablecoin transaction

Australia’s NAB has completed an intra-bank cross-border transaction using NAB-issued stablecoin on the public and permissionless Ethereum blockchain, involving deployment of stablecoin smart contracts for seven major global currencies. NAB’s AUDN stablecoin will be fully backed one-for-one with Australian dollars and managed as a liability of the bank, will be the cornerstone for NAB’s ambitions in digital assets. NAB claims this is the world’s first use case of a large financial institution leveraging a public blockchain for cross-border payment rails. [Read more at NAB]

Upcoming conferences, webinars and speaking engagements:

I’ll be providing an introduction to global CBDC developments (virtually) to a panel at the March 15 Digital Euro Association (DEA) Digital Money Academy with Ruslan Konurbayev National Bank of Kazakhstan) , and Péter Fáykiss (Maygar Nemzeti Bank). [Register here]
I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230313)

March 13, 2023March 13, 2023 ~ kiffmeister ~ Leave a comment

USDC stablecoin repegs after US intervenes on SVB

Cryptocurrencies rallied and Circle’s USDC stablecoin repegged after the U.S. Treasury and Federal Reserve announced a range of measures to stabilize the banking system in the wake of Silicon Valley Bank’s (SVB’s) demise, and said depositors at SVB would have access to their deposits on Monday, March 12, 2023. Also, the Federal Reserve announced its Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral, all valued at par. The moves came as authorities also took possession of New York-based Signature Bank, the second failure of a crypto-relevant bank in a matter of days. [Read more at Reuters]

The IMF on the macrofinancial implications of crypto-assets

The IMF published a paper on the macrofinancial implications of crypto-assets that they had delivered to the G20 in February. It concluded that “a widespread proliferation of crypto assets comes with substantial risks to the effectiveness of monetary policy, exchange rate management, and capital flow management measures, as well as to fiscal sustainability… Moreover, changes may be required to central bank reserve holdings, and the global financial safety net, yielding potential instability… Finally, banks may lose deposits and have to curtail lending.” [Read more at the IMF]

Custodia Bank on the U.S. Treasury and Federal Reserve banking system “stabilization” measures:

Upcoming conferences, webinars and speaking engagements:

I’ll be providing an introduction to global CBDC developments (virtually) to a panel at the March 15 Digital Euro Association (DEA) Digital Money Academy with Ruslan Konurbayev (National Bank of Kazakhstan) , and Péter Fáykiss (Maygar Nemzeti Bank). [Register here]
I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230312)

March 12, 2023March 12, 2023 ~ kiffmeister ~ Leave a comment

I’ve updated my tabulation of the 93 central banks that have recently issued, piloted, experimented with and/or researched retail central bank digital currency (CBDC). The updates since the last update are mainly minor, including fixing broken links. [Download the tabulation here]

Circle to ‘stand behind’ USDC, cover $3.3 billion shortfall held in Silicon Valley Bank

USDC stablecoin issuer Circle announced that it will “cover any shortfall” caused as a result of the $3.3 billion in its funds held by the collapsed Silicon Valley Bank (SVB). Circle said it is legally obliged to “stand behind” USDC and will cover any shortfall using corporate resources—and external capital if necessary. USDC is currently collateralized 77% ($32.4 billion) with short-term U.S. Treasury Bills and 23% ($9.7 billion) with commercial bank deposits ($5.4 billion with BNY Mellon, $3.3 billion at SVB, and $1 billion at Consumer Bank). Circle also maintains USDC transaction and settlement accounts with Signature Bank. [Read more at Decrypt]

The day before the California Department of Financial Protection and Innovation shut SVB down and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver (Thursday, March 9, 2023), Circle initiated transfers of the $3.3 billion held at SVB to other banks. Though these transfers remained unsettled when SVB was closed down (Friday, March 10), Circle believes that under FDIC policy, transfers initiated prior to a bank entering receivership should be processed normally. Hence, they are confident that the full $3.1 billion will be returned. Meanwhile, Coinbase says it will re-commence USDC:USD conversions when banks re-open (Monday, March 13). [Read more at Coinbase]

Interestingly, FDIC Chairman Gruenberg gave a speech on March 6 now seems quite prescient:

The current interest rate environment has had dramatic effects on the profitability and risk profile of banks’ funding and investment strategies. First, as a result of the higher interest rates, longer term maturity assets acquired by banks when interest rates were lower are now worth less than their face values. The result is that most banks have some amount of unrealized losses on securities. The total of these unrealized losses, including securities that are available for sale or held to maturity, was about $620 billion at yearend 2022. Unrealized losses on securities have meaningfully reduced the reported equity capital of the banking industry. The good news about this issue is that banks are generally in a strong financial condition, and have not been forced to realize losses by selling depreciated securities. On the other hand, unrealized losses weaken a bank’s future ability to meet unexpected liquidity needs. That is because the securities will generate less cash when sold than was originally anticipated, and because the sale often causes a reduction of regulatory capital.

Upcoming conferences, webinars and speaking engagements:

I’ll be providing an introduction to global CBDC developments (virtually) to a panel at the March 15 Digital Euro Association (DEA) Digital Money Academy with Ruslan Konurbayev National Bank of Kazakhstan) , and Péter Fáykiss (Maygar Nemzeti Bank). [Register here]
I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230311)

March 11, 2023 ~ kiffmeister ~ Leave a comment

USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank

Circle’s USDC stablecoin, the second-largest stablecoin at $42 billion of market cap, depegged from the USD, trading as low as $0.88 on Coinbase this morning (March 11, 2023). This followed Circle’s announcement that $3.3 billion of USDC’s reserves were held at Silicon Valley Bank (SVB) which was shut down yesterday by the California Department of Financial Protection and Innovation and taken over by the Federal Deposit Insurance Corporation (FDIC). Also, Coinbase announced that USDC redemptions would be temporarily suspended. [Read more at CoinDesk]

Silicon Valley Bank is a very American mess

An FT Alphaville analysis suggests that SVB exploited a regulatory loophole to run the egregiously mismatched balance sheet that ultimately led to its demise. Regulations put in place after the 2007-08 Great Financial Crisis meant to curb such mismatches (the liquidity coverage and net stable funding ratios) only apply to banks that rely on short-term wholesale funding, whereas SVB’s liabilities were mostly corporate customer deposits. (Bloomberg’s Matt Levine has also done a nice SVB post-mortem.) [Read more at FT Alphaville]

SEC denies VanEck spot BTC trust product, commissioners see double standard

The US Securities and Exchange Commission (SEC) has denied another spot Bitcoin exchange-traded product proposal, this time a Bitcoin trust application from VanEck. There have been almost 20 such unsuccessful applications over the last six years. VanEck applied to launch a spot Bitcoin exchange-traded fund (ETF) in 2017 but withdrew it after facing resistance from the SEC. Then it filed applications in November 2021 and June 2022, both rejected the same reasons as all other similar rejections, over SEC concerns of manipulation in the underlying market. [Read more at CoinTelegraph]

Upcoming conferences, webinars and speaking engagements:

I’ll be providing an introduction to global CBDC developments (virtually) to a panel at the March 15 Digital Euro Association (DEA) Digital Money Academy with Ruslan Konurbayev National Bank of Kazakhstan) , and Péter Fáykiss (Maygar Nemzeti Bank). [Register here]
I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230310)

March 10, 2023March 10, 2023 ~ kiffmeister ~ Leave a comment

Connecting digital islands: SWIFT CBDC sandbox project results report

SWIFT announced further progress on its experimental solution for interlinking central bank digital currencies (CBDCs), reporting that 18 central and commercial banks found “clear potential and value” in the API-based CBDC connector after a comprehensive review. SWIFT published the findings of the 12-week period of collaborative sandbox testing, in which almost 5,000 transactions were simulated between two different blockchain networks and with existing fiat-based payment systems. Sandbox participants included the Banque de France, the Deutsche Bundesbank, the Monetary Authority of Singapore, BNP Paribas, HSBC, Intesa Sanpaolo, NatWest, Royal Bank of Canada, SMBC, Société Générale, Standard Chartered and UBS. Over the coming months SWIFT will develop a beta version of the solution for payments that can be tested further by central banks. A second phase of sandbox testing will also be held, in which the SWIFT community can collaborate further with a focus on new use cases. [Read more at SWIFT]

Cash still plays an important role in the payment behavior of the Swiss population

The results of the 2023 Swiss Payment Monitor show that, although only 29% of daily payments are made in cash (17% in terms of value), cash still plays an important role in the payment behavior of the Swiss population, for small transactions (up to 20 francs).Cash usage differs by demographic characteristics, with 30–44-year-olds being the least likely to use cash, and over 60s and those on low incomes and with low levels of education being the most likely. Average amount of cash in wallets increased to CHF107 (vs CHF82 in 2022) and that at home to CHF831 (CHF524), possibly because of the energy crisis feared for the winter of 2022/23. [Read more at Cash Essentials]

Upcoming conferences, webinars and speaking engagements:

I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association Digital Euro Conference on March 31 in Frankfurt. [Register here]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

Kiffmeister’s #Fintech Daily Digest (20230309)

March 9, 2023March 9, 2023 ~ kiffmeister ~ Leave a comment

Crypto bank Silvergate announces ‘voluntary liquidation’

Silvergate Bank will “voluntarily liquidate” its assets and wind down operations. The bank was under fire after announcing it would have to delay filing its annual 10-K report due to questions from its independent auditors and accounting firm over its figures. “In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward. The Bank’s wind down and liquidation plan includes full repayment of all deposits.” [Read more at Silvergate]

CBDC as an untapped opportunity for the West African Economic and Monetary Union

IMF staff concluded that a central bank digital currency (CBDC) “could offer an untapped opportunity for promoting the development of the financial sector as well as financial inclusion in the West African Economic and Monetary Union (WAEMU).” However, the staff report warned that a CBDC presents significant challenges, and should not be viewed as a financial inclusion “silver bullet”. “In particular, it would be important to assess the extent to which private sector initiatives— particularly those related to e-money—could deliver similar results in terms of inclusion, efficiency, and safety, if adequately regulated. [Read more at the IMF]

Upcoming conferences, webinars and speaking engagements:

I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association Digital Euro Conference on March 31 in Frankfurt. [Register here]
I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor