I will soon be publishing an update to my central bank digital currency explorer tabulation but FYI here’s a CBDC Tracker (http://cbdctracker.org) that covers similar territory. The main difference is that it includes wholesale CBDC and some initial sovereign offerings (ISOs) such as the Marshall Islands SOV and Venezuelan Petro. Also it includes projects that are arguably simply central bank run blockchain-based payment rails (eg Cambodia’s Project Inthanon). Finally, as far as I can tell, the tabulation doesn’t include links to the official (or unofficial) sources of the information. But, on the other hand, it includes some useful information that doesn’t fit my more compact presentation, like announcement date, status, technology, and programmability.

Bank of Ghana Works On Establishing Digital Currency
The Bank of Ghana, says the bank is working on establishing a sandbox to promote innovation in the financial market and also test some concepts including the establishment of a Central Bank Digital Currency. https://www.bog.gov.gh/speeches/address-delivered-by-the-first-deputy-governor-dr-maxwell-opoku-afari-at-a-virtual-stakeholder-workshop-on-payment-systems-service-act-2019/

Measuring Bitcoin’s Trading Volume
The fragmentation of trading volume in the Bitcoin ecosystem prevents a straightforward assessment of its market size. Institutions considering entering the space should first survey the landscape and make a determination of which exchanges, markets, and assets they feel comfortable transacting in. Critical decisions such as whether they would be willing to transact in stablecoins such as Tether or use derivatives such as perpetual futures contracts can have a material impact on evaluation of trading volume and liquidity. Regardless of these decisions, all facets of Bitcoin’s trading volume have experienced exponential growth and, if sustained, will grow to levels similar to major asset classes.

Designing regulation for digital platforms: Why economists need to work on business models
This VoxEU column asks how economists can contribute to rationally progressing the debate on digital platform-focused regulation and legislation, so that it is not based on subjective priors, but uses applied theory to make testable predictions, and data to discriminate between theories. It suggests that business models matter fundamentally when one is evaluating the dual role of platform owners as umpires and players in their ecosystem.

Bitcoin Stares at Another Big Plunge as Mining Difficulty Hints Dropping 10.25%
The Bitcoin network undergoes a self-correcting phase that decides how difficult it is to mine bitcoin after every 2016 mined blocks. A drop in the difficulty makes it easier to confirm and add transactions on the blockchain every 10 minutes. Bitcoin’s network difficultly could drop by as much as 10.25% on June 4. It would be the most significant downward adjustment since Bitcoin’s third halving on May 11. The first took place on May 20 with a mere 6% plunge.

Federal Reserve Endorses Ethereum-Backed Alternative To Libor
Federal Reserve Board Chairman Jerome H. Powell provided a statement on May 28, 2020, regarding the suitability of AMERIBOR as a replacement to LIBOR. AMERIBOR is a reference rate created by the American Financial Exchange (AFX) based on a cohesive and well-defined market that meets the IOSCO principles for financial benchmarks. AMERIBOR uses a permissioned version of Ethereum blockchain to capture the interbank lending rates. AFX will mint two non-fungible tokens for each party in a transaction. Unlike bitcoin, which is fungible, meaning every token is the same, these non-fungible tokens, compliant with the ERC-721 token standard, contain information about the transaction and the counterparty. The tokens are automatically minted by the AFX Blockchain when a transaction begins, and, using the parity smart contract language, are automatically settled when the transaction ends. https://www.scribd.com/document/464255988/Chair-Powell-to-Sen-Cotton-5-28-20

EU Fintech market overview: EMI and PI licenses obtained between Jan-May 2020, compared to 2019
The pandemic has had a major impact on the issuance of E-money and Payment Institution licenses in the European Economic Area. Advapay compared the number of E-money and Payment Institution licenses issued between January-May 2019 and 2020. According to the data, PI licenses have declined 75 percent in 2020 compared to 2019. For E-money licenses, a decrease of 45 percent was recorded.

Fintech Innovation in the Western Balkans
This report produced by the World Bank and the Cambridge Center for Alternative Finance delves into the fintech ecosystem within six Western Balkan jurisdications. It finds that, despite high growth in the use of card and digital payments, there remains unexplored potential for other fintech services due to high mobile and internet penetration and a skilled IT workforce. In order to explore these opportunities further, the region will need to address limited access to capital and finance, high cash use, low access to payment and information systems, and regulatory barriers, amongst others.

Crypto-Friendly Arival Bank Is Launching Today for Those Willing to Disclose Their Bags
After two years of laying the groundwork, crypto-friendly Arival Bank is launching in beta. With a team of 20 with offices in Singapore, Puerto Rico and Saint Petersburg, Fla., it plans to provide banking accounts to crypto startups via its sponsor bank, Puerto Rico-based San Juan Mercantile Bank and Trust. But to bank with Aival clients have to show what’s in their wallet, because Arival is using tools from Elliptic to scan the crypto addresses that onboarding clients provide and see if there are any suspicious transactions.

Dubai SME allocates AED 20 million to guarantee capital for SMEs through The Fund & Beehive partnership
In the UAE, Dubai SME has allocated AED20 million “for the capital guarantee scheme launched by its financial arm, The Mohammed Bin Rashid Fund (The Fund), in partnership with Beehive, the first regulated peer-to-peer (P2P) lending platform in the Middle East & North Africa (MENA) region.”

Jack Ma’s Open Banking Strategy Gets a Boost From Lockdown
Ant Financial Services Group has seen a surge in banks interested in its digital technology. The number of customers paying for Ant to help them build mobile apps and provide cloud computing power jumped by 175% in the two months through April, and it’s now working with more than 200 lenders, according to the company. Inquiries to collaborate with the tech giant increased by 400% over the period.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Coinbase Repeats Pattern of Shutting Down When Bitcoin Gets Volatile
Coinbase has gone offline four times in the last three months during major Bitcoin (BTC) price moves and furious users unable to access their portfolios are demanding answers. On June 1, when Bitcoin rallied from the $9,600s to $10,380 in less than an hour, Coinbase users trying to access their portfolio were met with a message that the site is “temporarily available.” @CryptoWhale posted a chart on Twitter shortly after the recent outage, speculating that Coinbase had a built-in algorithm to automatically shut it down anytime there was a BTC price movement over $500.

Volatility: $230M in BitMEX Liquidations Hit Bulls and Bears Alike
Bitcoin volatility during the first week of June has left both bulls and bears facing significant liquidations, with almost $223 million in 24-hour margin calls on leading derivatives exchange BitMEX being evenly spread between BTC shorts and longs, according to Cryptometer. It caused a sudden price crash to as low as $8,600 on BitMEX.

Capitulation by Unknown Miner ‘Caused the Dip,’ Says CryptoQuant CEO
According to CryptoQuant’s Ki Young Ju, capitulation by an unknown mining pool was responsible for the June 2 dip to $8,600. The miner who had produced 51 blocks over the previous four days appeared to be capitulating, reports Ki Young Ju. The 51 blocks produced by the mining pool came with a reward of 637.5 BTC, 9% of the total over that time period.

DeCurret to Hold a Study Group on Digital Currency Settlement Infrastructure in Japan
Mizuho Bank, MUFG Bank and Sumitomo Mitsui Banking Corp. are looking to link their digital currencies to East Japan Railway’s Suica smart transit card. The Suica card is increasingly being accepted for purchases at stores and kiosks, especially within train stations, but it cannot be used for bank account transfers. Last year Mizuho rolled out its J-Coin Pay platform which can be used to transfer money or for QR-code payments. Meanwhile, MUFJ is reworking plans for its MUFG Coin digital currency.

Connecting Digital Economies: Policy Recommendations for Cross-Border Payments
This World Economic Forum report examines the key challenges facing cross-border retail payments and provides recommendations for policy-makers to overcome them. It finds that to efficiently facilitate cross-border retail payments between businesses and consumers around the world, policy-makers need to address four key areas: market barriers, interoperability, security and oversight.

Australia central bank mulls lowering e-payments charge
The Reserve Bank of Australia is conducting a review of retail payments regulation and will consider reducing the cost of electronic payments for both merchants and consumers given the current COVID-19 related reluctance to use cash. ATM withdrawals were down by 30% from March to April and down by more than 40% from a year earlier. However merchants have been hit by higher charges when debut card payments are automatically routed through certain international payment schemes.

Caitlin Long’s Crypto Bank Avanti Raises $5 Million
Avanti Financial Group, the crypto-focused bank backed by Caitlin Long, has announced the closure of a $5 million angel round. Avanti will focus its services only to an institutional client base and will provide payment, custody, securities, and commodities activities. The bank was registered in January and is in the process of applying for a bank charter.

Grab Launches its Numberless GrabPay Card in Philippines
Grab announced the launch of the GrabPay Card in the Philippines, a digital-first prepaid card powered by Mastercard. Regulated by the Bangko Sentral ng Pilipinas (BSP), GrabPay is a mobile wallet that can be used to transact within and outside the Grab app. A 24/7 fraud detection engine encrypts and protects user personal information and payment transactions. In a survey conducted by Mastercard in the Philippines in April 2020, 40% of Filipino consumers are now using contactless payments more often in light of the COVID-19 pandemic.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Sybil Welsh, Eastern Caribbean Central Bank (ECCB) Senior Project Specialist and member of the ECCB FinTech Working Group, confirms that the digital EC dollar is currently being piloted with financial institutions, merchants, and consumers in prep for a July 20 launch. https://www.facebook.com/ECCBConnects/

3 Main Reasons Bitcoin’s Price Plummeted 14% in 15 Minutes to $8,600
The price of Bitcoin (BTC) plummeted by 14% from $10,180 to $8,600 on BitMEX within less than 15 minutes. Three major factors that caused the price drop were: long contracts accounting for the overwhelming majority of the Bitcoin market, BTC reacting to a multiyear resistance at $10,500 and whales dumping.

Ethereum price reclaims $250 ahead of major upgrade
The Ethereum 2.0 upgrade is still on track to go live in July. The new upgrade will see Ethereum transition to a hybrid consensus system formed of a mix between its current proof-of-work (PoW) algorithm and a new proof-of-stake (PoS) algorithm. It will also introduce much-needed efficiency improvements, potentially helping Ethereum overcome its rampant bloat issues.

From Tether to Libra: Stablecoins, Digital Currency and the Future of Money
This paper provides an overview on stablecoins and introduces a terminology to help better identify stablecoins with disruptive potential. It provides a compact definition for stablecoins, identifying the unique features that make them distinct from previously known payment systems. Furthermore, it surveys the different use cases for stablecoins as well as the underlying economic incentives for creating them. Finally, it outlines critical regulatory considerations that constrain stablecoins and summarizes key factors that are driving their rapid development.

How a Fatal Weakness Forced Libra to Capitulate
The Tower of Babel project is over. Libra will comply with everything that governments demand, and in return, it will be absorbed into the existing international financial system. The lesson from Libra’s capitulation is that if you really want to challenge government authority, you don’t tie yourself into the existing system. You set up an alternative to it, and you defend it to the hilt.

MAS launches framework to promote responsible AI
The Monetary Authority of Singapore (MAS) launched two programmes to promote the responsible adoption of artificial intelligence and data analytics for financial institutions. The two projects are aimed at developing fairness metrics in credit risk scoring and customer marketing, and helping financial institutions validate their data-based systems.

FYI: The Stanford University Future of Digital Currency Initiative
The Initiative will focus on digital currencies of all forms across the entire ecosystem spectrum, from centralized to decentralized to hybrids including Central Bank Digital Currency (CBDC) and stablecoins amongst many others. Currently, more than 40 central banks are exploring some form of digital currency initiative. The Initiative will undertake research and evaluation of technical standards for interoperability in collaboration with key government, NGO and private industry stakeholders. The Initiative will also study and implement emerging cross-border business use cases related to supply chain, financial markets, charitable giving and macroeconomic impact of these instruments on promoting financial inclusion.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Eastern Caribbean Central Bank Governor Timothy Antoine will moderate a virtual discussion on “Pandemic and Digital Currency” and the possibilities offered by the ECCB’s digital EC currency project tomorrow (June 2) at 2:30 Eastern Time: https://www.eccb-centralbank.org/p/eccb-digital-dialogues

The Failed Hopes of Disintermediation: Crypto-custodian Insolvency, Legal Risks and How to Avoid Them
A Law Faculty of the University of Oxford paper examined the legal risks of depositing crypto-assets with custodians in the event of insolvency, and suggests ways that regulation and legal practice can help to mitigate this risk. However a lack of international standards related to the legal status of crypto-assets, along with the global nature of blockchain-based transactions, can make it hard to determine which laws apply.

Bug in Timelocked Bitcoin Contracts Could Spur Miners to Steal From Each Other
Pseudonymous engineer 0xb10c found more than a million “timelocked” bitcoin transactions made between September 2019 and March 2020 that were not accurately enforced by the network. This increases the risk of a hypothetical form of attack in which miners could essentially steal bitcoin from other miners. The bug affects 10% of timelocked transactions, or 2% of bitcoin transactions overall.

Banca D’Italia will open a facility dedicated to fintech in Milan
Banca D’Italia will soon establish a dedicated unit in Milan tasked with proposing and coordinating fintech initiatives, as well as monitoring retail payment services and instruments. Efforts will remain focused on supporting the development of a broadbased and safe digital economy, providing support for innovative projects promoted by the private sector and ensuring that households, firms and generalgovernment derive the maximum benefit.

Central Bank of Nigeria Guidelines on Operations of Electronic Payment Channels
The Central Bank of Nigeria updated its guidelines on operations of electronic payment channels.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Some IMF staff oppose Marshall Islands cryptocurrency, but microstate presses on
Manrique Saenz, IMF Mission Chief to the Marshall Islands, in an email to Decrypt, reiterated some IMF staff’s opposition to the Marshall Island’s forthcoming SOV national digital currency. She said none of their initial concerns have been allayed, despite new developments in the digital currency sphere. However, Barak Ben-Ezer, co-founder of SFB Technologies, said that the SOV will be issued this year.

Reasons Fostering or Discouraging the Implementation of Central Bank-Backed Digital Currency: A Review
This study analyses the current debate around central bank-backed digital currency (CBDC). A comparative study was carried out considering countries for and against implementing a CBDC and their reasons, looking for common causes, differences, etc. The conclusion was that there are opposite tendencies between defenders and detractors of establishing a CBDC.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Fintech and Payments Regulation: Analytical Framework
This IMF working paper proposes a fintech payment services analytical framework based on a four-step process; (i) identifying payment activities, (ii) licensing entities and designating systems, (iii) analyzing and managing risks, and (iv) promoting legal certainty. As payment activities evolve and potential systemic risks heighten, adherence to international standards and additional regulatory requirements should be warranted.

Innovation in Payments and Fintech: A comparison of the Chinese and Indian ecosystems
According to this World Economic Forum paper, Chinese and Indian payment system providers (PSPs) demonstrate that payment platform success is a non-linear function of the number of users it can attract, including both consumers and merchants. For Indian PSPs, interoperability of infrastructures has been essential for mass adoption of digital payments and creating a level playing field across players. Also, in both markets, the difference between online and offline was blurred from the beginning, from the moment smartphones were the defining factor and not the card.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Digital Dollar Project Publishes its US Central Bank Digital Currency White Paper
The Digital Dollar Project white paper calls for a tokenized US dollar that will operate alongside existing fiat currency and commercial bank money, and maintain the current two-tiered banking system. It will support a balance between individual privacy rights and necessary compliance and regulatory processes. The technological architecture will offer the flexibility to adapt configurability based on policy and economic considerations, and possibly (but not necessarily) be based on distributed ledger technology.

What Goldman Gets Wrong About Bitcoin (From Someone Who Used to Work There)
Jill Carlson argues for the need for the crypto industry to do more to quiet the noise and work harder to lift up the voices that make an honest and compelling investment and use cases for crypto-assets. She points out that the weakness of Goldman’s anti-bitcoin thesis is due primarily to the weakness of the industry around bitcoin in articulating the defining attributes and uses of this paradigm-shifting technology.

National Bank of Georgia Sets Regulatory Sandbox
The National Bank of Georgia has approved regulations on the establishment and use of a regulatory sandbox, that will allow representatives of the financial sector to test innovative services and products in real time after internal testing.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

The U.S. Digital Dollar Project’s White Paper will be published tomorrow (Friday, May 28) on DigitalDollarProject.org, making the case and setting up framework for U.S. CBDC through an iterative public/private process. Chris Giancarlo will be discussing it with @DBTreat and @CodeXCoasts at parallelsummit.io at noon.

Fintech Adoption and Innovation in the Hong Kong Banking Industry
A research arm of the Hong Kong Monetary Authority published a detailed report, based on an industry-wide survey, on overall Fintech adoption and the latest technological advancements in the banking sector. Banks see Fintech development more as an opportunity than a threat to their business operations, with risk management services having the greatest potential. Meanwhile, 86% of banks have adopted or plan to adopt Fintech solutions across all types of financial services. Preliminary results also show that increased cost efficiency and improved profitability are associated with more extensive Fintech adoption by banks.

Lithuania’s Central Bank Completes Blockchain Regulatory Research
The Bank of Lithuania has finished the research phase of its blockchain-related project, LBChain. In the next phase, it will create a sandbox that mixes technological and regulatory infrastructure for the technology. Among the projects mentioned, LBChain included a solution for blockchain-based regulatory reporting, a blockchain platform for green bond issuance, and a blockchain-based digital bank. https://www.lb.lt/en/news/lbchain-the-cradle-of-future-technologies-unrestricted-by-geographical-or-sectoral-boundaries

Grayscale Is Now Buying 1.5 Times the Amount of Bitcoin Being Mined
Crypto fund manager Grayscale Investments is accumulating Bitcoin at a rate equivalent to 150% of the new coins created by miners since the May 11 block reward halving. According to data published by independent crypto researcher Kevin Rooke, Grayscale has added 18,910 BTC to its Bitcoin Investment Trust since the halving, while only 12,337 Bitcoins have been mined since May 11.

Russia’s Central Bank to Launch Blockchain-Powered Digital Mortgage Platform
The Bank of Russian is reportedly developing a digital mortgage platform powered by a domestically developed blockchain called Masterchain. Masterchain is reportedly the first blockchain platform in Russia to be certified by the Federal Security Service. It is a permissioned, Ethereum-based blockchain that was launched in 2017.

Antigua’s Crypto Regulation Bill Passes Lower Parliament
Antigua and Barbuda’s House of Representatives passed a crypto-asset regulation bill, which will require all digital asset businesses operating in the country to obtain a license for issuing, selling, or redeeming virtual coins, operating as a payment service or electronic exchange, providing custodial wallet services, among others.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

I’ve updated my retail central bank digital currency (CBDC) explorer tabulation. China has now been “upgraded” to pilot status, and Ecuador has been “downgraded” to a less active status. https://kiffmeister.blogspot.com/2019/12/countries-where-retail-cbdc-is-being.html

TON Doesn’t Stand for ‘Telegram Open Network’ Anymore
TON once stood for “Telegram Open Network,” but has changed its name to reflect the messaging giant’s departure from the blockchain project. The project will simply be known as “The Open Network” going forward. Telegram officially terminated its involvement in Telegram Open Network in mid-May 2020. Although Telegram’s version of TON is no longer moving forward, it has given rise to other projects like Free TON and NewTON.

How WeChat Pay Determines If You Are Trustworthy With Their Credit Score
China’s WeChat Pay has told its users that it will be giving them a credit rating, called “Payment Points.” The system leverages artificial intelligence and uses users’ data collected from the platform including personal and credit records, spending habits and other factors to determine a user’s “credibility.” Tencent hopes the system will be adopted by small commercial institutions including banks for personal credit evaluation.

Coinbase Expands Institutional Services With Tagomi Purchase
Coinbase has announced plans to acquire Tagomi, an advanced crypto-asset brokerage platform specifically targeted at professionals and institutional investors. Tagomi’s platform is able to automate crypto trades valued at millions of dollars that many other firms still execute manually. Customers include family offices and crypto funds such as Pantera Capital, Bitwise and Multicoin Capital.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech

Facebook’s Calibra Rebrands to Novi
Libra’s wallet provider Calibra has now been rebranded to Novi – a portmanteau of the Latin root words, “novus” meaning new and “via” meaning way. The first wallet product from the firm is intended to hold Libra’s various digital currencies, once the Facebook-led initiative goes live.

China’s central bank governor says there is no timetable for digital currency launch
People’s Bank of China Governor Yi Gang said that the central bank doesn’t yet have a timetable for the official launch of digital yuan. He also confirmed that the PBOC has been internally testing its digital currency, known as Digital Currency/Electronic Payment (DC/EP), in four cities – Shenzhen, Xiong’An New Area, Chengdu, and Suzhou – since April. Yi also confirmed that DC/EP might see use during the 2022 Beijing Winter Olympics “to verify theoretical reliability and system stability.”

Spike in BTC Exchange Inflow Preceded Bitcoin Price Correction to $8.6K
Data from CryptoQuant suggests that miners are most likely behind the recent bitcoin sell-off. Some large Chinese miners may be selling because bitcoin is well above their breakeven costs. For large miners in Sichuan, China, the current rainy season will allow them to negotiate lower electricity rates. This means some mining centers will be able to secure a $0.03/KW rate which will bring down the cost of mining to about $6,000. Also, over-leveraged or small miners outside of China, whose profit margins have been significantly impacted by the May 11 halving, may be capitulating or simply selling to cover operating expenses.

Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech