Kiffmeister’s #Fintech Daily Digest (20230122)

Binance says Signature Bank sets transaction minimum amid pullback

Binance said Signature Bank will only handle user transactions of more than $100,000 as of February 1, 2023. According to Binance, this is the case for all of Signature Bank’s crypto exchange clients, and only its Signature Bank customers are affected. An earlier story from AsiaMarkets.com said that this limit applied to all banks. Also, Binance said that only 0.01% of its average monthly users are serviced by Signature Bank, but those customers would still be able to use their credit or debit cards to buy or sell cryptocurrencies. Also, SWIFT-based transfers would remain in operation for non-USD bank transfers, and the change wouldn’t impact its “corporate accounts.” [Read more at CoinTelegraph]

On-Chain Foreign Exchange and Cross-Border Payments

Circle Financial and Uniswap Labs staff published the results of their studies of the use of distributed ledger technology (DLT) in the trading and settlement of foreign exchange (FX) on public blockchains. They compared the traditional trading and settlement of FX with DLT-based implementations using stablecoins and automated market makers. Using public blockchain data, they quantified the liquidity, stability, and transaction costs of on-chain FX transactions in early adoption. They found consistency between on-chain FX exchange rate and those observed through traditional trading venues and stable on-chain liquidity throughout all times of the day and weekends. Their estimates suggest that on-chain FX can reduce the cost of remittance by as much as 80 percent. [Read More at SSRN]

Empirical evidence on the ownership and liquidity of real estate tokens

A paper by Robeco’s Laurens Swinkels examined the financial and economic consequences of tokenizing 58 residential rental properties in the US, particularly those in Detroit. Tokenization aims at fragmented ownership. He found that the residential properties examined have 254 owners on average. Investors with a greater than $5,000 investment in real estate tokens, diversified their real estate ownership across properties within and across the cities. Property ownership changed about once yearly, with more changes for properties on decentralized exchanges. He reported that real estate token prices moved according to the house price index; hence, investing in real estate tokens provided economic exposure to residential house prices. [Read more at Financial Innovation]

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 (20230118)

Tokyo Fintech published a video of a presentation I gave on retail CBDC for your viewing enjoyment. [Watch it here]

Exploring multilateral platforms for cross-border payments

The Committee on Payments and Market Infrastructures (CPMI), the BIS Innovation Hub (BISIH), the International Monetary Fund (IMF) and the World Bank published a paper on challenges to addressing and approaching the establishment of a multilateral cross-border payments platform. Such a platform could reduce the need for intermediaries and allow payment service providers in different jurisdictions to transact directly with each other. Two paths are examined – the growth approach that involves expanding existing multilateral platforms to additional jurisdictions, currencies and participants, and the greenfield approach that involves building a new, potentially global, infrastructure for cross-border payments. [Read more at the BIS]

IMF to collaborate with the Philippines on wholesale CBDC project

The IMF will be collaborating with Bangko Sentral ng Pilipinas (BSP) to create a wholesale central bank digital currency (CBDC) aimed at addressing (i) frictions on cross border foreign currency transfers; (ii) settlement risk exposure arising from the use of commercial bank money in the equities market; and (iii) challenges in operating the automated intraday liquidity facility. The BSP has decided that retail CBDC would have limited benefits for the Philippines economy due to widespread digitalization of retail payments and financial inclusion reforms. [Read more at the IMF]

Way forward for the digital euro project

The European Central Bank (ECB) published a digital euro “way forward” slide deck that provides a nice summary of the current status of their CBDC project, including the timeline (see below). [Download the slide deck at the ECB]

Fast payment with cash and contactless payments possible

How long do payments via different payment methods take? This question was analyzed in an interesting research by Deutsche Bundesbank (BuBa). The result: The quickest payments are smartphones/smartwatch payments (14 seconds), followed by contactless card payments (15.2 seconds), and cash payments (18.7 seconds). [Read more at the BuBa]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

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 (20230113)

E-CNY app adds payment function for when mobiles are offline, out of power

The People’s Bank of China (PBOC) has added a new function to its e-CNY payment app so that select Android-based mobile phones can be still be used to make tap-to-pay payments without internet connection or power. Users need to activate the function in the e-yuan app, and can choose how many times it can be used and how much can be paid after their phone shuts down. To allay security concerns, A verification code must be entered into the device if set payment and transaction limits are exceeded. Additionally, users can suspend the function by logging into the e-yuan app from another device. It apparently uses near-field Communications (NFC) technology, and payment amounts are limited to ten transactions of up to RMB 500 ($75). [Read more at Yicai Global].

Market research on possible technical solutions for a digital euro

As announced in December 2022, the European Central Bank (ECB) is inviting market participants to take part in market research to get an overview of options for the technical design of possible digital euro components and services. Participation is voluntary and will not have any impact on eligibility for future procurement procedures related to a digital euro or any other topic. Nor will it imply any pre-selection for a potential subsequent tender. Submissions are due by February 17, 2023 in a fully anonymous manner, avoiding trade names. [Read more at the ECB]

Addressing the risks in crypto: laying out the options

A Bank of International Settlements (BIS) paper suggests that authorities can take three different approaches when it comes to crypto-assets; targeted regulation, containment (“let crypto burn”), or  a complete ban. Central banks and public authorities could also work to make traditional finance (TradFi) more attractive. A key option is to encourage sound innovation with central bank digital currency (CBDC). [Read more at the BIS]

Mobile money activity rates: Exploring barriers to regular use

The Global System for Mobile Communications (GSMA) is exploring of low mobile money activity rates. Despite high sign-up rates, only 26% of accounts are active on a monthly basis, while 38% are active on a 90-day basis. Findings from the annual GSMA Consumer Survey run in ten countries in 2021 shed light on perceived reasons for low activity. The main barriers were found to be a preference for cash, lacking sufficient funds for mobile money to be useful and not needing mobile money due to alternative electronic financial services. Other important barriers include users having a limited ability in using a phone, and mobile money transaction costs being too high. [Read more at the GSMA]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

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 (20230111)

Indians living in ten countries can now make payments through UPI

India’s National Payments Corporation of India (NPCI) has extended access to the Unified Payments Interface (UPI) to non-resident Indians from 10 countries (Australia, Canada, Hong Kong, Oman, Qatar, Saudi Arabia, Singapore, United Arab Emirates, United Kingdom, and the United States). Indians living abroad comprise the world’s largest overseas remittance-sending diaspora.  Other countries like Nepal, Bhutan, and Singapore, have already signed deals with NPCI to integrate their payment networks with UPI, enabling seamless cross-border payments. [Read more at the NPCI]

ABN AMRO issues tokenized corporate bond on public blockchain

ABN AMRO issued a €450,000 bond on a public blockchain on behalf of APOC Aviation. The bond’s entire issuance process was digital, including the preparation, placement and documentation. Ownership of the digital asset was recorded on the blockchain after payment was received, but payment took place on conventional payment rails. Investors store the digital assets in a wallet. [Read more at ABN AMRO]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

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 (20221229)

Turkish central bank Digital Lira project update

The Central Bank of the Republic of Turkey (CBRT) provided an update on the proof-of-concept phase of its Digital Turkish Lira Project. Payment transactions were successfully executed on the Digital Turkish Lira Network, and in the first quarter of 2023, closed-circuit tests will be carried out with technology stakeholders. The findings obtained from the tests will be shared with the public in a comprehensive evaluation report. The tests will then be expanded later in 2023 to include selected banks and financial technology companies, followed by broad participation pilot tests. Tests will include checking out how distributed ledger technology (DLT) based platforms will integrate with existing payment ecosystems. Also, throughout 2023, priority will be given to the legal framework and building out digital identification infrastructure. [Read more at the CBRT]

Bank of Canada 2021 Methods-of-Payment Survey Report

The Bank of Canada published the results from the 2021 Methods-of-Payment (MOP) Survey. It finds that while fewer Canadians are holding cash, those who do have cash tended to hold higher amounts over time. This is associated with fewer trips to obtain cash, but larger amounts withdrawn for a given trip, on average. Views about the features of cash have changed somewhat in recent years, though cash is still viewed quite positively in terms of acceptance, cost, ease of use and security. Most Canadians have no plans to stop using cash in the future. [Read more at the Bank of Canada]

2nd Edition of DC³ Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)

The International Telecommunication Union (ITU) will hold (virtually) the second edition of its DC3 Conference – From Cryptocurrencies to Central Bank Digital Currencies (CBDCs)​ from January 24 to 27 2023. On January 27 I will be moderating two panels on offline central bank digital currency (CBDC). Also, on January 24, Jacques Francouer and I will be providing an update to our ITU Digital Currency Global Initiative digital currency ontology work. [For more event detail go to the ITU DC3 conference site]

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.

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 (20221223)

Boston Fed, MIT complete research project into feasibility of a central bank digital currency

A joint research effort between the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) into the technical feasibility of a potential central bank digital currency (CBDC) is now complete. Early this year, Project Hamilton published its research on a transaction processor for a theoretical high-performance and resilient CBDC. The processor was developed as open-source research software, called OpenCBDC, and project leaders urged global contributors to continue working on it. The project was announced in 2020, and in February 2022, the Boston Fed and MIT released the OpenCBDC software and a whitepaper describing their initial findings. They plan to release additional retrospectives on Project Hamilton’s findings in the coming months. [Read more at the Boston Fed]

Nigerian central bank increases cash withdrawal limits after receiving “feedback from stakeholders”

Starting on January 9, 2023, the Central Bank of Nigeria (CBN) will allow individual banking clients to withdraw an equivalent of N500,000 ($1,120) per week (up from the N100,000 ($224) cap introduced on December 6, 2022). For corporate organizations, the cash withdrawal will be capped at N5,000,000 ($22,200 up from N500,000 ($1,120)). Also, the fees for cash withdrawals above the limits, in “compelling circumstances… for legitimate purposes”, were reduced to 3% and 5% respectively (down from 5% and 10%). However, the daily limit on withdrawals from automatic teller machines (ATMs) and point-of-sale (PoS) terminals will remain at N20,000 ($45). [Read more at the CBN]

Ripple CEO Brad Garlinghouse Says $3,700,000,000 Wells Fargo Violation Overshadowed by FTX

Ripple Labs CEO Brad Garlinghouse says that most people are obsessing over recent debacles in the crypto industry while ignoring what’s going on in the traditional finance world. “The world is (appropriately) outraged by SBF and FTX’s fraud, but when Wells Fargo mismanages billions in customer funds as well, it’s barely a blip on the radar. Food for thought…” Wells Fargo agreed to a $3.7 billion settlement with the Consumer Financial Protection Bureau over customer abuses tied to mortgages, auto loans and overdraft fees. [Read more at the Daily Hodl]

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.

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 (20221220)

Visa proposes account abstraction for recurring auto payments

Visa published a paper that outlines how to write a smart contract application for a self-custodial wallet that could allow a user to setup a programmable payment instruction that can push funds automatically from one self-custodial wallet account to another at recurring intervals, without requiring the user’s active participation each time.  This solution taps into a concept known as “Account Abstraction” (AA), a developer proposal currently being explored within the Ethereum ecosystem. The idea behind AA is to make user accounts on Ethereum function more like smart contracts by allowing a user to have programmable features embedded into their wallets. [Read more at Visa]

Currently, there are two types of accounts on the Ethereum network: Externally Owned Accounts (EOA), controlled by a private key, and Contract Accounts (CA), which are essentially smart contracts. EOAs can initiate transactions, but CA’s cannot. However, by using AA, it is possible to create a smart contract that can initiate transactions on behalf of an EOA, enabling the creation of a self-custodial wallet that can make automatic recurring payments. AA combines user accounts and smart contracts into a single type of account on the Ethereum blockchain. This is possible by allowing for the creation of validity rules for individual transactions. [Read more at Coin Desk]

Towards legal interoperability of retail CBDCs: a comparative law perspective

The European Central Bank (ECB) published a collection of papers presented at the September 5-6, 2022 European System of Central Banks (ESCB) Legal Conference, including three on the legal aspects of central bank digital currency (CBDC) interoperability. A paper by Jess Cheng and Joseph Torregrossa discusses the concept of “legal interoperability” in the domestic payment system and its relevance to the retail CBDC context, particularly as the necessary legal foundation for transferability and convertibility. The second by Panagiotis Papapaschalis makes the case for exposing and overcoming technical and legal obstacles to interoperability ex-ante and early on, rather than trying to tackle them ex post, i.e. only when the various, diverging, CBDCs have gained momentum. The third paper, by Seraina Grünewald, focuses particularly on the prospects and challenges for the legal interoperability of a digital euro. [Read more at the ECB]

ECB finds strong demand for both cash and digital payments

Cash is still the most frequently used means of payment at the point of sale, but its share is declining according to the latest study on the payment attitudes of consumers in the euro area, published by the ECB. Cash was used for 59% of point-of-sale transactions in 2022, down from 72% in 2019. It is the means of payment most often used for small-value payments in stores and for person-to-person transactions. A majority (60%) also consider it important to have cash as a payment option. Consumers perceive cash as helpful to remain aware of their expenditures, to protect their privacy and to allow transactions to be settled immediately. [Read more at the ECB]

UAE to launch instant payment platform in 2023

In the first quarter of 2023, the Central Bank of the United Arab Emirates (CBUAE) will start phasing in an Instant Payment Platform with a pilot group of licensed financial institutions. The initiative will enable payments processing and fund transfers in the UAE both around the clock and in real time. The new platform will enable the provision of the next generation of payment services to UAE financial institutions and consumers. [Read more at the CBUAE]

Crunchfish ready to start Digital Cash pilot with Indian banks

Crunchfish in partnership with HDFC Bank and one additional Indian bank have been working together to develop a solution for offline retail payments that will be demonstrated in a pilot to Reserve Bank of India (RBI) in their Regulatory Sandbox program. The project, if successful, will provide the basis for RBI’s guidance and regulatory support in providing offline retail payments, based on Crunchfish Digital Cash platform, to the payment ecosystem of India. [Read more at Crunchfish]

Five ways you can use Bitcoin Lightning today

etonec continued its series of articles on the Lightning Network and Bitcoin Lightning. In the latest article, it focuses on payments in retail, hospitality, e-commerce, as well as donations, cross-border payments, streaming payments, and financial inclusion. The advantages of payments via the Lightning Network are primarily the high transaction speed, direct confirmation and settlement of payments, as well as the marginal transaction fees and a high degree of scalability. As a result, applications with very small payment amounts (“nano-payments”) and a high number of transactions can be achieved in a technically efficient manner. [Read more at etonec]

Digitalization, financial knowledge and financial decisions

La Banca d’Italia published a survey-based paper that analyzed the relationship between digitalization, financial knowledge and financial decisions. It found that digital skills are a useful complement to financial skills in monitoring expenses and therefore to saving money. Moreover, such skills are also related to a more favorable attitude towards digital finance. With the same level of financial knowledge, digital skills do not however affect investment decisions. Finally, there is a significant gender gap, at the expenses of women, in terms of both digital skills and financial knowledge. [Read more at Banca d’Italia]

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.

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 (20221209)

CBDCTracker.org updated its central bank digital currency (CBDC) database. Key highlights include the Reserve Bank of India starting a digital rupee pilot, the Bank of Korea sharing its second phase results, the BIS sharing the results of their joint six-week pilot project, a Central bank of the Bahamas dive into to the unexpected low adoption of its Sand Dollar, and the Central Bank of Türkiye’s plans to start piloting a retail CBDC in 2023. [Check the data out at CBDCTracker.org here and read Atakan Kavuklu’s summary of the key changes here]

OMFIF publishes the 2022 edition of its Future of Payments report

The Official Monetary and Financial Institutions Forum (OMFIF) published the 2022 edition of its Future of Payments report. It focuses particularly on the challenges of cross-border payments for emerging market countries, delving into the validity of cryptocurrencies and stablecoins as a means of escaping domestic inflation and sending cheap remittances. It also examines the value proposition of CBDC for emerging markets, as well as looking at some of the progress made by CBDC cross-border integration projects. Notably, while central banks think that interlinking CBDCs might be a promising avenue for enhancing cross-border payments, they are not pursuing CBDC in order to provide a solution to the cross-border payments problem. The consensus is that CBDCs must justify their existence with other merits , such as improving financial inclusion. [Download the report at OMFIF]

Bank of England CBDC Sample Wallet Proof of Concept and Research

The Bank of England has put out a request for proposal (RFP) for proof of concept work on a sample central bank digital currency (CBDC) wallet, to help make a potential CBDC product more tangible for internal and external stakeholders, eg. as a prototype for future user testing. It will also support the Bank’s work towards the BIS Innovation Hub’s ‘Project Rosalind’, by testing integration of a front-end with the Rosalind API. Key deliverables will be (1) a mobile wallet app (built on both android as well as iOS); (2) wallet website; and, (3) an example merchant website, and (4) back-end server to serve mobile app and website, including calling the core ledger API and stored user data and transaction history. [Read more at the Gov.UK Digital Marketplace]

The economics of a retail central bank digital currency in Australia

Reserve Bank of Australia (RBA) Assistant Governor Brad Jones discussed where the case for a retail CBDC in Australia fits into the wider international debate over the future of money, and provided an update on the RBI’s retail CBDC pilot project. On balance, the RBA does not yet see a case for issuing an eAUD, but the central bank is “keeping an open mind” as its eAUD pilot program remains in full swing. The program has not prescribed use cases in advance, instead inviting the applicants (80 of them) to propose their own use cases (140), from which the RBA eAUD project team will select to take forward into the pilot phase in early 2023. [Read more at the RBA]

Spain’s central bank opens call for proposals for wholesale CBDC project

The Banco de España is starting a wholesale CBDC project, and asking financial institutions and tech providers to submit proposals for the initiative by January 31. The project will focus on (i) simulating wholesale CBDC funds transfers; (ii) testing the integration of a wholesale CBDC in the settlement of financial assets; and, arising from the above, (iii) analyzing possible pros and cons of a wholesale CBDC versus traditional processes, procedures and infrastructures. [Read more at the Banco de España]

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.

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 (20221207)

Technical onboarding package for digital euro prototyping

The European Central Bank (ECB) will be running a digital euro prototyping exercise to allow market participants to develop front-end prototypes that can be integrated with the back-end infrastructure developed by the Eurosystem. The documents were provided to the five companies that were selected to carry out the experimental work (CaixaBank (peer-to-peer online payments), Worldline (peer-to-peer offline payments), EPI (point of sale payments initiated by the payer), Nexi (point of sale payments initiated by the payee), and Amazon (e-commerce payments)). The material published provides the information needed by any market participant to develop front-end prototypes compatible with the Eurosystem’s back-end infrastructure, without restricting participants’ potential to innovate. The prototyping exercise is expected to be completed in the first quarter of 2023. [Read more at the ECB]

Central Bank of Nigeria reduces over-the-counter withdrawals to N100k, N500k per week

The Central Bank of Nigeria (CBN) has imposed limits on cash withdrawals to push consumers towards alternatives, including its own eNaira central bank digital currency (CBDC). Over-the-counter cash withdrawals by individuals and corporate entities are not to exceed N100,000 and N500,000, respectively, per week. All cash withdrawals above the the limits will attract processing fees of 5% and 10%, respectively. Withdrawals from automatic teller machines and point-of-sale terminals will also be subject to a N20,000 daily withdrawal limit. [Read more at Nairametrics]

Central Bank of Kenya resumes charges for mobile money wallet and bank transactions

The Central Bank of Kenya (CBK) has resumed charges for mobile money and bank account transactions. Transaction charges were stopped in 2020 to facilitate the use of mobile money during the COVID-19 pandemic. While the CBK resumes charges, they will be significantly lower than before the pandemic. [Read more at the CBK]

 

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.

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 (20221203)

Bank of Namibia consultation paper on central bank digital currency (CBDC)

The Bank of Namibia (BoN) published a consultation paper on central bank digital currency (CBDC). It notes that its degrees of freedom is likely to be influenced by Namibia’s Common Monetary Area (CMA) membership, with the South African Rand co-circulating alongside the Namibia Dollar as legal tender in Namibia. The options open to Rand holders are likely to also impact the options that the BoN would give Namibia Dollar holders. Hence, the CBDC direction taken by South African Reserve Bank is likely to have an impact on the BoN’s decisions in this regard. Consultations and collaborations between the CMA member countries are being held to push for and develop as far as possible, a common view and approach on CBDCs that will serve all the CMA countries optimally. [Read more at the BoN]

Curb your enthusiasm: The Fintech hype meets reality in the remittances market

The IMF published a paper that investigates claims that the remittances market is on the verge of being disrupted by Fintechs. As remittances are considered too costly and incumbent remittance service providers inefficient, opaque, and outdated. The paper concludes that, contrary to expectations, instead of disrupting incumbents Fintechs have increasingly been entangled with them. Therefore, not only there is no evidence of disruption, but it is unlikely to occur in the foreseeable future. Even so, the paper argues that Fintechs play an important role in the remittances market. Richard Turrin provides an excellent summary of the paper on LinkedIn. [Download the paper at the IMF]

Rising Tether loans add risk to stablecoin, crypto world

The Wall Street Journal published an article that claims that Tether has increasingly been lending its own USDT stablecoins to customers rather than selling them for hard currency upfront. “The shift adds to risks that the company may not have enough liquid assets to pay redemptions in a crisis.” Tether says it does indeed make short-term USDT loans to carefully vetted customers, but they are required to post “lots of extremely liquid” collateral, which could be sold for dollars if borrowers default. About 9% of USDT’s backing assets are comprised of such secured loans, according to Bloomberg’s Matt Levine. [Read more at the Wall Street Journal]

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.

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]