Kiffmeister’s #Fintech Daily Digest (20220831)

Ava Labs CEO denies CryptoLeaks’ claims as ‘conspiracy theory nonsense’

Ava Labs CEO Emin Gün Sirer has dismissed allegations from CryptoLeaks that the company formed a “secret pact” with U.S. law firm Roche Freedman LLP to use the American legal system “gangster style” to “attack and harm crypto organizations [i.e., Ava Labs competitors].” Ava Labs is the firm behind Avalanche (AVAX), an Ethereum (ETH) rival in the decentralized finance (DeFi) and customized blockchain space. Roche Freedman LLP was recently involved in separate high-profile lawsuits against Solana Labs and Binance, claiming that the firms were engaging in unlawful activities. [Read more at CoinTelegraph]

The Digital Dollar Project Launches Technical CBDC Sandbox Program

The Digital Dollar Project (DPP) launched its central bank digital currency (CBDC) Technical Sandbox Program, with the help of initial participants Digital Asset, EMTECH, Knox Networks, and Ripple. It will serve as a collaborative space for the DDP participants and financial service providers, offering a neutral environment for the evaluation of technological, business, and policy approaches to CBDCs. It is slated to begin in early October with the inaugural cohort focused on cross-border payments. [Read more at the DPP]

Klarna losses quadruple as costs rise

“Losses at Swedish [buy now, pay later] payments provider Klarna reported a net loss of SKr6.2 billion ($581 million) for the first half of 2022, compared with SKr1.4 billion a year earlier. (Buy now, pay later services allow consumers to defer or divide payments into instalments.) Klarna attributed the deepening losses to higher employee costs, investments in integrating newly acquired Swedish price comparison service PriceRunner and rising credit losses, reflecting the greater difficulty of underwriting new customers with limited credit histories.” [Read more at the Financial Times]

Discounted tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the International Monetary Fund and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Ticket prices are as low as $99 and you can save 30% by entering KIFFMEISTER where the registration page asks for a discount code. [Register here]

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

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

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

Kiffmeister’s #Fintech Daily Digest (20220303)

Monetary Authority of Singapore Sees No Need for a Retail Digital Sing Dollar

The Monetary Authority of Singapore (MAS) has assessed that the case for a retail CBDC in Singapore is not compelling. It has found that reasons typically offered for issuing retail CBDCs are not very relevant to MAS and Singapore at this juncture. “Some of the reasons usually offered are that CBDCs can ensure financial inclusion or enable cheaper and faster payments. Financial inclusion is not a significant problem in Singapore. Electronic payments in Singapore have also become pervasive, seamless, and efficient…  In short, [the MAS is] using improvements in payment technology and competition to achieve [its] objectives of cheap and fast payments for all, using existing forms of central bank-backed money… [However] the case for a CBDC could strengthen if foreign digital currencies become more widely used locally… [so the MAS] continues to build up its technological and institutional capabilities in the CBDC space…” [Read more]

Taiwan to Debut Central Bank Digital Currency by September

Taiwan is reportedly looking to complete trials of its prototype central bank digital currency (CBDC) by the third quarter of 2022. Its most recent design is a two-tier system that allows consumers to exchange bank deposits with digital currency. In addition, the CBDC can also be linked to credit and debit cards and will be legal tender. [Read more]

Is the Bank of Mexico Ready to Launch its CBDC?

The Bank of Mexico reportedly plans to launch a two-tier (“intermediated”) CBDC by 2024. As part of the roll-out, commercial banks expect interoperability capacity to increase through the Interbank Electronic Payment System (SPEI), and that a CBDC should in principle seek greater inclusion and lower transaction costs. [Read more]

Rwanda’s central bank to pronounce itself on digital currency by December 2022

The National Bank of Rwanda will reportedly complete its CBDC research by the end of December 2022, according to central bank Deputy Governor, Soraya Hakuziyaremye, after which  it will have a clear policy on whether it will issue the CBDC or not. Financial inclusion will be the primary goal. [Read more]

Overhaul Needed for BNPL as Losses Mount up in APAC

Despite phenomenal growth, current buy now, pay later (BNPL) models are showing to be rather unprofitable. Quinlan and Associates estimates that in Asia-Pacific (APAC), the largest BNPL firms, including Australia’s Afterpay and Japan’s Paidy, are currently running average profit margins of -15% per annum (p.a.), while the more nascent players operating in emerging markets like the Philippines’ Cashalo and Indonesia’s Akulaku are suffering from profit margins of -100% p.a. According to the analysis, APAC BNPL providers are struggling to reach profitability as costs relating to sales, marketing, funding, staff, technology, and credit losses eat into all their profits. Losses are even more pronounced for emerging market BNPL providers because of their stronger focus on long tail, unbanked/underbanked consumers, leading to much larger credit losses and funding costs. Quinlan and Associates identified three key pathways for them to become commercially viable: optimization, vertical integration and expansion. [Read more]

Kiffmeister’s #Fintech Daily Digest (20220302)

The potential effects on the Israeli banking system of issuing a digital shekel

The Bank of Israel published a paper on the potential impact of issuing a central bank digital currency (CBDC) on the stability of the banking system and its ability to continue fulfilling its financial intermediation function. It concludes that, under common assumptions regarding the substitution volume between the public’s deposits and the digital shekel, the negative impact to profitability is not expected to lead to a significant erosion in the banking system’s profitability, its stability, or its ability to provide credit and fulfill its classic functions in a modern economy. [Read more]

A Report Card on China’s Central Bank Digital Currency: the e-CNY

The People’s Bank of China’s Mu Changchun provided an update to the central bank’s CBDC pilot.  He reported that the e-CNY system completes transactions at higher speed than Visa, but it’s still way behind payment AliPay and TenPay. The pilot uses a centralized ledger to record retail transactions and, in parallel, implements a distributed ledger for day-end reconciliation. Wallets can be software based or hardware based, and Mr. Changcun presented a video showcasing how the hardware wallets work, including their offline functionality. [Read more]

Klarna losses swell to $748 million

Full year 2021 operating losses at Swedish “buy now, pay later” (BNPL) group Klarna soared to SKR7.1 billion (versus SKr1.4 billion reported in 2020), driven by expansion to fresh markets and the challenges of underwriting a massive inflow of new customers. Credit defaults of SKR4.6 billion (versus SKR2.5 billion in 2020) were a significant proportion of losses. On the other hand, net operating income was up 38% from 2020, with the U.S. market continuing to be Klarna’s fastest growing market (71% year-over-year growth). [Read more]