Tag: OpenBanking

Kiffmeister’s #Fintech Daily Digest (20231123)*

~ kiffmeister

Korea shares plans for tokenized deposit, wholesale CBDC trials

The Bank of Korea (BOK) will launch two wholesale central bank digital currency (CBDC) tests. The first will be a pilot in which banks will issue tokenized deposits as programmable vouchers, and settle them between each other using wholesale CBDC. This tokenized deposit pilot will involve up to 100,000 people starting in September or October 2024. The second test will be a proof-of-concept that will involve banks using wholesale CBDC to settle carbon credit transactions on the Korea Exchange. [Listen to the press conference at the BOK]

Open finance policy considerations

The OECD published a paper that analyzes the benefits, risks and implementation challenges of open finance and provides policy recommendations for the safe and successful implementation of such data-sharing frameworks in finance. It considers the impacts of providing access to customers’ financial data and how to do this responsibly and safely, with due consideration for data privacy. The paper also discusses other consumer safeguards, notably related to consent and liability. Finally, it considers whether there is a need to support the development of technical infrastructure to promote data interoperability. [Read more at the OECD]

Canadian government to introduce open banking legislation

The Government of Canada’s Fall Economic Statement includes a promise to implement an open banking banking framework in 2024. The statement also indicated that the government intends to amend the Canadian Payments Act to expand membership eligibility for Payments Canada to firms other than big banks. The framework legislation, to be introduced in Budget 2024, will prescribe a phased-in approach to scope and oversight of the technical standard, with the goal of adopting legislation and fully implementing the necessary governance framework by 2025. [Read more at Finance Canada]

FYI here are some of my upcoming speaking engagements:

– Currency Research Americas Cash Cycle & Payments Seminar (Orlando Florida on November 27-30)[Register here]

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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 (20230909)*

~ kiffmeister

How should central banks explore central bank digital currency?

The IMF published a paper (co-written by yours truly) that proposes a dynamic central bank digital currency (CBDC) decision-making framework under which the central bank can make decisions under uncertainty. A phased and iterative approach could allow central banks to adjust the pace, scale, and scope of their CBDC projects as the domestic and international environment changes. If designed appropriately, CBDCs could allow central banks to modernize payment systems and future-proof central bank money as the pace and shape of digitalization continues to evolve. However, the decision to proceed with CBDC exploration and an eventual launch would need to be jurisdiction specific, depending on the degree of digitalization of the economy, the legal and regulatory frameworks, and the central bank’s internal capacity. [Read more at the IMF]

A guide to central bank digital currency product development

The IMF published a paper that develops a CBDC-specific project management methodology that establishes a common terminology and offers guidance to development teams on best practices for addressing the complex requirements and risks associated with CBDC. It is centered on an original five-step approach called the “5P Methodology”: preparation, proof-of-concept, prototypes, pilots, and production. The methodology emphasizes a phased approach to CBDC research and development, with strong focus on research preparation, experimentation and testing, risk management, stakeholder engagement, and cyber resilience. [Read more at the IMF]

Ripple acquires Fortress Trust, expands license portfolio in the US

Ripple is expanding its portfolio of U.S. regulatory licenses with the acquisition of Fortress Trust. Fortress Trust provides regulatory and technology infrastructure for blockchain organizations. The company holds a Nevada Trust license that allows it to custody financial assets. The acquisition is in addition to the more than 30 licenses Ripple holds across the country as a money transmitter, along with a BitLicense in New York, required digital currency businesses operating in the state. [Read more at Businesswire]

Open banking, shadow banking and regulation

The Bank of England (BoE) published a paper that argues that open banking will create diverse banking models: competitive banks (serving depositors who adopt open banking) and monopolistic banks (serving the other depositors). In equilibrium, at the margin, the profit of competitive and monopolistic banks should be equal. Hence, the system-wide impact of any policy change cannot be judged solely by the impact on a typical monopolistic or competitive bank, the impact on relative profitability also matters since this can lead banks to move from one banking type to another. [Read more at the BoE)

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s 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 (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and 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 (20230525)*

~ kiffmeister

Central bank digital currencies: ongoing policy perspectives

In a follow-up to their October 2020 paper, the Bank for International Settlements (BIS) and seven advanced economy central banks have published a new paper that shares perspectives on how central banks can best engage industry and the public, what are the key legal issues related to retail CBDC, what tools may be needed to manage stressed conditions, and what could be the implications of using blockchain technology and associated concepts in CBDC. It also suggests that central banks consider cross-border payments use cases for wholesale CBDC. [Read more at the BIS]

BCB publishes list of selected digital real technical testing participants

Banco Central do Brasil (BCB) selected 14 financial institutions to test digital real privacy and programmability functionalities through the implementation of a delivery versus payment (DvP) protocol for tokenized federal government bonds between customers from different institutions, in addition to the services that make up this transaction. The BCB received 36 proposals of interest from more than 100 institutions. The testing will involve no real transactions (so it isn’t the pilot that the BCB claims it to be). [Read more at the BCB]

Russia’s digital ruble pilot faces delays

Russia’s digital ruble pilot, originally scheduled to commence on April 1, 2023, has reportedly experienced delays due to legislative processes. The latest legislative amendments indicate a significant focus on enabling non-resident access. Other legal changes raise questions about data encryption and enforcement actions. The legal approval for the CBDC is now anticipated by the end of July, 2023. [Read more at Interfax]

Binance Pay sees growing interest in Africa, South Asia and Independent States

African, South Asian and Commonwealth of Independent States countries are using Binance Pay as a means to bridge cryptocurrencies as a payment source for goods and services, according to Binance regional business development lead Pakning Luk. Launched in 2021, the payments service has attracted over 120 million users in specific regions as it onboards major online merchant platforms and real-world retailers to its payment rail. Luk highlighted remittance and online shopping as key use cases seen by its user base. [Read more at CoinTelegraph]

Pathways to crypto-asset regulation: a global approach

The World Economic Forum (WEF) published a paper that highlight the needs and challenges in developing a global approach to crypto-asset regulation. In doing so, it delves into the various regulatory approaches being adopted by different jurisdictions. The result of multistakeholder consultations with experts from the Digital Currency Governance Consortium, comprising experts from public authorities, regulators, policy-making bodies, industry and academia, the paper explores pathways to creating a responsible crypto-asset ecosystem globally. [Read more at the WEF]

Colombia holds consultation on open banking

Superfinanciera Colombia is pursuing a consultation on open banking.  Feedback is accepted from the public until May 31, 2023. [Read more on LinkedIn]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Upcoming conferences, webinars and speaking engagements:

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 (20230105)

~ kiffmeister

I’ve updated my tabulation of wholesale central bank digital currency (CBDC) explorers, adding a Banque de France tokenized securities settlement project announced in December. However, the count remains at 17 central banks that have recently piloted, experimented with and/or researched wholesale CBDC. (I don’t separately count national central banks that are members of currency unions.) [Download the table here]

Silvergate sold assets at loss and cut staff to cover $8.1B in withdrawals

US-based crypto-focused Silvergate Bank, has cut 40% of its total staff or about 200 employees and written off the $196 million related to its acquisition of the technology and assets of Diem Association from Meta, parking its plans to launch a blockchain-based payment platform. The bank was hit with outflows of around $8.1 billion in digital asset deposits during the fourth quarter’s FTX debacle, which required the sale of $5.2 billion of debt securities at a loss of $718 million. However, Silvergate’s Exchange Network Platform continued to operate with an average daily trade volume of $1.3 billion in the fourth quarter of 2022, rising from $1.2 billion in the previous quarter. [Read more at Silvergate]

Saudi Central Bank Launches Open Banking Lab

The Saudi Central Bank (SAMA) launched its Open Banking Lab to provide banks and fintechs with a technical testing environment to enable them to develop, test, and certify their open banking services to ensure compatibility with the Open Banking Framework. The Open Banking Framework includes a comprehensive set of legislation, regulatory guidelines and technical standards based on international best practices to enable banks and fintechs to provide open banking services in the Kingdom. [Read more at SAMA]

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 (20221112)

~ kiffmeister

FTX says it moved remaining funds to cold wallets to ‘mitigate damage’ after ‘unauthorized transactions’

Over $600 million in crypto left FTX’s wallets late Friday (November 11, 2022) and many FTX wallet holders also reported that they were seeing $0 balances in their FTX.com and FTX US wallets. The bankrupt exchange’s general counsel Ryne Miller said the exchange was “investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges — unclear facts as other movements not clear.” Shortly after that, he said that the firm had initiated precautionary steps to move all digital assets to cold storage. Also, on-chain data seems to indicate that funds are also being drained from wallets of clients of Almeda, a sister trading company of the exchange. Obviously the situation is very fluid, with all sorts of rumors floating around. For those interested in following the FTX trials and tribulations, I’m still collecting them here on my Diigo social bookmarking page.

New York Fed, several big banks testing ‘regulated liability network’

The New York Fed is reportedly poised to unveil a proof-of-concept for “regulated liability networks” — an experiment around tracking and transmitting tokenized debt issued by an array of regulated financial institutions. Citi’s Tony McLaughlin, a leader in the field of regulated liability networks. in a recent blog post on Citi’s website, wrote, “It may be possible for central banks and regulators to create a new direction for the regulated sector through a slight pivot in existing CBDC projects and the nascent tokenization of commercial bank money. They may adopt a broader view of the task at hand — not the tokenization of central bank liabilities, but the tokenization of all regulated liabilities on a common platform.” [Read more on The Block]

FTX showed the problems of centralized finance, and proved the need for DeFi

The FTX collapse was a failure of centralized finance (CeFi), not decentralized finance (DeFi). If there is a silver lining for the FTX fiasco, it is a reminder of the importance of decentralization. Like the financial institutions that collapsed in 2008, the CeFi economic incentive is to under-collateralize and take risks with user funds, play political games, and cozying up to regulators. DeFi platforms are designed to preserve the benefits introduced by Bitcoin and magnified by Ethereum: permissionless, transparency, censorship resistance and self-sovereign custody of assets. [Read the whole editorial on CoinDesk]

Binance Reserves Show Almost Half of Holdings Are in Its Own Tokens

Binance holds $74.7 billion worth of tokens of which around 40% are in its own BUSD US dollar-pegged stablecoin and its BNB native coin. Of the $74.6 billion termed as networth, about $23 billion was in BUSD and $6.4 billion in BNB. The exchange has also allocated 10.5% of its holdings in Bitcoin and 9.8% in Ether. While Binance shared details of its reserves, the dashboard does not break down how much of the assets are its own holdings, versus those of its customers. [Read more on Bloomberg]

Crypto.com Holds 20% of Its Reserves in Meme Token SHIB

Crypto.com holds 31% of its digital asset reserves in Bitcoin, 20% in the Shiba Inu token (a highly speculative “meme coin”) and 17% in Ethereum. Various other cryptocurrencies and tokens collectively account for the rest. Meme coins are cryptocurrencies and tokens that are typically inspired by internet memes, and don’t have significant functional utility. [Read more at Decrypt]

New Zealand government moves to introduce open banking to give customers a better deal

New Zealand will introduce open banking over the next two years. Minister of commerce and consumer affairs David Clark said “open banking ensures banks must share customer information if they request it, making it easier for New Zealanders to compare mortgage rates, apply for loans, and switch banks.” [Read David Clark’s statement here]

A LeVeL Paying Field: Cryptographic Solutions towards Social Accountability and Financial Inclusion

Crypto-assets rely on fixed public/private key algorithms, which are resting targets for advanced cryptanalysis. BitMint’s BitMint*LeVeL protocol allows each holder to pick their own public/private key algorithm, so that an attacker would have to compromise all the algorithms used by all previous coin owners – a substantial security upgrade relative to existing crypto-assets. LeVeL can be applied to crypto-assets and fiat currency to effectively serve as a claim check. BitMint*LeVeL can achieve decentralization via BitMint’s InterMint: Money is minted by many smoothly interchangeable mints competing for traders. [Download the paper 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.

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]