Tag: Taxation

Kiffmeister’s #Fintech Daily Digest (20230706)*

~ kiffmeister

Central bank digital currencies and democratic values

The OECD published a paper, with contributions from Satoshi Capital Advisors, that explores how the design and implementation of central bank digital currencies (CBDCs) can help countries mitigate threats to individual liberties and human rights, as well as promote the equitable treatment of citizens, the protection of privacy, and citizens’ trust in central banks. The sound governance architecture of CBDC systems can further support these objectives. [Read more at the OECD]

India negotiates cross-border CBDC payments with global central banks

The Reserve Bank of India (RBI) is reportedly in dialogue with its counterparts from at least 18 other countries on the possibility of cross-border payments in the digital rupee. Central banks from these countries have already opened rupee vostro accounts since July 2022. India is eager to promote CBDC as a payment method for importing Indian goods for countries that are struggling with the U.S. dollar supply. [Read more at the Economic Times]

Digital euro and privacy: Analysis of the EC regulatory proposal

On June 28, the European Commission published a regulatory proposal for the digital euro, on which the it suggested a way to design a digital euro and how to integrate it into EU laws. Jonas Gross reviewed the proposal with a focus on its privacy aspects, including how it can be ensured that major design elements, such as related to privacy, will not be changed over time. It will need clear rules on governance and democratic political procedures for changes in the design. Further, it should be seriously considered to make (part of) the code open source, e.g., around the exact data that is recorded. [Read more on Jonas’s blog]

Taxing cryptocurrencies

The IMF published a paper on crypto-asset taxation. The greatest challenges are for implementation: crypto’s quasi-anonymity is an inherent obstacle to third-party reporting. Design problems arise from crypto’ dual nature as investment assets and means of payment: more straightforward is a compelling case for corrective taxation of carbon-intensive mining. Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes. The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars, but the more profound risks may ultimately be for VAT/sales taxes. [Read more at the IMF]

*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:

  • I’ll be lecturing at the Digital Euro Association (DEA) Digital Money Academy on July 27, 2023. [Register here]

Kiffmeister’s global central bank digital currency monthly monitor

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

The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]

Kiffmeister’s #Fintech Daily Digest (20230526)*

~ kiffmeister

Circle takes Euro Coin multi-chain with launch on Avalanche

Circle launched its Euro Coin on Avalanche, the first in a series of expected multi-chain launches, following the initial launch on Ethereum last year (2022). Circle currently maintains two fiat-based stablecoins, USD Coin (with a market capitalization of about $29 billion), and Euro Coin ($48 million). [Read more on PR Newswire]

Etonec and Mina Foundation to Create ZK-Powered Compliance Tool

Etonec and Mina Foundation will roll out a new zero-knowledge (ZK) proof-powered regulatory compliance tool for the decentralized finance (DeFi) and Web3 space. It will address gaps within the privacy and compliance space by providing know-your-customer (KYC) and anti-money-laundering (AML) services on the Lumina DEX when it goes live later this year. The prototype is powered by zkApps, which enables private and compliant transactions. [Read more at Etonec]

The potential of CBDC for transforming public finance: a focus on VAT systems

The Japan Ministry of Finance’s Michi Kakebayashi distributed a paper that explores the potential benefits of retail central bank digital currency (CBDC) for value added tax (VAT) systems. These benefits include streamlining and automating transaction, record-keeping, filing, tax payment, refund processes, and auditing reducing compliance and administration costs. While e-invoicing and e-payment may also achieve similar outcomes, the success of such alternatives would depend heavily on the financial institutions. The paper concludes that CBDC can address challenges faced by the VAT system while preserving simplicity, fairness, and effectiveness. [Read more at SSRN]

Taxing Stablecoins

The IMF published a paper that considers stablecoin tax treatment and associated challenges, and the challenges of achieving neutrality. Without greater tax certainty and tax neutrality than what is currently available, stablecoins will not be able to properly fulfill their promise as an alternative means of payment. Gaps and mismatches in tax treatment between tax jurisdictions may create distortions and opportunities for abuse. [Read more at the IMF]

*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 (20220920)

~ kiffmeister

The Hong Kong Monetary Authority (HKMA) e-HKD policy stance

The Hong Kong Monetary Authority (HKMA) released a position paper that sets out its policy stance on retail central bank digital currency (CBDC) and outlines its next steps. It was informed by two rounds of market consultation, one on high-level technical design and one on key policy and design issues. Taking into account the feedback received and further study by the central bank’s staff, the HKMA will start paving the way for possible implementation of e-HKD in the future. A three-rail approach will be adopted, one of which will be a pilot involving selected banks, payment companies and other technology firms, plus their staff and a small number of clients. [Read more at the HKMA]

Final Decision on Digital Tenge Still Pending in Kazakhstan

The final decision on the National Bank of Kazakhstan’s Digital Tenge project has reportedly not yet been made, but is expected to be announced by the end of 2022, the project’s head Ainur Kenzhayeva said in an interview with The Astana Times. The team is working now to expand the platform’s functionality. A pilot project with the participation of real users in a limited loop is also planned for this fall. [Read more at The Astana Times]

The Chainalysis 2022 Global Crypto Adoption Index

According to Chainalysis, global crypto adoption has leveled off in the last year after growing consistently since mid-2019. Emerging markets dominate the index. Out of the top 20 ranked countries, ten are lower middle income (:Vietnam, Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya, and Indonesia), eight are upper middle income (Brazil, Thailand, Russia, China, Turkey, Argentina, Colombia, and Ecuador) and two are high income (United States and United Kingdom). [Read more at Chainalysis]

Buy Now, Pay Later: Market trends and consumer impacts

The U.S. Consumer Financial Protection Bureau (CFPB) published research on the U.S. Buy Now, Pay Later (BNPL) market, based on data from Affirm, Afterpay, Klarna, PayPal, and Zip Co. It identifies several benefits of BNPL loans over legacy credit products (no interest and sometimes no late fees, and ubiquitous, easy to access, simple repayment structure) and a number of potential consumer risks (a requirement to use autopay for all loan payments, data harvesting and borrower overextension). [Read more at the CFPB]

Deutsche Börse to issue digital securities on DLT-ready D7 platform

“Last year, the Deutsche Börse unveiled the launch of D7, a digital securities post-trade platform. It is now taking its second step by issuing digitally native securities in the fourth quarter. While the latest phase uses smart contracts, the securities are not yet blockchain-based, which is planned for a third phase.” [Read more at Ledger Insights]

 

 

 

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) 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 chronicles@kiffmeister.com.

Kiffmeister’s #Fintech Daily Digest (20220919)

~ kiffmeister

After all this effort, crypto-assets are just tech stocks

Bloomberg’s Joe Weisenthal makes the same point I’ve been making for many months. “Basically [crypto-assets are] just tech stocks. Not only are the coins trading in line with each other still, they’re still basically trading in line with the Nasdaq 100… What does this all mean? One possibility is that the marginal crypto-asset buyers just doesn’t care about any of this stuff. Proof-of-work? Proof-of-stake? The merge? Inflation hedging? The halving? Deflationary monetary policy? What’s all that stuff? In other words, it’s possible that there’s a small coterie of people paying attention to any of this. And that what’s really driving price is just the animal spirits of a much larger group of speculators, who are also moving the price of Zoom or Tesla or Meta or whatever else. [Read more on Twitter]

Are interest rate swaps the next frontier of decentralized finance?

Decentralized finance (DeFi) is expanding into the world of interest rate swaps (IRS), a derivative instrument for exchanging fixed and variable interest rates. DeFi firm Voltz Labs has launched a non-custodial automated market making (AMM) IRS trading platform based on the Aave and Compound DeFi USDT, USDC, DAI and ETH lending markets. However, IRS AMMs are challenged by DeFi markets’ lack of fixed-rate products off which to price swaps. (Traditional markets offer variable- and fixed-rate products off which to arbitrage each other.)  [Read more about the Voltz protocol here]

New data on the e-levy in Ghana: unpopular tax on mobile money transfers is hitting the poor hardest

Ghana introduced a 1.5% tax (“E-levy”) on mobile money transactions in May 2022, in a country where 40% of the population aged 15 and above use mobile money platforms. It has been justified as a way to reduce aid dependence, and to capture informal economy workers. An International Centre for Tax and Development (ICTD) paper finds that the overall effect of the E-levy is highly regressive with users in the bottom income quintile paying the largest share as a proportion of their income, especially home-based informal workers. However, a 100 cedi/day (equivalent to about $10/day) taxation threshold has provided some relief. [Read more at the ICTD]

 

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) 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 chronicles@kiffmeister.com.