DFC

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Measurement and Use of Cash by Half the World’s Population
Measurement and Use of Cash by Half the World’s Population
The IMF published a paper that analyzes cash usage in 14 advanced and emerging market economies, using two measures; currency in circulation (CIC) and the value of cash withdrawn from ATMs. It finds that, while the CIC metric continues to rise, ATM withdrawals are declining rapidly. The main reason for this is that CIC includes cash used for payments, hoarding, and illegal use while ATM cash is focused much more on the use of cash for payments alone. As well, CIC is not adjusted for the turnover of cash for payments while ATM cash already includes it. The 14 countries in our sample account for half of the world’s population and two-thirds of its GDP.
#Fintech#CBDC#Cash#DFC
·imf.org·
Measurement and Use of Cash by Half the World’s Population
Wholesale CBDC – the safe way to debt capital market efficiency
Wholesale CBDC – the safe way to debt capital market efficiency
The European Stability Mechanism (ESM) published a paper that analyzes the usefulness of digital currencies for wholesale financial transactions in Europe. It identifies the risks impede broad adoption of distributed ledger technology (DLT), despite potential widespread debt capital market efficiency gains from DLT-based smart contracts. A wholesale central bank digital currency (CBDC) on a private permissioned blockchain could overcome these risks and impediments and lead to significant efficiency gains in the financial system.
#Fintech#CBDC#Tokenization#wCBDC#DFC
·esm.europa.eu·
Wholesale CBDC – the safe way to debt capital market efficiency
A practical guide to offline payment security
A practical guide to offline payment security
Lipis Advisors in partnership with Crunchfish published a paper that outlines the key security aspects relating to offline digital currency payments. Unlike other offline payment platforms that operate in various devices' secure elements, Crunchfish advocates a software-based approach that operates in smartphone trusted execution environments (TEEs). The need for hardware-based digital cash (e.g., on cards, wearables and feature phones) is acknowledged, but as peripheral bearers that need to be able to exchange digital cash with the smartphone as the main bearer, even in full offline-mode.
#Fintech#CBDC#Offline#Crunchfish#DFC
·crunchfish.com·
A practical guide to offline payment security
The Deposit Token: SBA white paper on a digital Swiss franc
The Deposit Token: SBA white paper on a digital Swiss franc
"The Swiss Bankers Association (SBA) has published a white paper on a digital Swiss franc, in which it outlines various designs of “tokenised” deposits on the blockchain. If issued by regulated banks, a deposit token could make an important contribution to Switzerland’s future competitiveness and innovative power, as well as bolster its sovereignty."
#Fintech#CryptoAssets#Stablecoins#Switzerland#Tokenization#DFC#DepositTokens
·swissbanking.ch·
The Deposit Token: SBA white paper on a digital Swiss franc
The Cash-use Cycle in Australia
The Cash-use Cycle in Australia
The Reserve Bank of Australia (RBA) published a paper on Australians' cash usage. It finds that the use of cash for day-to-day transactions continues to decline. Although the acceptance of cash by merchants remains at a high level, it is a little lower than prior to the pandemic. Nevertheless, some communities, particularly in rural areas, are increasingly susceptible to a decline in cash access if there were to be further removal of cash access points. Furthermore, many merchants indicated plans to discourage cash payments at some point in the future.
#Fintech#CBDC#Cash#Australia#DFC
·rba.gov.au·
The Cash-use Cycle in Australia
In Ukraine, Crypto Finds a Purpose
In Ukraine, Crypto Finds a Purpose
The United Nations High Commission for Refugees (UNHCR), the Stellar Development Foundation, USDC stablecoin issuer Circle, and cross-border money transfer company MoneyGram have rigged up a system for sending aid directly to Ukrainian refugees using crypto-assets. The UNHCR delivers USDC hosted on the Stellar network, to a digital wallet that can be accessed via smartphone, even to people without bank accounts. The recipient then exchanges their USDC for local currency at any MoneyGram facility. Because the USDC is hosted on decentralized infrastructure and in the custody of individual wallet owners, funds cannot be withheld.
#Fintech#CryptoAssets#Circle#MoneyGram#USDC#Stablecoins#CrossBorder#Payments#DFC
·wired.com·
In Ukraine, Crypto Finds a Purpose
India and UAE to Collaborate on Developing Digital Currencies
India and UAE to Collaborate on Developing Digital Currencies
The Reserve Bank of India (India) and the Central Bank of the United Arab Emirates (CBUAE) signed a memorandum of understanding (MoU) to explore the interoperability between the central bank digital currencies (CBDCs) of the two central banks. The banks will jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridges to facilitate cross-border CBDC transactions of remittances and trade. The MoU also provides for technical collaboration and knowledge sharing on matters related to Fintech and financial products and services. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55372
#Fintech#CBDC#India#UAE#CrossBorder#Payments#DFC
·coindesk.com·
India and UAE to Collaborate on Developing Digital Currencies
Whether Private Or Public, The U.S. Needs A Digital Dollar
Whether Private Or Public, The U.S. Needs A Digital Dollar
David Birch: "The travails of Silicon Valley Bank (SVBVB), which went from having an A credit rating to being taken over by the Feds in three days, reminded me of a the words of Morgan Ricks, a professor at the Vanderbilt Law School and a former Treasury official, who said "there's nothing inherently dodgy about stablecoins. But there is something inherently dodgy about banking, which is why countries build elaborate regulatory regimes to protect deposits”. Indeed. We should be encouraging truly stable stablecoins. Most of all, we should be encouraging a digital dollar."
#Fintech#CBDC#CryptoAssets#Stablecoins#DFC
·www-forbes-com.cdn.ampproject.org·
Whether Private Or Public, The U.S. Needs A Digital Dollar
The Values of Money: Will Tyranny or Freedom Be in Your Digital Wallet?
The Values of Money: Will Tyranny or Freedom Be in Your Digital Wallet?
In a new report published by the American Enterprise Institute, we expand on privacy principles published by the digital dollar. Our report includes two clear prescriptions: First, a U.S. freedom coin must not weaken the personal financial privacy available with today’s paper cash. Second, a U.S. CBDC must not become a new, easier avenue for government agencies to surveil citizens, levy fines and enact punishments as can be expected from autocratic governments using surveillance coins.
#Fintech#CBDC#Privacy#DFC
·aei.org·
The Values of Money: Will Tyranny or Freedom Be in Your Digital Wallet?
Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs
Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs
"We analyze U.S. banks’ asset exposure to a recent rise in the interest rates with implications for financial stability. The U.S. banking system’s market value of assets is $2 trillion lower than suggested by their book value of assets accounting for loan portfolios held to maturity. Marked-to-market bank assets have declined by an average of 10% across all the banks, with the bottom 5th percentile experiencing a decline of 20%. We illustrate that uninsured leverage (i.e., Uninsured Debt/Assets) is the key to understanding whether these losses would lead to some banks in the U.S. becoming insolvent-- unlike insured depositors, uninsured depositors stand to lose a part of their deposits if the bank fails, potentially giving them incentives to run. "
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#SiliconValleyBank#DFC
·papers.ssrn.com·
Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs
SVB Took the Wrong Risks
SVB Took the Wrong Risks
"Yes! I think that post (“Why is finance so complex?”) from Steve Randy Waldman at Interfluidity is a classic, I cite it often, and it was what I had in mind as I was writing yesterday. Waldman describes banking as, broadly speaking, an opacity mechanism for credit, a way for society to take a lot of credit risk without the people taking that risk quite knowing that that’s what they’re doing. My point yesterday was that it is also an opacity mechanism for interest rates, a way for society to borrow short and lend long. Sometimes you need to bulk up the opacity though."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·bloomberg.com·
SVB Took the Wrong Risks
NAB completes world-first with cross-border stablecoin transaction
NAB completes world-first with cross-border stablecoin transaction
Australia's NAB has completed an intra-bank cross-border transaction using NAB-issued stablecoin on the public and permissionless Ethereum blockchain, involving deployment of stablecoin smart contracts for seven major global currencies. NAB’s AUDN stablecoin will be fully backed one-for-one with Australian dollars and managed as a liability of the bank, will be the cornerstone for NAB’s ambitions in digital assets. NAB claims this is the world’s first use case of a large financial institution leveraging a public blockchain for cross-border payment rails.
#Fintech#CryptoAssets#Stablecoins#Australia#CrossBorder#Payments#DFC
·news.nab.com.au·
NAB completes world-first with cross-border stablecoin transaction
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
"The events of the last few days highlight the risks posed by excessive reliance on centralized infrastructure, and will be certain to inform future decisions. But despite a quickly-evolving regulatory environment in the U.S., some of the basic primitives granted by digital bearer assets such as bitcoin—that they are trivially self-custodied, disintermediated, and provide on-chain transparency—are more acute than ever, echoing a sentiment which sparked a pseudo-anonymous Satoshi Nakamoto to release a new project to the world amid the Great Financial Crisis in October of 2008."
#Fintech#CryptoAssets#Circle#USDC#Silvergate#Stablecoins#DFC
·coinmetrics.substack.com·
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
"The events of the last few days highlight the risks posed by excessive reliance on centralized infrastructure, and will be certain to inform future decisions. But despite a quickly-evolving regulatory environment in the U.S., some of the basic primitives granted by digital bearer assets such as bitcoin—that they are trivially self-custodied, disintermediated, and provide on-chain transparency—are more acute than ever, echoing a sentiment which sparked a pseudo-anonymous Satoshi Nakamoto to release a new project to the world amid the Great Financial Crisis in October of 2008."
#Fintech#CryptoAssets#Circle#USDC#Silvergate#Stablecoins#DFC
·coinmetrics.substack.com·
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
Remarks by FDIC Chairman Martin Gruenberg relevant to SVB's collapse
Remarks by FDIC Chairman Martin Gruenberg relevant to SVB's collapse
"The current interest rate environment has had dramatic effects on the profitability and risk profile of banks’ funding and investment strategies. First, as a result of the higher interest rates, longer term maturity assets acquired by banks when interest rates were lower are now worth less than their face values. The result is that most banks have some amount of unrealized losses on securities. The total of these unrealized losses, including securities that are available for sale or held to maturity, was about $620 billion at yearend 2022. Unrealized losses on securities have meaningfully reduced the reported equity capital of the banking industry. The good news about this issue is that banks are generally in a strong financial condition, and have not been forced to realize losses by selling depreciated securities. On the other hand, unrealized losses weaken a bank’s future ability to meet unexpected liquidity needs. That is because the securities will generate less cash when sold than was originally anticipated, and because the sale often causes a reduction of regulatory capital."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·fdic.gov·
Remarks by FDIC Chairman Martin Gruenberg relevant to SVB's collapse
Circle To ‘Stand Behind’ USDC, Cover $3.3 Billion Shortfall Held in Silicon Valley Bank
Circle To ‘Stand Behind’ USDC, Cover $3.3 Billion Shortfall Held in Silicon Valley Bank
USDC stablecoin issuer Circle announced that it will “cover any shortfall” caused as a result of the $3.3 billion in its funds held by the collapsed Silicon Valley Bank (SVB). Circle said it is legally obliged to “stand behind” USDC and will cover any shortfall using corporate resources—and external capital if necessary. USDC is currently collateralized 77% ($32.4 billion) with short-term U.S. Treasury Bills and 23% ($9.7 billion) with commercial bank deposits ($5.4 billion with BNY Mellon, $3.3 billion at SVB, and $1 billion at Consumer Bank). Circle also maintains USDC transaction and settlement accounts with Signature Bank.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·decrypt.co·
Circle To ‘Stand Behind’ USDC, Cover $3.3 Billion Shortfall Held in Silicon Valley Bank
Startup Bank Had a Startup Bank Run
Startup Bank Had a Startup Bank Run
"The lesson might be that there are some industries that are bad to bank. Imagine that it was 2021, and someone was like “do you want to start the Bank of Crypto? What about the Bank of Venture-Backed Tech Startups?” You’d be tempted, right? Those industries had so much money! They seemed cool. If you were their bank — if you were the specialized bank that exclusively focused on those industries — influencers on Twitter would tweet nice things about you, and you’d get invited to fancy parties. Also, as their bank, you’d probably find a way to get a cut of growing industries with lots of potential. Provide banking services to tech startups, get warrants in those startups, get rich when they go public. Provide banking services to crypto exchanges, start some sort of blockchain-based payment network, get rich through the magic of saying “blockchain” a lot. "
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·bloomberg.com·
Startup Bank Had a Startup Bank Run
USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
Circle’s USDC stablecoin, the second-largest stablecoin at $42 billion of market cap, depegged from the USD, trading as low as $0.88 on Coinbase this morning (March 11, 2023). This followed Circle's announcement that $3.3 billion of USDC's reserves were held at Silicon Valley Bank (SVB) which was shut down yesterday by the California Department of Financial Protection and Innovation and taken over by the Federal Deposit Insurance Corporation (FDIC). Also, Coinbase announced that USDC redemptions would be temporarily suspended.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·cointelegraph.com·
USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
Connecting digital islands - Swift CBDC sandbox project
Connecting digital islands - Swift CBDC sandbox project
SWIFT announced further progress on its experimental solution for interlinking central bank digital currencies (CBDCs), reporting that 18 central and commercial banks found “clear potential and value” in the API-based CBDC connector after a comprehensive review. SWIFT published the findings of the 12-week period of collaborative sandbox testing, in which almost 5,000 transactions were simulated between two different blockchain networks and with existing fiat-based payment systems. Sandbox participants included the Banque de France, the Deutsche Bundesbank, the Monetary Authority of Singapore, BNP Paribas, HSBC, Intesa Sanpaolo, NatWest, Royal Bank of Canada, SMBC, Société Générale, Standard Chartered and UBS. Over the coming months SWIFT will develop a beta version of the solution for payments that can be tested further by central banks. A second phase of sandbox testing will also be held, in which the SWIFT community can collaborate further with a focus on new use cases.
#Fintech#CBDC#SWIFT#DFC
·swift.com·
Connecting digital islands - Swift CBDC sandbox project
CBDC as an untapped opportunity for the West African Economic and Monetary Union
CBDC as an untapped opportunity for the West African Economic and Monetary Union
IMF staff concluded that a central bank digital currency (CBDC) "could offer an untapped opportunity for promoting the development of the financial sector as well as financial inclusion in the West African Economic and Monetary Union (WAEMU)." However, the staff report warned that a CBDC presents significant challenges, and should not be viewed as a financial inclusion "silver bullet". "In particular, it would be important to assess the extent to which private sector initiatives— particularly those related to e-money—could deliver similar results in terms of inclusion, efficiency, and safety, if adequately regulated.
#Fintech#CBDC#Africa#WAEMU#DFC
·imf.org·
CBDC as an untapped opportunity for the West African Economic and Monetary Union
How Deposit Tokens Are Changing The Digital Money Ecosystem
How Deposit Tokens Are Changing The Digital Money Ecosystem
"Like bank deposits that make up over 90% of the money in use today, tokenized deposits can support a variety of use cases including domestic and cross-border payments, trading and settlement, and provision of cash collateral. In a token form, commercial bank money becomes a programmable instrument that operates 24/7 and can be transferred instantly, without relying on intermediaries. These technical features allow “deposit tokens” to express sophisticated payment operations and to act as collateral that travels within minutes."
#Fintech#CryptoAssets#Stablecoins#DepositTokens#DFC
·oliverwyman.com·
How Deposit Tokens Are Changing The Digital Money Ecosystem
Central Bank of Nigeria consults Convexity on e-Naira adoption
Central Bank of Nigeria consults Convexity on e-Naira adoption
The Central Bank of Nigeria (CBN) has reportedly partnered with Nigerian-based blockchain development firm Convexity to speed up the adoption of eNaira. Barbados-based Bitt is the CBN's current eNaira platform provider, although rumors were flying in February 2023 that the CBN was looking for a new platform provider. From the headlines, one might suppose that Convexity's role here is to replace Bitt's, but a Techpoint article makes it seem like Convexity's role is focused mainly on building use cases for the eNaira. https://techpoint.africa/2023/03/01/even-with-zero-charges-and-speedy-transfers-nigerians-are-not-using-the-enaira-and-heres-why/
#Fintech#CBDC#Africa#DFC
·cryptotvplus.com·
Central Bank of Nigeria consults Convexity on e-Naira adoption
Privacy Enhancing Technologies: Payments and Financial Services in a Digital Society
Privacy Enhancing Technologies: Payments and Financial Services in a Digital Society
The Bank of Japan (BoJ) published a paper on privacy-enhancing CBDC technologies, comparing methods for privacy-preservation, such as homomorphic encryption and zero-knowledge proofs (ZKPs), and discusses how important other central banks rank privacy within their CBDC projects. As part of its CBDC research, the BoJ will continue to research and study privacy protection related to digital currencies with a wide range of stakeholders.
#Fintech#CBDC#Japan#Privacy#DFC
·boj.or.jp·
Privacy Enhancing Technologies: Payments and Financial Services in a Digital Society
ANZ to trial offline CBDC payments via smart cards
ANZ to trial offline CBDC payments via smart cards
Australia's ANZ is partnering with two universities to trial offline central bank digital currency (CBDC) payments via smart cards that can be loaded with funds and used like physical cash. Students will install secure apps on their smartphones to view their CBDC balances and use NFC functionality to load CBDC onto their smart cards. Students will use them to make purchases at on-campus merchants and make instant peer-to-peer payments in offline environments when unconnected to existing banking infrastructures. https://dfcrc.com.au/2023/02/28/offline-payments/
#Fintech#CBDC#Australia#Offline#DFC
·finextra.com·
ANZ to trial offline CBDC payments via smart cards