Snippings

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Halifax and Revolut were among a string of UK businesses hit by a disruption to Google Cloud’s services in London on Tuesday, before the tech giant resolved the problem.

From: UK banks hit by Google Cloud outage.

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The key requirement for settlement is that both settlement banks have an account on the same ledger – whether the ledger is at a central bank, commercial bank or other institution.

From: (31) Real-time Cross Border Payments Explained – by Jeremy Light.

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The U.S.-U.K. Transatlantic Taskforce for Markets of the Future offers a diplomatic vehicle. Its July recommendations endorsed stablecoins, tokenized deposits, and other digital money co-existing, and proposed a one-year industry group to test cross-border applications.

The network should publish operating rules and secure initial customer commitments by mid-2027, followed by a limited commercial service pilot by the end of 2027. Initial service could prioritize banks in Asia and the Gulf to offer a dollar-based competitor to mBridge.

From: Washington must do more to maintain dollar-settlement dominance | American Banker.

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Personal Agent Protocol (Poppy for short ) is an open protocol for how personal agents and companies work together. A company uses it to declare how personal agents can interact with it. A personal agent uses it to sign in safely and get access to a person’s account, limited to what that person and the company agree to.

From: Personal Agent Protocol: Introduction.

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The protocol is built on OAuth, JSON Web Tokens (JWTs), HTTPS, OpenAPI and MCP. Because these are open and widely used, teams can implement it with libraries and tools they already have. The core is also designed to be extended, so industries can build their own layers on top.
Protocols such as Universal Commerce Protocol (UCP) focus on shopping, from finding products to checking out and managing orders. Personal Agent Protocol is complementary, covering how a personal agent identifies itself, gets the customer’s permission, and works with a company across any kind of task — from buying a sweater to applying for a mortgage.

From: Sharing a draft of Personal Agent Protocol | Sierra.

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Going “Cashless” through cards, as seen in the West, is a windfall for banks, as cash usage continues to decline about 4% a year.

Every card tap, swipe, or digital wallet use generates interchange, processing fees, and data.

So banks did not fight the death of cash. They profited from it and actively suppressed A2A and other alternative payments.

In North America, that profit is staggering. Credit cards alone account for 39% of the region’s $0.7 trillion payments revenue.

That is $273 billion in credit card revenue, or for better context, nearly 1% of North American GDP.

From: (21) Thank You, Stablecoins: Why 1% of North American GDP Goes to Card Companies.

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Credit Cards bundle a credit line, a ubiquitous payment method and rewards. Alternate payment methods (APMs) generally don’t offer all three. Fintechs have been nibbling around the edges of this bundle. Agents may accelerate the nibbling

Basic math suggests Agentic optimization reduces card margins
Issuers and networks eventually need to reduce acceptance costs to avoid steering at purchase; that may undermine rewards levels
Issuers eventually need to narrow lend margins to avoid adverse selection versus Fintech lenders
This will be a slow drip rather than a flood, but forewarned is forearmed

From: (21) Unbundling the Credit Card – by Andrew M. Dresner.

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Buterin wrote this week that he has lost more money in botched migrations than in all hacks combined.

From: Answers That Cannot Be Questioned – by Timo Hotti.

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Most humans don’t actively optimize. They may take a good deal as they shop for a new service, but then stay with that service once the promo period ends. Banks & Fintechs count on this to justify the promo cost. It takes discipline and effort to optimize. Only a fraction make a habit of it.

Marketing departments know this and try to design propositions that deter optimization.

From: (21) Do banks need optimizer firewalls? – by Andrew M. Dresner.

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Should policymakers seek to enhance the moneyness of stablecoins, we counsel for the adoption of five targeted reforms: Federal Reserve master account access for qualifying issuers, industry-funded insurance for claimholders, a secured interest regime to replace the Act’s flawed bankruptcy provisions, finality rules establishing when stablecoin transfers conclusively discharge obligations, and express tokenization of the stablecoin redemption right.

From: The Moneyness of Stablecoins by Christopher K. Odinet, Andrea Tosato, Yesha Yadav :: SSRN.

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