Snippings

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“Because it’s the bank that goes to multifactor authentication or pushes the consumer through multifactor authentication, we have a very high degree of certainty that we know who is behind that device,” explained Gonthier. “And the consumer gets protected by law. Paying in the U.S. with a bank account entitles users to zero liability for 60 days. They can even go to their bank and ask for their money back.”

From: An Online Payments Pioneer on What It Will Take to Scale Pay by Bank in the US.

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Barclays Bank has overturned an appeals court ruling that rendered it potentially liable for a £700,000 authorised push payment scam against one of its customers.

Barclays customer Fiona Philipp sued the bank over the losses, arguing that the UK lender had failed in its duty of care by transferring the funds to scammers in the United Arab Emirates. Philips’ case rested on whether the bank had reasonable grounds to suspect the transfers were fraudulent in nature.

Barclays took the case to the UK Supreme Court, which voted unanimously in favour of the bank.

In a written ruling, Judge George Leggatt stated: “Where the customer has authorised and instructed the bank to make a payment, the bank must carry out the instruction promptly.

“It is not for the bank to concern itself with the wisdom or risks of its customer’s payment decisions.”

From: Supreme Court rules in favour of Barclays over APP reimbursement claim.

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Vort3x Volume XX – Twitter on Fire:

The ability to clone someone’s voice cheaply from as little as three seconds of audio – often easily found on social media – makes the impersonation hard to spot. At Rest of World, Nilesh Christopher reports the conflicting results of three analyses of two controversial audio clips of an Indian politician who claims they are Deepfakes. The bigger threat, says the AI expert firm DeepMedia, is that everyone has plausible deniability.

As I am sure you have noticed, there was an interesting development in the world of stablecoins this week with the news the PayPal is going to issue its own digital dollar. The market liked the news. While many observers are asking what its purpose is. Jose Fernandez da Ponte, PayPal’s senior vice president and general manager of blockchain, crypto, and digital currencies is clear about their advantage: “We have always said that our role in crypto and digital currencies is trying to build that conduit between fiat and web3” and they do indeed have potential as an “on ramp” for retail users.

While the purists may be unhappy that PayPal’s stablecoin PYUSD (an ERC-20 token issued on the Ethereum blockchain) retains centralised control (PayPal is able to cancel accounts, block transactions and so on) I think it is important to see the bigger picture here. The purpose of PayPal’s stablecoin (apart from attracting billions in interest-free loans!) is not to be a competitor to a cryptocurrency such as Bitcoin, Dogecoin or whatever else coin. The key role of this new digital currency will be to act as a mass market on-ramp for millions of (initially) Americans who want to access a convenient means of transferring value from what we might loosely label “web 2 money” (online credit cards and bank accounts) to web3, the world of decentralised finance and tokens.

Why do I focus on this? Well, it’s because I agree Elliot Hentov, head of macro policy research at State Street Global Advisors, who says that the technological revolution in financial services is in the coming tokenisation of wide swaths of financial and real assets. He is absolutely correct to note that these digital assets will will require a “corresponding” (ie, sharedl ledge- based) digital currency to make a functioning market in which protocols used to exchange fungible and non-fungible assets (eg, both the dollars and the ticket for the Taylor Swift concert will be token).

Will PYUSD get traction? Undoubtedly. Apart from anything else we know that lots of people around the world want to use digital dollars. And America will benefit from supplying them whether via public or private infrastructure because digital dollars are more than a new electronic payments mechanism, they are a means to reinforce the post-WWII international monetary order and American “soft power”.

Here is an example to illustrate that point: I saw a tweet from someone had just sent money to friend in Argentina using another stablecoin, USDT (Tether). It was the recipient’s preferred method of payment. The tweeter pointed out that the recipient had access Bitcoin, but did not want it. What this confirmed to me was that in many places, people want cryptocurrency only as a second-best way of getting fiat currency. They don’t want Dogecoin, they want Dollars. Right now a lot of these dollars are in the form of Tether (USDT) and offshore. But if the dollars are supplied in digital form by a globally-recognised, trusted, audited, regualted and well-run company such as PayPal, I suspect that a great many people will prefer them. 

(That example of cross-border payments is often put forward as a key driver for cryptocurrency take up and given the size of the global market, you can see why. Cross-border retail spending and remittances will reach around $5 trillion this year and business-to-business payments are worth eight times that. If even a fraction of those payments are made using PYUSD, then the future looks pretty bright for PayPal’s ecosystem.)

Interestingly, the same week that PayPal announces its stablecoin, the Federal Reserve establishes its new “Novel Activities Supervision Program” to enhance the supervision of  the banking organizations in its remit. It will focus on activities related to crypto-assets, shared ledgers and technology-driven partnerships with non-banks to deliver financial services to customers. The Feds says that this will be risk-focused and complement existing supervisory processes. I think that in this context, PYUSD will have its most significant impact on the market: Legitimising stablecoins as an activity for regulated institutions.

(Incidentally, I cannot help but wonder whether one of the users of PYUSD might well be X. After, all, Mr, Musk helped found PayPal and knows a fair amount about the payment system. PayPal’s digital dollar might be a very convenient way of moving value in and out of the X ecosystem!)

I think it is entirely consistent with the evidence to remain sceptical about the impact of cryptocurrency on the wider economy, while at the same time being excited about tokenisation and the transition to that web3 world of decentralised finance protocols exchanging digital assets backed by regulated institutions with digital currencies, similarly backed by regulated institutions. In this respect, PayPal’s move will I am sure be seen in hindsight as a cusp moment and a vote of confidence in the web3 world.

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Large language models (LLMs) can analyse transcripts of emails, web chats, messages and social media posts between firms and their customers. The AI reviews the language, wording and structure used to detect compassion, clarity and compliance issues. For example, the model may detect vague, misleading or “salesy” language which fails to properly inform consumers or places undue influence.

The AI can also check if communications contain all the information consumers need to make informed decisions, such as fees, charges, risks and the customer’s right to cancel. If key details are missing, the firm should revisit their communication templates and staff training.

From Hosted VoIP | Dialler Software | Hosted VoIP Service… | Hostcomm.

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Traditional AI is leveraged heavily to take care of the 80% of requests that are straightforward (e.g., simple requests like “What is my balance?” or “When is my bill due?”) but not the 20% of requests that are bespoke and actually represent 80% of the cost (e.g., complex requests like “Should I refinance my mortgage now or wait until next year?” or “My account balance is lower than I expected. What happened?”). The latter requires customer service representatives, but they are slow, expensive and don’t always have the right information readily accessible to address the customer inquiry.

From Sharing Our Field Notes: The State of Generative AI in Financial Services – Bain Capital Ventures.

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And from at least 2012, the agency said, in order to reach now defunct sales-based incentive goals and boost their evaluations, bank employees “illegally applied for and enrolled consumers in credit card accounts without consumers’ knowledge or authorization.” That involved using or obtaining consumers’ credit reports without their consent and it resulted in customers being charged unjustified fees, taking hits to their credit reports and having to make efforts to correct the errors the bank made.

From Bank of America accused of opening fake accounts and charging illegal junk fees | CNN Business:

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The importance of developing a foundational taxonomy classification mechanism for DeFi (and DeFi activities) as well as digital assets.

From Decentralised Finance – Principles for building a robust digital economy | AFME:

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are18:

• Settlement layer (the Infrastructure Layer in the ACPR Consult): manages the ledgers by recording

changes to the state of the blockchain (e.g., payments) and sets incentives for validators and miners to maintain the chain (e.g., process transactions). These are the core protocols within a distributed ledger infrastructure (e.g., Ethereum). This layer is also responsible for the network’s fundamental operations including the consensus mechanism, dispute resolution, and other technical enablers.

• Token layer (the Application Layer in the ACPR Consult): is where crypto assets are created. This includes non-fungible and fungible tokens like stablecoins, governance tokens, etc. Protocols are built on top of the settlement to extend functionality, typically with regard to privacy, permissioning and performance requirements. The token layer protocols often use processing elements that run outside of the core chain to enhance scalability (e.g., zero-knowledge roll-ups) and cost inefficiencies (e.g., transaction costs) of the settlement layer protocol.

• Application layer (the User Layer in the ACPR Consult): the broad application layer interacts with the underlying network to provide interoperable, functional utility to end-users, including decentralised exchanges, liquidity provisioning, and liquid staking applications. It is where most DeFi protocols are integrated as they rely on both settlement and token layers to execute their associated smart contracts. This layer also may contain applications for services such as credit, decentralised exchange, asset management and derivatives.

These layers are demonstrated well i

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Chancellor Jeremy Hunt has been revealed to have been denied a bank account with Monzo amid an ongoing row over ‘laborious’ anti-money laundering rules.

From Jeremy Hunt ‘denied a bank account by Monzo’ amid row over anti-money laundering rules | Daily Mail Online:

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The untimely deaths of crypto enthusiasts and entrepreneurs have sparked speculation about the fate of their cryptocurrency holdings. Without access to their private keys, these fortunes may be lost forever,

From Bitcoin Millionaire and Crypto Founder Found Dead with Gunshot Wound | by Crypto Beat | Coinmonks | Jun, 2023 | Medium:

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