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All PSP’s offering instant payments of euro will be required to provide their customers with a service to check for any discrepancies between the payee’s IBAN and the payee’s name and are required to notify the customer of any discrepancy.

From Legal Opinion: EU Proposal for the Regulation of Instant Payments:

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Since FTX’s collapse, some crypto enthusiasts have flocked to smaller firms in the experimental field of decentralized finance, which allows traders to borrow, lend and conduct transactions without banks or brokers, relying instead on a publicly viewable system governed by code.

But DeFi has its own problems, including vulnerability to hackers, who have drained billions of dollars this year from the experimental projects.

From The Crypto Industry Struggles for a Way Forward After FTX Collapse – The New York Times:

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The opportunities for financial institutions in the metaverse go beyond simply offering conventional services in this new digital space. Countless new businesses and markets are being created through the trade of intangible products like non-fungible tokens (NFTs) in the metaverse.

Virtual commodities in the art and fashion sectors have also seen strong investment, with the transactions underlying these purchases potentially benefiting from the involvement of players in the financial industry.

From What will financial services look like in the metaverse? – Fintech Talents:

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It is not unreasonable to be sceptical. Jeffrey Funk, Lee Vinsel, and Patrick McConnell write in some detail about what they call the Metaverse “bubble” and go on to examine the economic effects of bubbles by comparing this technology bubble to past ones. They say that the biggest difference is that some goods did emerge from the dot-com bubble but “probably not much will result from the current bubble”. I am not convinced by this argument, because the goods here are not the Metaverse itself (however interesting and entertaining that might be) but because it will become a nexus for safer commercial interaction and the location of better, cheaper and faster financial services.

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Offering consumers a digital version of an official, government-issued state ID requires the official sanction and endorsement of the government in question, and Apple has reportedly spent months negotiating with various state governments in the US. Presumably, Google has been doing the same, and it seems fair to expect some information about which states will be among the first to support its own digital ID system when the beta feature rolls out this month.

From Google Play Changelog Points to Beta Launch of Digital IDs – Mobile ID World:

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oogle is preparing to follow through with a beta launch of its own digital ID solution, suggests a technical document pertaining to a Google Play System update slated for this month. As XDA Developers notes, the partial changelog includes a “Beta feature to allow users from selected US state(s) to digitize their state ID/driver’s license into the Google Wallet for convenient, private and secure presentation.”

From Google Play Changelog Points to Beta Launch of Digital IDs – Mobile ID World:

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Our six Deutsche Bank experts believe that the most likely future scenario in the future is one of multiple metaverse ecosystems, but which allow interoperability through standard solutions and protocols for digital identity, credentials, and asset ownership. The metaverse could usher in the next e-commerce revolution as it gains traction through advances in technology and becomes more mainstream. Financial services firms have a significant role in powering this evolution.

From Metaverse – the next e-commerce revolution – Corporates and Institutions:

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In the first half of 2022, the price of every major cryptocurrency dropped following the collapse of TerraUSD and LUNA. Now, multiple crypto-related companies are facing serious financial difficulties, including insolvency. In November 2022, crypto exchanges FTX and FTX.US filed for Chapter 11 bankruptcy. The fallout of this crypto crash is ongoing. This period of market cooling has become known as “crypto winter.”

From Crypto Winter 2022: What Happened? – NerdWallet:

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Money transmitters began operating in the 19th century, with the telegram used to move money from sender to recipient. The Journal of the Telegraph 2(20), p.248 (1867) reports that:

One of the English telegraph companies has been in the habit, for many years, of transmitting money in amounts of any size, by the employment of a cypher or key which has never yet failed (my emphasis), and by which a large revenue has been derived.

Given that in the early 1860s the messaging business in England was mostly generated by business and institutional users (as the general public had yet fully to understand, let alone domesticate, telegraphy) this means that the encrypted money transmission services referred to in the Journal must have been a commercial service before 1865,  soon after the deployment of telegraphy technology beyond its orignal base in the railways.

This use of a “cypher” to send money is not surprising. The use of telegraphy created an almost immediate demand for encryption and not only financial services. However, most European countries forbade the use of codes by anyone other than governments. Twenty states founded the International Telegraph Union (ITU) in 1865, drawing up a set of rules under which the ban on the use of codes was lifted. (The United Kingdom did not join until 1871.)

Telegraphy users then became increasingly innovative with their codes (using meaningless long words to mean specific things) until the ITU imposed a limit of ten letters per word and ruled that code words had to be genuine words in the language concerned. As is generally the case in such matters, all attempts to restrict the use of codes was defeated by clever code makers. What’s more, since the code books were a source of insecurity, the procedures were not secure and depended on a high level of trust between counterparties.

This struggle between authority and cryptography reminds me of a similar tale in a different context. The “Cod Wars” between Britian and Iceland (see Mark Kurlansky’s splendid “Cod: Biography of the fish that changed the world“ for the full story). The Anglo-Danish Convention of 1901 gave the British permission to fish up to three miles from the coast of Iceland, a state of affairs that the volcanic colony was most unhappy about. By the late 1920s, the Icelandic Coast Guard had started to arrest British (and German) trawlers found within what it saw as its territorial waters. However, the British trawlers got smart and got harder to catch because from 1928, they were equipped with radio and started passing coded messages between themselves to alert each other when Coast Guard vessels were in and out of harbour. “Grandmother is well” meant that the Coast Guard were in port, for example. The Icelandic authorities therefore made it illegal send coded wireless messages. This had no impact whatsoever, of course: British seafood companies simply devised new code systems for the trawlers to use. Think about it: how on Earth would an Icelandic wireless operator know whether “Tottenham Hotspur are the pride of North London” was a coded message or gibberish?

 But back to the telegraph. It is a testament to British fintech that the Journal report above dates from some years before Western Union’s introduction of the first commercial money transfer service in 1871 whereby Americans could pay money to a telegraph office, and the operator would transmit a message to “wire” funds to another office. The intended recipient could pick up the transfer at the destination by using a password to release the funds. Western Union also introduced “private” code books containing words and special passwords that were used consecutively and were only known to selected telegraphers so that they were able to offer a secure service.

I mention this slice of history to make the point the new communications technology inevitably creates a demand for money transmission and a need for new governance and new institutions. After the arrival of the telegraph, money transmission took on several forms. For example, informal financial institutions grew out of local businesses, such as grocery stores and butcher shops, to facilitate ticket sales for immigrants entering the United States via steamship. These institutions, informally referred to as “immigrant banks” in the early 20th century, acted as agents for families, providing access to financial services and helping them to arrange travel from Europe.

Today, most people own a smartphone, and money transmission is as simple as downloading an app and clicking a few buttons. Many Americans use their phones to store money on digital wallets and use apps to send and receive money from family and friends. Many fintech businesses are already registered as money transmitters. Cryptocurrencies and digital currencies are part of consumers’ payment options, and policymakers are increasingly grappling with their interaction in the market for payments and real currency.

UK banking insiders have warned that losses from fraud on the Facebook Marketplace are now so frequent that bank call centres are dealing with more cases of this than any other type of purchase scam.