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Then came Pix, an instant-payments system operated by the central bank. Launched in November 2020, it has transformed the way Brazilians make payments. The platform allows consumers and merchants to send and receive money via a qr code, without having to share details of their wallet, fintech provider or bank. In April around 118m people used the platform—or more than two-thirds of Brazilian adults. In the last quarter of 2021 they made a staggering 3.9bn payments. Already Pix has surpassed debit and credit cards as the most popular method of payment in Brazil. One in five transactions now takes place on the platform’s mobile app.

From Digital payments have gone viral in Brazil | The Economist:

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Policymakers also acted to encourage adoption. Unlike its Mexican counterpart, whose Pix equivalent has been less successful, Brazil’s central bank compelled big banks and fintech firms to join its platform. During the covid-19 pandemic it mandated that emergency payments made by the government should also be available through the app. In this way, up to 30m unbanked Brazilians received a cashless payment for the first time.

 

The introduction of Pix has had a mixed effect on the country’s banks. Current-account service fees charged by Brazil’s five biggest lenders were almost 2.7bn reais lower in 2021 than the year before. But banks insist that Pix also presents them with opportunities. For one thing, as society goes cashless, they are spending less on transporting lorryloads of banknotes. And although it is not necessary to have a bank account to use Pix, the platform seems to encourage people to open one. According to Mastercard, a credit-card giant, Brazil reduced its unbanked population by as much as 73% during the pandemic. There are now more potential customers to sell credit products to, says Julio Paixão of Bradesco, one of the big five banks.

 

One of the biggest surprises is that despite the astronomical success of Pix, the number of credit-card transactions has continued to grow. Pix is not just serving as a substitute for other cashless payment methods, but increasing them.

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Just 29 of top 100 digital banks globally are profitable. Aggregated assets of world’s top 100 digital banks stood at $2 trillion in 2021. Together, they generated annual gross revenues of more than $51 billion.

From Global Top 100 Digital-only Banks Ranking – No easy path to profitability- The Asian Banker:

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BNP Paribas has joined JPMorgan in using digital tokens for short-term trading in fixed-income markets as some of the world’s biggest investment banks step up efforts to modernise the $12tn market with blockchain technology.

The repurchase, or repo, market is used by investors to borrow high-quality assets for a couple of days, and by central banks to conduct their monetary policies.

Three-quarters of deals are backed by government bonds, according to the Bank for International Settlements, making the market a key source of high-quality collateral for banks to fund their balance sheets or find the funds to support their derivatives positions. JPMorgan’s blockchain allows banks to lend out US government bonds for a few hours as collateral, without the bonds leaving their balance sheets.

From Banks turn to blockchain in search for high-quality trading assets | Financial Times:

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The technique for overcoming these safeguards is surprisingly simple. The key is the ability to brute-force the PIN that encrypts the data. Since it’s only four digits long, there are only 10,000 possible combinations. Using publicly available scripts and a commodity computer, someone can learn the correct combination in a matter of a few minutes, as this video, showing the process on an iPhone, demonstrates.

From “Tough to forge” digital driver’s license is… easy to forge | Ars Technica:

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Lastly, the area where I think this dynamic really causes some problems: watchtowers. Most people are not going to be able to be online 24/7 to make sure their channel counterparty isn’t trying to cheat them. This is where a watchtower comes in; they watch things for you. But in order to do that, they need to store all the same data you do to be able to penalize your counterparty if they cheat. Watchtowers are still barely developed or deployed, but long term they are an absolutely critical piece of infrastructure for people to use the Lightning Network safely.

From Why The Bitcoin Lightning Network Doesn’t Work – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides:

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Does this meltdown imply that stablecoins can never be stable? Not really. It’s probably a warning against learning the wrong lessons from the world’s most successful stablecoin, one that has come out unbroken through multiple crises: the Hong Kong dollar.
Pegged to the US dollar for nearly four decades, the currency in the Asian financial center is a stablecoin, albeit of the paper variety. Most days it relies — just like UST — on arbitrage to hold its value at 7.8 to the dollar. But there are two key differences. The Hong Kong Monetary Authority runs a pure currency board. All of HKMA’s monetary base is backed 110% by US dollar assets. Second, while fixing the exchange rate, the authority deliberately lets interest rates float freely to absorb pressures on the peg.

From The World’s Best Stablecoin Has Advice for Newbies – The Washington Post:

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Randell said he was opposed to including crypto firms under the financial services compensation scheme, which would mean the pot of money collected from regulated financial companies would be available to compensate their customers. The financial services industry as a whole should not be “exposed to the costs of failing crypto firms”, he noted.

From Financial regulator cautions UK against rushing to create ‘crypto hub’ | Financial Times:

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Charles Randell, chair of the Financial Conduct Authority, called for “realism” about how long it would take the regulator to prepare to supervise issuers and traders of “purely speculative crypto tokens”, and how much crypto firms need to improve before they could be officially authorised.

From Financial regulator cautions UK against rushing to create ‘crypto hub’ | Financial Times:

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Users will have different identities in the metaverse depending on the (virtual) setting, similar to the physical world. In real life, with your friends, you behave and dress differently than in a business setting. The same applies to the virtual world. Depending on the community you want to go to or join, you would dress your avatar differently or select a completely different avatar. However, the exciting aspect of using an avatar to portray your identity is that you are no longer bound to your physical identity.

In the metaverse, you can be who you want to be, and digital fashion will play an important role. You can be a purple flying centaur dressed as barbie, a blue man with a burning head, or Bowser from Mario Kart; you are only bound by your creativity. We can expect humans to explore new identities in novel ways, further redefining what it means to be human.

From How the Metaverse Will Change What It Means to be Human | Datafloq:

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Indian authorities are planning to develop a new mechanism that would allow mobile users to see the caller’s name on their phone screen, as per the know-your-customer (KYC) record of subscribers with telecom service providers. This is similar to the caller ID application, Truecaller, but better since Truecaller can show names that may not be there in the KYC records.

From Indian customers may soon get a better Truecaller alternative.

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