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Work is nearing completion on proposed amendments to the Uniform Commercial Code (“UCC”) to address a limited set of transactions largely involving emerging technologies, such as virtual (non-fiat) currencies, distributed ledger technologies, and, to a limited extent, artificial intelligence. The principal amendments address so-called digital assets. The rules covering transfers of covered digital assets, including security interests in those assets, are carefully coordinated so that the transactions generate predictable and consistent results.

From The Proposed 2022 Amendments to the Uniform Commercial Code: Digital Assets:

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However, DeFi also involves the buildup of leverage, and is particularly vulnerable to market, liquidity, and cyber risks. Cyberattacks, which can be severe for traditional banks, are often lethal for these platforms, stealing financial assets and undermining user trust.

From Fast-Moving FinTech Poses Challenge for Regulators – IMF Blog.

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Central bank actions over the last century have resulted in a well-functioning banking and payment system. Why not take advantage of that, and issue tokenized deposits? While a number of practical details would need to be worked out, the principle behind tokenized deposits is straightforward. Bank depositors would be able to convert their deposits into and out of digital assets—the tokenized deposits—that can circulate on a DLT platform. These tokenized deposits would represent a claim on the depositor’s commercial bank, just as a regular deposit does.

From The Future of Payments Is Not Stablecoins – Liberty Street Economics.

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Note that domestic payments were unaffected, because Russia has spend the last eight years developing the National Card Payment System (NSPK) to process card transactions. Visa and Mastercard were forced on to these rails a few years ago, a policy that I am sure has not gone unnoticed in some other jurisdictions concerned about the position of American networks in the critical infrastructure of their economies.

(The Russian domestic debit scheme, Mir, runs on these rails too. Mir was launched in 2015 after three options were considered for the scheme — using UnionPay, opening up the Sberbank network or creating the new system.)

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On Wednesday, Russian newspaper RBC reported that UnionPay, the Chinese state–led financial services network, had suspended negotiations with Russian banks on issuing new bank cards for their customers, now unable to make purchases outside Russia as a result of Visa’s and Mastercard’s withdrawal. (Russians could still use the cards to make domestic purchases, owing to Russia’s local Mir payment system.)

The payment processor is reportedly worried about being the target of sanctions from the U.S. and other countries if it works with sanctioned Russian banks.

From UnionPay suspends negotiations with sanctioned Russian banks, reports say | Fortune.

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Central bank actions over the last century have resulted in a well-functioning banking and payment system. Why not take advantage of that, and issue tokenized deposits? While a number of practical details would need to be worked out, the principle behind tokenized deposits is straightforward. Bank depositors would be able to convert their deposits into and out of digital assets—the tokenized deposits—that can circulate on a DLT platform. These tokenized deposits would represent a claim on the depositor’s commercial bank, just as a regular deposit does.

From The Future of Payments Is Not Stablecoins – Liberty Street Economics.

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Eight countries have jointly proposed a set of “high-level principles” in the hope they can enable future mutual recognition and interoperability of digital identities.

The countries came together to form the digital identity working group (DIWG) in 2020 to discuss how to make digital identity a key component of the global digital trade and travel ecosystem. The set of principles is the group’s first set of publicly released work since inception.

Chaired by Australia’s Digital Transformation Agency, the working group’s other members are from Canada, Finland, Israel, New Zealand, Singapore, the Netherlands, and the United Kingdom.

From Eight countries jointly propose principles for mutual recognition of digital IDs | ZDNet.

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Instant payments flips the table. The merchant will hold all of the consumer data, but an A2A or instant payment scheme will leave the bank holding responsibility for managing the fraud.

From Acceptance Hurdles – Noyes Payments Blog.

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Payments providers are increasingly resuming business-as-usual as the pandemic eases, but so are criminals. Losses from identity-fraud schemes, in which fraudsters use stolen payment credentials for their own gain, soared 79% last year to $24 billion, according to a study released Tuesday by Javelin Strategy & Research

From Losses From Stolen Identities Skyrocketed 79% to $24 Billion in 2021, a Javelin Study Finds – Digital Transactions.

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Forty years ago, in July 1982, author William Gibson coined the word “cyberspace” in his story, Burning Chrome, published in Omni magazine.