A library of snippets
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The Central Bank of The Bahamas has begun consultations with banks, credit unions and other payment services providers on a strategy to eliminate all use of domestic cheques by the end of 2024.
From Press Release Bahamas Cheque Elimination Strategy- Central Bank of the Bahamas.
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The participants believe that Project Jura’s approach, including subnetworks and dual-notary signing, may give central banks comfort to issue wCBDCs on third-party platforms and to provide regulated non-resident financial institutions with access to wCBDCs.
The Project Jura report, published by the BIS, concluded that
Moving to a production setting would require further work. This may include: (i) if, where
and how a central bank might delegate functions and activities to a platform operator;
(ii) how oversight arrangements could be formed internationally for multi‐currency and
multi‐jurisdiction systems; (iii) integration between DLT platforms and existing payment
and core banking systems to achieve straight through processing;14 and (iv) legal changes
related to the issuance of wCBDC to achieve settlement finality on the third‐party platform,
which would simplify PvP and DvP settlement considerably for a production setting.
On the same day, the Reserve Bank of Australia (RBA), Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys, with input from King & Wood Mallesons, announced the conclusion of their wCBDC experiment, Project Atom.
The year-long project involved a PoC for the issuance of a tokenised form of CBDC that could be used by wholesale market participants for the funding, settlement and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform. The Australian central bank said that the PoC demonstrated that the digitisation of syndicated loans on a DLT platform could provide efficiency gains and reduce operational risk by replacing manual and paper-based processes.
From The great wholesale digital currency race heats up – Editor’s Blog –.
The RBA’s report on the project said, essentially, that the Ethereum blockchain worked as advertised, but other than that… well, given that the project “did not focus on non-functional requirements (for example, the scalability of the system, or how it would address cyber risk)” and that the project “highlighted a range of additional
questions and issues that need to be explored to help address the question of whether there is a case for a wholesale CBDC”.
While both of these reports are very interesting, and contain useful lessons, it doesn’t seem to me that either Atom or Jura signal the imminent launch of wholesale CBDC in either jurisdiction.
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The cost of intermediating financial services is going up ( see my blog). Proving that modern finance is one of the few networks in the history of man to grow LESS EFFICIENT over time.
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Chime is the largest neobank in the U.S., with over 12 million customers. According to Insider Intelligence, Chime is expected to reach 22.7 million account holders by 2025, improving its position among both digital-only and traditional banking competitors.
Chime offers “spending” (checking) and savings accounts without monthly fees as well as a secured credit card. The spending account offers free access to over 60,000 ATMs and a fee-free overdraft program that covers up to $200 if the customer signs up for direct deposit. Other features include receiving a paycheck two days early and a credit builder credit card. The majority of revenue generated by Chime comes from interchange fees, estimated at $600 million in 2020.
Similar to many neobanks, cash deposits are available at several large retailers for a nominal fee. The completely digital account opening process is significantly easier than at the vast majority of traditional banks. The rapid growth of Chime has positioned the neobank as a top 10 financial institution based on number of customers. Chime also raised $750 million in July 2021, at a valuation of $25 billion, positioning the neobank as next fintech startup to seek an IPO in 2022.
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Hoping that the reader will tolerate one last acronym, let us conceive broadly of a discipline of “Intelligent Infrastructure” (II), whereby a web of computation, data, and physical entities exists that makes human environments more supportive, interesting, and safe.
From Artificial Intelligence—The Revolution Hasn’t Happened Yet · Issue 1.1, Summer 2019.
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The current public dialog about these issues too often uses the term AI as an intellectual wildcard, one that makes it difficult to reason about the scope and consequences of emerging technology. Let us consider more carefully what AI has been used to refer to, both recently and historically.
Most of what is labeled AI today, particularly in the public sphere, is actually machine learning (ML), a term in use for the past several decades.
From Artificial Intelligence—The Revolution Hasn’t Happened Yet · Issue 1.1, Summer 2019.
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More than 200,000 previously unbanked Cambodians use a Bakong e-wallet now, the NBC said.
That is just a fraction of the more than 70% of the 17-million population estimated to be unbanked in the Southeast Asian country who never or rarely use a bank.
From Cambodia aims hybrid digital currency on blockchain at unbanked | Reuters.
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With open banking regulations, anyone could have access to the infrastructure of banks. Now, all they need to do is bring in customers. To do this, fintech companies need to tap into merchants because that’s where the customers already are. This is also where BNPL enters the picture.
From What Has Caused a Quantum Leap in BNPL Consolidation Trends? –:
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More videogame makers are selling virtual guns, helmets and other gear in the form of NFTs, a move that is increasingly pushing the trendy digital deeds into the average household.
Players have been paying for virtual goods in games like “Grand Theft Auto Online” and “World of Warcraft” for years, but turning those items into nonfungible tokens would let gamers trade and resell them, making them into potentially valuable assets.
The change also could mean that players who buy an NFT in one game could use it later in other games, on social media and in other corners of the internet—an important step in developing an economy for the so-called metaverse.
“FarmVille” maker Zynga Inc. ZNGA -0.38% and “Assassin’s Creed” creator Ubisoft Entertainment SA UBI -0.83% are among the first big, publicly traded gaming companies to say they are experimenting with the strategy. Electronic Arts Inc., EA 0.35% Playtika Holding Corp. PLTK -1.17% and others are also looking into NFTs’ potential use for engaging players.
From Virtual Guns in Videogames Could Soon Be Worth Real Money – WSJ.
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Robert Greene from the Carnegie Endowment for International Peace
The entire e-CNY network is, according to the China Banking Association’s chief economist, built upon the concept of “one coin, two databases, three centers” (一币，两库，三中心). “One coin” refers to the e-CNY unit of currency, which researchers at one major state-controlled financial institution explain is essentially an “encrypted digital string representing a specific amount that is guaranteed and signed by the central bank for sale.” The “two databases” refer to (1) the central bank’s ledger that keeps track of all e-CNY outstanding and (2) all the e-CNY ledgers maintained by the network’s lower tier either locally or on the same cloud used by the central bank.
The e-CNY network’s “three centers” are all reportedly PBOC entities. Details on these are scarce. Reportedly, the first is the certification center, which will keep a database that maps real identities against all digital wallet users; the second is the registration center, which will track e-CNY ownership and transactions; and the third is the big data analysis center, which the central bank will use to monitor payment flows for financial risks and detect illegal behaviors.
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Snippings