Snippings

I was listening to the “Pomp” podcast in which he interviewed David Marcus, who leads Facebook’s financial services drive. It was an interesting discussion but I was surprised when at one point in the interview Mr. Pompliano says that he thinks that people have underestimated the importance of the wallet. I have certainly never fallen into this category and my analysis of the launch of Facebook’s “Libra” initiative, as it was initially called, was that the play was all about the wallet: the day that it was announced I said that “identity is at the heart of the Libra proposition, if you ask me“.

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Money Box hears from the successful businessman who had half a million pounds stolen in three months through a Bitcoin fraud. He wants to warn people that “if it can happen to me, it can happen to anyone”

From BBC Radio 4 – Money Box, Bitcoin fraud totalling £500k:

I listened to this typically excellent edition of MoneyBox with my head in my hands. The victim of the fraud actually said “I saw it on YouTube so it look legitimate”.

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But if money is to be identity-based rather than token-based and fungible, this introduces a whole new set of ethical dilemmas and social questions, which aren’t really being asked at the moment on a wide enough social level.

The conversations we should be having relate to who do we as a society really entrust with our personal data? The current choice includes private companies like Facebook, highly regulated private institutions like banks, “independent” central banks, government-directed central banks, a bit of everyone or nobody at all.

From Why CBDCs will likely be ID-based | Financial Times.

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“More recently, we have seen the rise of digital wealth managers or ‘robo-advisers’ which make investing more accessible to ordinary people. Dashboards need to be seen in this context, moving in the same direction as other financial services to bring these benefits to all and make planning for your retirement as easy as possible. Most of this is a matter of plumbing: sorting out the infrastructure between the different parts of the industry and moving away from manual and paper-based processes.”

From Grand ambitions for open pensions dashboards face a challenging reality..

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We own a small business, revenue circa $10k per month. You know the type of business where cash-flow is king. We receive a number of small daily deposits direct from customers who pay online via credit card. If you ever wondered how those cash back and reward cards are funded, let me tell you, it’s from businesses like ours. We pay a small percentage when you pay with a regular card, but when you pay with a reward card, or cash back card, we pay sometimes as much as double in fees.

But you knew that right?

We do not price our services based on fees, and we are not punitive by charging back those fees to everyone, even people who don’t use reward cards.

From CHASE Backwards Banking – Life, Technology and more….

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In 2018, Andrew Schober was digitally mugged for approximately $1 million worth of bitcoin. After several years of working with investigators, Schober says he’s confident he has located two young men in the United Kingdom responsible for using a clever piece of digital clipboard-stealing malware to siphon his crypto holdings. Schober is now suing each of their parents in a civil case that seeks to extract what their children would not return voluntarily.

From Man Robbed of 16 Bitcoin Sues Young Thieves’ Parents – Krebs on Security.

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Making matters worse for traditional banks and credit unions, several fintech firms are expanding beyond offering only checking accounts, including payment services, lending, and small business accounts.

Loyalty at Risk:

As financial options increase, existing relationships are getting fractured, putting loyalty and the lifetime value of customers at risk.

And then there are the big tech firms. Google, PayPal, Apple and other tech giants are delving deeper into financial services. And these competitors dwarf even the biggest fintech neobanks.

From Banking Share of Wallet Threatened By Hidden Attrition.

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Most traditional banks and credit unions might not even be aware of the fragmenting of relationships caused by non-traditional competition. This is because most institutions simply monitor lost accounts, as opposed to changes in activity, balances and other indicators of lost share of wallet.

 

Churn is a lagging indicator.

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Most Salvadorans disagree with the government’s decision to adopt bitcoin as legal tender, with many unaware of how to use the digital currency and distrustful of the project, a poll by the Central American University (UCA) showed on Thursday.

At least 67.9% of 1,281 people surveyed said they disagree or strongly disagree with the use of bitcoin as a legal tender, said the poll by UCA, a Jesuit university based in El Salvador. Just over 32% of people said they agree on some level.

The study was issued days before the government is due to formalize the cryptocurrency as legal tender in El Salvador on Sept. 7, a plan announced by President Nayib Bukele in June.

UCA’s poll, carried out in August, also showed that 9 out of 10 people did not have a clear understanding of bitcoin, and 8 out of 10 said they had little or no confidence in its use.

From Majority of Salvadorans do not want bitcoin, poll shows | Reuters.

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IRS pretending to be supplier of counterfeit goods from China

For instance, on Aug. 12, 2020, Joseph converted approximately $12,000 in cash to Bitcoin for an undercover agent who Joseph believed to be a seller of counterfeit “Gucci” products sourced from China.

From Fitchburg man charged with money laundering and illegal money transmission for converting cash to Bitcoin | Internal Revenue Service.

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In a search warrant reviewed by Forbes, the undercover IRS agent went by the name of “Mr. Coins” on LocalCryptos.com, a platform exchanging cryptocurrency for dollars and other fiat currencies. Mr. Coins’ profile, still live at the time of publication, had 100% positive feedback after shifting up to $200,000 in digital money.

But his biggest success may have been to take down an alleged dark web drug dealer, tricking him into sending more than $180,000 in cash to the IRS in exchange for cryptocurrencies, according to the warrant.

From The IRS Goes Undercover As A Bitcoin Trader In $180,000 Sting.

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