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Research undertaken by our partner firm kompany indicates only 5% of FIs have an automated B2B or corporate banking onboarding process, with 75% of FIs still relying on Google searches to identify Ultimate Beneficial Owners (UBOs), annual filings and financial accounts.

From The coming crisis in KYC and KYB explained at length:

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The contribution of technology to both capital access and market structure relies on the ability to access and process data collected from customers. But what the tech companies use it for has become a looming concern for regulators, mainly those in Europe and the U.S. The issues raised range from the spread of misinformation to systematic bias in the financial services sector, data privacy and data ownership rights.

From The Promise and Peril of Digital Currency in a Global Economy – Milken Institute Review:

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MercadoLibre in Latin America, Alipay and WeChat in China and M-Pesa in Kenya and India are often used to illustrate how tech firms’ involvement in financial services increase financial inclusion.

From The Promise and Peril of Digital Currency in a Global Economy – Milken Institute Review:

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[Privacy] is a complex area. There is clearly a trade – off between the need for effective law enforcement to combat illicit activities on the one hand and citizens’ right to privacy on the other. The balance will I am sure need to be struck in the same place for digital private and public money alike. It may however, be considerably easier to implement for public digital money.

From Do We Need ‘Public Money’? – Speech By Jon Cunliffe, Bank Of England, Deputy Governor, Financial Stability, Given at the OMFIF Digital Money Institute, London:

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Money is not only a social convention, it is a very dynamic one. The forms it can take and the uses to which it can be put have varied materially through history and between societies. Change has often been driven by the interaction of technological innovation that has improved the functionality of money – for example, by making it more secure or more convenient to use.

From Do We Need ‘Public Money’? – Speech By Jon Cunliffe, Bank Of England, Deputy Governor, Financial Stability, Given at the OMFIF Digital Money Institute, London:

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Banks can be expected to resist the adoption of CBDC

From Some Thoughts on Central Bank Digital Currency | Cato Institute:

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There’s a letter in The Economist this week (22nd May 2020) that touches on one of my favourite topics: why do people still rob banks? The letter is from Graham Farrell, Professor of Crime Science and the University of Leeds who writes that bank robbery is now largely extinct because of security improvements such as bandit screens, money tracing and time-locked safes. He is right, of course, but it means I can’t help but wonder why some people still do it!

 

As Graham Farrell notes, one reason is certainly that the technology sector bears little or none of the costs of the crime opportunities that its products generate and that to overcome this market failure “governments need to provide incentives to the computing industry for security development”.

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“We think it’s important that we not wait for the policy debate because then we’ll be a year or so behind,” James Cunha, the Boston Fed senior vice president leading the prototype effort, told Bloomberg.

From Policy questions remain as global governments explore CBDCs | Banking Dive.

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In 2005, several central bank advisers, including Charles Kahn, wrote that the key social function of cash is to protect the purchaser’s identity and that, even though banknotes may get displaced, users would push for their survival (Kahn, McAndrews, and Roberds 2005). However, the ensuing decade seemed to change Kahn’s mind. In 2017, he wrote,

When central banks first took on the job of note issuance they became privacy providers.… As they try to get out of the paper money business, I think the future of central banks and payment authorities is no longer in privacy provision, but in privacy regulation [Kahn 2017: 11].
That regulation is subject to constant negotiation and an observable erosion of citizen rights. In fact, in 2020, Kahn pushed his opinion even further away from a defense of privacy writing that an anonymous CBDC would pose “security risks” to users (Kahn and Rivadeneyra 2020: 3).

From Financial Freedom and Privacy in the Post-Cash World | Cato Institute:

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I don’t think this is at all surprising, because I have been through the same weighing of the evidence and similarly changed my opinion.

 

Electronic cash isn’t like physical cash and presents much greater risks to society

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Drawing on nationally representative survey data, we show that despite traditional portrayals of the U.S. as the embodiment of a democratic “civic culture,” a substantial share of Americans express readiness to sell their votes for cash: 12% of respondents would do so for just $25, as would nearly 20% for $100. Citizens who place low importance on living in a democracy are significantly more willing to sell their votes.

From Would You Sell Your Vote? – Jordan Gans-Morse, Simeon Nichter, 2021:

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