Snippings

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Morgan Stanley already uses AI to crawl through client information to provide financial advisers with “next best action” suggestions to make to clients.

From Morgan Stanley creates bot that does junior analysts’ work — faster | American Banker:

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At NextBank Barcelona, back in 2015, I gave a presentation called “Towards Ambient Accountability” in which I said that the legacy of the global financial crisis would be a more transparent financial system built on public shared ledgers and “smart contracts” (there was no such word as “defi” back then).

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Competition will be particularly tight in the world of payments, he said: “I expect to see very, very tough, brutal competition in the next 10 years,” Dimon said. “I expect to win, so help me God.”

From Jamie Dimon: JPMorgan Chase should absolutely be ‘scared s—less’ about fintech:

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In a detailed and fascinating paper on the topic Dirk Zetsche, Douglas Arner and Ross Buckley summarise the opportunity very accurately by noting that defi potentially offers an opportunity for the development of an entirely new way to design regulation, specifically with the concepts of “embedded supervision” and “embedded regulation” (or as Richard Brown, Salome Parulava and I called it “ambient accountability”) potentially decentralizing both finance and its regulation in the ultimate expression of not fintech but regtech.

 

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DeFi may increase the efficiency, transparency, and accessibility of the financial infrastructure. Moreover, the system’s composability allows anyone to combine multiple applications and protocols, thereby creating new and exciting services.

Decentralized Finance: On Blockchain- and Smart Contract-Based Financial Markets | St. Louis Fed:

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Building these structured products on DeFi offer a unique opportunity. Instead of having institutions construct these complicated payout structures, can smart contracts act as your broker? The contracts can source liquidity from various on-chain derivatives protocols, compose them together to achieve some specific risk objective, while staying 100% transparent at all times.

From Yield Hacking for Fun and Profit. Over the last two years, DeFi has seen… | by Ribbon Finance | Feb, 2021 | Medium:

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In a recent video interview with The Economist, Madame Lagarde said that a digital euro should be implementing in such a way as to “respect privacy”. She also said that she expected it to be in place within four years.

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It was on Aruaz’s watch that Ecuador famously dabbled with its own experimental digital currency, one of the first in the world, which was launched by the Correa government in 2015.

From Ecuador’s presidential front-runner is a CBDC advocate | Financial Times:

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Ecuador could clearly learn from this to capture even more benefits from its transition to digital currency.

Unreal Money.

 

The Ecuadorian Digital Dollar has, I have to say, not been universally well-received. A suggestion for governments thinking of introducing such a system in the future is that it  would benefit greatly from transparent auditing as citizens will not hold the electronic currency unless they are sure that it will remain redeemable at par for US dollars (or other basket of currencies or commodities) themselves. Any suspicion of fractional reserve is disastrous.

From Don’t listen to me, listen to Christine Lagarde | 15Mb:

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In January, 2019 Arauz published this paper outlining how central bank digital currencies (CBDCs) could be used as tools to help countries who fare badly under the yoke of the international dollarised system to acquire monetary sovereignty.

From Ecuador’s presidential front-runner is a CBDC advocate | Financial Times:

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BNY Mellon, the $2 trillion banking giant, announced the creation of a Digital Assets Unit, which the company describes as “a team dedicated to building the first multi-asset custody and administration platform for traditional and digital assets, including cryptocurrencies.”

From Bitcoin Welcomes Tesla, Mastercard, BNY Mellon, Venmo To The Cryptocurrency Party:

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To be completely clear, not all of today’s cryptocurrencies will be supported on our network. While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements.

From Why Mastercard is bringing crypto onto its network:

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Companies are therefore reimagining the business card for the era of social distancing. Nagaya, a Japanese firm, prints them on face masks (a literal interpretation of a Japanese metaphor that likens business cards to one’s face). After the launch of the “Meishi” mask, traffic to Nagaya’s website surged by 65,000%.

Sansan, another Japanese firm, allows companies to sort scanned business cards so bosses can see which employees have made new contacts. It also offers “virtual cards”. Users receive qr codes which they display as virtual backgrounds on video-conferencing apps. Scanning the code with a phone camera will summon the user’s digital business card. Some 4,300 companies have begun using Sansan’s virtual cards since they launched in June.

From Here’s my QR code – Business cards are going online in Asia | Asia | The Economist:

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Last year I wrote about PayPal’s move into the Bitcoin space on Forbes, saying that:

I suspect that PayPal are making two much more strategic and long-term plays around the wallet and its contents… In their scenario planning, PayPal must have started to think about the opportunities that will arise from the trading and management of digital assets (in the form of tokens) in the not-too-distant future. By gaining expertise in decentralised alternatives to commercial bank money, PayPal is being very smart.

Following this line of thinking leads us to one particular category of digital asset that is inevitable: Central Bank Digital Currency (CBDC).

From PayPal’s Bitcoin Strategy Is Not About Bitcoin:

Therefore I was very interested to read today that in PayPal’s investor day call, the CEO Dan Schulman said that he sees PayPal playing a significant role in the utility of central bank digital currencies and that PayPal is gearing up to be “the digital wallet for global CBDCs.“

 

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And PayPal is planning to take a closer look at those other digital forms of value. Schulman’s comments hinted at wider aspirations than just CBDC distribution. “Step 1” on the product roadmap is enabling crypto as a funding instrument on PayPal, but Schulman also indicated that PayPal is looking into digitizing other assets through the use of smart contracts and tokenization.

From PayPal CEO says the payments giant wants to be ‘the digital wallet for global CBDCs’:

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