Snippings

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Three points stand out. First, there are a few countries that both trade heavily with China and make intensive use of the RMB. Second, most observations are below the 45-degree line: for most countries RMB is underused relative to China trade. Third, many countries are clustered at zero RMB usage.

From Jump-starting an international currency – Bank Underground:

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As I said in my book, economic theory does not explain why banks provide payment services at scale. Here’s what Charles Calomiris, Chief Economist and Senior Deputy Comptroller for Economics, Office of the Comptroller of the Currency (OCC) said about this at the CATO Institute conference.

“it requires some rather complicated and specialized economic modeling assumptions to explain why banks sometimes choose to bundle lending and payments services within one intermediary. Those assumptions do not always hold, which explains why bundling is not always a good idea.”

Perhaps digital currency is about more than payments, perhaps it’s an opportunity to rethink the system. And you don’t have to be a Bitcoin cult fanatic to believe this might be a good idea.

 

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Platforms like Amazon, Facebook or Alibaba incorporate more and more financial services into their ecosystems, enabling the rise of new specialized providers that compete with banks in payments, asset management, and financial information provision.

From What is Really New in Fintech – IMF Blog:

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Indeed, as The Economist magazine noted recently, the real risk of CBDCs to the financial system is they will ask the question as to whether banks need to exist at all.

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The UK is not alone in seeing a spike in fraud. More than 10,000 cases of potential fraud related to the pandemic are being investigated in Germany. While in the US, the agency that manages Covid-related loans found “strong indicators of widespread potential fraud”.

From ‘A giant bonfire of taxpayers’ money’: fraud and the UK pandemic loan scheme | Financial Times:

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The first president of the FRBNY, Benjamin Strong, had an explicit goal of making the dollar an international currency. He succeeded, with the dollar widely used by the 1920s and becoming the dominant currency by the end of World War II. Through many policies, he helped create a liquid secondary market in New York for dollar-denominated trade acceptances, the credits used to fund international trade.

From Jump-starting an international currency – Bank Underground:

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Lab registry

Lab app

Travel app

 

 

Technically, the app is being built in accordance with Self-Sovereign Identity* (SSI) principles

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IATA’s One ID initiative was endorsed by a resolution at its 75th Annual General Meeting in 2019 to securely facilitate travel processes with a single identity token. It is the base for the IATA Contactless Travel App for identity verification that will also manage the test and vaccination certificates.

From IAG working with IATA on its new Travel Pass – Business Traveller:

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This creates a Type 1 digital travel credential (a verified digital identify**) in line with ICAO standards.

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The IATA Travel Pass is scheduled for release early in the first quarter of 2021 for Android and for iPhone. For iPhone it will use the “Secure Enclave” features of Apple devices and a similar security encryption technology for Android.

From IATA unveils key design elements of its digital health pass:

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IATA has also stated that no central database or data repository is storing the information, ensuring the highest standards for data privacy. IATA Travel Pass is also built on the highest standards of data protection laws, including General Data Protection Regulation (EU GDPR).

The second priority is using global standards recognised by governments to ensure verified identity and test/vaccine information.

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Under the International Health Regulations, this is managed by the “yellow card” or International Certificate of Vaccination and Prophylaxis. The World Health Organization (WHO) is developing digital standards that will make these vastly more secure and will dramatically reduce fraud. When ready, the IATA Travel Pass will be able to accommodate such new global standards.

 

From IATA – IATA Unveils Key Design Elements of IATA Travel Pass:

 

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Media update IAG Pilot 1Q21

 

Alexandre de Juniac

IATA’s Director General and CEO

Nick Careen

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Medicine is a regulatory minefield with powerful incumbents where big tech’s business models, particularly the ad-supported sort, are not a natural fit.

From Health care and technology – The dawn of digital medicine | Business | The Economist:

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The International Air Transport Association (IATA) has unveiled key design elements of its digital health pass. IATA Travel Pass is a mobile app to help travellers easily and securely manage their travel in line with any government requirements for COVID-19 testing or vaccine information.

From IATA unveils key design elements of its digital health pass:

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Critically, regulators around the world are pressing health-care providers to open up their siloed systems—a precondition for digital health to flourish. The eu is promoting an electronic standard for medical records. In August the Indian government unveiled a plan for a digital health identity with interoperability at its core. Kuantai Yeh of Qiming, a vc firm, says that China’s government, too, is trying to overcome resistance to electronic records from hospitals fearful of losing patients to rivals. Yidu Cloud, a big-data platform for hospitals, may already be the world’s largest health data set, thinks Lee Kai-fu of Sinovation Ventures, another vc firm.

From Health care and technology – The dawn of digital medicine | Business | The Economist:

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According to the Federal Deposit Insurance Corporation’s (FDIC’s) most recent report, 7.1 million households (5.4%) in the United States fit the definition of unbanked. The same holds true for 14 million individuals, or 5.5% of the adult population.

While these numbers are staggering, they actually reflect a downward trend in the number of unbanked households and individuals in the U.S. In fact, they represent the lowest level of individuals and households without a checking or savings account since the FDIC initiated its unbanked study over a decade ago.

From Banking the Unbanked: How to Become Part of the Solution.

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The federal government struggled to get stimulus funds into the pockets of the nation’s unbanked during the pandemic. In a recent PaymentsJournal article, Mercator Advisory Group Director of Debit and Alternative Products Advisory Service, Sarah Grotta, discussed this issue.

“Much has been written in the popular media about how difficult it has been to distribute stimulus funds to all eligible recipients quickly. There are two central reasons for this: a) individuals do not trust the federal government with their checking account credentials that could facilitate a fast and safe direct deposit of funds, and b) they don’t have an account,” she wrote.

From Banking the Unbanked: How to Become Part of the Solution.

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The plight of the unbanked has been used to justify all sorts of government fixes: a Federal Reserve-issued digital currency, FedAccounts, postal banking, a USPS prepaid card, and a public Venmo. At the core of all these projects is the idea that unbanked Americans are unbanked because of excessive fees and high minimum account balance requirements. And that theory may be right, to a degree.

But none of these projects tries to account for people who may be unbanked for the same reason they don’t want to be vaccinated, or because they believe in QAnon. One of the motivating ideas behind FedAccounts, for instance, is to have the Federal Reserve provide a public option for the unbanked. But it could be that folks who are philosophically opposed to banks will also be intolerant of an account at the FED. God know the U.S. is rife with central banking conspiracy theories.

This may be one reason why places like Walmart are the best option for reaching the unbanked. Walmart isn’t a bank, so it can attract bank skeptics. And it has the financial heft to offer those on a low income a set of well-priced banking products via its Walmart MoneyCenters (which offer check cashing, bill pay, and money orders) and its prepaid debit card, the MoneyCard. Many of the 5.4% of the population that FDIC categorizes as unbanked are happily getting financial services at Walmart. They aren’t really unbanked; they are differently banked.

If not the Fed, perhaps the United States Postal Office is the right institution for reaching the philosophically unbanked. The USPS is not a bank. And according to Morning Consult, the post office is the most trusted brand in America. When asked how much do you trust each brand to do what is right? 42% of Americans responded that they trusted the USPS “a lot.” And so people who bristle at the idea of keeping a Chase debit card in their wallet may very well be proud owners of a USPS card.

From Moneyness: Why are so many Americans content to be unbanked?:

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Unbanked is not the problem, and banks are not the solution

The CEO of PayPal, Dan Schulman, has said that one of the benefits of digital currency is inclusion and that the adoption of such digital alternatives to cash would benefit millions of unbanked Americans. But why is this? Why would the use of digital cash help people who are excluded?

The millions of Americans who are unbanked (or underbanked) are not in that position because there is a shortage of banks. Quite the reverse, in fact. America has thousands of banks. So clearly a lack of banks isn’t the problem. There must be some other problem. Why don’t the millions of unbanked people use PayPal instead? 

 

 

As Wired magazine pointed out, basic bank accounts (which are mandated by the UK government) are accessible to those with poor credit histories, while challenger banks including Revolut and Monzo do not usually ask potential customers for proof of address in order to open an account. So it seems reasonable to ask why almost two million British adults do not have a bank account.