Snippings

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The international status of a currency depends on the financial cost of credit in that currency, and this is affected by central bank policies. This holds in theory. It also holds in the data when inspecting the impact of the PBoC’s swap lines on RMB usage. The RMB now looks to be an international currency in the sense that it used for cross-border transactions. It is still much less used than the dollar was by the 1920s. Whether the RMB will rise further is an open question.

From Jump-starting an international currency – Bank Underground:

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Garanti BBVA ships ‘blank’ card with no code imprints:

Customers of the Turkish bank can already apply for the new Bonus Diji card digitally and have it approved in a matter of minutes without the need for a physical signature.

Once approved, customers will be able to start shopping immediately thanks to the built in QR and mobile payment features without having to wait to receive the physical card.

The physical version of Bonus Diji does not include any visible number or code imprinted on the card’s surface, Instead, this information is stored securely on companion app BonusFlaş.

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In another example, the device of a first responder, such as police officer, firefighter, etc. may have its own digital credential that authorizes the first responder to automatically receive the user’s identity credential when in proximity to the user’s device.

In this instance, the device of the first responder may transmit its own identity credential to the user’s device, and the user’s device, upon verifying that the first responder is authorized to receive the identity credential, may automatically transmit the user’s identity credential to the device of the first responder, e.g., if the user pre-configured their device to provide the user’s identity credential and/or other information to a first responder.

From A new Apple Patent Reveals yet another Dimension to their Gigantic Security ID Credentials System In-the-Works – Patently Apple:

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This is precisely the proposal that I put forward in 2008 in response the British government’s (failed) attempts to create a national identity card. Using Dr. Who’s “psychic paper” as my inspiration, I suggested that an infrastructure based on the symmetric recognition of credentials would deliver both security and privacy for the new age.

 

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That’s according to ING’s chief executive, Steven Van Rijswijk. He told an audience at Sibos that regulators need to offer banks an equivalent to the second Payments Services Directive (PSD2).

Van Rijswijk is “strongly advocat[ing]” that regulators come up with an equivalent for banks
“We strongly advocate that there needs to be a level playing field,” says Van Rijswijk.
“You see with the new regulation, new platforms and open banking, that a number of competitors are entering this space.

“They get access to our customers’ data, and at the same point in time, they can use their own data as well which they get from customers.”

From Sibos 2020: ING’s CEO urges regulators to give banks a PSD2 equivalent – FinTech Futures:

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“In a world of CBDCs, I am not sure what Swift would do,” Birch says.

“It involves an awful lot of messing around to do with settlement, reconciliation, clearing and so on.”

He imagines a world in which an African farmer buys fertiliser from China and receives payment for the soya beans he grows all in CBDC.

“There may not even be banks involved in that transaction, let alone Swift,” he claims.

From Sibos 2020: ‘In a world of CBDCs, I am not sure what Swift would do’ – David Birch:

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I had the opportunity to listen to a fascinating virtual armchair discussion on “Digital Currencies and the International Monetary System” between Brent J. McIntosh, Under Secretary for International Affairs at the U.S. Department of the Treasury, and Kenji Okamura, Vice Minister of Finance for International Affairs at the Japanese Ministry of Finance. The discussion, moderated by Stephanie Segal (a Senior Fellow in Economics Program at the Center for Strategic and International Studies.

 

Kenji Okamura, Japanese Vice Minister of Finance for Intl. Affairs on the dangers of “idosyncratic” central bank digital currencies that “do not possess the features necessary to maintain the stability of the international monetary and financial system”

 

Does “maintaining the stabilty of the international monetary and financial system” actually mean maintaining dollar hegemony, or do the panelists think this might be a period of punctuated equilibirum that leads to a stable but different system in the not-too-distant future?

 

During the following panel discussion with Tommaso Mancini-Griffoli
(Division Chief of Payments, Currencies and Infrastructure, Monetary and Capital Markets Department, IMF),  Neha Narula (Director of the Digital Currency Initiative, MIT Media Lab) and Naveed Sultan (Global Head of Treasury & Trade Solutions Group, Citigroup) there was a number of themes that caught my attention. One of them was the issue of competition between currencies on characteristics other than stability. I am very curious about possible development here and have written before about the use of currencies that are more closely linked to the communities that they serve.

 

While I was listening to this interesting discussion, I saw on the inter web that

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Square, Twitter CEO Jack Dorsey’s payment company, has purchased $50 million worth of bitcoin.

Announcing the news on Thursday, Square said “cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose.”

Jack Dorsey’s Square purchases $50 million worth of bitcoin  – The Block:

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In some cases, Pennsylvania law enforcement has deemed seized cash to be “guilty” simply because it’s been in circulation. The article cites two studies detailing how much drug residue ends up on cash, which has the possibility of turning innocent people into suspects Pennsylvania cops have no interest in charging criminally. A 2008 study showed 42% of currency had trace amounts of meth on it. A 2009 study said nearly 90% of currency is contaminated with cocaine residue. If Pennsylvania cops can’t find another pretext to seize cash, they’ll test the cash itself for drug residue and go from there.

From Pennsylvania Cops Are Still Abusing Asset Forfeiture To Help Themselves To People’s Cash | Techdirt:

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Under a quick-rebound scenario, BCG’s outlook suggests that the global payments revenue pool will expand from $1.5 trillion in 2019 to $1.8 trillion in 2024, a compound annual growth rate of 4.4%. Although solid, this CAGR is much lower than the 7.3% annual growth the industry enjoyed from 2014 to 2019.

In a slow-recovery scenario, the global revenue pool would reach $1.7 trillion by 2024, a CAGR of 2.7%. Under a deeper-impact scenario, the revenue pool would grow by only a moderate CAGR of 1.1%.

The second half of the decade, however, looks considerably brighter, driven by economic expansion, advancements in payments infrastructure, e-commerce growth, and greater financial inclusion. From 2024 to 2029, global payments revenues should rise by 4.4% to 5.6% annually, states the consultancy, roughly 1.5 times faster than the growth of banking revenues overall. By 2029, the revenue pool could swell to between $1.9 trillion and $2.4 trillion, depending on the extent of the economic recovery.

From Payments revenue growth forecasts almost halved under brightest post-Pandemic outlook:

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PBOC’s deputy governor Fan Yifei told an audience at the virtual Sibos 2020 event that until “late August” the bank had processed 3.1276 million transactions. The total value of theses add up RMB 1.1 billion ($162 million).

More than 6,700 pilot use cases have been implemented for the CBDC
“An aggregate of 113,300 personal digital wallets and 8,859 corporate digital wallets have been opened,” the deputy governor says.

From Sibos 2020: Chinese central bank processes CBDC worth $162m in 2020 – FinTech Futures:

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If there’s one fintech segment that has been an unalloyed pandemic winner, it’s the business Afterpay is in: online point-of-sale installment financing. It’s benefiting from both consumers’ shift to online buying and their reluctance, in these uncertain economic times, to take on new credit card debt.

From The Pandemic Plutocrats: How Covid Is Creating New Fintech Billionaires:

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