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The first was collecting drug money in U.S. cities such as Chicago and New York from cartel contacts, typically anywhere from $150,000 to $1 million at a time. She would wait in a public place, armed with a burner phone, a code name and the serial number of an authentic $1 bill. Mexican cartels would pass on her details to their dealer contacts, who would call Lim’s burner phone and use the code name to identify themselves. At the rendezvous point, Lim would give them the $1 bill with the corresponding serial number as a “receipt” to verify the handoff had taken place, Lim said at trial.

From Special Report: Burner phones and banking apps: Meet the Chinese ‘brokers’ laundering Mexican drug money | Reuters.

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Still, U.S. law enforcement officials told Reuters that Chinese “money brokers” such as Gan represent one of the most worrisome new threats in their war on drugs. They say small cells of Chinese criminals have upended the way narcotics cash is laundered and are displacing the Mexican and Colombian money men that have long dominated the trade.

Virtually unheard of a decade ago, these Chinese players are moving vast sums quickly and quietly, authorities said. Their expertise: routing cartel drug profits from the United States to China then on to Mexico with a few clicks of a burner phone and Chinese banking apps – and without the bulky cash ever crossing borders. The launderers pay small Chinese-owned businesses in the United States and Mexico to help them move the funds. Most contact with the banking system happens in China, a veritable black hole for U.S. and Mexican authorities.

From Special Report: Burner phones and banking apps: Meet the Chinese ‘brokers’ laundering Mexican drug money | Reuters.

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The lovely people at ACI Worldwide invited me along to take part in their ACI Edge, reincarnated in virtual form for the December 2020 event.

The event included a great panel with Bridget Hall (Leader of Real-Time Payments at ACI Worldwide), Simon Brooks (Faster Payments Line Manager at Pay.UK), Anne Butler (Chief Legal Officer at Payments Canada) and Reed Luthanen (Executive Director of the US Faster Payments Council). Their discussion ranged across a number of issues, but what struck me as particularly interesting was their discussion about new business models made possible by request-to-pay models. Reed talked about opening up new verticals, and I think he is absolutely right. We really are only scratching the surface (in Bridget’s words) by talking about utilities and bill payments. The data-rich opportunities that RTP presents mean that payments can be integrated into envioronments.

 

Rod Boothby, Global Head of Identity — Digital Platform at Santander.

Big companies get fake invoices all the time

From Santander’s aspirations to be your trusted identity custodian.

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Stripe has brought in several big name banks to back its new banking-as-a-service API that lets online businesses embed financial services in their platforms.

Stripe Treasury promises to make it easy for firms to send, receive and store funds, slashing the red tape associated with opening business bank accounts.

E-commerce marketplace Shopify is taking advantage of the API, working with Stripe and Evolve Bank to offer its merchants a business account built specifically for them.

Shopify merchants will be offered interest-earning accounts eligible for FDIC insurance in minutes. Customers can get near-instant access to revenue earned through Stripe, spend this directly from their balance with a dedicated card, transfer it via ACH or wire transfer and pay bills.

From Stripe makes banking-as-a-service play:

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Many modern East Asian currencies have roots in Ming dynasty trade and Chinese traders’ faith in the Mexican silver dollar. Attempts to dislodge it, such as the Hong Kong-minted silver British dollar, were not always successful

From How China and Hong Kong’s currencies were shaped by Spanish, Mexican silver dollars | South China Morning Post:

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A member of the European Central Bank (ECB) board, Fabio Panetta, referred to the issue of such stable coins at a recent Bundesbank-convened event about the future of payments noting that if the risks of such coins were to be minimised by insisting on a reserve in central bank money, that something like a Facebook would be “tantamount to outsourcing the provision of central bank money”.

 

Panetta states. “It could endanger monetary sovereignty if, as a result, private money – the stablecoin – were to largely displace sovereign money as a means of payment. Money would then be reduced to a ‘club good’ offered in return for the payment of a fee or membership of a platform.”

From ECB warns the future of money is at stake as Facebook preps January crypto launch:

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If people store, send, receive, and sell crypto assets in crypto wallets, then surely they should be regulated like bank accounts.

Except that is only one use case for a crypto wallet. It happens to be the primary use of crypto wallets right now but it is not likely to be the primary use of crypto wallets in a decade.

From Crypto Wallets Are Not Bank Accounts – AVC:

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Privacy-preserving digital payment alternatives, such as cryptocurrencies, involve high transaction costs and can be environmentally costly. Private initiatives proposed by “BigTech” firms are likely to lead to even less privacy. Central banks are better positioned, relative to private intermediaries, to commit to safeguarding data from outside vendors, because a central bank has no profit motive to exploit payments data. By helping consumers to monetize privacy, central banks would not be proposing a radical transformation to the payments landscape. Rather, they would be preserving aspects of payments that existed prior to the digital revolution.

From Monetizing Privacy with Central Bank Digital Currencies -Liberty Street Economics:

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Available from from February 2021. NFIs that are licenced as major payment institutions under the Payment Services Act will be allowed to connect directly to Fast and Secure Transfers (Fast) and the PayNow overlay central addressing service .

Singapore opens faster payment plumbing to non-banks:

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