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America is at stage zero. Customers are locked into sticky credit-card schemes funded by extortionate levies on merchants. Tech firms must rely on creaky financial plumbing run by well-protected incumbent banks.

From The digital surge – How the digital surge will reshape finance | Finance & economics | The Economist:

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America has shielded banks and credit-card firms the most, by being slow to build fast-payment pipes and making it hard to gain digital-banking licences. It has left it to the market to decide when data should be shared, and at what price. Europe and many emerging markets are somewhere in the middle. These have tried to instil competition by allowing data to flow. Some version of Open Banking will soon be in force in 51 countries, ranging from Malaysia to Mexico.

From The digital surge – How the digital surge will reshape finance | Finance & economics | The Economist:

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Investors reckon that “embedded finance”—the integration of credit, insurance and investment into non-financial apps or websites—could in time become as valuable as payment services are today. Both banks and fintechs are therefore racing to integrate the services they offer. In September Yandex, Russia’s leading web-search and ride-hailing app, said it would buy the country’s largest digital bank. A week later Sberbank, Russia’s top lender, dropped “bank” from its name in order to rebrand itself as a tech firm dabbling in food delivery and telemedicine. Peter Ndegwa, who runs Safaricom, a Kenyan telecoms firm and m-pesa’s main owner, wants the service to become a “lifestyle brand” offering overdrafts, loans, wealth management and insurance.

From The digital surge – How the digital surge will reshape finance | Finance & economics | The Economist:

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An original sin was committed at the internet’s conception: its underlying, decentralized architecture was built without an identity layer.

From Getting Internet Identity Right, 30 Years On – CoinDesk:

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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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