Snippings

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ECB has decided to discontinue production and issuance of €500 banknote

From ECB ends production and issuance of €500 banknote

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My good friend Wendy Goodman was kind enough to write about her experiences at Tomorrow’s Transactions this year (our 19th annual Forum!!) referring to it as

Tomorrow’s Transactions Forum, Dave Birch’s quirky annual event where ideas about the future of money are smashed together like particles to see what happens.

From net.wars: The blockchain menu

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there is no reason why, in principle, central banks could not offer online digital money accounts for the public

From MacroMania: Monetary policy implications of blockchain technology

This is, essentially, what the first central bank did. The Bank of Amsterdam (the Amsterdamsche Wisselbank, founded in 1609) was, essentially, a municipal bank that provided a reliable and trusted payment mechanism. It did not lend money: it was there to make account-to-account ledger transfers. It had an important difference to previous experiments in the same direction: legal restrictions on settlement outside of the bank. The Amsterdam merchants were forced to open accounts there because of the law demanding that commercial payments had to be through the bank. They could deposit all sorts of different coins to credit their accounts and then make payments by instructing account-to-account transfers. The result was that Amsterdam supported a vibrant commercial marketplace with access to safe, efficient and cost-effective payments. This in turn supported the evolution of the Amsterdam bourse and helped to make the Netherlands rich.

So we are back the “big problem of small change”. How can private companies provide a circulating medium of exchange and still make a profit on it? It’s possible that they can because of new business models. But suppose they can’t? Suppose it falls to the central banks to provide the digital money for everyday use. As we discussed before, one of the objections to this 

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Turkey has gone live with its own card payment system, dubbed Troy, as it seeks to boost electronic money and usher in a cashless society by 2023.

From Turkey launches national payments system

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the company’s co-founder and chief technology officer revealed that in 2016 Airbnb would be looking into blockchain integration, or a similar distributed ledger system, to authenticate a user’s reputation and establish trust on the platform.

From What Airbnb’s blockchain proposal means for privacy

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solarisBank, formed by the fintech startup incubator FinLeap, announced it had been granted a banking license by regulators in Germany, enabling it to offer fintech companies things like account and transaction services, compliance and trust solutions, working capital financing and online loans. It is essentially banking as a service

From ‘Banking as a Service’ for Fintechs Seeking Scale | American Banker

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In March 2015, the Financial Conduct Authority published a report on “Making currency account switching easier” detailing “the effectiveness of the Current Account Switch Service (CASS) and evidence on the account number portability”. It said that:

Consumer organisations, while appreciating the benefits that such a system would give consumers, were also cautious about ANP, arguing that the real barriers to switching do not lie in the infrastructure but in the choice and differentiation of the current accounts available.

From Making current account switching easier – making-current-account-switching-easier.pdf

This is a fair point (note that it also applies to the current account switching service) but I think it misses the advantages to other stakeholders, not of ANP but of Virtual Account Numbers (VANs), 

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Well, as I mentioned to [the Economic Secretary to the Treasury] at techUK (I was the nutter at back who kept going on about “7-0” solutions, Angela) the best way to do this is with virtual account numbers (VANs) and virtual payment names (“pay names”).

From Account number portability is on the PSR’s agenda. Sorted. | Consult Hyperion

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Let’s call this a VAN. A virtual account number. Now, you know how all mobile phone numbers in the UK begin with a “7”. Well, what if all virtual account numbers in the UK began with “7” as well? It turns out that the “7” sort codes in the UK have an unusual history

From A suggestion for doing something about account switching in the UK | Consult Hyperion

The solution is straightforward. When someone opens a bank account, give them a virtual sort code that begins with 7 and then an account number. They keep this number for as long as they like. When they change bank accounts, they keep the 7X-XX-XX XXXXXXXX number but it now points to their new account. Employers, utility companies, P2P services and everyone else carries on using the that virtual number. No-one needs to update anything or notify anyone.

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law enforcement agencies (LEAs) could attempt to lower the value of drugs traded on the marketplaces by purchasing products and then leaving bad reviews.

From Cops Could Undermine Dark Web Markets by Leaving Fake Reviews | Motherboard

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Interbank co-operative Swift has confirmed that it has experienced a number of recent instances of hackers compromising network interface devices at client banks to send fraudulent payment messages over the global banking network.

From Swift confirms multiple cases of fraudulent message traffic

May as well use Bitcoin then.

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Maj Gen Gerstner, the deputy commander for operations and intelligence for the US-led operation against IS, said under 20 air strikes targeting the group’s stores of money had been conducted… While it was difficult to know precisely how much money had been destroyed in total, estimates put the figure at between $500m and $800m, he said.

From Islamic State: Up to $800m of funds ‘destroyed by strikes’ – BBC News

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