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"Open and harmonised APIs have allowed network-neutral and cross-technology platforms to carry out financial data exchange while tackling system sustainability issues by providing them a single, standardised set of APIs rather than customised APIs. Through open and harmonised APIs, improved and expanded financial services can be offered to the public. These financial services could enable a higher level of financial inclusion globally, thus reducing the digital access gap within and between countries."

This Boston Fed paper discusses the key developments, drivers, and considerations in the U.S. market that support progress towards open banking and application programming interfaces (APIs) and how APIs offer a wide variety of new services. It finds that opening a bank's platform to third-party applications can create synergies with innovative technology businesses to build a new generation of digital financial activities that enhance the consumer experience. Open banking can create a paradigm shift in how financial institutions (FIs) treat the issue of ownership, storage, and use of data. However, several risks and challenges need to be addressed. The industry is waiting for guidance from the Consumer Financial Protection Bureau (CFPB). Interoperability is lacking and many FIs struggle to replace legacy infrastructures with fully digital platforms, which can require considerable investment. FIs may be struggling to prioritize open banking and API permissioned data with competing projects.

Plaid serves as the connective glue between financial apps like Robinhood and Credit Karma and customers' bank accounts. Through the use of application programming interfaces (APIs), the San Francisco-based fintech links the two sides, allowing financial data to flow between them.

The Bank for International Settlements (BIS) published the results of its Project Rosalind joint work with the Bank of England. It explored how a universal and extensible application programming interface (API) layer could connect central bank and private sector infrastructures and facilitate retail central bank digital currency (CBDC) payments. It demonstrated that a well designed API layer could work with different private sector applications and central bank ledger designs and that a set of simple and standardized API functionalities could support a diverse range of use cases.

The Monetary Authority of Singapore (MAS) launched a S$1.75 million MAS Global FinTech Innovation Challenge to seek innovative solutions that can help financial institutions respond to COVID-19 and climate change challenges. It will be hosted entirely on the API Exchange (APIX), a cloud-based innovation platform, which will allow these solutions to be curated, contextualised, and validated.

"Emtech's digital regulatory platform includes the innovator's center, which helps fintechs to prepare and test the requirements for multiple regulators and/or countries and test regulatory reporting APIs for pre-market technical integration, as well as the regulatory sandbox, a fintech launchpad based on regulator limits and the live reporting of data. The sandbox helps the regulatory authorities base their response to innovations on the outcomes of live experiments."

Visa is piloting a suite of application programming interfaces (APIs) that will allow banks to offer bitcoin services. The Visa Crypto APIs pilot program will let clients "easily connect into the infrastructure provided by Visa's partner, Anchorage, a federally chartered digital asset bank, to allow their customers to buy and sell digital assets such as Bitcoin as an investment within their existing consumer experiences." Visa is already working with crypto companies to issue bank cards and has partnered with 35 crypto firms to date, but this is the first time the company has offered crypto services to banks.

So, what happened in open banking 2019? In Australia, open banking is finally launched; Payments NZ in New Zealand launches open banking APIs and ther NZ banks follow; Mexico continues to be the hot spot for LATAM; Brazil launches open banking model; Additional API offerings launched in Malaysia to further enrich the open banking market there; US banks begin conversations on open banking and to develop open banking 'like' APIs; the Central Bank of Nigeria places open banking on its Payments Vision Statement (PSV) 2030 to become the next EMEA country to implement open banking; and Bahrian makes claim to implementing open banking.

The Central Bank of Kenya (CBK) outlined a five-year digitalization plan to modernize the country's domestic payment landscape. The CBK says it will work to define standards for API development and mandate data portability with hopes that more options and innovative solutions will be made available for users in Kenya to choose from. These standards will include API specifications for identification, verification and authentication; customer account information/data access; transaction initiation; and formats and coding languages for APIs. https://www.centralbank.go.ke/2020/12/23/invitation-for-public-comments-on-the-draft-kenya-national-payments-system-vision-and-strategy-2021-2025/

Visa has called off its deal to buy fintech start-up Plaid for $5.3bn after the US Department of Justice sued to block the transaction on antitrust grounds. Plaid makes software that allows banks and fintechs to plug into consumers' various financial accounts, enabling those companies, with users' permission, to aggregate spending data, look up balances and verify other personal financial information. Visa denied it had been trying to eliminate a potential competitor but said it wanted to avoid "protracted and complex litigation".

With its rule change, the FDIC has significantly broadened the ability of fintechs and nonprofits to partner with banks without having being characterized as a "deposit broker" - so long as the third party's primary business is not accepting deposits. More importantly, the FDIC has initiated an application process where any third party can apply to the FDIC and receive an exemption if it meets the requirements of the new rule. Once the exemption is granted, banks can receive deposits from the fintech's customers without the deposits being characterized as "brokered deposits" by regulators.

Plaid is launching a new service to help banks, especially small ones, quickly develop application programming interfaces for sharing their account data with third parties. The company already works with 3,000 other fintechs to help them access customers' bank account data. But Plaid Exchange will enable banks to be in the driver's seat of data-sharing efforts.

This Bank for International Settlements (BIS) report explores the development of an identification and authentication application program interface (API) that could be used to implement privately and publicly administered open finance solutions with seamless scalability. It analyzes an API scheme based on the establishment of a central validator (CV) that allows secure relationships to be created between financial institutions and third parties, without the need for them to come into direct contact with each other. It provides the necessary elements to guarantee that each party involved accesses only the user information strictly necessary to allow the provision of a specified financial service.

The Bank for International Settlements (BIS) published two Committee on Payments and Market Infrastructures (CPMI) reports that offer key insights and recommendations on the interlinking and interoperability of payment systems to enhance cross-border payments. The first report discusses design choices and the risk implications of interlinked fast payment systems (FPSs) and the role of application programming interfaces (APIs), setting out the key decisions for governance and outlines recommendations for their oversight. The second report presents ten recommendations to promote the harmonization of APIs to enhance cross-border payments. https://www.bis.org/cpmi/publ/d223.htm https://www.bis.org/cpmi/publ/d224.htm

Just as the invention of APIs enabled software by allowing systems to communicate and operate autonomously, stablecoins are becoming the financial APIs of artificial intelligence. APIs enable software to seamlessly exchange data and execute tasks without human intervention. Similarly, stablecoins provide the liquidity, programmability and efficiency AI agents need to exchange value and execute transactions in a fully autonomous world. Stablecoins like USDC bring instant, secure and programmable money into the workflows of AI systems. Autonomous agents, operating on behalf of individuals or businesses, rely on fast and efficient monetary systems to optimize their performance. Together, AI and stablecoins are creating a foundation for "self-driving economies," where value moves as seamlessly as data does today.

The Basel Committee on Banking Supervision today published its Report on open banking and application programming interfaces (APIs). The report monitors the evolving trend of open banking observed in Basel Committee member jurisdictions and the use of APIs.

The BIS Innovation Hub London Centre has launched the Project Rosalind TechSprint, inviting expressions of interest to come up with retail central bank digital currency (CBDC) use cases. Participants will be required to develop feasible prototypes by using the set of application programming interfaces (APIs) developed in phase one of Project Rosalind. It aims to develop prototypes of an API platform for the distribution of retail CBDC. The purely experimental setup is based on a two-tier distribution model, comprising a central bank at the foundation of the retail CBDC system and with customer-facing activities carried out by the private sector payment interface providers (PIPs).

The BIS Innovation Hub London Centre invites companies and organizations to submit expressions of interest to join the Project Rosalind to develop application programming interface (API) prototypes for distributing CBDCs. The group will be structured into two tiers - API users and technical advisors, with different roles and responsibilities for each. The project, run jointly with the Bank of England, aims to address some of the questions around developing a retail CBDC system, including: how to improve public-private sector collaboration? How to maximize interoperability, encourage competition and enable adoption? How might retail CBDC meet current and future consumer needs in a fast-changing payments landscape? The objective is to explore how this interface could best enable a central bank ledger to interact with private sector service providers to safely provision retail payments.

Crypto cards have become a must-have for many crypto services. Hoping to reduce the risk of blocking transactions, companies have been looking again and again for reason why their customers should use "plastic." But a crypto card is a placebo that does not solve the problems of either users or fintech companies - its only goal is to bring profit to payment systems and intermediaries. All cards are serviced by payment systems that create a closed consumption ecosystem; banks and processor companies pay an annual fee or transaction fees to the credit card companies and payment system operators for the possibility of issuing cards, sellers transfer to banks on average 1%-4% of the transaction amount for acquiring servicing, and various intermediaries, aggregators, API providers, etc. also collect a commission. For crypto transactions the fees are higher, since the traditional financial industry regards these transactions as high-risk.