Group items tagged

The North Carolina Insurance Underwriting Association (NCIUA) latest catastrophe bond has now upsized by 150%, with the Cape Lookout Re Ltd. (Series 2021-1) transaction set to provide it $250 million of reinsurance from the capital markets. At the same time, the spread on the cat bond notes dropped considerably thanks to ILS investor appetite, with the pricing eventually fixed at the bottom of reduced guidance, indicating a roughly 13% decline in pricing during marketing.

Germany reinsurer Hannover Re has collaborated with Schroders Capital on a pilot tokenization project, designed to enhance the way insurance-linked securities are invested and managed. On an internal-only basis, Schroders successfully enabled reinsurance contracts to be tokenized and traded on a public blockchain platform using smart contracts. This allowed a number of time-consuming processes to be automated. For example, by integrating key catastrophe insurance data sources into the smart contracts payments to appropriate recipients could be automatically triggered if qualifying natural disaster events occurred. [Source: Artemis.bm]

The Bank of Israel's Yoav Sofer provided an update on the digital shekel project, which he leads, in a couple of local media outlets. The project team want to finalize the plan by the end of 2026, after which they will present it to the Governor, who will decide whether to launch the digital shekel. The current thinking is that it would provide for an offline payment wallet by which it will be possible to set a certain amount in advance to be held by phone or prepaid card that can be used to make payments when there is no internet connection. It will also allow for anonymous payments up to a certain amount, both offline and online, in a way that will not even be accessible to payment service providers. The project team is also considering allowing the digital shekel to bear interest, which will create an incentive for banks to offer better interest rates on deposits, and push Bank of Israel policy rate changes out to the economy faster and more efficiently. See also https://www.makorrishon.co.il/

The Bank of Israel has decided to accelerate its research and preparations for a possible future launch of a digital currency. A steering committee set up by the bank has issued a report outling the potential benefits, a draft model and issues to examine, accompanied by a public call for responses. The draft model envisages a two-tier framework in which the central bank provides digital shekels to private sector payments providers who would then act as the interface to the general public. https://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/11-5-21.aspx

On January 4, 2021, the Chief Counsel of the Office of the Comptroller of the Currency ("OCC") issued an interpretive letter ("IL 1174") on the permissibility of national banks to use independent node verification networks ("INVN") and stablecoins for payment activities. In particular, "[n]ational banks … may use new technologies, including … stablecoins, to perform bank permissible activities, such as payment activities." The letter, when coupled with other OCC interpretations, now firmly places the issuance and use of stablecoins as permissible bank activities. While stablecoins may also be securities under certain circumstances, there is a well-defined line of case law, including from the Supreme Court, about the factors to apply when determining whether a product that has characteristics of both a banking product and a security is one or the other (or both). Therefore, issuers and investors may now apply the age-old factors to bank-issued stablecoins and be comfortable about the regulatory characterization of the ultimate product.

The Tel Aviv Stock Exchange (TASE) has signed an agreement with the digital asset platform Fireblocks to jointly offer a range of new digital asset products and services. The TASE noted that the new partnership will enable it to provide institutional-grade digital asset solutions for regulated entities. TASE had previously worked with Fireblocks and the Israeli Ministry of Finance on Project Eden, a proof-of-concept (PoC) that tested the atomic settlement of tokenized government bonds using digital payment tokens on a blockchain-based platform. https://www.tase.co.il/en/content/news-lobby/20230802_pr

The Bank of China has partnered with China Telecom and China Unicom to test SIM card near-field communication (NFC) payments for the e-CNY on specific Android smartphones in certain regions. The SIM card hardware wallet shares its balance with the main wallet, eliminating the need for separate top-ups. In order to make payments, users are only required to move their mobile phones close to point of sales terminals, even with a switched-off smartphone. https://mp.weixin.qq.com/s/Il2p2rKE116xMh97Ml0wQg

The law to reduce the use of cash is intended to assist in the fight against black capital and criminal activity. The law sets restrictions on the use of cash and checks and applies to a dealer, private individual, tourist, accountant and attorney when providing "business service" to a customer. From August 1, the maximum amounts allowed for cash use will be updated: in transactions with dealers - NIS 6,000 and between private individuals - NIS 15,000. https://www.gov.il/en/departments/topics/cash-use-reducetion/govil-landing-page

[October 31, 2024] During the Digital Shekel Challenge that concluded in October 2024, Kima, an asset-agnostic, peer-to-peer money transfer and payment protocol, successfully facilitated the transfer of a tokenized stock via digital shekel, demonstrating a successful use case of its cross-ecosystem interoperable delivery-vs-payment (DvP) solution. To demonstrate the utility of its transfer protocol, Kima built an imaginary trading platform called PeerTrade which facilitated an atomic swap of the tokenized share. Kima's secure decentralized settlement layer orchestrated the transaction instead of an intermediary, directly linking the buyer interested in purchasing the stock using her digital shekels with the seller, who held a tokenized share in their wallet to receive the payment into their bank account in the form of regular shekels. https://www.boi.org.il/en/communication-and-publications/press-releases/the-bank-of-israel-held-a-concluding-conference-for-the-digital-shekel-challenge-today-and-announced-the-winners-of-the-challenge/

The Bank of Israel (BOI) remains committed to plans for a digital shekel currency to improve Israel's payments system and foster innovation, but is unlikely to launch one ahead of other advanced economies, according to Deputy Governor Andrew Abir. He wants an eventual central bank digital currency (CBDC) to pay interest to create competition with bank deposits and provide an incentive for the public to hold it. It will operate in a two-tier model, with a wide range of participants providing services on the digital shekel platform, including banks, plus other payment companies, fintech or Bigtech companies, consumer clubs, and retail entities. Participants will support regular payment use cases, plus advanced and innovative use cases. https://www.boi.org.il/en/communication-and-publications/speeches-and-presentations/9-7-2024en/

The Bank of Israel (BOI) concluded its Digital Shekel Challenge with presentations by the 14 entities selected to develop innovative use cases for the digital shekel. The use cases presented demonstrated the potential of the digital shekel to help create advanced payment solutions and lead innovation in Israel's payment system. First place was awarded to Siara for a platform for returning debtors to an economic growth path, second went to Paypal for a smart payroll payments system, third to IDEMIA for an offline payments solution, and the "People's Choice" to QEDIT for a platform that enhances trust for digital transactions using advanced cryptography. https://www.boi.org.il/en/communication-and-publications/press-releases/the-bank-of-israel-held-a-concluding-conference-for-the-digital-shekel-challenge-today-and-announced-the-winners-of-the-challenge/

In a LinkedIn post, the Bank of Israel's Yoav Sofer discusses how the long-run plan for a prospective digital shekel would blur the distinction between retail and wholesale central bank digital currency (CBDC). Box 2 in the design paper published on March 3, 2025 rejects the notion that wholesale use cases (and users) and retail use cases (and users) cannot be served by one system. The proposed design offers the concept of a "multipurpose CBDC" - one reservoir of digital central bank money, available for all users and use cases in the economy - of course, with the adequate controls, risk management measures, and regulatory requirements attached to each type of user. https://boi.org.il/en/communication-and-publications/press-releases/3-3-25/

Bangladesh could benefit from the use of insurance and reinsurance structures including catastrophe bonds as a way to secure much needed capacity enabling it to better respond to natural disasters and climate related risks, according to the International Monetary Fund (IMF).

Moody's warns that reliance on retrocession capital is growing but that it considers increased reliance on retrocession to sustain a normal reinsurance underwriting business to be risky and weaken the capital quality of those dependent on it for support.

The Israel Securities Authority intends to draft a regulation for DLT-based digital asset exchange platforms. It is now calling on the private sector to pitch the regulator with proof-of-concept DLT trading systems.

The Central Bank of Azerbaijan and VISA signed an agreement on strategic cooperation to expand digital payments in Azerbaijan. The new strategic agreement will accelerate the development of non-cash payments in the Azerbaijani market, the introduction of innovative payment solutions, as well as through mobile devices, as well as the implementation of initiatives to expand financial literacy and inclusiveness.

The United States Treasury continues to explore its options for terrorism risk sharing with private markets, with terrorism catastrophe bonds once again under discussion at committee level.

DeFi potentially offers much higher returns to savers than high-street institutions. Compound, for example, has been offering an annualized interest rate of 6.75% for those who save with stablecoin Tether. Not only does a user gain interest, but it also receives Comp tokens, an added attraction. With two-thirds of people without bank accounts in possession of a smartphone, DeFi also has the potential to open up finance to them.

The Israel Securities Authority (ISA) and the Israel Innovation Authority (IIA) have introduced a "Data Sandbox" program for Fintech firms that will help them work cooperatively with regulators, licensed entities, and other financial services providers based in the country.

"After four years of development, the Central Bank of Nigeria (CBN) is set to roll out its digital currency project. The launch will reportedly happen on the occasion of the country's 61st Independence Day celebration on Oct. 1."