Fintech Daily Digest

In China, where cryptocurrency exchanges are banned, people can pay cash over the counter to get Tether with few questions asked and from there trade Tether for Bitcoin and other cryptocurrencies.

None of Libra's founding partners have anted up their $10m entry fee. So far no agreement has been made, and the fee was not discussed at the Libra Association's first general assembly last week.

Governments, central banks and regulators need to recognise new opportunities for faster and cheaper payments, particularly cross-border, and greater financial inclusion. So far, however, cryptocurrencies are overhyped, the new payment platforms useful and Libra worrying.

Crypto investor Michael Terpin has written an open letter to US FCC chairman Ajit Pai requesting urgent action on SIM swapping fraud. He asked the regulator to make mobile carriers hide customer passwords from employees and to provide a "no port" option, whereby customers would have to go through a company's fraud department before transferring their SIM information to a new phone. In a SIM swap, criminals pose as the owners of a victim's mobile phone number, convincing telecom providers to grant them access to the SIM card.

In a draft bill published Tuesday, Rep. Sylvia Garcia (D-Texas) introduced legislation to the House Financial Services Committee to regulate stablecoins under the Securities Act of 1933, seeking to provide clarity in an area the bill suggests lacks regulatory guidance.

Ripple has expanded, opening offices in Washington, DC - the first major blockchain company with a dedicated global regulatory team in the US capitol. But this doesn't come alone: Ripple is joining the Blockchain Association with Michelle Bond, Ripple's Global Head of Government Relations, seated at the board, and even further, Craig Phillips, former Counselor to the Secretary at the U.S. Treasury Department, has joined Ripple's Board of Directors.

A Russian government official says the nation will ban Facebook if the US decides to block the company's Libra cryptocurrency.

Bitfinex, the controversial Hong Kong based exchange at the heart of ongoing investigations against Tether, has been one of the biggest cryptocurrency exchanges in the world since its launch in 2012. But recently there are signs that its market share may finally be slipping.

The Financial Action Task Force (FATF) has agreed on how it will assess whether countries have taken the necessary steps to implement the crypto-related requirements. "Given the global nature of the virtual asset industry, it is essential that countries implement these requirements swiftly," the FATF emphasized.

Chinese police are investigating financial technology firm 51 Credit Card Inc for allegedly hiring debt collectors that used intimidation and harassment, part of a broader crackdown on the peer-to-peer lending (P2P) sector.

This could logically mean a new enhanced role for the BIS, which coincidentally relies on a primitive kind of "stablecoin": the BIS's vast reserves, accounting for close to 7 per cent of the world's total currency, are held via a BIS unit of account denominated in IMF special drawing rights, which in turn are pegged to a basket of convertible currencies. It would be a small step to ensure there is life after Libra, albeit with central banks in charge.

After the PBoC ICO/exchange ban, the most convenient way to buy cryptos in China, is to buy stable coins like USDT first using OTC, and then trade it into any cryptos you want in exchanges.

National Bank of Cambodia Assistant Governor Serey Chea said that the National Bank of Cambodia has experimented with domestic blockchain payments for retail, but the main interest is testing them for cross-border transactions. She noted that the institution has been collaborating with Malaysian bank Maybank.

Last month, the Nigerian monetary authorities announced that they will be rolling out a national tax on cash. When Nigerian individuals or businesses deposit large amounts of cash at a bank, they will have to pay up to 3% in fees. And when they withdraw cash they will have to pay as much as 5% in fees. Nigeria joins a number of other emerging nations that have adopted policies that try to restrict domestic cash usage.

When bitcoin advocates claim adoption is surging in developing countries, particularly during periods of political unrest or economic turmoil, their go-to source for evidence is often the LocalBitcoins P2P exchange. But a closer look at the way this data is collected shows substantial noise mixed in with the signals, undermining the claims of growing crypto use empowering the downtrodden.

To achieve the potential compliance, accounting, and legal automation that blockchain could provide, it will be vital that businesses and their advisors understand, review, and plan for the associated risks of using blockchain technology.

Cash accumulation can go only so far as a sign of trust in government. After all, governments in the developed world would typically like to see more electronic payments. Getting rid of cash can have a lot of benefits: It can help deter crime, reduce tax evasion and give central banks more power to stimulate the economy. But people have to believe that electronic money will be safe from mismanagement, man-made disasters, hackers and even confiscation. So far, neither the denizens nor the overseers of the financial system have done a great job of earning that trust.

While trustless sidechains on Bitcoin may still be quite a few years away, there are other layer-two protocols, such as federated sidechains and the Lightning Network, that allow Bitcoin to gain the features of the most popular altcoins right now - albeit usually with security trade-offs. These additional protocol layers will likely become relatively trustless eventually, as advancements in cryptography are made over time.

New Wharton research shows that getting the initial coin offering design structure right is a key ingredient for success. However, it found that even the best design has flaws. "ICOs have the advantage of being a low-risk means of financing for firms... but this comes at a cost of lower production quantity, lower profit and limited flexibility in terms of product margin."

The results of PwC's Global Fintech report - conducted by PwC Research - have been released. The survey gathers the opinions of over 500 global business leaders to explore the current fintech landscape, the factors that will determine likely future winners and losers, and the steps that organisations can take to put them in the best position to lead.