Fintech Daily Digest

Crypto exchanges operating illegally in China face a new threat after the PBOC announced it would take new steps to uphold its trading ban. The PBoC also underscored the official government position in favor of blockchain but against cryptocurrency more clearly than ever.

The crypto industry took a setback recently with reports from China about raids in the offices of Binance and Bithumb's Shanghai offices by the local authorities. However, both the exchanges came out to deny any such raids, claiming these as attempts to tarnish their reputation in the country.

The world continues to move towards open banking with some markets, including the European Union (EU), the UK and Australia, taking the lead by creating and passing favorable regulations, according to a new report by the Paypers. In a paper, titled Open Banking Report 2019 and released in September, the company explores the current open banking ecosystem and provides an analysis of the present global state of play of open banking.

PBOC VP Yifei Fan said the bank aims to better regulate new technologies applied across the financial industry. Blockchain is among 17 categories of financial technologies, including cloud services and artificial intelligence, to be regulated under the new standards.

Chainalysis laid off 39 employees Thursday, about 20 percent of its workforce, as the startup prioritizes turning a profit and bringing products to market.

Protests in Hong Kong, Lebanon and Iran have forced cypherpunks to test censorship-resistant technologies in the wild.  But protesters on the ground found they lack internet access during times of civil unrest. Bitcoin has mainly proven useful for receiving value from abroad to hold and privately store. Sources in Lebanon and Iran said there is scant liquidity, and since they are cut off from global exchange platforms, digital assets are rarely useful as currency.

In a historically low interest rate environment, investors have looked toward high-yielding assets - wherever they can find them - in search of some form of yield. Meanwhile, over the past year, the number of digital currency-related products that bear an interest payment, or similar, have grown. Here, TradeBlock diagrams some of the highest yielding 'passive' income digital currency products and compares these assets to those offered in the traditional markets.

"Libra may become an alternative for certain cross-border payments, but will probably not be used for payments in Sweden to any great extent. These are some of the conclusions drawn in a recent Riksbank Economic Commentary."

Questions about privacy are becoming increasingly important, especially as we learn more about the degree of involvement governments and large technology companies have in gathering and sorting through our data. In this context, the work of Kahn and his colleagues Roberds and McAndrews on financial privacy is becoming ever more relevant.

This report surveys the legal and policy landscape - regulation surrounding cryptocurrencies around the world, covering 130 countries as well as some regional organizations that have issued laws or policies on the subject.

An ECB official confirmed its work on a digital Euro. The bank has explored it as both a retail and wholesale CBDC, and noted it has experimented with blockchain.

While PayPal's de-risking of PornHub is unfortunate, there are many alternative payment options available to PornHub's content providers. Competition saves the day. For now, at least.

One way that banks are addressing the challenges associated with cross-border payments is by adopting the SWIFT gpi standard on the basis that they can make payments from one central location, rather than spreading liquidity among various correspondent banks across different countries. This central view gives banks a much more transparent view of their liquidity.

Long summary: The Howey test is so vague, and cryptos are so new! Who could know anything, really? Also, the SEC messed us around. All this is so fundamentally unknowable that it violates constitutional due process, and you should throw it out. Short summary: f- you SEC, and see you in court.

Drawing on existing evidence, this paper surveys the main mechanisms through which digital innovations in payments, credit, savings and insurance could impact on welfare.

In a Nov. 19 letter responding to questions from lawmakers Rep. French Hill (R-Ark.) and Rep. Bill Foster (D-Ill.) in late September, Powell said the Fed has noted the efforts of other nations to explore a CBDC option, and that it continues to "carefully analyze the costs and benefits of pursuing such an initiative in the U.S."cb

Regulators in the U.S. might be hesitant to mandate an outright move toward open banking, but several factors are pushing the financial services industry in that direction. For starters, 65% of bankers viewed open banking as more of an opportunity than a threat, according to one survey. Respondents believed so strongly in the benefits that 90% expect open banking to boost organic growth by 10%. Opinions, however, diverge when it comes to execution and how financial institutions can best shape open banking to their advantage.

Bitcoin is something you hodl. Ethereum is something you build on. At least that has long been the official narrative, with projects favoring dedicated smart contract networks over Bitcoin for spinning out dapps and second layer solutions. Like all crypto narratives, however, this one has started to shift, as projects reappraise the benefits of crafting censorship-resistant applications anchored to Bitcoin Core and Bitcoin Cash.

Businesses are experimenting with going cashless, hoping to speed up transactions, combat theft and create a safer environment for their employees. Actually, though, physical currency is experiencing a resurgence. People in many of the world's most advanced nations - including the United States, the euro area and Japan - are holding more of it than ever.

The Monetary Authority of Singapore plans to bring crypto-asset futures traded on approved exchanges under its regulation in response to interest from international institutional investors.