Fintech Daily Digest

What if governments concede that it's both impossible and unnecessary to formally identify poor people at the on and off-ramps? What if they accepted an AML model that treats the endpoints as unidentified nodes and, drawing on these new analytic tools, actively managed access to networks based on behavior not identity? Here, ongoing research in machine learning and high-performance computing by the MIT-IBM Watson AI Lab in collaboration with Elliptic could be a catalyst.

A new partnership between the Dubai International Financial Centre (DIFC), Mashreq Bank and fintech firm Norbloc aims to launch a blockchain-based Know Your Customer (KYC) data-sharing consortium in 2020.

Revolut has launched a commission-free stock trading service in a push to challenge major trading platforms such as Hargreaves Lansdown and differentiate itself from rival banking start-ups such as Monzo and Starling Bank.

A team of former Royal Bank of Scotland (RBS) engineers is bringing trading and settlement of digital assets, including cryptocurrencies, to a private blockchain network originally developed for enterprise.

Crypto exchange Kraken has acquired Interchange, an accounting, reconciliation and reporting service provider that it says offers an "institutional-grade" service.

Bitfinex started publishing real-time liquidation updates in preparation for the rollout of its new derivative product with up to 100x leverage, which is not uncommon, with BitMEX also offering it.

Bakkt is seeking a license to operate as a trust, while LedgerX went the route of DCM and DCO licenses, which some have said means its contracts are likely to be fully collateralized, so traders can't legally trade them on margin.

Chinese authorities have spoken out about accelerating the development of a CBDC. The country has greenlit the next stage of the PBOC digital currency program, said Wang Xin, director of the PBOC Research Bureau, during a seminar at Peking University a few weeks ago.

The PBOC is urging individuals and companies to not refuse or discriminate against cash payment, asking people to dial down what it calls an "overhype" of a cashless society comes as mobile payment volumes continue to soar to new heights.

LedgerX launched the first physically-settled bitcoin futures contracts in the U.S., beating ICE's Bakkt and TD Ameritrade-backed ErisX to the punch. It will be available to both institutional and retail investors.

WhatsApp and other encrypted messaging services face pressure to hand over access to encrypted chats after a meeting between the "Five Eyes" nations which share intelligence this week. "The Five Eyes are united that tech firms should not develop their systems and services, including end-to-end encryption, in ways that empower criminals or put vulnerable people at risk."

Swedish banknotes and coins in circulation rose 7% last year, to 62.2 billion krona, according to the European Central Bank. It was the first yearly increase since 2007; the value of cash in circulation has dropped by around 45% over that period.

The UK FCA Issues Guidance on Regulation for Bitcoin and Crypto Assets. Most of the rules were proposed in a January consultation paper. As widely expected, the final guidance does not drastically alter the regulatory landscape, instead specifying when certain types of crypto assets fall under existing categories.

FX Derivatives (FXD) participants face a tricky choice across a patchwork of clearing and uncleared optimization techniques, trading off funding and capital usage with infrastructure spend and operational risk. In earlier posts, we showed you how FX IM optimization via NDFs and FX Options clearing developed in Q1 2019.  Here I update the volumes for Q2 2019 and set the trends alongside other emerging techniques in FXD counterparty risk reduction.

Insurtech start-up B3i has launched its first product on R3's Corda platform, v1.0 of its Property Catastrophe Excess of Loss Reinsurance product. The new Cat XoL product will allowing insurers, brokers and reinsurers to "interact, negotiate and place risk more securely and efficiently."

Crypto payments and banking services provider, Bitwala, has raised EUR 13m in Series A funding. Bitwala currently offers accounts for retail customers across all 31 European Economic Area countries via Berlin-based SolarisBank.

PBOC officials have released more information about a CBDC which is still at the research stage. It will be backed by a reserve fund, according to Mu Changchun, deputy director of the PBOC payments department.

Chinese importers in Russia are buying up to $30 million a day of tether from Moscow's OTC trading desks. They use the cryptocurrency to send large sums back to their home country, which has strict capital controls. Previously the merchants used bitcoin for this, but when the market crashed in 2018 they switched to tether. Despite longstanding questions about USDT's collateral, in this market "nobody actually cares if tether is backed or not," says one Moscow trader.

The massive $2.27 billion bitcoin transfer that occurred on Monday has led to the emergence of fanciful theories that Tether might be creating a private dark pool for future USDT issuance.

Bitcoin wallet and blockchain explorer provider Blockchain just launched its first custodial exchange platform, called The PIT, that can connect to non-custodial Blockchain wallets for nearly instant transfers.