Fintech Daily Digest

According to IBM, World Wire is the first blockchain network of its kind to integrate payment messaging, clearing and settlement on a single unified platform. Participants are also allowed to dynamically choose from a variety of digital assets for settlement. Currently, World Wire has enabled payment locations in 72 countries, with 48 currencies and 44 banking endpoints.

Markus Brunnermeier and Dirk Niepelt argue that concerns about central bank digital currency choking investment, cutting into banks' profits, or increasing the likelihood of bank runs are misplaced.

To help clarify Fintech regulatory positions and move policy forward, French and German regulators have started a variety of initiatives, ranging from novel legislation in France to preliminary expert hearings in Germany. France has paved the way with the "PACTE bill" and a new regime for crypto-asset players. Germany is taking a similar path with a public consultation launched by a cooperation of the Ministry of Finance and the Ministry of Justice in early March.

Sveriges Riksbank published positive feedback from 20 Swedish institutions and organizations on its 2nd e-krona report, including from the Finansinspektionen, the National Debt Office and the national tax agency. However, most entities called for a government inquiry; something the central bank has requested.

While industry executives generally agree Ethereum is not a security, the SEC chairman did not directly confirm it.

The Swiss Federal Assembly has approved a motion to instruct the Federal Council to adapt existing provisions on procedural instruments of judicial and administrative authorities, so that they can also be applied to cryptocurrencies.

The Japanese cabinet approved draft amendments to the country's financial instruments and payment services laws, which would cap leverage in virtual currency margin trading at two to four times initial deposits. Also all cryptocurrency exchanges that offer margin trading will have to register with the FSA.

The Central Bank of the Bahamas will impose a ceiling on how much of their CBDC can be maintained in mobile wallets. High volume use will require a pass-through flow of funds to personal bank accounts. The wallet's integration with commercial banks or other licensed entities would be required in order for account holders to have access to foreign exchange services.

"Changes made to the public API of major cryptocurrency exchange Binance seemingly reveal that the company is working on implementing margin trading."

"In September 2018 we launched the Mobile Money Regulatory Index, an interactive tool that measures the effectiveness of mobile money regulatory frameworks. Today, we are pleased to release a paper that provides a deep analysis on the findings of the Mobile Money Regulatory Index. We examine in detail the six key facets of regulation."

"MakerDAO token holders have again voted to increase fees charged to those taking out programmatic loans on the blockchain through its U.S. dollar-backed ethereum stablecoin DAI. The fourth and largest fee hike to the DAI "Stability Fee," users who take out loans with MakerDAO to generate new DAI will soon be required to pay a 7.5 percent fee when closing out the loan."

"Since February, MKR holders have agreed on three different raises of Dai's "stability fees," which are essentially interest rates people have to pay for borrowing Dai. First came two separate fee hikes of 0.5 percent. When those didn't work, the community enacted an additional 2.5 percent increase. That didn't quite stabilize Dai either, so the MakerDAO community is currently debating adding another two percent to the coin's borrowing rate."

"I think JPM Coin is a bold attempt to gain a first mover advantage in a potentially lucrative new banking service. It shares more DNA with Bitcoin than any product announcement so far from a major financial institution, but it has some traditional bank in there too."

"Currently, cash stock trades are settled over two business days, or in industry parlance, T+2 (transaction date plus two). Using the distributed ledger technology (DLT) of blockchain, the ASX confirmed that period could be condensed; others speculated it could be as little as four hours."

IBM World wire focuses on the cross-border payments market with enabled payment locations in 72 countries, 48 currencies and 44 banking endpoints. It supports Stellar Lumens and a USD based stablecoin - thanks to their work with Stronghold. The network will also support stablecoins issued by several of its consortium banks.

"China's Center for Information and Industry Development has released its latest crypto project ranking. Tron and EOS top the list out of the 35 crypto projects evaluated while Bitcoin has been downgraded slightly. The center also evaluated the projects independently based on basic technology, applicability, and creativity."

"The Mexican central bank, acting under authority from a recently enacted fintech law, proposed new regulations last week that would effectively ban cryptocurrency exchanges in the country. "

The BIS continues to sound warnings about CBDC. Aside from the run risk, they warn that CBDC could impact monetary policy implementation by changing the demand for base money and its composition in unpredictable ways, and possibly modifying the sensitivity of the demand for money to changes in interest rates. Also, CBDC could lead to a larger central bank balance sheet, which may require it to purchase additional assets, which could interfere with key markets functioning or dry up liquidity.

"The Federal Reserve Bank of New York today launched the Fintech Advisory Group to provide Bank leaders with a high-level platform to establish clear points of contact with senior representatives and thought leaders from the financial technology industry and consumer organizations. The group's first meeting will be April 1, 2019."

The Swiss Federal Council has initiated a consultation on the adaptation of federal law to developments in distributed ledger technology. It wants to increase legal certainty, remove hurdles for DLT-based applications and limit risks of misuse. The consultation will last until the end of June 2019.