Fintech Daily Digest

Trading has started on the Boerse Stuttgart Digital Exchange. Selected users in Germany can connect directly to the trading venue, where they can trade the Bitcoin-Euro pair initially.

Five of South Korea's biggest banks have joined JPMorgan's cross-border, blockchain-powered payments initiative, the Interbank Information Network. The network operates on Quorum, a platform based on the Ethereum blockchain."

"If Libra has its heart set on choosing an artificial currency unit as the basis for its global currency, it should have probably just go with the IMF's SDR basket rather than brewing its own strange currency concoction."

The National Bank of Romania has launched a Fintech Innovation Hub, described as "a platform for dialogue with companies developing innovative public interest solutions in the area of payment and financial services.

One of blockchain's biggest problems is that it was approached badly. Rather than beginning with the challenges banks were trying to solve and then seeing whether blockchain could be applied to them, too many projects started with the technology, tried to discern how to make money from it, and worked from there.

Wells Fargo, JPMorgan and Bank of America have seen their share of home loan origination fall from a peak of 49% in 2010 to just 19 per cent in the first half of this year. Quicken Loans became America's largest mortgage lender last year.

China has no specific launch date in mind for its digital currency, its central bank has said in fresh comments contradicting previous statements.

"Volatility continues to wane for bitcoin and is now the lowest it's been since April 1st, with a 30-day reading of 36% and a 60-day reading of 52%," said analyst David Martin, citing figures provided by Blockforce Capital and Digital Assets Data.

Intercontinental Exchange's (ICE) Bakkt platform has traded 71 Bitcoin (BTC) futures contracts in the first 24 hours following its launch on Sept. 22.

The ongoing digital revolution may lead to a radical departure from the traditional model of monetary exchange. We may see an unbundling of the separate roles of money, creating fiercer competition among specialized currencies. On the other hand, digital currencies associated with large platform ecosystems may lead to a re-bundling of money in which payment services are packaged with an array of data services, encouraging differentiation but discouraging interoperability between platforms. Digital currencies may also cause an upheaval of the international monetary system: countries that are socially or digitally integrated with their neighbors may face digital dollarization, and the prevalence of systemically important platforms could lead to the emergence of digital currency areas that transcend national borders. Central bank digital currency ensures that public money remains a relevant unit of account.

The physically delivered Bitcoin futures by ICE-backed Bakkt has been finally launched. However, in the first 30 minutes of listing only 3 BTC has been traded, although after about 12 hours 28 BTC had been traded.

Maker will also possibly add KYC to its onboarding process, once again defeating the purpose of decentralized finance to offer low barriers to entry. This extends the troubles with Maker, including the very high participation fee, which is, in essence, its interest rate for lending.

The Riksbank plans to start work on a pilot 'proof-of-concept' for a retail CBDC next year. To-date, no decision appears to have been reached for the technology likely to be used for the pilot or any subsequent launch.

Central banks' frameworks for managing foreign exchange reserves have traditionally balanced a triad of objectives: liquidity, safety and return. Pursuing these objectives involves explicit trade-offs. Recently central banks have shown interest in incorporating environmental sustainability objectives into their reserve management frameworks. Rather than a triad, central banks may analyse (and weigh) a tetrad of reserve management objectives in allocating part of their foreign exchange reserves to green bonds.

New FIS report finds 54 countries now have active real-time payment programs, up from 40 in 2018 and nearly four times as many as 2014. India remains the global leader in real-time payments usage with 10-fold increase in value and eight-fold increase in transaction volumes driven through its national system over the last year.

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).

Virtual asset service providers may have to make quick decisions about how they will comply with the FATF.

CME this month filed rule changes with the CFTC that will give it the right to impose variation margin gains haircutting (VMGH) as a recovery tool for its rates clearing segment. The clearing house operator is also looking to introduce partial tear-ups for troublesome contracts, for the purposes of recovering rather than winding down the CCP.

P2P lending industry faces threat of economic slowdown just as underwriting skills show improvement

The extensive uptake of mobile money in recent years and the subsequent creation of transactional data has spurred access to short-term loans for individuals who had been previously excluded from formal credit markets. By offering instant loans and advances, these products can help individuals and MSMEs (micro, small and medium-sized enterprises) to meet their household needs, handle financial shocks and capitalise on business opportunities.