Fintech Daily Digest

The Australian Securities Exchange's work on a DLT-based platform aimed at replacing its ageing CHESS settlement system is "on track" to likely 2021 completion. It will "will deliver upgraded security, resilience and performance" for equity post trade services. It will also offer new functionality over and above what is currently enabled by CHESS.

Digital transformation is powering China's economy and also new growth opportunities for the insurance sector. [PDF]

Coin Metrics says the unique identifiers known as addresses show that only about 300 entities control around 80% of Tether, the token that serves as a conduit for trading on many of the world's largest crypto exchanges.

Graychain released its first report on the collateralized crypto lending industry, estimating that $4.7b has been lent out over the history of the sector, but only $86 million has been earned back in interest. That's a 1.8% return, despite the fact that loans typically cost borrowers 6 to 10% on an annual basis.

"I think practical transactions allow you to see the potential benefits [of blockchain], such as the reduction in settlement time," says Paul Snaith, the multilateral lender's head of operations for capital markets. He was speaking to WatersTechnology ahead of the one-year anniversary of the bank's issuance of the first blockchain bond, Bond-i.

Central banks worldwide are examining the possibility of issuing a central bank digital currency (CBDC), with some already testing theirs for different uses. Countries that have advanced their digital currency projects include China, Singapore, Canada, the Bahamas, Thailand, Uruguay, and Sweden. India has also included the digital rupee in the country's draft cryptocurrency bill.

Amid a downturn in the cryptocurrency markets, the apparent swathe of Bitcoin sell-offs from a $3 billion Chinese Ponzi scheme could be to blame.

Blockchain technology and digital currencies - seen today as a risk by the establishment, the authorities and others - could be an opportunity to relaunch the migration of the SDR's monetary architecture similar to the supranational currency "bancor," conceptualized by the economist John Maynard Keynes.

Regulation, technology, and process innovation are reshaping the market landscape. While regulatory reform precipitated these changes, technology, operating models, risk management, and efficiency are the real drivers. The trading business is shifting to newer and more adroit trading firms bridging traditional asset management liquidity pools with private and hedge fund capital.

Previous posts discussed what the IMF's Special Drawing Rights (SDRs) are and how they are used. This post discusses what a hypothetical crypto-SDR, or Crypto Drawing Rights (CDR), would look like and how it could benefit the IMF and its member organizations.

Marco Polo, the trade finance blockchain network launched in 2017 by R3 and TradeIX, is moving slowly but surely toward production. The latest milestone in the 22-bank blockchain consortium's methodical piloting process allows a third party to a trade (in this case a logistics provider) to trigger a payment to a supplier in real-time at the moment the goods are on their way to their destination.

PayPal is ramping up its presence in India, looking to capitalise on surging digital payments demand as the country's 450m mobile users leap online and as growth slows in the US and Europe.

Bantotal, a core banking service provider based in Uruguay that services over 60 different financial institutions across 14 different countries, is partnering with crypto exchange Bitex to facilitate bitcoin-based cross-border payments.

On May 13, 2019, Flexa payments launched in the United States and released the iOS SPEDN app, which processes regular purchases in cryptocurrencies. Now SPEDN is now open to Canadians on both iOS and Android.

Barclays is no longer working with cryptocurrency exchange Coinbase, which, however, has found a replacement in U.K. upstart ClearBank

CIMB announced that its virtual bank that was launched earlier this year have secured 500,000 customers, approximately six months after opening its doors for business in the Philippines. The all-digital, mobile first bank is part of CIMB's strategy in penetrating new markets.

A recent run-up in the price of bitcoin has been attributed to many factors: aggressive monetary easing by central banks, plans by Facebook to develop its own digital tokens, and market manipulation via Tether, another crypto asset. But another force may be giving bitcoin a lift: demand from Chinese investors.

The BIS is seeking to fill the top spot in its new Innovation Hub to manage the selection and execution of projects across multiple Hub Centers with the aim of increasing knowledge in areas of critical interest to central banks and with a view towards the production of potential global public goods.

As an electronic money institution (EMI), we are issuing asset-backed e-money on blockchains. A regulated EMI provides customers with legal protections while gaining all of the advantages afforded by blockchains: sending, receiving, and storing digital money without going through a financial institution. In contrast, virtual currencies that transact on blockchains do not offer such protections, they are not subject to the same requirements of being asset-backed, redeemable, fully audited and supervised.

The Financial Supervisory Authority of Iceland approved Reykjavik-based Monerium as its first electronic money institution in June. The designation means that Monerium has regulatory approval to provide fiat payment services on a blockchain and use it throughout the European Economic Area. Electronic money is a well-established regulatory framework in Europe that's been in use for years.