Fintech Daily Digest

Regulators and central banks should immediately address the real problems Facebook has identified. Central bank digital currencies would quite easily do so. Governments have been remiss by dragging their feet on this - in part because of deference to the established banking industry; but they no longer have any excuse to do so.

Facebook got in touch with the FT citing factual errors in Jemima Kelly's story on the basis of her interpretive analysis which critiqued the notion that libra was actually a blockchain or a cryptocurrency. "

According to CME, bitcoin (BTC) open interest spiked on June 17 with an all-time high of 5,311 contracts totalling 26,555 BTC, or approximately $246 million.

The White Paper vows that the Libra Association will move to a permissionless system, but the commitment is weak-just an intent to begin the transition within five years. But Facebook Chief Economist Christian Catalini notes that for now, no one knows how to build such a thing at a global scale

Libra type systems face different kinds of difficulties in low and high interest rate environments. In high rate environments, the opportunity cost of holding the currency is high, which leads to lower quantity demanded. In low rate environments, the revenue stream may be insufficient to cover the costs incurred by the intermediaries. This creates an incentive for asset substitution, i.e., to allow backing the currency with higher risk assets (with higher yields) thereby increasing insolvency and run risks.

The U.S. Senate Committee on on Banking, Housing, and Urban Affairs will hold a hearing on July 16 regarding Facebook's new cryptocurrency, Libra. The hearing, "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations," comes in the wake of calls from members of Congress to more closely examine Libra and its potential risks. There have even been calls to halt work on the project until hearings are held.

The G7 is preparing a communique that will detail plans for a working group to investigate the financial stability implications of stablecoins. It will include central banks and the IMF, under the leadership of the ECB's Benoît Cœuré.

"Libras have a right to be peeved. Facebook is attempting to represent themselves as fair and just, akin to Libra's most positive qualities," said astrologist Mackenzie Greer. "Given their track record, I'm not so sure they'll be able to live up to the Libra name."

ChainThat has been approved as the first company to join The Bermuda Monetary Authority's (BMA) Innovation Hub and will house its Distributed Ledger Technology (DLT) driven risk and capital exchange there for the duration of its trial period.

CME Bitcoin futures reached a record all-time of 5,311 contracts or $250 Million this week, as new Institutional money flows into the Bitcoin derivative market.

Known as "Lifechain," the collaboration with Singapore Press Holdings and NTUC Income will enable bereaved families who place obituaries in a local newspaper to instantly trigger searches to see whether their loved one had a life insurance policy.

PwC has added a new tool to its Halo auditing suite to provide assurance services for entities engaging in cryptocurrency transactions. It will permit the firm to provide independent evidence of private-public key pairing (to establish crypto asset ownership), and gather information about transactions and balances from blockchains.

In the absence of a proper fixed exchange rate and a credible mechanism to maintain it, Libra looks more like a standard flexible exchange rate currency. Its stability will depend on its credibility. Referring to the fact that there are enough assets backing its supply is not a good argument (that argument applies to any central bank issuing fiat money).

Chinese netizens are unimpressed with Facebook's blockchain project as Tencent's Pony Ma and Sogou's Wang Xiaochuan weigh in.

Euroclear, one of the world's largest securities depositories, says it will push forward with building a pilot blockchain-based platform for the issuance and settlement of European commercial paper (ECP).

When you dig in to the details of how Libra is supposed to work, there's nothing at all about how it will actually help the unbanked.

Jameson Lopp digs into the 26 page technical document describing the protocol to be used as a platform for the Libra coin (and more.)

Facebook's plans to launch a new global digital currency drew an immediate response from regulators on Tuesday, with the Group of Seven nations saying it would set up a high-level forum to examine the risks of such currencies to the financial system. Central banks and the IMF will also participate.

Major global banking group HSBC has implemented tokenization technology into its receivables infrastructure for corporate clients in India.

The Italian Banking Association has announced that Italy's banks will integrate distributed ledger technology into internal processes to boost settlements. The deployment of blockchain is also set to improve transparency in transactions between banks and efficiency of communication between counterparties.