Fintech Daily Digest

"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. "

"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."

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.

"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."

"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."

"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."

"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."

"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."

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

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.

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 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.

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

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.

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.

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.

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.

The Bahamas CBDC pilot is scheduled to be introduced in the remote Exuma district in 2020. The central bank is currently finalising the contractual onboarding of its chosen technology solutions provider, NZIA. Be cause the CBDC aims to complement and not replace existing banking services, the currency will not be interest-bearing. However, users may be able to invest in government securities via the CBDC wallet.

IBM said at least two major U.S. banks are considering whether to follow JPMorgan Chase & Co.'s lead in issuing a stablecoin. IBM said it is also working with six non-U.S. banks on digital currencies, including BNK Financial Group Inc.'s Busan Bank in South Korea, and in the Philippines, Rizal Commercial Banking Corp., which is expected to issue a stablecoin in the second quarter. The banks are awaiting approvals from regulators.

The choice of Stellar is a bit surprising given that IBM has been working with the Linux Foundation on Hyperledger Fabric for years. But Hyperledger Fabric is permissioned, private distributed-ledger technology. IBM wanted something more open that any organization could join if it met certain criteria. In World Wire, IBM has created kind of a virtual private network within Stellar. Organizations can register assets and become part of the network, but IBM carefully vets each participant and validator. By contrast, Ripple says it does not know who runs the validator nodes on its distributed ledger. It's really about knowing the validators, but without creating this walled garden that you have to have special permission to join.