Fintech Daily Digest

A newly-proposed relay protocol called Erlay could reduce the transaction bandwidth used up by bitcoin nodes by up to 75%. The proposed protocol alters the way transactions are relayed, for example, by sending transaction announcements directly only over a small subset of connections. The authors include Greg Maxwell and Pieter Wuille.

The CEO of NZIA, the tech firm behind the Central Bank of the Bahamas Project Sand Dollar, has said the key to making it a reality is by engaging with local banks, SMEs and entrepreneurs to create new products and solutions around the new digital currency.

PIN numbers and contactless cards have greatly eased the ability of mules to share their crypto-backed debit cards with those they are working for. And that is why crypto cards pose such a risk.

Digital currencies store balances using anonymous addresses. This Bank of Canada paper analyzes the cost, safety and convenience trade-offs between aggregating balances versus safeguarding a large number of passwords of many small accounts.

The legislation amending the Payment Services Act and Financial Instruments and Exchange Act was formally enacted on May 31 and will take effect in April of next year. Among the notable changes, the Act will limit crypto-asset margin trading.

The Australian Securities and Investment Commission (ASIC) published new initial coin offering (ICO) and cryptocurrency guidelines on its official website on May 30.

The Congressional Research Service examined the decline in cash usage in the United States and the potential rise of alternative payment systems, including bitcoin or other digital assets, in the purchase of goods and services.

SBI Ripple Asia is launching a store settlement service using the consumer-focused XRP-powered payments app MoneyTap, jointly developed by SBI and Ripple. MoneyTap implements Ripple's blockchain solution xCurrent to enable near-instant domestic bank-to-bank remittance services.

Hardly anyone is using Bitcoin for anything beyond speculation. Data from Chainalysis show that only 1.3% of economic transactions came from merchants in the first four months of 2019, little changed over the boom and bust cycles of the prior two years.

The Hong Kong Privacy Commissioner for Personal Data and Singaporean Personal Data Protection Commission has signed a memorandum of understanding that will see the pair cooperate on protecting personal data

The Financial Stability Board published a report on crypto-assets, which considers work underway, regulatory approaches and potential gaps. The report is being delivered to G20 Finance Ministers and Central Bank Governors for their meeting in Fukuoka on 8-9 June.

State Farm and USAA are testing a blockchain-based system to automate the time-consuming and paper-heavy processing of automobile claims. It runs on JP Morgan's Quorum enterprise version of ethereum.

This Bank of Canada paper shows that when banks have no market power, issuing a deposit-like CBDC would would shift deposits away from the banking system, reducing bank lending. Otherwise, issuing a deposit-like CBDC with a proper interest rate would encourage banks to pay higher interest or offer better services to keep their customers, attracting more deposits and extending more loans. In fact, the CBDC would serve as an outside option for households, thus limiting banks' market power, and improve the efficiency of bank intermediation.

The crypto custodial service industry is booming. Institutional investors now have a way into the market and can pick from a multitude of solutions that allow them to secure crypto assets in a safe, secure, trusted, regulated way.

European crypto firms are facing a double-pronged banking crisis. The handful of small, "crypto-friendly" banks are seemingly only friendly in name, accepting only a select-few firms, while "blockchain phobia" among mainstream banks continues. Many firms are now resorting to back-room deals or facing long, expensive delays to get banked via alternative institutions

Grayscale Bitcoin Trust (GBTC) is now buying up about 21 percent of newly mined BTC monthly suggesting increasing demand from Wall Street.

On-chain metrics suggest increasing use of the stable coin despite a decreasing circulating supply.

The fake volume problem is getting worse. In the period from November 2018 to January 2019 BNC analysis identified 68% of reported market volume on the 240 exchanges it tracks as being suspect - up from 54% in the previous period.

The Central Bank of The Bahamas will enter into an official agreement with the executives of NZIA Ltd. for the design and implementation of Project Sand Dollar on May 30.

Bundesbank President Jens Weidmann warned that widespread use of CBDC could have serious consequences. He said easy access to digital money could exacerbate bank runs in times of crises, leading to a faster collapse of lenders, and that even in good times it would fundamentally change the business model of banks.