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Tag Archives: fintech

Tether, a bigger badder PayPal

My recent article on Tether, a stablecoin, was just published at Coindesk. In the article I commented on Tether's recent settlement with the New York Attorney General's office. Because the settlement forces Tether to adopt a bunch of new practices, I think it's a win for stablecoin consumers. Why have I been focusing so much of my time on Tether stablecoins? Diligent readers will recall I wrote about it twice last month. (1 | 2 ).First, I've been writing about stablecoins for a long time...

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The fabrication of trust in various types of dollars

How are we consumers to know whether the dollars that financial institutions provide us aren't fraudulent dollars? On what basis can we assume that the funds we hold at PayPal, for instance, or in Cash App, are "good money"?It's an age-old problem. If you were alive in 1889 and someone offered to pay you with a $10 note from Banque d'Hochelaga (see below), a privately-owned Montreal-based bank, how could you know the issuer wasn't a fraud and that it had enough assets on hand to always...

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The unbanked, the post office, and fintech in the 1880s

"A large population of people are excluded from the financial system because they don't have bank accounts. Fintechs compete to connect them and parallel plans emanate from the government to reach the unbanked, including postal banking." What year am I describing in the above paragraph? It could be 2021. But it also describes 1870s. It's 2021 and the U.S. still has a large population of unbanked, those who have so little money that banks would rather not serve them. An astonishing 5.4% of...

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What is Really New in Fintech

By Arnoud Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski The financial industry is undergoing rapid technological change. Traditional banks face competition from online start-ups with no physical branches. Social media and other digital platforms are expanding into payments and credit. The increase in demand for digital services triggered by COVID-19 is turbo-charging this transformation. The confluence we are witnessing is driving fintech innovation and raises important questions. What are...

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Programmable money isn’t new, we’ve had it for ages

I often hear that modern money just isn't up to snuff because it isn't programmable. That's why we need Ethereum, stablecoins, and other exotica like central bank digital currencies. These platforms will provide the world with much needed programmability.Stablecoin issuer Circle is one of the bigger marketers of this idea, but it's far from being the only one: "While value exchange may be the initial killer app, it’s the programmability of digital money that will ultimately usher in...

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The ECB’s digital euro: anonymous or not?

 The European Central Bank (ECB) recently published a report that explores the idea of introducing a digital euro for use by the general public. This project is known as a central bank digital currency, or CBDC, and many other countries are exploring the same idea. John Kiff has a useful database here showing how far these projects have progressed.Will the ECB's new euros-for-all be relatively open and anonymous like cash? Or will they require ID and permission like a bank account? In short,...

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Digital Financial Inclusion in the Times of COVID-19

By Ulric Eriksson von Allmen, Purva Khera, Sumiko Ogawa, and Ratna Sahay  中文, Español, Français, 日本語, Português, Русский  The COVID-19 pandemic could be a game changer for digital financial services. Low-income households and small firms can benefit greatly from advances in mobile money, fintech services, and online banking. Financial inclusion as a result of digital financial services can also boost economic growth. While the pandemic is set to increase use of these services, it has also...

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You’ve Got Money: Mobile Payments Help People During the Pandemic

By Sonja Davidovic, Delphine Prady and Herve Tourpe Español, Português The practical challenge of quickly getting financial support in the hands of people who lost jobs amid the COVID-19 economic crisis has baffled advanced and developing economies alike. Economic lockdowns, physical distancing measures, patchy social protection systems and, especially for low-income countries, the high level of informality, complicate the task. Many governments are leveraging mobile technology to help their...

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The Global Economic Reset—Promoting a More Inclusive Recovery

By Kristalina Georgieva  عربي, 中文, Español, Français, 日本語 The COVID-19 crisis is inflicting the most pain on those who are already most vulnerable. This calamity could lead to a significant rise in income inequality. And it could jeopardize development gains, from educational attainment to poverty reduction. New estimates suggest that up to 100 million people worldwide could be pushed into extreme poverty, erasing all gains made in poverty reduction in the past three years. Policymakers...

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Want to open an account at the central bank? I’ll pass, thanks

The only type of central bank-issued money that we hoi polloi can own are banknotes. But over the last few years, researchers at central banks have been increasingly toying with the idea of issuing digital money for public consumption. I count 380,000 search results on Google for the term "central bank digital currency," up from zero just a few years ago.There are two types of proposed central bank digital currencies, or CBDCs. The first, Fedcoin, is implemented on a blockchain. I wrote...

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