Frank Schwab

☑ ... another prediction materializes ... #stablecoin issuers will become banks, or #banks will become stable coin issuers (likely both). Regardless which path materializes, one fact is certain - money will not remain the same, and #banking leaders need to be using their modern cores to remain "plugged into the future of money." The days of the electronic dollar are numbered, the years of your #communitybanking institution need not be. The team at DaLand LLC is ready and available to serve, from educational seminar to operational solutions. You're going to need more than an 'app' or a 'crypto wallet;' you're going to need to keep new forms of money data at/in the core of your business! https://lnkd.in/gZeTi5qK

CBDC and blockchain I attended an excellent conference organised by DZ BANK AG in Berlin on 22-24 Apr. President of the Bundesbank Joachim Nagel gave a really good address about the future of central bank money where he stressed adoption of a digital medium for the general public as part of a natural evolution. Herein lies I think one of the best arguments in favour of a digital euro. He also highlighted, and I don’t think this is being done enough, that the banking system could use the digital euro as a “vehicle of innovation.” Making the digital euro more about innovation I think will help building support for the project. In a subsequent panel on central bank digital currencies (CBDC), there was an interesting discussion about how to use central bank money on blockchain and other distributed ledger technology platforms. Here many arguments stressed the need for standards, controls, the difficulty of conducting transactions on a decentralised basis. It sounded a lot like a debate about conventional systems. It also risks missing what blockchain is about. Blockchain is about public blockchains. The idea, I believe, and this holds especially for retail CBDC, is that it is an infrastructure for everyone to use. But it implies that issuers need to adapt to the rules of each chain. They thereby benefit from the dynamic environment, the innovation and functionalities of the chains and become an integral part of the emerging blockchain-enabled economy. Blockchain is more like the cash infrastructure. Banknotes are issued by the central bank but processed by a highly decentralised network no one controls (by every one of us). The banknote adapts continuously by becoming more durable and more difficult to counterfeit. Finance should similarly be about adapting to the different blockchains (and not the other way round). For central banks, it could mean issuing CBDCs for different chains if and only if those meet critical attributes of central bank money like security. Permissioned chains will likely be the preferred approach where transactions by nature occur only among a very reduced set of institutions. This holds especially for interbank clearing and other large value payments use cases using wholesale CBDC. Here blockchains can bring important advantages amid their out-of-the-box features including immutability, programmability facilitating bi-directional, instant and nested transactions (see WEF’s recent report at https://lnkd.in/eY8bmpVS). Blockchains are based on very different foundations compared with existing systems. It is why they can enrich the financial market infrastructure. The more blockchain will be made to resemble what we have the less the utility of blockchain will be apparent. The true potential of blockchain will likely be achieved when joining a public chain. #cbdc #digitaleuro #blockchain

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Liquidity & Interoperability In the world of digital assets, something of note happened in the last few days. Berlin Hyp issued a native digital bond and settled it with “old fashioned” money in Target 2, the Euro Systems payment platform. #interoperability was the magic ingredient. Wonderful progress. But, not nirvana. In this article, I’ll share a view on what the missing ingredients are for the means of payment aka money. This is the seventh edition of a monthly column on things liquidity for LiquidityFinder . If you have two minutes for a read, and one to leave a comment, I'd love to hear your views. Liquidity Finder is a professional network and service to assist trading businesses find well-matched liquidity and technology providers in FX, equities, money markets and crypto. #Liquidity #LiquidityManagement #LiquidityMatters #FinancialServices #digitalassets

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Swiss tokenised bonds. The Zurich and Basel cantons. Issued the first so-called tokenised bonds. Settled in Switzerland’s experimental digital currency.  Rival financial centres have yet. To match the Swiss blockchain-based system. Tokenisation projects are under way. In virtually all of the world’s major financial hubs. But in Switzerland. The efforts have taken on additional significance. As officials try to change. Perceptions around its diminished banking industry. Citigroup Inc predicts there will be as much as. $4 Trillion worth of tokenised securities by 2030. https://lnkd.in/giETK_ZS Portfolios, design and management. Jean Bedard, Global Banker Liaison (Canadian citizen). HNWI, UHNWI Envoy.

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Liquidity & Interoperability. In the world of digital assets, something of note happened in the last few days. Berlin Hyp issued a native digital bond and settled it with “old fashioned” money in Target 2, the Euro Systems payment platform. #interoperability was the magic ingredient. Wonderful progress. But, not nirvana. In this article, I’ll share a view on what the missing ingredients are for the means of payment aka money. This is the seventh edition of a monthly column on things liquidity for . If you have two minutes for a read, and one to leave a comment, I'd love to hear your views. Liquidity Finder is a professional network and service to assist trading businesses find well-matched liquidity and technology providers in FX, equities, money markets and crypto. #Liquidity #LiquidityManagement #LiquidityMatters #FinancialServices #digitalassets

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🗞 I thought I would be done with posting till "la rentrée" but the European Union Authorities have been on 🔥 #norestforthewicked 🚀 ESMA published a Q&A on staking where it states that "staking as such is not subject to specific requirements or licensing. If in the provision of staking services, the crypto assets, or the private keys giving access to them, are held by the staking service provider in custody, regulation apply. Indeed, in that case the provision of staking services is ancillary to custody services which are fully covered under MiCA. The provision of staking services therefore requires that the crypto asset staking service provider is authorised under MiCA to provide custody and administration of crypto-assets on behalf of client". This perfectly coincide with the release of our paper on the risks in staking and block building in ETH where we discuss legal and compliance aspects: https://lnkd.in/dKssGYqp 💡 3 European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) t published a consultation paper on Guidelines under Markets in Crypto-assets Regulation (MiCAR), establishing templates for explanations and legal opinions regarding the classification of crypto-assets along with a standardised test to foster a common approach to classification: https://lnkd.in/djBjC2vW. The first part of the test is to determine if there is a digital representation of a value or right, these being the necessary attributes of a crypto-asset as defined in Article 3(1) point (5) of Regulation (EU) 2023/1114, with value and right interpreted broadly, ‘right’ may include an entitlement to a payment or reward (e.g. a right to receive a discount on goods or services, or a voucher), a right to access a good or service, or a right of display (e.g. a tokenised visual). Cryptoassets with no-intrinsic value, but having a value attributed to them by the seller / buyer or by market participants9 should be treated as digital representations of value. The draft guideline also gives references to other applicable regulations to determine if the asset does not fall in another category such as financial instruments where it recommends to use the Guidelines issued by the European Securities and Markets Authority under Article 2(5) of Regulation (EU)2023/1114 🚀 And as always do not forget to join the Crypto Compliance and Legal TG group https://lnkd.in/ed9gh_xw where we share all the lattest regulatory news, best practices, experiences and tips Solidus Labs #cryptoregulations #cryptocomplianceandlegal #MiCAr

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US Congressman Tom Emmer: CBDCs "threaten to destroy the American way of life. Unlike decentralized digital assets such as #Bitcoin.” Huzzah, Tom! The future of local financial services is nowhere to be found in continuing to latch onto the centralized system. Financial flourishing and local banking sovereignty will require #creditunions and #localbanks to embrace censorship resistant private wealth and personal property tech - i.e. #Bitcoin. My hope is that hundreds of credit unions are writing and calling their reps to support bills like this, and to back Jim Nussle in his recent related comments. The team at DaLand LLC is ready to serve local banking institutions and noble local financial cooperatives in the important work of developing strategies to stay plugged into the future of money and deploying technical solutions to put digital wealth at the core of your operation (assuming you have a modern core!): https://lnkd.in/e29h5rzY #banking #money #dollar #CBDC #inflation #economics #liberty #financialliteracy #digitaltransformation

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European crypto regulation MiCA went in to effect as of 1st of July. Circle announced their stablecoins USDC and EURC are MiCA compliant. The interesting part is that they also have an e-money licence from France. Watch this space for emergence of crypto payments innovation in Europe. An excerpt from the coverage: “Circle’s new issuance and redemption processes for USDC and EURC are handled through Circle Mint France, targeting major institutions in the European market, including exchanges, market makers, brokerages, fintech companies, payment institutions, banks, and large enterprises”. #cryptopayments #mica #stablecoins https://lnkd.in/dHRknKJs

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"BlackRock and Citadel plan to launch a new national stock exchange in Texas to compete with the New York Stock Exchange!" So, there's no planned backwards compatibility to plug #WallStreet equities and investments into new value storage and value movement networks (#DLTs, #blockchains, #DeFi); but, #bankers assume #banking institutions will be dealt into the future of #streaming #money; and that it will have something to do with the #electronic #dollar? Ok ... sure. Uh, might be a good idea to dive into an educational seminar with DaLand LLC on digital assets, #crypto, and #tokenization, and how they ARE and WILL impact your #local #bank or #creditunion institution. https://lnkd.in/esrJ-GmC #bitcoin #ethereum #eth #btc #investments #tokenizedeconomy #bitcoinbanking

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Another big domino.. all occurring as we predicted in our 2024 Blockchain Predictions in November! Find that report here —> https://shorturl.at/aftKS And the full webinar here —> https://lnkd.in/gxUi9Umk #blockchain #web3 #germany #baFin #adoption

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Digital Euro Association : The role of Open source software in CBDC projects, the state of open source report 2024 underscores the importance of OSS in critical infrastructure projects. That’s why LF Decentralized Trust open source DLT projects are best choice among the most of CBDC projects globally. Hyperledger fabric and Besu are most preferred DLT frameworks for CBDC. To know more visit CBDC ebook from LF Decentralized Trust https://lnkd.in/dxTDf2w9 Hyperledger Powered CBDCs around the Globe European Central Bank France Brazil India Nigeria Philippines Thailand Cambodia Norway Saudi Arabia & U.A.E. #opensource #cbdc #digitalcurrency #community #criticalinfra #hyperledger #blockchain #dlt Dr Ritesh Jain Hubert W.E. Knapp Open Source Initiative (OSI) The Linux Foundation LF Decentralized Trust India Chapter Bank for International Settlements – BIS Prasanna Lohar Atlantic Association of CBDCs MIT Digital Currency Initiative (DCI) Julian Gordon David Boswell Daniela Barbosa Karen L. Ottoni Open Source For You Magazine Open Source India Conrad Kraft

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I’m not sure whether this is a case of the proverbial tail wagging the dog or just a natural outgrowth/evolution. Either way, and to keep the motif mentioned in earlier writings, the “creep” continues towards general, global acceptability of these “crypto” creatures. That said, I still respectfully maintain that G-7 governmental issuances of CBDCs will be a watershed. Its coming & pronouncements like this from Crypto Council for Innovation, LBBW et al. are very likely tips of what seems to be a surely- &/or slowly- melting iceberg.

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"Digital Identity", very interesting report published now in May 2024 by the Deutsche Bank in collaboration with Polygon Labs. 👇 This paper examines a #blockchain and zero-knowledge #cryptography-based sovereign, private #digitalidentity infrastructure. This #digital framework is proposed as the foundation for #future lifestyles that are predominantly #digital and fully integrated, taking advantage of the convergence of #Web3, the #IoT, and #AI. Link: https://lnkd.in/gxdKt3sk #web4 #web5 #fintech #digitalera #defi #cryptocurrency #digitalcurrency #virtualassets #digitalassets #virtualcurrency #digitaltransformation #blockchain #dlt #stablecoins #cryptoassets #web3 #tokenization #RWAs #NFTs #DAOs #RWAs #staking #mining #ZKPs #tokenomics #gamefi #lending #CEXs #DEXs #DePIN #LSTs #digitalidentity #eID #digitalservices #digitalmarketplace #digitaltrade #digitalproducts #digitalproductpassport

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Great achievement of BMM Blockchain Maturity Model from GBA.

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❗️Now that ECB wholesale payments trials and experiments are running at full speed, it's interesting to repeat that commercial banks could apply the same interoperability mechanisms too for enabling on-chain payments with commercial bank money, without necessarily having to go for for issuing stable coins, EMTs, or tokenize deposits. The "only" thing needed would be to extend the online banking interface with Blockchain/DLT Interoperability functions, e.g. Hashed TimeLock Contracts (HTLCs). E voilà! Customers can pay on-chain directly via online banking. 🛠 How to implement? Get some inspiration from the ECB wholesale payments exploratory toolbox. For instance from the Banca d’Italia report “Integrating DLTs with market infrastructures: analysis and proof-of-concept for secure DvP between TIPS and DLT platforms”. It’s written for TIPS/Eurosystem, but the interface can be put in front of any ledger.

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This European Central Bank Occasional Paper explores the relationship between #banks and #stablecoins and their issuers, focusing on the mechanical effects on banks’ capital and liquidity ratios when issuing stablecoins or collecting #deposits from stablecoin issuers. The analysis reveals that converting retail deposits into stablecoin issuers’ deposits weakens a bank’s liquidity coverage ratio #LCR, turning a retail deposit into a wholesale deposit, even when these funds are reinvested in high-quality liquid assets #HQLA. If a credit institution issues its own stablecoins, the impact on its LCR depends on whether it can identify the stablecoin holders; unknown holders weaken the LCR which could incentivise banks to issue stablecoins where they can continually identify the holders to benefit from more favourable liquidity treatment. Additionally, banks must either hold the reserves backing the stablecoins as central bank reserves or reinvest them in low-risk assets, making these funds a less effective source for economic financing and maturity transformation compared with traditional retail deposits. The study also finds that when retail customers of bank A buy a stablecoin issued by a non-bank that keeps reserves at bank B, both banks could see an unexpected decline in their liquidity ratios, as bank A loses stable retail deposits and bank B gains volatile wholesale deposits. These insights are crucial to understanding the dynamics between banks and stablecoins in the evolving financial landscape.

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Still no legislation for financial market digitalization – The German government must act now! Together with 5 other expert advisors of the Finance Committee of our German Government / Bundestag, I see urgent need to address the significant risk to Germany's position within the global crypto ecosystem.  Germany stands at a crossroads. Without a national law to implement the EU’s Markets in Crypto-Assets Regulation #MiCAR, the country risks losing its edge in digital finance. Legal uncertainty threatens regulated institutions, jobs, innovation, and billions in investments. Meanwhile, other EU nations are seizing the chance to lead, leaving Germany behind. The time to act is now! In March 2024, exactly 270 days ago, I was invited as an expert for the Finance Committee of the German Bundestag to advise on the Financial Market Digitization Act #FinmadiG and together with other advisors from business and academia we urged the German Bundestag's Finance Committee to take decisive action. The message was clear: finalize the FinmadiG as soon as possible to give regulatory certainty to the industry, but also to regulatory bodies like BaFin and Deutsche Bundesbank. And still: Germany currently fails to comply with the EU regulation, which has been in force since June 30, 2024, by not having implemented FinMadiG. The stakes could not be higher. A further delay risks EU non-compliance, infringement proceedings, and leaves BaFin and the Bundesbank unable to enforce critical regulations which are much needed for German financial institutions. The German Bundestag must act now before it dissolves. Spread the word and let’s make sure this issue gets the attention it deserves! Benedikt Faupel I Dominik Skauradszun I Philipp Maume I Florian Möslein I Prof. Dr. Riechert

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CBDCs are gaining traction globally! According to the 2023 Bank for International Settlements survey, central banks are leaning towards issuing wholesale CBDCs over retail ones in the next six years. The study highlights increased engagement with stakeholders to shape CBDC design, with many features still up for discussion. Interoperability and programmability are key considerations for wholesale CBDCs, while retail CBDCs may include holding limits, interoperability, offline options, and zero remuneration. Explore more insights on CBDCs and crypto in the BIS survey: https://t.co/Un9O65FejV. #CBDC #BIS #Crypto #CentralBanks #Survey Bank for International Settlements – BIS FSV Labs Digital Euro Association Prasanna Lohar

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