tag:blogger.com,1999:blog-58114281305325898442024-03-13T04:22:48.256-07:00SnippetsCayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.comBlogger1636125tag:blogger.com,1999:blog-5811428130532589844.post-13651196182832549562019-12-18T00:02:00.001-08:002019-12-18T00:02:40.681-08:00When China and other big countries launch cryptocurrencies, it will kick off a global revolution<p>xxx</p>
<blockquote>
<p>"countries will form cryptocurrency unions to regulate currencies and platforms, standardise technology and maintain the stability of the system"</p>
<p>From <a href="https://theconversation.com/when-china-and-other-big-countries-launch-cryptocurrencies-it-will-kick-off-a-global-revolution-128678">"When China and other big countries launch cryptocurrencies, it will kick off a global revolution"</a>.</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-65993545307024680542019-12-17T23:58:00.001-08:002019-12-17T23:58:24.253-08:00(4) Kremlin throws weight behind EU effort to boost Iran trade | Financial Times<p>xxx</p>
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<p>"Moscow’s support for Instex prompted a warning from US Treasury secretary Steven Mnuchin, who attended a G7 financial meeting in France.</p>
<p>‘If you want to participate in the dollar system you abide by US sanctions,’ Mr Mnuchin said, after discussing Iran with his French counterpart Bruno Le Maire."</p>
<p>From <a href="https://www.ft.com/content/3aa3e7ee-a8b7-11e9-984c-fac8325aaa04">"(4) Kremlin throws weight behind EU effort to boost Iran trade | Financial Times"</a>.</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-77205768835612304632019-12-15T05:09:00.001-08:002019-12-15T05:09:00.707-08:00Innocent people arrested following surveillance blunders, IPCO reveals<p>xxx</p>
<blockquote>
<p>"Innocent people have been questioned by police, had computer equipment confiscated and faced arrest when suspected of serious crimes following errors made by internet service providers (ISPs), telecoms companies, police and other public bodies in gathering intelligence through electronic surveillance."</p>
<p>From <a href="https://www.computerweekly.com/news/252456885/Innocent-people-arrested-following-surveillance-blunders-IPCO-reveals">"Innocent people arrested following surveillance blunders, IPCO reveals"</a>.</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-61152363184539441832019-12-14T02:31:00.001-08:002019-12-14T02:31:44.815-08:00Facebook contractor accepted bribes to restore banned accounts: report - Business Insider<p>xxx</p>
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<p>"In October an investigative report from BuzzFeed detailed how Ads Inc. paid to place deceptive ads on thousands of personal Facebook accounts. Ads Inc. reportedly paid Facebook users $15 to $30 per month for access to their account, then sold those accounts to other marketers for $800 each.</p>
<p>By paying Facebook users to post ads on their personal page, Ads Inc. and other companies are able to circumvent Facebook's policies for paid advertisements. Facebook prohibits account rentals and deceptive advertisements, and Facebook has been actively banning accounts sharing posts for Ads Inc.</p>
<p>However, Ads Inc. CEO Asher Burke and other employees offered multiple Facebook contractors payment in exchange for reversing the bans"</p>
<p>From <a href="https://www.businessinsider.com/facebook-contractor-bribe-restored-banned-accounts-report-2019-12?op=1&r=US&IR=T&nr_email_referer=1&utm_source=Sailthru&utm_medium=email&utm_content=10_things_tech&utm_campaign=Post%20Blast%20sai:%2010%20things%20in%20tech%20you%20need%20to%20know%20today&utm_term=10%20THINGS%20IN%20TECH%20YOU%20NEED%20TO%20KNOW%20-%20ENGAGED%2C%20ACTIVE%2C%20PASSIVE%2C%20DISENGAGED">"Facebook contractor accepted bribes to restore banned accounts: report - Business Insider"</a>.</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-77160346061186993292019-12-09T23:43:00.001-08:002019-12-09T23:43:55.752-08:00History of live five <h2><span style="font-size: 1.5em;">Oh man! 2017!</span></h2>
<p>This was the first public “live five” of technology-driven changes in the secure transactions field that we thought would have a real business impact over the previous year. We’d used the idea internally before, but in 2017 we made the predictions public in the spirit of openness and honesty that we are famed for, to see how the predictions held up.</p>
<ol>
<li><strong>RegTech</strong>. I think we did pretty well with this prediction. Interest in regtech has grown throughout the year and the ability of regtech to make real differences in major markets is established.</li>
<li><strong>Digital Identity</strong>. As we noted, one of the key regtechs, if not the key regtech, is digital identity. It did shoot up the agenda over the year and some interesting initiatives opened up.</li>
<li><strong>PSD2 (still). </strong>No commentary is needed!.</li>
<li><strong>Paying on the Go</strong>. We thought that a key use of open APIs will be payments, and very likely mobile payments. MasterCard’s purchase of VocaLink would tend to support this view!</li>
<li><strong>Invisible POS</strong>. The shift from “check out to check in” paradigms is underway but it is fair to observe that we did not see the number of launches we were expecting as many of the projects remain in beta and will be holding to wait for the arrival of PSD2 (and CMA remedies in the UK).</li>
</ol>
<p>Not bad. Actually a pretty good high level view of the kind of areas our clients began to prioritise five years go.</p>
<h2><span style="font-size: 1.5em;">2018 not bad!</span></h2>
<p>This was the “live five” for 2017. Let’s see how we did…</p>
<ol>
<li><strong>Open Banking</strong>. Well, it was hardly a tough call and we were bang on with this one. We were working on open banking projects in the UK, on the continent and beyond, so there was no need to guess at the importance.</li>
<li><strong>Conversational Transactions. </strong>Yes, we were spot on with this one and not only in financial services. Many organisations began planning to move to messaging both for customer support and for transactions.</li>
<li><strong>The Internet of Cars</strong>. This continues to develop, although the security concerns that we spoke about before continue to add friction to the development of new products and services in this space.</li>
<li><strong>Artificial Intelligence</strong>. Again, this was an easy prediction because many of our clients were already active, although to be fair most of their spending was on machine learning rather than “true” AI.</li>
<li><strong>Tokens/ICOs</strong>. Well, we were right to highlight the importance of “tokens” (the basis of Initial Coin Offerings, or ICOs) and our prediction that once the craziness is out of the way, then regulated token markets will become significant looks to be borne out by mainstream commentary.</li>
</ol>
<p>As we said back then, 2018 saw disruption because the shift to open banking, starting in the UK, meant the reshaping of financial services.</p>
<h2><span style="font-size: 1.5em;">On a roll for 2019!</span></h2>
<p>Last year we began organising our "live five" in a slightly different way, listing them by priority to our clients rather than as a simple list. So we put together the four key technologies that we thought would be hot last year together with a new technology that we were looking at out of the corner of our eyes. We went with…</p>
<ol>
<li>
<p>The most important technology at the customer interface from the secure transactions perspective is going to be the technology of <strong>Secure Customer Authentication</strong> (SCA). We knew that better authentication technology would make life easier for clients in a number of ways, not only because of PSD2.</p>
</li>
<li>
<p>We thought more organisations around the world would look at the <strong>cross-sector digital identity</strong> initiatives and this is what happened in Canada and Australia for example.</p>
</li>
<li>
<p>From our work on ticketing around the world we saw a renewed focus on the deployment of real <strong>digital wallets </strong>because transit (and other forms of ticketing, such as the sporting events) are what make consumers start using digital wallets, not payments.</p>
</li>
<li>
<p>We expected to see a growing use <strong>structured risk analysis for IoT</strong>. This has begun, but not to the extent that we though it would. The </p>
</li>
<li>
<p>We thought it was time to start talking about <strong>post-quantum cryptography</strong> (PQC) in the mainstream and we were very right about this.</p>
</li>
</ol>
<p> </p>
<p>So a pretty accurate outline for the previous 12 months and in fact the renewed focus on identity, authentication and authorisation as the basis for transactions was emphasis early in the year when Mark Carney, the Governor of the Bank of England, spoke early in the year about the significant need for, and the high priority of, digital identity infrastructure for the financial sector.</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-17135283975091596572019-12-09T23:39:00.001-08:002019-12-09T23:39:11.825-08:00How William Gibson Keeps His Science Fiction Real | The New Yorker<p>xxx</p>
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<p>Gibson first used the word “cyberspace” in 1981, in a short story called “Burning Chrome.”</p>
<p><a href="https://www.newyorker.com/magazine/2019/12/16/how-william-gibson-keeps-his-science-fiction-real">How William Gibson Keeps His Science Fiction Real | The New Yorker</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-50203699807402162212019-12-08T00:54:00.001-08:002019-12-08T00:54:14.085-08:00(1) FBI says blockchain expert aided North Korea | Financial Times<p>xxx</p>
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<p>US officials are also concerned about the possibility that foreign countries will increasingly use mass-market digital currencies, such as Facebook’s planned Libra coin, to avoid sanctions.</p>
<p><a href="https://www.ft.com/content/6c9b6be0-12ee-11ea-a7e6-62bf4f9e548a">(1) FBI says blockchain expert aided North Korea | Financial Times</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-41288896372931422392019-12-08T00:53:00.001-08:002019-12-08T00:53:07.954-08:00(1) Central bank talk of launching cryptocurrencies is all bluff | Financial Times<p>xxx</p>
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<p>Mr Couré recently praised an initiative by about 20 large European banks including BNP Paribas and Deutsche Bank to create a new digital payments system — dubbed the Pan European Payment System Initiative, or Pepsi. The idea is to enable instant cashless payments through a European rival to ApplePay in the US and Alipay in China [but] the project is becoming bogged down with competition authorities in Brussels for being too much of a closed shop.</p>
<p><a href="https://www.ft.com/content/5988c3f4-15e6-11ea-9ee4-11f260415385">(1) Central bank talk of launching cryptocurrencies is all bluff | Financial Times</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-44914457342813743402019-12-08T00:46:00.001-08:002019-12-08T00:46:20.018-08:00CCIEE Vice Chairman Says PBOC Will Be First to Roll Out Digital Currency - Pandaily<p>Huang Qifan, vice chairman of CCIEE (China Center for International Economic Exchanges), speaking at the Inaugural Bund Financial Summit of 2019 in Shanghai, said that "<a href="https://pandaily.com/cciee-vice-chairman-says-pboc-will-be-first-to-roll-out-digital-currency/">in the current digital age, the payment and settlement methods between enterprises and countries need to be reshaped</a>”. He also went on to say that cross-border liquidation of China’s renminbi (RMB) is "highly dependent" on SWIFT (Society for Worldwide Interbank Financial Telecommunication) system and CHIPS (the US Clearing House Interbank Payments System). He added that the two financial instruments that are "gradually becoming effective tools for the US to exercise global hegemony and carry out widespread jurisdiction control”.</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-18432600434378819652019-12-08T00:36:00.001-08:002019-12-08T00:36:12.073-08:00Brace for the Digital-Money Wars - WSJ<p>xxx</p>
<blockquote>
<p>Money has always been a powerful, blunt instrument. It’s an imposition not just of will, but of values. After World War II, the dollar became the foundation of the international monetary system. That gave the U.S. government a special tool.</p>
<p><a href="https://www.wsj.com/articles/brace-for-the-digital-money-wars-11575694806">Brace for the Digital-Money Wars - WSJ</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-57288299458703086152019-12-08T00:23:00.001-08:002019-12-08T00:23:49.724-08:00Papers, please - African countries are struggling to build robust identity systems | Middle East and Africa | The Economist<p>xxx</p>
<blockquote>
<p>This is not just a poor-world problem. Britain was recently rocked by the “Windrush” debacle, in which dozens of citizens were wrongly deported. But it is a particularly acute problem in sub-Saharan Africa, where one in two people cannot prove his or her identity. It is not for want of effort. Every country in the region has either established or plans to create a universal identity programme.</p>
<p><a href="https://www.economist.com/middle-east-and-africa/2019/12/05/african-countries-are-struggling-to-build-robust-identity-systems">Papers, please - African countries are struggling to build robust identity systems | Middle East and Africa | The Economist</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-11316071238414066172019-12-06T09:04:00.001-08:002019-12-06T09:04:01.501-08:00Euro area card payments double in a decade<p>xxx</p>
<blockquote>
<p>"The number of card payments in the euro area have more than doubled in a decade as consumers increasingly dispense with the hassle of carrying notes and coins, according to the latest statistics from the European Central Bank.</p>
<p>In 2018, card payments accounted for almost half of the total number of non-cash payments across the single-currency area.</p>
<p>Credit transfers and direct debits were the second and third most common non-cash payment methods, accounting for approximately 23% each, while e-money and cheques together made up around seven percent.</p>
<p>However, the relative popularity of each type of payment service still varies widely across euro area countries. In 2018 card payments accounted for just over 70% of all non‑cash payments in Portugal, compared with around 23% in Germany.</p>
<p>The stats show that the number of card payments made by consumers and businesses has more than doubled in the last decade, with an average of 121 card payments per capita in 2018, compared with 56 in 2008. However, the average value of each card payment has declined steadily, falling from €54 in 2008 to €44 in 2018.</p>
<p>Again, big differences appear between member states, with the Finns, for example, using their cards five times more often than people living in Germany and six times more often than people in Italy.</p>
<p>Curiously, the average value of annual cash withdrawals in the euro area also rose, from €1,925 to €2,082 per card between 2008 and 2018."</p>
<p>From <a href="https://www.finextra.com/newsarticle/34499/euro-area-card-payments-double-in-a-decade?utm_medium=newsflash&utm_source=2019-9-27&member=36853">"Euro area card payments double in a decade"</a>.</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-71623411711923224202019-11-30T10:38:00.001-08:002019-12-04T11:21:26.290-08:00POST Bycatch<p>I tend to agree with people who see privacy as a function of control over personal information. Not a thing, <a href="https://www.techdirt.com/articles/20161020/12551835847/privacy-is-about-tradeoffs-things-go-wrong-when-those-tradeoffs-are-not-clear.shtml">more like a trade off</a>. It’s a big problem though that the trade-offs in any particular situation are multi-dimensional and nothing like as explicit as they should be. And what if you have no possibility of control? The always interesting Wendy Grossman made me think about this in <a href="https://www.pelicancrossing.net/netwars/privacy/">her recent net.wars column about her neighbour’s doorbell camera</a>. </p>
<p>As Wendy puts it “we have yet to develop social norms around these choices”. Indeed.</p>
<p>Whether it is neighbours putting up doorbell cameras or municipalities installing camera for our comfort and safety, the infrastructure of cameras (much more cost effective and useful than the one imagined by George Orwell) and pervasive always-on networks is going to created a decentralised surveillance environment that is going to throw up no end of interesting ethical and privacy issues.</p>
<p>Here’s an example. What happens if you set up a camera trap to photograph badgers but accidentally capture a picture of someone doing something they shouldn’t be doing? <a href="https://onezero.medium.com/wildlife-cameras-are-accidentally-capturing-humans-behaving-badly-5c363b080b91">This is called “human bycatch”</a> apparently. According to a 2018 University of Cambridge study, a survey of 235 scientists across 65 countries found that 90% of them had human bycatch. I remember thinking about this a while back when I came across a story about some Austrian wildlife photographers who had set up cameras in a forest in order to capture exotic forest creatures going about their business, but instead caught an Austrian politician “enjoying an explicit sexual encounter” (<a href="http://www.spiegel.de/international/europe/forest-sex-footage-sparks-debate-in-austria-a-838691.html">as Spiegel Online put it</a>).</p>
<p>This was big news although (as one comment I saw had it) "if it had been with his wife it would have been even bigger news”. Amusing, indeed. But the story does raise some interesting points about mundane privacy in a camera-infested world. I don’t know whether, in a world of smartphones and social media, one might have a reasonable expectation of privacy when having sex out in the woods somewhere. I would have thought not, but I am not a lawyer (or a wildlife photographer). It’s getting really hard to think about privacy and what we want from it and cases like this one remind us that privacy is not a static thing. <a href="http://www.fastcoexist.com/3027407/why-teens-are-innovators-of-a-new-public-form-of-privacy">It is not an inherent property of any particular information or setting</a>. It might even be described as a process by which people seek to have control over a social situation by information and context.</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-85615432903636741602019-11-30T10:27:00.001-08:002019-12-15T05:33:08.125-08:00POST Digital currency is getting serious<p>North Korea is, apparently, developing a digital currency of its own. <a href="https://decrypt.co/9364/north-korea-to-launch-its-own-crypto">According to Alejandro Cao de Benós</a>, President of the Korean Friendship Association, the Democratic People’s Republic of Korea intends to go down the Facebook route by creating an asset-backed digital currency rather than a digital fiat currency and then use some sort of blockchain with “Ethereum-style smart contracts” to do business and avoid sanctions.</p>
<p>Why use a blockchain? Well, the regime sees such smart contracts as a way to enforce deals it makes with foreign counterparts. Since it doesn't trust the U.N., it relies on Chinese intermediaries to enforce deals abroad. But sometimes, so sources claim, those intermediaries cheat the North Koreans. Hence, they want to bypass intermediaries altogether by developing a “token based on something with physical value” (eg, gold) in order to create a stable mechanism for payments in international trade between the regime and "other companies/individuals” (although it will not be available to individuals in the DPRK, who will be stuck with the Korean Won).</p>
<p>(This is not a new idea, by the way. A couple of years ago, <a href="https://www.engadget.com/2017/12/04/venezuela-will-start-cryptocurrency/">the Venezuelans tried a similar idea</a> “the petro”, a digital currency to be backed by the country’s natural resources — diamonds, gas, gold and oil — to beat the "financial blockade" imposed by the U.S. and others. I will check the world currency markets later on, but my general sense of the matter is that the petro is yet to topple the Swiss Franc. It, may, however have served as a useful input to other regime’s feasibility studies.)</p>
<p>This is why U.S. (and other countries) care whether the North Koreans launch an eWon that stops them from being cheated in international transactions. As the Financial Times points out, the U.S. has a genuine and well-founded concern that, the financial side of U.S. currency hegemony to one side, foreign countries will increasingly use digital currencies, "<a href="https://www.ft.com/content/6c9b6be0-12ee-11ea-a7e6-62bf4f9e548a">such as Facebook’s planned Libra coin</a>", to avoid sanctions. Indeed, this was one of the arguments that David Marcus uses. He says, for example, that a Chinese digital currency running on a Chinese permission blockchain could mean the potential for “<a href="https://www.pymnts.com/cryptocurrency/2019/david-marcus-china-wins-if-facebook-libra-fails/">a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions and having a new digital reserve currency</a>”.</p>
<p>Sanctions are a serious thing. An Ethereum developer was recently arrested for violating U.S. sanctions against North Korea. According to the U.S. Department of Justice, one Virgil Griffith <a href="https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-arrest-united-states-citizen-assisting-north-korea">was arrested at Los Angeles airport and charged</a> with violating their International Emergency Economic Powers Act (“IEEPA”) by travelling to North Korea to give a presentation about using cryptocurrency to evade sanctions. As observers pointed out, Mr. Griffith may have evolved a sub-optimal communications strategy in connection with his travel plans.</p>
<blockquote class="twitter-tweet" data-partner="tweetdeck">
<p dir="ltr" lang="en">When you plan on visiting a country to teach them how to evade your government's imposed sanctions, best not to tweet about it. <a href="https://t.co/pbwLp6Wbgb">https://t.co/pbwLp6Wbgb</a></p>
<p>— Jameson Lopp (@lopp)</p>
<p><a href="https://twitter.com/lopp/status/1200514721901731840?ref_src=twsrc%5Etfw">November 29, 2019</a></p>
</blockquote>
<p>A North Korean digital currency has every chance of succeeding under the stewardship of the Korean Worker's Party and the divine tutelage of Kim Jong-Un, the Dear Leader. His father, the previous Dear Leader, was famous for being t<a href="http://www.worldgolf.com/blogs/william.wolfrum/2005/10/04/a_golfing_debut_with_11_aces_makes_kim_j">he greatest golfer in history</a>, was responsible for an earlier experiment in radical transformation through money, when the DPRK <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/12/01/AR2009120101841.html">fell into chaos after his government revalued the currency</a> and restricted the trading in of the old money (thus wiping out the personal savings of counter-revolutionary running-dog lackeys of U.S. imperliasm.</p>
<p>When the North Korean people were not <a href="http://www.atimes.com/atimes/Korea/JD30Dg01.html">eating tree bark to stay alive</a>, they must surely have noticed that the revaluation of the unit of account didn’t make the slightest difference to the supply and demand for goods and services. It made a difference to the market, though. The revaluation and exchange limits triggered panic, particularly among market traders with substantial hoards of old North Korean won — much of which became worthless. Gresham's Law took immediate effect: the KRW disappeared from the marketplace and people began to use whatever hard currencies they could get their hands on. The Dear Leader therefore launched an attack on this as well, <a href="http://world.globaltimes.cn/asia-pacific/2009-12/494057.html">banning everyone (including foreigners) from using foreign currencies</a> such as euros or dollars. The authorities started a TV campaign asking good citizens to report anybody using dollars directly and I imagine that the same will apply to digital dollars or electronic euros.</p>
<p>So, if a North Korean digital currency based on gold or whatever does appear, would it help the regime and others to avoid sanctions? Well, it depends. It is certainly possible to design digital currencies that have unconditional anonymity that Bitcoin (for example) does not. Perhaps this is what Mr. Griffith was explaining to the North Koreans in Pyongyang, although to be honest they could have discovered this for themselves on the Internet without too much trouble. So let’s imagine that they do indeed create such a beast, a bastard child of ZCash and Quorum. What will happen?</p>
<p>(The North Koreans have other options for disruption using digital currency, by the way. See John Cooley’s book on counterfeiting <a href="http://www.amazon.co.uk/Currency-Wars-Forged-Weapon-Destruction/dp/1602392706%3FSubscriptionId%3D0PZ7TM66EXQCXFVTMTR2%26tag%3Ddb0e-21%26linkCode%3Dxm2%26camp%3D2025%26creative%3D165953%26creativeASIN%3D1602392706">Currency Wars</a>, which is about various attempts to destabilise countries by forging their currencies. He talks a lot about North Korea’s “superdollar” forgeries and the like. Now, think what the coming version of this might be: not counterfeiting physical money, but creating electronic money. I can't help but wonder whether the shift to digital money for retail and person-to-person payments will make a modern-day <a href="http://blog.dgwbirch.com/?p=481">Operation Bernhard</a> — Hitler’s plan to undermine the British economy by forging £5 notes — easier or harder?)</p>
<p>The Foundation for Defense of Democracies (FDD), a Washington think tank, summarise the situation quite well in their position paper “<a href="https://www.fdd.org/analysis/2019/07/11/crypto-rogues/">Crypto Rogues</a>” observing that “blockchain technology may be the innovation that enables U.S. adversaries for the first time to operate entire economies outside the U.S.-led financial system”. Now, while this may be technically slightly inaccurate (there are ways to create anonymous transactions without a blockchain, but let’s take this use of “blockchain” to mean “third-party anonymous digital currency") it does accurately flag up that the widespread availability of decentralised financial services threatens to bypass the existing infrastructure. The FDD are surely right to say that “blockchain sanctions resistance is a long-term strategy for U.S. adversaries”.</p>
<p>Now, whether using the blockchain to create an immutable record of sanctions-busting transactions is a good idea or not I couldn’t say, but as a general rule I’m someone who believes in the democratic process and therefore I’d prefer it if sanctions could not be so easily evaded. Especially when you consider why the sanctions are there in the first place.</p>
<p>(A recent U.N. report estimates that North Korea has generated some $2 billion for its weapons of mass destruction programs using “<a href="https://www.reuters.com/article/us-northkorea-cyber-un-idUSKCN1UV1ZX">widespread and increasingly sophisticated</a>” cyberattacks to steal from banks and cryptocurrency exchanges. It makes you nostalgic for the days when hackers were stealing credit card numbers to access porn.)</p>
<p>No-one would imagine that a digital currency by itself would render sanctions ineffective. When the Iranian regime, for example, set up a venture to explore Bitcoin payments with a Swedish startup, the Swedish banks refused it a bank account because they themselves did not want to become subject to secondary sanctions. I wouldn’t go and give a talk on sanctions-busting in Tehran whether I was paid on Cash or not. There is no doubt, though, that moving transactions outside of the international monetary and finance system could help to make other sanctions-evading tactics more effective.</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-26931857655129621182019-11-27T03:38:00.001-08:002019-11-27T03:38:27.006-08:00Why Libra Worries This Physicist-Turned-Congressman — The Information<p>xxx</p>
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<p>Do you think it is inevitable that the U.S. Treasury will make the leap to the digital coin of the dollar?</p>
<p>‘Currently, Congress is set up in a way that matches the economy of 200 years ago.’
I think we are going to be in trouble if we don’t. The one good thing about the Libra proposal is that it [brought attention to] China, which has been working at some level for several years on central bank digital currencies.</p>
<p><a href="https://www.theinformation.com/articles/why-libra-worries-this-physicist-turned-congressman?utm_content=article-4077&utm_campaign=article_email&utm_source=sg&utm_medium=email">Why Libra Worries This Physicist-Turned-Congressman — The Information</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-50540453056892369682019-11-27T03:36:00.003-08:002019-11-27T03:36:31.943-08:00Why Libra Worries This Physicist-Turned-Congressman — The Information<p>xxx</p>
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<p>Providing citizens of advanced countries the ability to authenticate themselves online is something that will be essential for central bank digital currencies or any traceable currency. Even if Libra was perfectly traceable, if you are allowed to set up a fake identity and start trading Libra, it is meaningless.</p>
<p><a href="https://www.theinformation.com/articles/why-libra-worries-this-physicist-turned-congressman?utm_content=article-4077&utm_campaign=article_email&utm_source=sg&utm_medium=email">Why Libra Worries This Physicist-Turned-Congressman — The Information</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-8190913664580614832019-11-27T03:36:00.001-08:002019-11-27T03:36:01.370-08:00Why Libra Worries This Physicist-Turned-Congressman — The Information<p>xxx</p>
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<p>Currently, Congress is set up in a way that matches the economy of 200 years ago. For example, at the time of our Founding Fathers, 70% of our GDP was subsistence farming. Now agriculture is down to maybe 1½% of GDP, and yet the Agriculture Committee has all the good congressional office space, to put it in congressional terms. Congress should match itself to the economy as it exists.</p>
<p><a href="https://www.theinformation.com/articles/why-libra-worries-this-physicist-turned-congressman?utm_content=article-4077&utm_campaign=article_email&utm_source=sg&utm_medium=email">Why Libra Worries This Physicist-Turned-Congressman — The Information</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-46439902215536650432019-11-27T03:25:00.001-08:002019-11-27T03:25:03.043-08:00ECB offers support to bank-backed alternative to Visa and Mastercar...<p>xxx</p>
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<p>The European Central Bank has welcomed an initiative by some of Europe's top banks to explore the development of a rival payment system to challenge the dominance of Visa and Mastercard and the threat from Chinese and US Big Tech firms</p>
<p>Backed by twenty French and German banks, the The Pan European Payment System Initiative (Pepsi) would seeks handle all forms of cashless transactions.</p>
<p><a href="https://www.finextra.com/newsarticle/34843/ecb-offers-support-to-bank-backed-alternative-to-visa-and-mastercard">ECB offers support to bank-backed alternative to Visa and Mastercar...</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-87677431457786623472019-11-26T01:53:00.001-08:002019-11-26T01:53:01.803-08:00French central bank floats European CBDC<p>xxx</p>
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<p>In a speech, Banque de France first deputy governor Denis Beau says that his organisation is "quite open for experiments" with the ECB on a wholesale CBDC.</p>
<p><a href="https://www.finextra.com/newsarticle/34839/french-central-bank-floats-european-cbdc?utm_medium=newsflash&utm_source=2019-11-25&member=37875">French central bank floats European CBDC</a>:</p>
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<p>Why </p>
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<p>Speaking about the inefficiencies that still bedevil cross-border payments, Beau says: "The tokenisation of financial assets combined with the recourse to blockchain-based solutions and more broadly distributed ledger technologies to store and transfer those assets could help answering market’s demands."</p>
<p><a href="https://www.finextra.com/newsarticle/34839/french-central-bank-floats-european-cbdc?utm_medium=newsflash&utm_source=2019-11-25&member=37875">French central bank floats European CBDC</a>:</p>
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<p>The tokenisation of financial assets is, of course, a much broader topic than CBDC and (as I have said for some time) and inevitable trend. In my mental model of the world, I look from that perspective. So we use the cryptocurrency platform to trade tokens, and one form of these tokens (homomorphic to, but necessarily built from, ERC-720) is digital currency and one option for implementing digital currency is CBDC.</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-21371977130868290432019-11-25T00:10:00.001-08:002019-11-25T00:10:30.598-08:00Ana Botin of Santander on FinTech and Blockchain - Chris Skinner's blog<p>xxx</p>
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<p>"I need to know you and that’s based on data. Why should data be regulated in a different way if you’re called a bank and if you’re called something else"</p>
<p>From <a href="https://thefinanser.com/2019/11/ana-botin-executive-chair-of-santander-on-strategy-sustainability-fintech-and-blockchain.html/">"Ana Botin of Santander on FinTech and Blockchain - Chris Skinner's blog"</a>.</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-33838731795949826512019-11-23T04:06:00.001-08:002019-11-28T03:51:00.591-08:00Data not money<p>I was quoted in The Economist (“<a href="https://www.economist.com/finance-and-economics/2019/11/21/big-tech-takes-aim-at-the-low-profit-retail-banking-industry">Plug and pay</a>”, 21st November 2019) talking about the impending reshaping of the retail financial services sector. Although the quote isn’t quite accurate — I was responding to the statement that a a bank is a balance-sheet, a factory that turns capital into financial products (such as loans and mortgages) and a sales force, I didn’t make it — the paraphrase is correct. Those first two activities are heavily regulated, as they should be, which is why Big Tech is uninterested are in them. They are more than happy to have banks, for example, do this boring, expensive and risky work with all of the compliance headaches that come with it. As noted in article, the Apple credit card is actually issued by Goldman Sachs (although it was Apple that caught the flack in the row about gender discrimination around credit limits) and the Amazon cards are issued by Chase, Synchrony and American Express. Similarly, the Google “checking” account (this is the American word for a current account, because they still use cheques, which must be something to do with the Continental Congress or something) is actually provided by Citi.</p>
<p> <a title="Open Banking F-M-B Picture" href="https://www.flickr.com/photos/15mb/49136296368/in/dateposted-public/" data-flickr-embed="true"><img src="https://live.staticflickr.com/65535/49136296368_c53b0b53e8.jpg" alt="Open Banking F-M-B Picture" width="500" height="338" /></a>
<script src="//embedr.flickr.com/assets/client-code.js" async="" charset="utf-8"></script>
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<p>What big tech wants is the distribution side of the business, as shown in this old diagram of mine. They have no legacy infrastructure (eg, branches) so their costs are lower but to my mind more importantly the provision of financial services will keep customers within their ecosystems. If you use the Google account and Google pay then Google will have a very accurate picture of your finance. As the article says "Amazon wants payments in-house so users never leave its app”. Indeed. What Big Tech wants isn’t your money (the margins on payments are going down) but your data.</p>
<p>This is where there are some pretty serious implications. If Big Tech takes over consumer relationships, banks will end up having to give away margin but, far more seriously, data. Andrei Brasoveanu of Accel, a venture-capital firm, is quoted as saying that they could turn into "utilities, providing low-margin financial plumbing". Well, that’s the lucky ones. The unlucky ones will be wiped out in a wave of consolidation and closures.</p>
<p>This isn’t a technology prediction, by the way. In Europe at least it is a regulatory prediction. Back in 2016, <a href="https://www.chyp.com/facebook-apis-and-cardmageddon/">I wrote about regulators demanding that banks open up their APIs</a> that "if this argument applies to banks, that they are required to open up their APIs because they have a special responsibility to society, then why shouldn’t this principle also apply to Facebook?”. My point was, I thought, rather obvious. If regulators think that banks hoarding of customers’ data gives them an unfair advantage in the marketplace and undermines competition then why isn’t it true for other organisations in general and the “internet giants” in particular? This same point was just made by Ana Botin, Chairperson of Santander. My good friend <a href="https://thefinanser.com/2019/11/ana-botin-executive-chair-of-santander-on-strategy-sustainability-fintech-and-blockchain.html/">Chris Skinner notes her comments</a> to Bloomberg: "I need to know you and that’s based on data. Why should data be regulated in a different way if you’re called a bank and if you’re called something else”.</p>
<p>There are big changes coming, and banks and payment companies in particular are going to need effective strategies to survive. It’s not only a problem for those legacy incumbent dinosaurs that the happening new digital kids like to poke fun at. The fintech “challengers” also have a problem. Just as Big Tech has made ecosystems impervious to competition, so it could cross-subsidise (with data as well as with money) its financial services products to raise such a barrier to competition that no newcomer will be able to spend enough to gain traction.</p>
<p>There are some really big changes coming in retail financial services. And that’s not a prediction, that’s a fact.</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-71026852200805619472019-11-23T02:54:00.001-08:002019-11-23T02:54:31.829-08:00Why central banks are edging away from the dollar | Financial Times<p>xxx</p>
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<p>The dollar’s falling share of reserves represents an “official sector vote against US ‘exceptionalism’”, said Mr Ruskin. In his view, the data should give pause to US policymakers contemplating laws to tax foreign purchases of US assets, further sanctions based on the international use of the dollar and plans to restrict access to US capital markets. All are actions that could weaken the dollar’s influence.</p>
<p><a href="https://www.ft.com/content/45d2ae3e-e6ab-11e9-9743-db5a370481bc">Why central banks are edging away from the dollar | Financial Times</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-74332115202005538932019-11-23T02:45:00.001-08:002019-11-23T02:45:48.724-08:00Programme<p>ITU Workshop on Standardizing Digital Fiat Currency (DFC) and its Applications <br />New York City, USA, 18-19 July 2018</p>
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<p>Case: The State of DFC Implementation in China
People's Bank of China (PBOC) has been a leader in thinking strategically about DFC deployments at a large scale with a mixture of heavy cash use and robust and growing use of mobile payments. This will highlight PBOC's efforts in meting these challenges.
Yao Qian,Vice Director-General of Technology Department, People's Bank of China [ <a href="https://www.itu.int/en/ITU-T/Workshops-and-Seminars/20180718/Documents/Yao%20Qian.pdf">Presentation</a> ]</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-12877300171818388262019-11-23T02:31:00.001-08:002019-11-23T02:31:50.149-08:00The High Stakes of the Coming Digital Currency War by Kenneth Rogoff - Project Syndicate<p>xxx</p>
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<p>Western regulators could ultimately ban the use of China’s digital currency, but that wouldn’t stop it from being used in large parts of Africa, Latin America, and Asia, which in turn could engender some underground demand even in the US and Europe.</p>
<p><a href="https://www.project-syndicate.org/commentary/global-battle-for-digital-currency-supremacy-by-kenneth-rogoff-2019-11">The High Stakes of the Coming Digital Currency War by Kenneth Rogoff - Project Syndicate</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0tag:blogger.com,1999:blog-5811428130532589844.post-5915625209799781102019-11-23T02:29:00.003-08:002019-11-23T02:29:49.749-08:00Fed Reserve Evaluating Digital Dollar But Benefits Still Unclear, Says Chairman - CoinDesk<p>xxx</p>
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<p>Powell said… a digital national currency may not offer advantages to the U.S. that it may do to other nations</p>
<p><a href="https://www.coindesk.com/fed-reserve-evaluating-digital-dollar-but-benefits-still-unclear-says-chairman">Fed Reserve Evaluating Digital Dollar But Benefits Still Unclear, Says Chairman - CoinDesk</a>:</p>
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<p>xxx</p>Cayce Pollardhttp://www.blogger.com/profile/18441199457742532638noreply@blogger.com0