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xxx " Frederick the Great saw an opportunity here to damage Russia’s economic infrastructure and boost his own. Hiring counterfeiters, Frederick struck imitation coins. The pieces, referred to as Ephraimiten, were struck of inferior silver content but maintained the same face value. This meant that when Russian merchants or consumers unwittingly accepted the counterfeit coins, the Prussian state was essentially profiting through theft." Seven Years' War: Frederick II Used Fake Coins to Sabotage Foes - Gainesville Coins News xxx

xxx "San Francisco Municipal Transportation Agency conducted an investigation and found two conductors had been stealing fare money.Agency Director John Haley says using cash has been part of the cable car’s 140-year-old tradition, but it might be time to modernize." San Francisco cable car may go cashless after insider theft xxx

xxx "According to convenience store chain CU, credit cards were used to pay for 55.1 percent of transactions last year, surpassing cash use for the first time." Credit card use surpasses cash at convenience stores xxx xxx "As Koreans are carrying less cash, with the average standing at 74,000 won last year, down 3,000 won from the previous year, the central bank is also issuing less cash. It released 12.3 percent fewer 10,000 won banknotes last year from the previous year, while the issuance of 5,000 won notes dipped 5.9 percent and 1,000 won bills 3.7 percent." Korea shifting to cashless society xxx xxx "The Bank of Korea on Thursday announced it will step up its efforts to reduce the circulation of coins, the highest denomination of which is worth less than $0.50. As part of the plan it wants consumers to deposit loose change on to Korea’s ubiquitous ‘T Money’ cards" South Korea to kill the coin in path towards ‘cashless society’ xxx

xxx "In 2015, Franco A had registered as a refugee with the Bavarian authorities. He’d claimed he was a Christian Syrian, the son of a fruit seller from Damascus. Under his Syrian alias, he was given a monthly allowance of €400, and a room in a local hostel. All the while he continued his army service in the Bundeswehr, and no-one smelt a rat." Islamism isn’t the only terror threat Germany is facing | Coffee House xxx

xxx "What is blockchain? First and foremost, Blockchain is a public electronic ledger -- similar to a relational database -- that can be openly shared among disparate users and that creates an unchangeable record of their transactions, each one time-stamped and linked to the previous one." FAQ: What is blockchain and how can it help business? | Computerworld xxx "Each digital record or transaction in the thread is called a block (hence the name), and it allows either an open or controlled set of users to participate in the electronic ledger. Each block is linked to a specific participant." FAQ: What is blockchain and how can it help business? | Computerworld xxx

xxx "Students at a Mumbai chemical college succeeded in spoofing a fingerprint attendance device with fake fingerprints." via Indian pupils cheat biometric system with glue | Planet Biometrics News xxx

xxx categorizing all unreported cash as “black money” risks putting into one policy basket the multiple (and legally valid) contexts that lead people to keep money hidden and store value in cash form. In particular, a large section of women, including many belonging to the middle class, have had good reasons to hide their small savings in rice bins and cosmetic jars, away from husbands and other family members. From IMTFI Blog: demonetisation xxx

xxx Amazon, Apple, Google, Intuit, and Paypal just asked Congress for a unified federal alternative to state money transmission licensing. In a letter to congress, their industry group, Financial Innovation Now, explained how state-by-state money transmission licesing is a major impediment to innovation in financial serivces here in the US From Amazon, Apple, Google, Intuit, and Paypal just asked Congress for a unified federal alternative to state money transmission licensing. | Coin Center xxx

There’s so much that needs to be thought through about “open banking” before it turns into a thing across Europe. For one thing, we are a long way away from being able to go online and download a standard European bank account API (there is no such thing, by the way) and then activate it by obtaining an API from the European Bank API Management Centre (there is no such thing, by the way) by using a European Financial Services Identity (there is no such thing, by the way). As the Euro Banking Association say in their very good March 2017 working paper on “ Open Banking: Advancing Customer-Centricity ”, open banking "will require crucial developments in digital identity and APIs. Let’s assume that these crucial developments happen. Then what exactly will we be able to do in the new open banking environment? There are gazillions of rules and directives and regulations that govern financial services and all of them will have to be interpreted and re-interpreted for API access. Some o...

xxx Over in the Livery Hall, a lively discussion about open banking was introduced and expertly steered by Dave Birch, head of innovation, Consult Hyperion. From London Leads the Way in Regtech Innovation Well, to be honest to success of the Open Banking session was more to do with the fact that the expert panel were actual experts and that they were prepared to share their genuine opinions than it was to my steering. The panel, it seemed to me, were very clear about the priority of organisational strategies for the open banking world.

xxx Banks operating in the EU will be able to verify the identity of customers and carry out due diligence checks on a wholly digitised and cross-border basis under plans outlined by the European Commission. From Digital ID and fintech at the heart of new EU consumer financial services action plan When the Commission say “digital identity”, they are talking about electronic identity schemes as set out their rules on e-ID and trust services (e-IDAS). To the best of my knowledge there is, at the time of writing, only one scheme “notified” to eIDAS and that is in Germany, so we are a long way from a universal eIDAS infrastructure, which is why I tend to think that a sector specific financial services identity (“financial passport”) might be a more practical way forward if we are going to tackle the escalating costs of regulation.

The good people at BBVA Research recently published a paper on central bank digital currencies ( Central Bank Digital Currencies , Gouveia et al, March 2017) in which, amongst other conclusions, the authors say that “we also consider it likely that a scenario in which CBDC is anonymous, universal and non-yield bearing will be implemented”. But why is this “likely”? Why would any central bank bother setting up the form of distributed ledger that the authors envisage in order to implement something of such obvious utility to criminals, terrorists, money-launderers, tax-evaders and corrupt politicians? I don’t get it.

xxx "‘If all I want to do is take your phone and use your Apple Pay to buy stuff" That Fingerprint Sensor on Your Phone Is Not as Safe as You Think - The New York Times xxx

How fun was Innovate Finance Global Summit 2017 at the Guildhall this month! Great agenda, great speakers, great location and sunshine! xxx

We all know that “Open Banking”, by which I mean a regulatory environment that enables third-parties to have access to banks’ accounts (with the informed consent of the account holders, of course) is on the way. Regulators around the world are looking at what is going on in Europe (where the regulators are forcing banks to open up to third party service providers) and what is going on in the U.K. (where the government has decided that open data in banking and open access to bank accounts is the best way to bring competition and innovation into the sector) and beginning to formulate similar strategies. Whether it will involve the security standards of the European Union or the access structures of the U.K. is beside the point: whichever jurisdictions you are in, open banking is on the way and you should begin formulating your open banking strategies now. Why? Well, what sort of things might you learn about somebody if you have access to their bank account? All sorts of things, actually...

xxx "The electronic endorsement of a bank, an organisation accountable to no one but its owners, is required." via You can’t spend a penny without being snooped on | David Mitchell | Opinion | The Guardian As it happens, this isn’t true since, as I myself blogged some time ago, you can pay using Avios points.

xxx "The financing of the terrorist attacks which took place in France in January and November 2015 have been analysed in detail by the Center for the Analysis of Terrorism, a leading European Think Tank on the analysis of terrorism. The report - The Financing of the Paris Attacks (in French) - concludes: via And here we go again! The January attacks against Charlie Hebdo cost € 26,000 and were funded essentially thanks to consumer credit fraud, including two car loans. For both attacks, the perpetrators used a mix of payment instruments including money transfer services and anonymous pre-paid cards. The report states ‘Anonymous reloadable pre-paid cards enable anonymous transactions up to €2,500, including over the internet. Anonymity is guaranteed at all levels, from the purchase of the card, to its reloading, making it the ideal payment instrument for the perpetrators of the 2015 attacks.’ " xxx

xxx "Since then, I’ve thought to myself that anyplace where there is the possibility of fraud and corruption – money laundering, investing in sharia-compliant products, moving funds offshore, giving to charities, paying taxes, managing government funds and more – could be assisted by DLT.  It could provide a fully transparent, tamperproof view of who paid what to whom. " via Solving state corruption with technology - Chris Skinner's blog But how? Suppose all of the bank accounts in the UK are on a shared ledger and anyone can look at that ledger to see all of the transactions. Oh dear. Something of a privacy problem - it’s none of my business if Chris has spent his money on… well… you get the point. So clearly a transparent ledger is not practical. So we’d better encrypt it then. Now you can see that I paid Chris but not how much or what for. But that sounds like no-one’s business but ours, doesn’t it? In which case, he should be using anonymous digital cash like Z-...

I saw an interesting comment about the recent Google I/O conference, referring to the opening up of the European payments marketplace under PSD2. It came in a discussion about Google wallet: For now, the service is linked to a user’s credit card, but not for long (at least for European users), Daniel Döderlein, CEO for payments systems provider Auka, told Bank Innovation.  “Once Google’s able to go to direct to account they will cut out the cards companies and to some extent, the bank,” From  Would You Like to Set Google As Your Default Financial Institution? | Bank Innovation This resonated with a story that I heard last year and mentioned to a few of our clients in seminars and workshops. A friend of mine was on a study tour of the US during which he visited a number of different technology companies as well as a number of different technology users in a group of related industries. He told me that the whole time he was in the US, the only people who had asked him about PSD2 cam...

xxx "A digital facial scan of the customer is recorded when they travel through security, and when they arrive at the gate, their face is matched with this representation when they present their boarding pass – allowing them to board the aircraft." British Airways introduces new automated biometric technology - International Airport Review xxx

Some good news arrives from our friend at Financial Fraud Action (FFA), the body tasked with reducing financial fraud in the UK. Remote banking fraud losses totalled £137.1 million, a 19 per cent decrease from £168.6 million in 2015. From  Financial fraud data for 2016 published : Financial Fraud Action UK Great news. Except…  "But the report failed to include any reference to one form of crime that is on the rise and blighting victims’ lives: bank transfer fraud." 'I was robbed of £19k, and Barclays just stood by' Oh dear. Having made it easier to transfer money between bank accounts, criminals have t "After it was realised this was a scam, your bank contacted the Italian post office where the funds had gone but the money could not be retrieved." 'I was scammed for £1,300 and Amazon told me to buy again' xxx   xxx "It was only on closer inspection that they saw underneath the displayed name that the email address was not his ...