Seeds of Wisdom RV and Economic Updates Monday Evening 9-2-24
Good Evening Dinar Recaps,
Fed Governor Waller questions need for speed in cross border payments
In a speech last week, Federal Reserve Governor Christopher Waller argued that “not all frictions that slow down payments are bad”. While he was mainly questioning the interconnection of faster payment systems, he touched on correspondent banking.
As context, the Bank for International Settlements (BIS), the central bank to the central banks, is working on Project Nexus for interlinking faster payments via its innovation hub.
Additionally, Project Agorá plans to use tokenization and wholesale CBDC to speed up cross border payments via correspondent banks. The Federal Reserve Bank of New York is a participant in that project, but “strictly for research and experimentation.”
While Governor Waller acknowledged that it’s desirable for remittances to arrive faster, the heart of his objections were in one paragraph:
“Not all frictions that slow payments down are bad. Certain frictions are purposely built into the global payment system for compliance and risk-management reasons.
Slowing down the speed at which payments are cleared and settled helps banks prevent money laundering and counter the financing of terrorism, detect fraud, and recover fraudulent or misdirected cross-border payments.
Granted, the practice today of sending payments through an often complex chain of correspondent banks contributes to slower payments that could benefit from efficiency enhancements.
However, there is no silver bullet that increases speed and efficiency without tradeoffs. Unless new solutions are found, interlinking fast payment systems might increase the risk-management burden for banks that participate in them.”
Buyers don’t want faster payments?
He went on to argue that it is only sellers that want to receive money faster. Buyers don’t want to pay earlier. That’s certainly true.
However, speeding up cross border payments is not the same as using bank transfers versus cheques. To Governor Waller’s point, paying by cheque means the payer keeps hold of the money for longer.
In my experience, cross border payment transfers leave my account instantly. Contrary to Governor Waller’s argument, buyers should love faster cross border payments, because if a payment arrives instantly instead of taking two days, then the buyer can send the money two days later.
If I know it takes two days, then I have to send the payment two days before the expected arrival date. It is invariably the banks involved that keep hold of the money in the interim.
That might be a mismatch in banking hours or issues with Nostro account liquidity or compliance. And some banks may use compliance as an excuse for delays.
The Governor then questioned whether improving payment systems is always the role of central banks or should be left up to the private sector.
He gave examples of where the Fed steps in, such as the case of FedNow, where the private instant payment systems only served a subset of banks.
Mr Waller emphasized that the current focus of FedNow is rolling it out domestically. So it has no plans for interlinking the system.
What does this mean?
One of the aims of Project Agorá, the cross border initiative that uses correspondent banks, is to improve compliance.
That should mean that when a payment instruction is received, the banks conduct compliance first and share information.
Perhaps the amount meant for payment is reserved rather than removed. If all is clear, then the money leaves your account and arrives at the destination.
So part of this is a change in the process order. Mr Waller acknowledged that the correspondent banking process is ripe for optimization.
His comments on the role of the central bank could be good news for Fnality. That’s the private sector system for tokenized institutional payments using central bank deposits. It is working on adding tokenized US dollars to its existing GBP offering.
On the other hand, so far the U.S. regulators have not been supportive of some of the private interbank payment initiatives that use blockchain, particularly those targeting corporates. Hopefully, that is changing with the Regulated Settlement Network.
@ Newshounds News™
Source: Ledger Insights
~~~~~~~~~
ARE ELON MUSK, THE IMF, AND THE WORLD BANK SETTING THE STAGE FOR XRP IN THE GLOBAL FINANCIAL SYSTEM?
▪️XRP is a prominent subject of discourse in global cross-border and payment solutions.
▪️The coin is linked to the Ripple Labs ecosystem, with a rich payment solution record.
With its growing popularity, XRP is now linked with Tesla CEO Elon Musk, the International Monetary Fund (IMF), and the World Bank. As a result, there is a growing debate in the crypto community concerning XRP’s future role in global finance.
Elon Musk’s Connection to Ripple
Over the weekend, Versan Aljarrah, founder of Black Swan Capitalist, pointed out Musk’s involvement with Ripple Labs Inc. The founder noted in an X post that Musk’s connection to Ripple is part of a larger narrative that includes XRP in the new financial system.
▪️#ElonMusk’s connection to #Ripple is no secret, it’s always been part of the larger narrative
▪️Remember Elon and Peter Thiel backed #OneCoin, rebranded to #OpenCoin, and then Ripple under Chris Larsen guidance
▪️They’re just setting the stage for #XRP in the new #financial system pic.twitter.com/jRUDK6tQBr
▪️— Black Swan Capitalist (@VersanAljarrah) September 1,
He noted that Musk’s relationship with Ripple is no secret. He recalled a time when Musk and Peter Thiel once supported OneCoin. According to him, this was shortly before OneCoin rebranded to OpenCoin and later Ripple under the leadership of Chris Larsen.
The founder’s recent disclosure comes only shortly after crypto-friendly lawyer Fred Rispoli made a bold proposal to Elon Musk. Notably, Rispoli recently urged Musk to consider integrating XRP into his X Payments platform.
This suggestion could mark a major transformation for XRP. It comes shortly after the Ripple Labs and US Securities and Exchange Commission (SEC) legal battle ended.
As highlighted in our previous article, Judge Analisa Torres ruled that secondary sales of XRP are not securities. This verdict has helped provide greater regulatory clarity, strengthening investor confidence in the digital asset.
Nonetheless, Ripple was ordered to pay a $125 million fine for institutional XRP sales violating federal securities laws.
XRP Role in Global Financial Payment Systems
In a related post, Aljarrah noted that the World Bank and the IMF have consistently featured XRP and stablecoins in payment discourse. The founder thinks this is not a coincidence but the foundation of the new monetary system.
Meanwhile, Ripple has preserved a brand identity connected to financial transactions since its founding. XRP is already being used to solve key financial problems in the crypto space.
For instance, XRP is a bridge currency in cross-border payments, offering instant settlements at lower charges between different fiat currencies.
According to our recent analysis, the Bank of Russia began exploring XRP in its financial system in 2018. Based on the details, the coin was leveraged for cross-border remittances with plans to solve digital payment needs.
Moreover, Ripple strongly believes blockchain-based payment solutions may become invaluable to local banks. As noted in our earlier post, the payment company provides local banks with blockchain-based payment solutions to help SMEs overcome the hurdles of traditional cross-border transactions.
Overall, Ripple’s blockchain solutions have helped strengthen XRP’s position as a leader in the crypto market. As XRP sees more integration, experts’ predictions of XRP facilitating global payments could eventually come true.
At press time, XRP is trading at $0.5576, up by 0.44% in 24 hours. The trading volume surged 67% within the same timeframe to $883 million. With more positive narratives around the coin, it might ultimately sustain its rebound moves.
@ Newshounds News™
Source: Crypto News Flash
~~~~~~~~~
IOTA NEWS: EMBARK ON EPIC QUESTS WITH IOTA HEROES AS GAME DEBUTS ON IOTA EVM SEPTEMBER 4TH
▪️IOTA Heroes, a game built exclusively for the IOTA ecosystem, is launching on IOTA EVM on the 4th of September 2024 at 20:00 CEST.
▪️New features include a Hatchery, the option to end adventures early, faster routing and navigation, and inventory item filters.
IOTA Heroes, an exciting game that allows users to fight, conquer, and earn, will launch in the IOTA EVM later this week.
The game launches on the 4th of September 2024 at 20:00 CEST, the developers revealed on X.
The IOTA EVM is the first fully EVM-compatible smart contract chain on the IOTA network, enabling fast, secure, and scalable smart contracts. As we’ve reported, the EVM has thrived since its launch and has been pushing the boundaries of DeFi, decentralized trading, sustainability, and more.
As the IOTA Heroes team revealed in an accompanying blog post, it has been working to prepare the game for a token migration, which is no mean feat given how vast the number of tokens they manage is. The team benefitted from the IOTA Grants, being one of the first projects to receive one to fund the migration.
IOTA Heroes is doing all the heavy lifting for the token holders.
We’ll ensure that all your heroes, items, and gold are airdropped directly to your address. Additionally, we’ve prepared scripts to automatically set up all your facilities and hero skills that you’ve developed on ShimmerEVM. Everything will be ready and waiting for you when you first log in to the game!
IOTA Heroes on IOTA EVM
The migration comes with a raft of changes. For starters, the team has updated the battle visualizer, allowing users to access more information on the combat scenes. More updates are expected in the near future.
Other changes include the long-overdue introduction of the Hatchery, where users can now crack their eggs for some exciting possibilities. The game has previously limited users to reforging only five items at a time, but with the new update, users can reforge any multiple of five (10, 15, 100) as long as they have enough charcoal to power the process.
The update also gives users more options as they play IOTA Heroes. For one, you can choose to end an adventure early; say, for instance, that your adventures were set to end in an hour or two, and you want to end them earlier and get on with other things—well, you can choose to end it by spending some of your gold.
Others might choose to end the adventure to preserve some of the in-game items they have acquired, especially if they value them higher than gold. Of course, you must engage in an adventure at least five minutes before you get the option to call it quits.
On the back end, the IOTA Heroes team has refined its smart contracts to make the experience smoother. It has also switched to SvelteKit, a framework for deploying web apps using Svelte, which will translate into smoother routing and faster navigation.
@ Newshounds News™
Source: Crypto News Flash
~~~~~~~~~
An important update on Gold.
THE BEGINNING STAGES OF THE GOLD STANDARD | Youtube
@ Newshounds News™
Source: Currency Facts
~~~~~~~~~
Newshound's Currency Facts Youtube and Rumble
Newshound's Podcast Link
Newshound's News Telegram Room Link
Q & A Classroom Link
Follow the Roadmap
Follow the Timeline
Seeds of Wisdom Team™ Website
Subscribe to Newsletter
Thank you Dinar Recaps