A funny thing happened on the bitcoin road in place of the legal currencies. The speculative crypto-mania has collapsed (again) this year and the original stateless digital token has lost 70% of its value. And then the technology companies massaged salt in the crypto bros wounds by appealing to the US Federal Reserve for help in improving digital payments.
As electronic transactions have become more popular, it now seems like a time when decentralized new age systems can be implemented. Instead, the opposite is happening.
Large technology companies such as Amazon, Apple and PayPal are urging the US Federal Reserve to build the real-time transaction infrastructure, according to a letter from the business group reported by American Banker. Google, Square and Stripe have also logged in. The letter was in response to a request for comments from policymakers, who are discussing whether to build a system in real time or leave it to the private sector to be managed. In payments, the United States is already far behind places like the United Kingdom and China, while last month the European Central Bank launched an immediate 24-hour payment system.
Blockchain technology offers the promise of transactions away from centralized systems like those of a central bank. But many of the world's largest technology companies apparently want the government to play a role in money, even if it becomes more and more digitized.
The big US banks have their system in real time, but smaller lenders are wary of them, according to the report. Large financial institutions claim that having two separate systems would be inefficient and counter-productive. Technology companies circumvented interoperability concerns and claimed that the biggest concern fell further behind – something that they said only that the Fed could prevent.
However, not all big techs have renounced encryption. Facebook is working on a money transfer token in its messaging service WhatApp, according to Bloomberg. It will be interesting to see if Facebook discovers something that TransferWise money transfer specialist missed. The CEO of the latter aims to charge substantially zero to send money and has not yet found benefits in using blockchain-style systems to date.
And to be honest, some people use encryption for transactions. His of rigor on the dark network for hackers and criminals, according to Andrei Barysevich, who works for the online research firm Recorded Future. But those who do not appreciate the utmost discretion seem good with money flowing through banks, large technology companies or government systems.
Because paper money is used less often, this tendency could paradoxically give governments more power and control over their currencies than they ever had before. (Paper money is out of sight when printed, but governments have more control and visibility than the digital version.) Crypto's greatest strength is the relative privacy that comes from working outside the reach of government, but , for better or for worse, does not exist There seems to be much demand at this time.
- As part of Quartz's Rewiring Small Business series, journalists have asked store owners around the world if they are excited about bitcoins. Some were open-minded, but most did not adopt digital tokens.
- While the United States seeks to recover digital payments, the United Kingdom is worried about going without cash too quickly. The elderly, people in rural areas, as well as the poor are at risk of being left behind.
- Goldman Sachs is leading the fall in US bank stocks this year. Malaysia filed a criminal complaint against the New York bank in connection with the 1MDB scandal.
- Take a look at Quartz's three-part series on the economy remake. From the reinvention of the macro models after the great accident of 2008, to the costly lack of diversity in the field, Eshe Nelson deepens the sad search for post-crisis science of science.
The future of finance elsewhere
- US lawmakers fear startups are devious, after Robinhood complicated the launch of "control and savings" services that were not traditional control and rescue services. The senators asked the regulatory authorities for information on how they monitor fintechs.
- Gartner argues that a shocking 80% of legacy financial services companies will cease their business, become commodities or barely exist by 2030. Gartner analysts believe fintechs can finally destroy the industry.
- The United Kingdom is trying to renew the way in which banks charge for discoveries. Historically, lenders have obtained over 50% of overdraft fees only discovered by 1.5% of customers.
- Experian now allows users to place a wider range of variables into their credit scores. Additional information, such as utility and telephone payments, could help more people access credit.
- The Financial Times has published a long reading (paywall) on the increase in passive investments. The concerns for the future still include the way they manage corporate governance and if they are "lazy owners".
Previously, in Friday of finances
December 14: Amazon could learn from the Chinese technology giants
December 7: an Indian businessman aims to free Japan from paper money, then repeats the trick in the United States
November 16: Americans are coping with all tastes of subprime debt