- UK Unveils New Russian Sanctions Package
- Central Bank-Backed Consortium Launches International CBDC
- FSB Considers Lessons Learned From Recent Banking Turmoil
- J.P. Morgan Dreads Bigtech, Fintech Rivals
- Swiss Parliament Unimpressed By Credit Suisse Rescue
- Mastercard Launches New Cross-Border Payment Service Targeting SMEs
- US Court Halts MoneyGram Suit Amid Agency Constitutionality Row
- The End Of NFTs On Instagram Comes Early
- FCA To Host Greenwashing TechSprint
- Tech Industry In Mourning After Cash App Founder Death
- China Welcomes First Latin American Bank To CIPS Ahead Of Lula Visit
- Republican Congresswoman MTG Proposes Return To Gold Standard
- Singapore Establishes Financial Sector Cloud Resilience Forum
UK Unveils New Russian Sanctions Package
Those who have knowingly helped sanctioned Russian oligarchs to hide their assets in complex financial networks will be subject to new sanctions, the UK government has revealed.
Among those named are Demetris Ioannides and Christodoulos Vassiliades, two Cypriot professionals who have been helping Russian elites Roman Abramovich and Alisher Usmanov.
According to the UK government, Ioannides is responsible for creating offshore structures that former Chelsea Football Club owner Abramovich used to hide more than £760m in assets before being sanctioned after the invasion of Ukraine.
Meanwhile, Vassiliades, a Cypriot lawyer, is at the centre of a web of trusts and offshore companies that link Usmanov and countryside manor house Sutton Place Estate, alongside companies in his financial network.
According to the Foreign Office, sanctioning these companies will ensure that assets associated with Usmanov, including a £90m mansion in London, remain sanctioned.
The latest sanctions also stop individuals using family members as proxies for their assets. For example, Vladimir and Varvara Skoch, the father and daughter of Usmanov’s business partner and the so-called ”richest man in the Duma” Andrei Skoch, have been placed on the UK list.
The new sanctions package will sit alongside the £18bn of Russian assets that have already been frozen in the UK.
Central Bank-Backed Consortium Launches International CBDC
A digital currency advocacy group backed by states, central and commercial banks and the International Monetary Fund (IMF) has launched an international central bank digital currency (CBDC) known as the Universal Monetary Unit (UMU).
The UNU was launched by the Digital Currency Monetary Authority (DCMA) at this week’s Spring Meetings of the IMF and World Bank.
In a statement, the group said the UMU strengthens the monetary sovereignty of participating central banks and complies with the crypto-asset policy recommendations of the IMF’s latest financial stability report.
“UMU is legally a money commodity, can transact in any legal tender settlement currency, and functions like a CBDC to enforce banking regulations and protect the financial integrity of the international banking system,” the group said.
“Banks can attach SWIFT Codes and bank accounts to a UMU digital currency wallet and transact SWIFT-like cross-border payments, bypassing the correspondent banking system at best-priced wholesale FX rates and with instantaneous real-time settlement.”
FSB Considers Lessons Learned From Recent Banking Turmoil
Klaas Knot, chair of the Financial Stability Board (FSB), has written to G7 finance ministers and central bank governors on policy responses to the banking shocks of 2023, including prudential and resolution frameworks.
In the letter, Knot said that although the financial reforms put in place since the 2008 financial crisis have meant the banking sector is better able to absorb shocks, recent events provide important lessons for financial authorities.
“The FSB is working closely with the Basel Committee on Banking Supervision and other standard-setting bodies to comprehensively draw out these lessons and consequent policy priorities,” the letter states.
The letter notes that the financial stability outlook has become more challenging in recent weeks, and states that ongoing surveillance has highlighted vulnerabilities associated with elevated debt levels and business models based on the presumption of low and stable interest rates.
J.P. Morgan Dreads Bigtech, Fintech Rivals
In his annual shareholder letter, Jamie Dimon, CEO of J.P. Morgan, said he is keeping an eye on fintech and bigtech rivals as the growing competition is “intense” and “clearly contributing to the diminishing role of banks”.
According to Dimon, the pace of change and the size of the competition are extraordinary, and activity is accelerating.
The J.P. Morgan CEO has previously singled out PayPal, Square, Stripe, Ant Financial, Apple and Google as rivals it needs to keep an eye on, eloquently stating that the banking goliath should be “scared shitless” about fintech competitors.
In his latest letter, Dimon reiterated this message, pointing out that Apple has a strong presence in banking-type services with Apple Pay and the Apple Card, and is actively moving into other similar services such as payment processing, credit risk assessment, person-to-person payment systems, merchant acquiring and buy now, pay later offers.
He has also singled out Walmart, which also relies on new digital technologies to offer banking-type services to its customers.
“Large tech companies, already 100 percent digital, have hundreds of millions of customers, as well as enormous resources, in data and proprietary systems — all of which give them an extraordinary competitive advantage,” Dimon wrote.
Swiss Parliament Unimpressed By Credit Suisse Rescue
Switzerland's parliament has failed to approve the CHF109bn ($120.5bn) of financial guarantees used to rescue Credit Suisse last month.
The vote, which was largely symbolic considering the funds have already been allocated, was rejected by members of the lower house, the National Council, at near midnight, with a 102 voting against.
Subsequently, a heated debate between parliamentarians continued into the early hours of the morning in the 200-strong legislative body.
The vote against followed a previous positive vote by members of the upper chamber, the Council of States.
The emergency law was used by the Swiss government to enable Credit Suisse to be taken over by UBS last month for CHF300bn. More than CHF250bn in guarantees and support has garnered widespread criticism.
Meanwhile, the Swiss Bank Employees Association has demanded that Credit Suisse and UBS freeze any layoffs planned as part of their merger in a letter to Swiss lawmakers.
"We call on you to support our demand for a freeze on layoffs by the end of 2023 in parliament," said Natalia Ferrara, managing director of the trade union.
"Politicians must not shirk their responsibility.”
Mastercard Launches New Cross-Border Payment Service Targeting SMEs
Mastercard’s Cross-Border Services Express is a new tool that enables financial institutions to set up international payments facilities among small and medium-sized enterprises (SMEs).
By partnering with Fable FinTech and Payall Payment Systems, the service allows users to deliver funds to bank accounts, mobile wallets, cards and cash payout locations, with added transaction status and delivery time features.
Participating firms can offer their customers international payments in more than 60 currencies to over 100 markets, covering 90 percent of the world’s population.
“Cross-Border Services Express will enable financial institutions to meet SMEs’ needs for an efficient and digital cross-border payments solution to pay employees, suppliers and partners fast and with full predictability,” said Jane Prokop, executive VP of SMEs at Mastercard.
US Court Halts MoneyGram Suit Amid Agency Constitutionality Row
A New York federal court has a lawsuit by the US Consumer Financial Protection Bureau (CFPB) against MoneyGram on hold, until the Supreme Court of the US (SCOTUS) rules on the constitutionality of the agency.
Last April the CFPB sued MoneyGram, alleging that the firm repeatedly failed to comply with consumer protection laws and ignored government warnings.
MoneyGram is accused of unnecessarily delaying remittance transfers, lacking policies and procedures designed to ensure compliance with money-transferring laws and failing to train employees on how to comply with laws on resolving disputes.
Many of these obligations were introduced by a 2010 law to make remittance transfers more transparent and less risky, but the CFPB says the payment giant failed to fully comply with its requirements.
The District Court for the Southern District of New York has now put the case on ice pending a legal challenge that questions all of the CFPB’s activities to date.
In October, a three-judge panel ruled that the CFPB’s funding structure was unconstitutional and, as a result, annulled an agency rule they argued was a product of an unconstitutional scheme.
The CFPB challenged the ruling before SCOTUS, which is expected to hear the case in the coming months.
In its ongoing debate with the CFPB, MoneyGram argued that “the last time the Supreme Court resolved a major constitutional challenge to the CFPB…numerous district courts were forced to revisit previous holdings to conform to the new precedent.”
The court sided with MoneyGram, concluding that it would be “an inefficient use of time and resources of the court and the parties to proceed in light of a pending US Supreme Court decision.”
The End Of NFTs On Instagram Comes Early
Instagram has announced that its wind down of support for digital collectibles, also known as non-fungible tokens (NFTs), is now complete.
As of Tuesday (April 11), Instagram users can no longer create new digital collectible posts. Existing posts have been moved to users’ archive folders.
In addition, connections between Instagram accounts and third-party digital wallets, such as MetaMask and Trust Wallet, have been disassociated. Instagram users can also no longer access data related to their NFT transactions.
The move brings almost a year of experimentation to an end, after Instagram announced its entry into NFT creation and trading in May 2022.
FCA To Host Greenwashing TechSprint
The UK’s Financial Conduct Authority (FCA) is to lead a new virtual summit on behalf of the Global Financial Innovation Network (GFIN) on June 5, which it says will be the first ever greenwashing techsprint.
The objective of the techsprint, which is being hosted on the FCA’s digital sandbox, is to develop a tool or solution that can help regulators and the market effectively tackle the risks of "greenwashing", whereby products are misleadingly labelled as green or sustainable, in financial services.
UK-based firms can apply to take part from April 17, with the application window remaining open for four weeks.
GFIN is an international group of financial regulators and related organisations. The FCA is among 13 organisations confirmed to attend the techsprint, which includes the World Bank, Dubai Financial Services Authority, and Reserve Bank of India.
Tech Industry In Mourning After Cash App Founder Death
Founder of Cash App, a mobile payments company, and Android creator Bob Lee has been stabbed to death in San Francisco.
MobileCoin, a crypto payments app, where Lee had been chief product officer, confirmed Lee's death on Wednesday (April 5).
Meanwhile, Elon Musk tweeted that he was “very sad” and called on San Francisco to crack down on violent criminals.
Meanwhile, fellow tech entrepreneur Jack Dorsey wrote on his social media network, Nostr, that he was “getting calls. Heartbreaking.”
“Bob was instrumental to Square and Cash App. STL guy.”
China Welcomes First Latin American Bank To CIPS Ahead Of Lula Visit
Brazil’s Bank of Communications BBM has become the first bank in Latin America to join the Cross-Border Interbank Payment System (CIPS).
Also known as Banco BOCOM, the Brazilian subsidiary of the Chinese bank has joined CIPS ahead of a state visit by Brazilian President Lula da Silva to China, which takes place this week.
In a statement, Banco BOCOM said its participation as a full member of CIPS will promote greater use of the renminbi in trade and investment transactions between the two countries.
CIPS will allow counterparties to send transactions in renminbi 24 hours a day, while under the previous model this could only be done during local banking hours.
The Banco BOCOM announcement follows a memorandum of understanding (MoU) signed between China and Brazil in February this year, committing the two countries to building an RMB clearing infrastructure.
Republican Congresswoman MTG Proposes Return To Gold Standard
Ahead of the launch of the FedNow instant payments system in July, a Republican House Representative has said the US should focus not on digital payments but on improving the longevity of the US dollar.
After sharing an article from CNBC on the FedNow launch, Marjorie Taylor-Greene (R-GA) said in a tweet: “We should go back to the gold standard, not digital currency payment systems.”
Over the weekend, FedNow also came under criticism from Robert Kennedy Jr, a newly-announced Democratic presidential challenger for 2024, who described the instant payments system as a “first step” towards a central bank digital currency (CBDC).
“We should be wary since CBDCs are the ultimate mechanisms for social surveillance and control,” he said, adding that the move towards CBDC in the US has benefitted from a “crackdown” on the crypto industry.
Singapore Establishes Financial Sector Cloud Resilience Forum
The Monetary Authority of Singapore (MAS) last week hosted the inaugural Financial Sector Cloud Resilience Forum, welcoming financial regulators and cloud service providers.
Companies including Amazon and Microsoft, as well as regulatory representatives from countries such as Japan, Australia, Thailand and Indonesia joined the forum.
Outcomes, according to MAS, included a consensus that information technology resilience must be built on cooperatively by cloud service providers, regulators and financial institutions.
Participants also called for greater information sharing between financial regulators and cloud service providers on cloud technology and cybersecurity risk management practices to build collective competencies to address these risks, which can be unique to public cloud deployment.