Daily Dash: UAE Completes Cross-Border CBDC Transaction With China

February 1, 2024
The United Arab Emirates (UAE) celebrated its central bank’s 50th anniversary with a cross-border digital currency transaction, while Luxembourg’s bankers have shared their concerns about the EU’s open finance plans.

UAE Makes Its First Cross-Border CBDC Transaction

Sheikh Mansour, deputy prime minister of the United Arab Emirates (UAE), has made the first cross-border payment of the country’s central bank digital currency (CBDC), the digital dirham. 

The cross-border transaction was settled with China, and worth AED50m ($13.6m). 

Sheikh Mansour made the transaction while at 50th anniversary celebrations for the Central Bank of the UAE (CBUAE).

In his capacity as vice president, he also serves as chairperson of the CBUAE. 

More Challenges Than Opportunities With Open Finance, Luxembourg Banking Sector Says

The Luxembourg Bankers Association (ABBL) and Deloitte Luxembourg have conducted a survey addressing concerns related to open finance and the Financial Data Access framework (FIDA) among credit institutions and other financial services providers.

“The regulatory text will offer huge opportunities for digital transformation, so it’s important that we start working right now,” commented Ananda Kautz, head of innovation, payments and sustainability at ABBL. 

The survey revealed that two-thirds of respondents see more challenges than opportunities. 

These are linked to data management, IT security, infrastructure readiness and implementation costs.

The survey also revealed concerns about potential risks like the use of financial data by non-financial entities and cybersecurity concerns.

Respondents also said that they view FIDA as an opportunity to consolidate data, offer new services and gain insights by retrieving information about clients from other players. 

Netherlands Launches New Consultation On Access To Cash Bill

The Dutch Ministry of Finance has opened a new consultation on a bill that aims to safeguard the acceptance of cash payments.

The draft Cash Payments Act is designed to ensure that cash remains accessible, available and affordable by introducing several new protective measures.

The main obligation would be for large banks with more than 3m payment account holders, who would be required to provide a national basic infrastructure of ATMs.

These ATMs would remain free to use for citizens, and reporting obligations for cash transport companies would maintain continuity of cash services.

Interested stakeholders have until March 8 to respond to the consultation.

Circle Gears Up For Second Attempt At Going Public In The US

The issuer of the world’s second-largest stablecoin has begun the process of filing for an initial public offering (IPO), after a previous attempt to go public was aborted in December 2022.

Earlier this month, Circle submitted a confidential draft registration statement to the Securities and Exchange Commission (SEC) on a proposed IPO of its equity shares.

Circle did not state the price or number of shares that would be offered, noting only that the IPO is expected to take place after the SEC completes its review process and subject to market conditions.

In July 2021, when Circle first announced its intention to go public via a special purpose acquisition company (SPAC), it was originally valued at $4.5bn.

By February 2022, following rapid growth of the stablecoin and crypto markets, Circle was valued at $9bn.

However, in December 2022, Circle and its SPAC partner, Concord Acquisition Corp, mutually agreed to terminate their proposed deal due to unfavourable market conditions.

PayPal Launches Six New Features Including Fastlane Checkout, AI Suggestions

PayPal has announced the launch of six new features that aim to “revolutionise” the e-commerce experience for consumers and merchants in the US.

Fastlane is a new feature that allows PayPal users to sign up with a new merchant in as close to one click as possible.

When using Fastlane, a consumer who visits a new merchant for the first time can automatically upload all of their ID, payment and shipping information straight from their PayPal account.

Similarly, for recognised merchants, PayPal has added a one-click checkout process that allows users to log in and send a payment using their face or fingerprint.

Next, PayPal Smart Receipts is a new feature that uses AI to predict what a consumer who has just checked out may purchase from that same merchant in future.

Recommendations with links to buy will then populate the receipt, and merchants will also be able to add personalised rewards and cash back offers.

A similar feature, known as CashPass, has been added to the PayPal app. This allows any merchant to show offers to any consumer, and PayPal selects relevant offers based on shopping behaviour.

Switzerland’s TWINT App Doubled Its Transactions Made In Store In 2023

TWINT has strengthened its dominance of Switzerland’s digital wallet market after almost doubling the number of in-store transactions it processed in 2023 compared to 2022.

In a statement, the wallet provider said that the strong growth was due mainly to payments made at supermarket cash registers, which made up the “vast majority” of in-store transactions.

In total, TWINT processed more than 590m transactions in 2023, about 72 percent of which were commercial payments.

“The strong growth in the number of transactions made in traditional retail stores shows that TWINT has become part and parcel of the everyday lives of Swiss residents,” said Markus Kilb, CEO of TWINT.

TWINT, which is jointly owned by a consortium of banks, including Credit Suisse and UBS, is the largest payment app in Switzerland, with more than 5m active users.

Tink, Token.io Confirmed As Latest Members Of Europe’s SPAA Scheme

Tink and Token.io have joined the SEPA Payment Account Access (SPAA) scheme, which is managed by the European Payments Council (EPC).

Version 1.1 of the SPAA scheme launched in November 2023 to much fanfare in the EU's payments industry.

The SPAA scheme establishes the rules, practices and standards that govern the exchange of payment accounts-related data and the initiation of payment transactions through "value-added" API-based services.

These services are provided by account-servicing payment service providers (ASPSPs) to third-party providers (TPPs), such as payment initiation service providers (PISPs) or account information service providers (AISPs).

It is thought that the scheme will complement EU legislation such as the Payment Services Directive (PSD) and the Instant Payments Regulation. 

TrueLayer became the first company to officially join the scheme on January 15.

Alipay+ Makes Inroads In Pakistan Through NayaPay Partnership

Alipay+, the cross-border payments and marketing platform from Ant Financial, has partnered with Pakistan’s NayaPay digital wallet.

The partnership will lead to the deployment of QR codes that are compatible with both RAAST, Pakistan’s instant payments system, and with Alipay+ partners, including digital wallets and bank apps.

In total, more than 25 Alipay+ payment partners can connect 1m NayaPay users to more than 1.5bn consumer accounts worldwide.

“This strategic alliance is specifically designed to streamline digital payments, tackling prevalent issues such as limited interoperability and elevated transaction costs,” said NayaPay.

In other Ant Group news, the Chinese fintech is close to acquiring Dutch payments firm MultiSafePay in a $200m deal, according to a report from Retuers.

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