Week In Brief - November 26, 2021

November 26, 2021
A short roundup of some of the week's payments news you may have missed. This week we look at the CMA's lessons learned review in the UK following the recent open banking scandal, proposals in Japan for a bank deposit-backed digital currency, the strong demand for request to pay in Europe and news that NFT, or non-fungible token, has become word of the year.

Japan: Private Forum Proposes Bank Deposit-Backed Digital Currency

The Digital Currency Forum, a forum of 70 companies, including Japan's leading banks, and local governments have published a white paper and a progress report on a digital currency, backed by bank deposits.

The forum considered that digital currencies issued by banks could be the fastest way to incorporate digital technology into the payment infrastructure and decided to develop a yen-denominated digital currency, with a two-tier structure, that incorporates new technologies.

According to the white paper, the two-tier structure consists of a common area where the transfers of coins is recorded in the ledger, which will be linked to a business area where the payment message, and the transfer of rights and goods is recorded.

“We believe that [a two-tiered digital currency platform] will be able to connect with other digital platforms in many ways, and that various economic activities and businesses will be able to incorporate the functions of the digital currency according to their own needs, adding payment and settlement to a wide range of services”. The goal is to realize a form of "Digital Payment as a Service,” the forum said.

EU: Pan-European Request To Pay Survey Shows Strong Corporate Demand

In a recent interview, Thomas Egner, secretary general of the Euro Banking Association (EBA), said businesses have a strong appetite for European Request to Pay services.

According to Egner, almost 100 percent of the businesses support a Europe-wide uniform mode of operation for Request to Pay, but widespread reachability is a key prerequisite for using the service.

Although participants saw clear benefits for all four use cases covered in the survey — point of sale payments, e-commerce, e-invoicing and recurring payments — they raised doubts about the ability of Request to Pay to compete with other payment methods at the average retail checkout counter, Egner noted.

The main benefits for corporates to use the feature include enhanced convenience, security and usability.

“The verification of the identities of the biller and the payer and the exchange of the transaction data before the initiation of the payment were perceived as a true game changer for the overall payment experience,” Egner said in the interview.

Brazil: FIU Launches PEP Registry

The Brazilian financial intelligence unit. the Financial Activities Control Council (COAF), has released a resolution establishing procedures for dealing with politically exposed persons (PEPs).

The resolution includes the establishment of a PEP registry which will be maintained by the Office of the Comptroller General. The PEP registry is updated on a monthly basis.

The COAF stresses that although the PEP registry “is an important primary source of consultation, it should be complemented with other information available in public or private databases”.

UK: CMA Publishes Details Of Open Banking Lessons Learned Review

The Competition and Markets Authority (CMA) has published the terms of reference for its review of the Open Banking Implementation Entity (OBIE) lessons learned.

Following the scandal that led to former OBIE chair Imran Gulamhuseinwala resigning, the CMA is now looking at what it can learn from the issue and to make recommendations on how to approach remedies resulting from market investigations in the future.

The review will address the following key questions:

  • What weaknesses were there in the CMA’s design, implementation and monitoring of OBIE?
  • What factors should the CMA consider when designing, implementing and monitoring remedies in market investigations in future, including in terms of scoping, timing, flexibility and allocation of resources and responsibility?
  • What measures or processes would ensure that the governance of Market Investigation remedies is effective and appropriate, including where scope or timeframes change?
  • What should be the process for CMA executive and board oversight of remedies when the Market Investigation Reference Group oversight ends?
  • What if any further recommendations should be made for the future?

NFT: Word Of The Year

Finally, NFT, or non-fungible token, is not only a new and trending form of investment, but also the Collins Dictionary's word of the year.

It achieved this honourable position after the use of the abbreviation rose by more than 11,000 percent in 2021.

According to Collins' definition, NFT is “a unique digital certificate, registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible”.

Crypto, metaverse and climate anxiety have also made Collins' top ten new words list.

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