130 Countries exploring CBDCs; Banks want open access to digital platforms platforms say not so fast; Top 10 emerging technologies
"CBDCs are coming, like it or not."
1. 130 Countries exploring CBDCs
2. Banks want open access to digital platforms; platforms say not so fast.
3. Top 10 emerging technologies
Today’s artwork: The Atlantic Council’s CBDC tracker just got a big update and is the picture of the week! I use the ominous subtitle of “like it or not” because CBDC is being savaged in the media and is now a front-and-center US election issue. Despite the undeserved bad press, I view the trend toward sovereign digital currency as unstoppable.
Please forgive any editing errors in this “Taiwan Edition” newsletter.
A special note of thanks to readers who have been sending me great PDFs throughout my long trip.
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1. 130 Countries exploring CBDCs
CBDCs are coming whether you like it or not.
The Atlantic Council CBDC tracker recently got an update and 130 nations are now exploring CBDCs, with 64 moving to advanced phases.
These great video clips show how CBDC development is simply on fire. CBDCs are now a “hot-button” issue and have become a part of the US’s coming presidential election cycle, with some states going as far as banning CBDC usage. Someday it may be amusing to watch how they would legally enforce these bans if the US government ever decides to issue a retail CBDC.
The US is but one country, and while an important one, CBDC development on the global stage marches on with or without the US.
The Atlantic Council CBDC tracker can be found: here The above video shows the CBDCs according to phase of development and whether they are retail or wholesale versions. Note that this video is from Atlantic Council’s Twitter page. Tweets cannot be shown on Substack and vice-versa.
This videos from the Atlantic Council’s CBDC tracker page shows how in just 3 years the number of CBDCs under development went from 35 to 130.
-CBDCs are coming “like it or not.”
-The need for a digital form of sovereign currency is clear; how best to deliver it is a worthy debate.
-Kudos to Atlantic Council for a great job on its CBDC tracker
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2. Banks want open access to platforms; platforms say not so fast.
Banks want better access to platforms with “three-sided marketplaces,” but platforms may have other ideas!
Citi plunges banking into a “Brave New World” where instead of single banks supporting platforms, banks are given open API access to platforms as equal market participants.
This is a HUGE shift in how banks view their role on platforms!
Banks are currently forced to go out and strike proprietary deals with platforms. A good example is Amazon which partners with Chase for cards and Marcus for lending (among many others). A single partner for each banking function.
Citi proposes that “rather than viewing financial services as a ‘bolt on’, three-sided marketplaces will incorporate identity, payments, foreign exchange, lending, hedging, insurance, and the full gamut of trust-based financial services that will further accelerate the platform flywheel.”
Spinning banks’ flywheel
Such a system would also spin banks' flywheels as they would have access to the platform on set terms and tech standards. Make no doubt that Citi has its own self-interest in mind when suggesting that platforms open to banks.
Platforms will likely not be in a rush to make the conversion. Why would they when they can extract more value from banks and consumers by limiting their offerings!?
Benefits of a three-sided market:
🔹 Leverage customer due diligence
Utilize the trusted relationships financial firms have with their customers for identity verification, streamlining onboarding processes and bringing new levels of trust to transactions conducted on the platform.
🔹 Employ loyalty incentives
Platforms can collaborate with financial firms to offer exclusive discounts, rewards, or other value-added services that drive usage of the marketplace, customer loyalty and engagement.
🔹 Alleviate customer journey frictions
Leverage financial firms’ capabilities to enhance user experiences by facilitating rapid onboarding, instant payments, accessible lending, and providing peace of mind.
🔹 Encourage financial services firms to participate as buyers
Financial firms, as significant consumers of goods and services, can contribute to the platform’s growth by becoming active buyers.
Citi is asking platforms to help banks, a tough sell:
“Platforms can switch mindset and begin to consider financial firms as a new class of marketplace participant, equal in importance to producers and consumers."
🔥"Equal to consumers?" Citi didn’t just say that did they? 🔥
Yes, they did…and do you believe it❓
—Three-sided markets are coming but are still years off.
—Platform owners will not rush to open their platforms to banks when they can charge more for limiting access.
—More variety in bank providers is good for consumers.
—Citi has a tough job convincing platforms.
I’m using reverse psychology:
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3. Top 10 emerging technologies
The TOP 10 emerging technologies YOU NEED TO KNOW and fintech isn’t on the list!
The WEF looks at the Top 10 emerging technologies and comes up with a list with entries that go far above and beyond AI.
Fintech fans should take note that fintech doesn’t make the list, nor should it. The WEF is looking for emerging tech that may go exponential, and fintech is no longer “emerging;” it “emerged” long ago.
You should read this for the chapters with tech that you hadn’t imagined. For me, it was “designer phages” and “spatial omics” “ which lie far out of my area of expertise. Perhaps for you, the eye-opening tech will be different.
My last post on the WEF received more than a few comments that I was supporting “Davos Man,” and I even lost a few connections over the post. Not the first or last time this will happen. Several comments even went as far as to ask me to explain my support for the WEF, so I will.
For the record, I like -some- of the WEF’s research, and this report is a good example. If you want to unfollow me for liking high-quality WEF research like this, feel free. I also don't buy into conspiracy theories that the WEF is hell-bent on world domination.
The WEF’s Top 10:
Generative artificial intelligence
Sustainable aviation fuel
Metaverse for mental health
Wearable plant sensors
Flexible neural electronics
So the real question is how does the WEF rank these techs:
A. People: Participants rated their expectations regarding each technology’s potential to enhance security and dignity.
B. Planet: Participants gauged the extent to which they envisage the technologies could help protect and restore our planet.
C. Prosperity: Survey respondents were asked to evaluate the potential of each technology to improve the quality of life for individuals worldwide.
D. Industry: Participants assessed the potential of these technologies to disrupt existing industries and generate new markets over the next decade.
E. Equity: Finally, the survey asked participants to rate the potential for these technologies to promote global societal equity.
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—The WEF’s list of “emerging tech” is a great read and shows AI isn’t the only game-changer
—Is this list an example of “Davos Man” taking over? Perhaps the “Designer Phages” are programmed?
—Fintech is tech that has already emerged.
—GenAI and sustainable computing will be game-changers for fintech.
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Rich Turrin is the international best-selling author of "Cashless - China's Digital Currency Revolution" and "Innovation Lab Excellence." He is number 4 on Onalytica's prestigious Top 50 Fintech Influencer list and an award-winning executive previously heading fintech teams at IBM following a twenty-year career in investment banking. Living in Shanghai for the last decade, Rich experienced China going cashless first-hand. Rich is an independent consultant whose views on China's astounding fintech developments are widely sought by international media and private clients.
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