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WillGetThere

Money and payment systems in the digital age

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This is speech by Agustín Carstens, Gen Manager, Bank of International Settlements, Basel (Switzerland).

Feel free to download here - https://www.bis.org/speeches/sp181101.htm

Some quotes:

"One interesting development in the central banking community is ongoing experimentation with 
distributed ledger technology (DLT) as a means to enhance operational robustness. People often use 
DLT and Bitcoin interchangeably, but they are not the same! It is important to emphasise that DLT is the 
underlying technology for Bitcoin, which is just one use case. DLT is simply a set of processes and 
technologies that enable multiple computers to maintain collectively a common database. DLT does not
mean mining of coins, public ledgers and open networks. And no central bank that I’m aware of is 
contemplating these properties in its DLT experimentation. 
 While central banks play around more with DLT, I think it would be useful to highlight two 
findings. The first is a Bank of Canada study noting that a DLT-based payment system meeting central 
bank requirements would be similar to what we have today (ie private ledgers, closed networks and a 
central operator). The difference is that a network of computers would be used to settle a transaction 
instead of one computer. The second is an ECB and Bank of Japan study concluding that processing times 
would be three times longer using DLT versus current systems. This may not seem like much when 
processing times are measured in seconds, but today’s standard is instant. My take is that current versions 
of DLT are not any better than what we already have today. 
More resilient systems. Furthermore, central banks are working to improve their systems’ 
operational resilience. The international standards for systemically important payment systems require 
that they be able to resume operations within two hours of an operational outage. As you can imagine, 
resuming operations within two hours of something like a cyber-attack is not always easy to do. The 
problem needs to first be diagnosed, and then it needs to be determined whether the system can safely 
be turned back on again. Central banks have adopted, and others are exploring, different arrangements, 
including DLT-based arrangements and last resort contingency arrangements, to ensure the highest levels 
of operational resilience. Faster settlement. For retail payments, there is intense focus on enhancing the speed of 
settlement. The days of multi-day cheque holds, whereby a bank can withhold funds until it receives the 
cheque from the debiting bank, are limited as real-time or near real-time settlement becomes the norm. 
Moreover, faster settlement on a 24/7 basis will allow new value added services, including cash flow and 
liquidity management and quicker and easier reconciliation processes. Last month, the Federal Reserve 
announced that it was seeking public comment on potential steps towards a fast payment system to allow 
business and individuals to receive money faster and reduce payment risk.
Faster payments will hopefully lead to improved cross-border payment services, which is the next 
(and perhaps final) frontier for payment innovation. Sending money overseas remains cumbersome, slow 
and expensive. The introduction of fast payments across jurisdictions is akin to building domestic 
highways. The next step, of course, is to connect the various domestic highways into a global 
superhighway. Connecting fast payment systems with 24/7 operations and immediate settlement should 
one day allow for seamless settlement of cross-border payments. For the Americas, this would be a 
significant and important development."

The whole chapter is named :" Cryptocurrencies: fake money." 

The following quote from that chapter:  "As a means of payment, the acceptance of cryptocurrencies has not reached critical mass and is 
unlikely to do so for a number of reasons."

My take - quite old school/biased/short sighted/poorly informed speech. BUT the institution the Speaker represents is some sort of bank for central banks when it comes to international settlements, so he must be familiar with the topic and newest developments...  

Or its just a game and in fact his thinking is different/not time to let the cat out?? I doubt it though.

Thoughts..?

Edited by WillGetThere
Additional thoughts and grammar

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This speech is extremely bullish on XRapid!  He bashes "cryptocurrency" but specifically omits XRP from all his graphs.  It's apparent he doesn't even view XRP as a cryptocurrency which in this context I'm perfectly happy with.  

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57 minutes ago, WillGetThere said:

The second is an ECB and Bank of Japan study concluding that processing times 
would be three times longer using DLT versus current systems. 

This particular comment is somewhat perplexing.  Exisiting systems are faster than DLT?   He also says...

 

"My take is that current versions  of DLT are not any better than what we already have today."  Really?  I'm even more lost. Someone with a tech background may have to explain please.

 

The general comments, in addition, have me confused as the BIS has in the past -in whitepapers, interviews, et al -been supportive of not only DLT but open to digital assets as a means of settling funds (or so I thought).  I thought that Christine Lagarde has come out and said so.  But maybe I am mistaken.

So, I'm unsure where this particular individual is coming from.

 

Yet when it comes to cross-border payments his comments are encouraging.  There is innovation needed, they are slow and cumbersome, etc.  This bodes well for XRP I would think?

 

 

 

 

 

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6 minutes ago, WillGetThere said:

@Wizann in terms of AmEx / LianLian its huge, huuuuuge i think. 

With so many developments around Ripple/XRP we witnessed in 2018 it feels like smth big is in the air... The same time in 2017 was depressive, we all remember what happened afterwards... 

The market and "air" does not feel nearly the same as last year.

Last year there was a pressure a need to get in now it feel like "Show me the money. Put up or shut up" enough with the hype where are the results.

No bull run 2018 at least nothing like 2017.

If XRP hit $1 I would call that a success price per coin wise givien the crypto market sentiment. (Traders not hodlers market)

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1 hour ago, pumpndump said:

The market and "air" does not feel nearly the same as last year.

Last year there was a pressure a need to get in now it feel like "Show me the money. Put up or shut up" enough with the hype where are the results.

No bull run 2018 at least nothing like 2017.

If XRP hit $1 I would call that a success price per coin wise givien the crypto market sentiment. (Traders not hodlers market)

I understand where you are coming from but from the other hand i must say is crypto is unpredictable - anything can happen within quite short period of time. 

Also if speculation is fueled by use case driven demand then we might see XRP skyrocketing still in 2018 (1Q2019).

 

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2 hours ago, aavkk said:

This speech is extremely bullish on XRapid!  He bashes "cryptocurrency" but specifically omits XRP from all his graphs.  It's apparent he doesn't even view XRP as a cryptocurrency which in this context I'm perfectly happy with.  

Exactly. XRP is being sold as a liquidity tool. Which is of course absolutely brilliant, because it is then directly connected to an actual problem. Cryptocurrecy sounds like nuclear power. It’s scary, because we don’t understand it, and we’ve learned they are used in ransomware. But who would not want to dive in a global liquidity pool? That sounds great! Let’s party!

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48 minutes ago, WillGetThere said:

I understand where you are coming from but from the other hand i must say is crypto is unpredictable - anything can happen within quite short period of time. 

Also if speculation is fueled by use case driven demand then we might see XRP skyrocketing still in 2018 (1Q2019).

 

"Might".......

use = volume and not too much of that lately. 

I base this on higher lows and higher highs volume included. If at any point volume lulls in the 200 mill range that shoots usage in the foot imo. If XRP truly has usage at some point old low volume days should cease to exist.

6-9 months is my window to stop seeing these low volume days as in (200MM)

Edited by pumpndump

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16 minutes ago, pumpndump said:

"Might".......

use = volume and not too much of that lately. 

I base this on higher lows and higher highs volume included. If at any point volume lulls in the 200 mill range that shoots usage in the foot imo. If XRP truly has usage at some point old low volume days should cease to exist.

6-9 months is my window to stop seeing these low volume days as in (200MM)

Very Valid point.  At this stage we should be beyond the $200M days

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4 minutes ago, LiquidGoat said:

Why?

well,  if $200M was the average as its been running from the everyday Joe's like you and I and the other traders and exchanges....then if the use case takes off and creates activity...then this would be an increase to what was the daily average before the go-live use case starts.

 

So going back down to an average of $200K would symbolize there is no real commercial activity adding to the former average.

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