Economic news

The Federal Reserve and other central banks deciding whether to compete with private cryptocurrencies should heed the financial stability risks, such as expanding the economic power of governments and altering longstanding payments models.

Sen. Cynthia Lummis, a Republican, leads a new congressional caucus aimed at educating members about fintech issues. She says her state could serve as a model for regulating digital assets.

Zions Bancorp. CEO Harris Simmons says the Secured Overnight Financing Rate is more suited for derivative traders than regional banks as a replacement for Libor. His bank this week became the largest to say it would use the alternative developed by the American Financial Exchange.

The growth in e-commerce has opened new avenues for crooks, with better tech, compliance and educated consumers needed, says Ecommpay's Paul Marcantonio.

The markets and the Fed are not on the same page about the future of inflation. Luke Tilley Senior Vice President and Chief Economist at Wilmington Trust will discuss the economy and inflation.

The special-purpose bank, licensed by the state of Wyoming, has drawn the support of investors and some policymakers. But banking groups say the digital assets that underlie its business model are highly volatile.

Federal Reserve Chair Jerome Powell said the central bank is involved in a large-scale research and development project on the digital dollar, and that questions of whether adopting such a currency would provide a public benefit have yet to be resolved.

Walmart, Amazon, Facebook, Apple and Google are just a few of the non-financial companies that are using scale and innovation to compete in financial services.

Both consumers and merchants are realizing the permanent benefits, says Azoya USA's Franklin Chu.

Starting Thursday, firms should stop issuing new loans, bonds and securitizations tied to the discredited benchmark, according to the Bank of England.

Online ordering, outdoor pickup and digital shopping features are more than emergency workarounds, and merchants need to make them a regular part of their strategies, says Signifyd's Mike Cassidy.

For the U.K. payments industry to be in the best position to succeed, keeping consistent with compliance to both U.K. and EU regulations will be critical, says Ecommpay's Paul Marcantonio.

Bradley Riss is chief commercial officer at Checkout.com, a firm that acts as a payment gateway, acquirer and processor through a single channel, covering cards, passthrough wallets, stored value wallets and alternative payment options such as point of sale credit. It charges a fee based on processing and card payment costs rather than the percentage+ model that most payment API companies charge. The model is designed to make the service customized to different merchants and serve as a base to offer other merchant products.

The heads of the Federal Reserve and Treasury are urging passage of legislation that would replace Libor with the Secured Overnight Financing Rate in certain contracts. That would spare banks litigation over trillions of dollars of contracts when Libor expires in 2023.

China’s central bank said its planned digital currency will coexist with technology platforms like Ant Group’s Alipay, Tencent and WeChat Pay, which currently dominate the online payments market.

The pandemic changed consumer priorities quickly--and payment companies need to keep up since the trend is likely permanent, says Signifyd's Indy Guha.

Democratic leaders are encouraging the Federal Reserve to develop its own digital currency to expand financial services access. Chair Jerome Powell indicated the central bank plans to take a methodical approach.

The Secured Overnight Financing Rate stemmed from years of discussion between regulators and a broad group of industry stakeholders about a safer alternative to Libor. Critics who say big-bank control of the new benchmark exacerbates risk are wrong.

Potential central bank digital currencies would need to be integrated into existing payment systems alongside cash and other forms of money, Federal Reserve Chair Jerome Powell said.

Providing incentives for banks to transition legacy loan contracts from the London interbank offered rate to the new Secured Overnight Financing Rate, as New York Gov. Andrew Cuomo’s proposed budget does, is a gift to megabanks and limits pricing options for smaller lenders.