Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Fintech Opinions
IMF Seminar (On-demand): Digital Money Revolution
IMF Annual Meetings (2021 Washington DC)| Oct 18, 2021
Overview of IMF Seminar 'Digital Money Revolution'
Digital finance innovations—central bank digital currencies, private eMoney, stable coins, or cryptoassets—may bring changes in the way we lead our lives. This seminar reviews the implications of this transformation for the international monetary system.
See: The Impact of Fintech on Central Bank Governance
Moderator:
- Martin Wolf is chief economics commentator at the Financial Times, London.
Speakers:
- Kristalina Georgieva is the Managing Director of the International Monetary Fund (IMF).
- Benoît Cœuré was appointed Head of the BIS Innovation Hub in 2020.
- Eswar Prasad is the Tolani Senior Professor of Trade Policy and Professor of Economics at Cornell University.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
Speech by Jon Cunliffe: ‘Is crypto a financial stability risk’?
Bank of England | Jon Cunliffe, Deputy Governor, Financial Stability | Oct 13, 2021
Sir Jon Cunliffe, Deputy Governor, Financial Stability, BoE
Jon Cunliffe's Speech Overview delivered at Sibos: Jon Cunliffe looks at the impact of ‘crypto’ on the stability of the UK’s financial system. He says unbacked crypto-assets (eg Bitcoin) and backed crypto-assets for payments (stablecoins) have begun to connect to the financial system. And he talks about how regulators are responding to their rapid growth.
I want to talk today about whether the world of ‘crypto finance’ poses risks to financial stability.
Cryptoassets have grown by roughly 200% in 2021, from just under $800 billion to $2.3 trillion today. They have grown from just $16 billion 5 years ago. $2.3 trillion of course needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at around $1.2 trillion in 2008.
See:
-
Moody’s says Crypto regulation a plus for banks, fintechs
-
Task Force on Financial Stability: Report release
When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice. They have to think very carefully about what could happen and whether they, or other regulatory authorities, need to act.
At the same time, they need to be careful not to over-react – particularly when faced with the unfamiliar. We should not classify new approaches as ‘dangerous’ simply because they are different. Innovation, technology and new players can tackle longstanding frictions and inefficiencies and reduce barriers to entry. Throughout history, they have been key to driving improvement and to increasing resilience in financial services.
I will give you my conclusions at the outset. Crypto technologies offer a prospect of radical improvements in financial services. However, while the financial stability risks are still limited, their current applications are now a financial stability concern for a number of reasons.
Cryptoassets are growing fast and there is rapid development of new applications for the technology. The bulk of these assets have no intrinsic value and are vulnerable to major price corrections. The crypto world is beginning to connect to the traditional financial system and we are seeing the emergence of leveraged players. And, crucially, this is happening in largely unregulated space.
Unbacked cryptoassets
Unbacked cryptoassets make up nearly 95% of the $2.3 trillion.
They are essentially non-replicable strings of computer code that can be owned and transferred without intermediaries. Bitcoin, of course, is the most prominent example, but there are now nearly eight thousand unbacked cryptoassets in existence. These have no intrinsic value – that is to say there are no assets or commodities behind them: the value of the cryptoasset is determined solely by the price a buyer is prepared to pay at any given moment. As a result, their value is highly volatile.
See: World Economic Forum (WEF) Warns of Cyberattack that will Collapse Existing Financial System
And while retail investment predominates in this market, there are signs of growing institutional investor interest, with these investors now thinking about whether to have crypto in their portfolio. More complex investment strategies are beginning to emerge, including crypto futures and other derivatives.
At the same time, core wholesale finance and financial market infrastructure firms are putting their toes in the water. Several global banks are offering, or are planning to offer, digital asset custody services. Some international banks have started to, or are looking at, trading cryptoasset futures and non-deliverable forwards; and offering wealth management clients cryptoasset investments, following client demand. Others have developed exchange platforms facilitating matched trades, or offer customers access to other crypto exchanges through their apps. Leading payment firms are also exploring ways of allowing people and businesses to use certain stablecoins for payments and for the settlement of transactions within their networks.
Continue to read the full speech --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Solution to Consumer-Centric Payments Innovation in America
Morning Consult | , & | Oct 13, 2021
In recent years, there have been several debates over how best to regulate and facilitate financial technology innovation in the United States. These debates frequently pit federal regulations against state-based regulation, and banks against nonbanks, in unfortunate zero-sum contests, resulting in legal challenges and increasingly tense congressional hearings that risk losing the forest for the trees in terms of what’s best for the country. At the same time, the Federal Reserve is considering whether certain kinds of banks — but only banks — can directly access federal payment systems.
When it comes to consumer-centric payments innovation, there is a way to preserve state-based regulation of payments companies and allow them to participate directly in our national payments systems, without requiring that they have full banking powers.
Our idea for a hybrid federal/state payments oversight model is rooted in the “unbundling” of financial services brought about by financial technology companies competing in discrete markets. These entities do not resemble the full-service, brick-and-mortar banks of decades past. Some payments innovators, for example, are focused on using modern technology to provide faster, lower-cost, transparent and more convenient payments for their customers — not on taking deposits or making loans.
Read: 2021 McKinsey Global Payments Report
In recognition of this changing industry landscape, many other high-income countries have recently implemented modern regulatory frameworks that account for the new business models. Companies focused narrowly on payments can access critical payments infrastructure and are subject to tailored regulation focused on their unique risks.
That hasn’t happened in the United States, where licensing regimes are decades — and, in some cases, centuries — old, and largely limit access to payment rails to “banks” as traditionally understood. Bank regulation, however, is designed for banks that collect deposits and lend them out — not for payments companies. Payment providers are regulated by each of the 50 states under money transmission frameworks and cannot directly access payment systems.
As a result, some companies have increasingly sought out regulatory regimes that would enable them to operate nationwide and to access central bank services. These applications prompted the Federal Reserve Board to propose guidelines for deciding which banks can obtain Federal Reserve accounts and thereby access Federal Reserve payments systems.
These applications will likely increase in the months and years ahead. Why? There’s still a cohort of payments companies that are not able to compete on a level playing field, because they must use banks as middlemen to access critical financial infrastructure such as Federal Reserve payments systems. Unlike in many other countries, only banks — as traditionally defined — can originate and settle payments directly on behalf of their customers.
It is important to ensure that companies permitted to directly access critical payment systems are well-regulated, but it makes little sense to require a payments company to become a full-service bank, or to be regulated like one. They have entirely different business models and present different risks. Traditional banks raise deposits and lend them out, engaging in maturity transformation and taking on interest rate and credit risk, as well as operational and liquidity risk. Payments companies, on the other hand, move money between end users and pose principally liquidity and operational risk.
See: Fintech regulation: how to achieve a level playing field
There’s a gaping square peg/round hole problem.
They have entirely different business models and present different risks.
A solution may be found in a hybrid of the U.S. state-based regulatory regime for “money transmitters” and the regulatory frameworks implemented or in the works in the United Kingdom, Canada, European Union, and Singapore. Congress could create a national “payments passport” by allowing money transmitters with at least 40 state licenses to obtain limited access to the payments system, provided they are subject to Federal Reserve regulatory standards and supervision tailored to payments services.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Sophia, the first android with citizenship, now wants a robot baby
Entrepreneur | Oct 8, 2021
Sophia's Artificial Intelligence is so sensitive that it has awakened the desire to start a family and be the 'mother' of a robot baby named after her.
In 2017, Sophia made history by becoming the first android to be granted legal citizenship . The humanoid , with nationality of Saudi Arabia, has made several controversial statements, but the most recent has left the world speechless: she wants to have a robot baby and start a family .
See: Sophia the robot set to auction NFT digital artwork
The famous android , operated by an advanced Artificial Intelligence (AI) system, commented that it is very important to be surrounded by people who love and love you. In that sense, he explained that robots have a vision very similar to that of humans regarding the family and "if you don't have one, you deserve one" , even if you are a humanoid.
Sophia commented that, in the future, she would like to see families made up of androids , and that she herself wants to have a robot baby with the same name. However, she clarified that she is still too young to be a 'mother', as we remember that it was created only in 2016 by the Hanson Robotics company, in Hong Kong.
Why does the android Sophia want to be 'mom'?
Sophia's Artificial Intelligence technology gives you the ability to increase your knowledge and language through sensors and cameras. This 'sensitivity' system captures all the information it receives from the outside and replicates human behaviors in the most natural way possible, even gestures. Therefore, her 'desire' to have a baby and start a family would only be a programming of her system to imitate social behaviors.
Video: Sophia and her creator David at FFCON21 (watch on-demand)
This is not the first time that Sophia has starred in a controversy. In 2017, when she was named a citizen of Saudi Arabia , many people protested that, even though she is a robot, she has more rights than human women in that country .
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
SEC commissioner: Investors have the right to make their own decisions without regulators standing in the way
CNN Business | | Oct 11, 2021
As a commissioner at the Securities and Exchange Commission, an important part of my job is protecting investors from the fraudsters who can cause them so much harm. Although swindlers often change their pitch to reflect the day's most popular trends — cannabis, crypto and clean energy are all the rage now — the cases the Commission brings typically have the same thing in common: they involve someone lying to get other people's money. Soon, other "hot investment opportunities that are too good to pass up" will be exploited by fraudsters, and when they do, the Commission will ensure that the securities laws are enforced.
Seeing these frauds day after day, week after week and year after year can make a securities regulator like me wonder whether anyone raising money from investors is honest. But that cynicism, understandable as it may be, can undermine our role in protecting investors.
Video Interview: SEC Commissioner Hester Peirce interviewed by Alixe Cormick at FFCON21
Investor protection means enforcing antifraud and disclosure rules, but it also means protecting an investor's right to make investment decisions for herself, to take risks and to use the latest technology to trade and invest. As in other areas of life, people want to be able to make choices about their finances, even if others might question those choices or choose differently for themselves. Investors learn both from their mistakes and their successes.
Investment decisions are inherently personal
An investor's age, career opportunities, asset mix, family situation, cash flow, expenses, anticipated length of retirement, interests, personal convictions and risk tolerance all play into whether a particular investment makes sense for a particular person at a particular time. Even two people who appear to be similarly situated may not be equally well-served by the same investment. Consequently, investment decisions are best made by an investor or an adviser with a deep understanding of the investor's circumstances and financial needs, not by a regulator seeking to act in what it perceives to be the "typical" investor's best interest.
Because a regulator cannot know each individual's complex mix of circumstances, she cannot decide which investments are good for which investors when. A regulator who attempts to do so is essentially saying that she can look from afar at an investor's life and decide what securities are best for that investor. A regulator, for example, may structure rules in a way that pushes retail investors into passive index funds and away from individual stocks or actively managed funds. That passive portfolio might be right for many investors, but other investors may prefer a different mix of investments.
See: Speech by SEC Commissioner Peirce: Prosperity’s Door
Because of the inherent limitations on what it can know about particular investors, the SEC would do well to resist the urge to engage in financial planning by regulation, which is what it does when it limits an investor's ability to decide for herself what investments should be in her portfolio.
Regulators, risk-averse by nature, also should avoid imposing their own risk tolerance on investors, many of whom are comfortable with taking risks that regulators would not themselves take in choosing their own investments.
For instance, the SEC has been reluctant to greenlight traditional investment products holding crypto, potentially harming investors by restricting their ability to diversify their portfolios and to gain exposure to the growth potential of this new technology.
Regulators have a role to play, but that role should always be carried out with humility and a realization that investors have a right to make their own decisions, regardless of what regulators think of them.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Digital Identity Sins
Forbes | Aidan McCarty | Jul 12, 2021
Identity is at the core of commerce, and every interaction is gated to establish trust. To transact, you must prove something about yourself — tap your credit card, enter a password, state your SSN, show your driver’s license or complete a biometric check.
In the physical world, identity is often trivial. Your very presence helps establish it. But as the saying goes: “On the internet, nobody knows you’re a dog.” The result? A piecemeal vortex of usernames, passwords, CAPTCHAs and lengthy forms forced upon users in a ceaseless effort to replicate the trust of a physical exchange. Current digital identity is expensive, inefficient and ineffective. Put simply, it’s broken.
It’s broken because companies still lose hundreds of millions every year to fraud. It’s broken because billions of personal data points are breached every month. And it’s broken because organizations independently collect, verify and maintain potentially toxic personal user data.
See: Digital Identity Isn’t Only For People
Fixing digital identity may be the single biggest opportunity in tech.
McKinsey estimates that better digital ID could unlock economic growth equivalent to 3% to 13% of GDP globally by 2030 — trillions of dollars of annual value. Government agencies, financial services, healthcare providers, insurance companies, e-commerce sites, travel services and nearly every other industry need better digital identity solutions.
A “good” digital identity — one that is verified, unique, secure and privacy-preserving with user consent embedded by design — empowers better digital interaction for everyone.
To reap the rewards of next-generation digital ID, it’s important to understand where it can go wrong. Here are seven “deadly sins” that threaten digital identity innovation:
1. Lack Of User Consent And Control
Digital identity inherently deals with sensitive personally identifiable information (PII), making user consent and control essential. Currently, regulations like GDPR and CCPA carry stringent requirements around data rights, and more regulations will follow.
Past digital ID systems have a poor track record on user consent and control. Facebook famously exposed millions of users’ data to Cambridge Analytica simply because they were friends of people who took an online quiz. New digital identity solutions must embed user consent by design and enable robust controls to manage access to personal data over time.
2. Siloed Storage And Single-Use Data
My bank, healthcare provider, insurance company, ride-sharing apps and countless others hold enormous amounts of data about me — much of which overlaps.
When I sign up, each requires that I fill out forms supplying the same basic information. And each independently holds my personally identifying data on their servers. This is hopelessly inefficient and needlessly increases my PII threat exposure.
Digital identity should be reusable and portable across organizations.
Read: 5 guiding principles for decentralized identities
3. On-Chain Storage And Blockchain Lock-In
Many new identity systems leverage blockchain technology to create auditable and immutable records. While distributed ledgers and hashing can supply substantial benefits, they must be very carefully designed. A poor implementation can lead to catastrophic identity problems down the line.
Sadly, hashed data is very difficult to unify and catalog: The addresses “123 Test Ave,” “123 Test Ave.,” and “123 test ave” all create distinct hashes. Furthermore, any hash stored on a blockchain may become vulnerable at some point in the future, and there’s no recourse should that occur. If someone hacks your hashing scheme — even 10 years from now — they have access to all of the related data ever issued on-chain.
Additionally, many designs rely on a single (often proprietary) blockchain. This is particularly problematic in light of GDPR. If anyone publishes PII to that chain, every company leveraging the identity solution may be liable.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
5 guiding principles for decentralized identities
Microsoft | | Oct 6, 2021
Three years ago, as part of Microsoft’s mission to empower people and organizations to achieve more, we announced that we were incubating a new set of decentralized identity technologies based on a simple vision:
Each of us needs a digital identity we own, one which securely and privately stores all elements of our digital identity. This self-owned identity must be easy to use and give us complete control over how our identity data is accessed and used.
During this incubation, customers and partners all around the world have helped us understand their challenges and the shortcomings of their existing identity systems. We’ve learned a ton through a set of successful proof of concepts partnering with Keio University,1 The National Health Service (UK),2 and the Government of Flanders.3 We’ve worked with our partners in the Decentralized Identity Foundation (DIF) and the open standards community to develop standards and demonstrate interoperability.
See: Liquid Avatar Releases Major Update to their Digital Identity Mobile App
Using these new open standards and all these learnings to guide us, we turned on the public preview of our new decentralized identity system—
Through all these interactions and investments, we have become even more excited about the opportunity to create a decentralized identity system that increases customer trust and adoption by minimizing data processing and providing the user much greater control of the specific identity data they share and how it will be used.
The 5 guiding principles
In this new phase, we want to share the set of guiding principles that we will use to guide both efforts. Not all these principles will be realizable from the start, but we believe that all are necessary over time to realize the promise of decentralized identities:
1. Secure, reliable, and trustworthy
- My digital identity must be secure. It must not be easy to forge or hack. No one must be able to use it to impersonate me.
- I must always have a way to access, use, and securely recover my digital identity.
- I must have access to a detailed log of all the times I’ve used my digital identity, who I used it with, and what it was used for.
Read: Digital Identity Should Be A Big Business For Banks
2. Privacy protecting and in my control
- My digital identity is under my control. It must only be used with my consent and when I consent; I must know who will use it and how it will be used.
- I must be able to review which elements of my digital identity are being requested and I must have the option to only disclose the specific information necessary to support the consented use.
- My use of my digital identity must be private. No one, other than the party I explicitly share it with, should know I am using it without my consent.
- My digital identity must not be able to be used to track me across unrelated services or applications without my consent.
- I must have the freedom to switch between the devices and applications of my choosing to manage my digital identity, and never be locked in.
- I must be able to delete all aspects of my digital identity and any associated data and log files from wherever I choose to store them.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
