Payments Insight February 2021: The match goes on between CBDC and cryptocurrencies

Cryptocurrencies – The match goes on between CBDC and cryptocurrencies  

• UNITED STATES - VISA launches APIs to equip all banks with crypto-currency trading platforms.
• UNITED STATES - Mastercard wants to integrate stablecoins into its payment infrastructure.
• CHINA - The Chinese Central Bank has just introduced a hardwallet to store digital yuan.
• INDIA - India's Central Bank is about to ban crypto to push its own CBDC.
• BAHAMAS - The Central Bank of the Bahamas presents with Mastercard the first prepaid card linked to a CBDC account.

On the one hand, progress is palpable on the side of central banks whose currency is already in the pilot phase. This is the case of China, which has just presented a physical infrastructure to store its digital yuan and be able to use it offline. This is also the case of the Bahamas Central Bank, for which Mastercard has just issued the first prepaid card backed by a central bank digital currency. According to the latest BIS report, 86% of central banks now have a CBDC project under way, with greater motivation for developing countries, as a way to foster financial inclusion and improve the efficiency of the existing payment infrastructure.

On the other hand, the payment schemes try to keep up with this rapid movement. For example, after launching a test platform for central banks (which was used by the Bahamas’ central bank), Mastercard announced that it is working on implementing stablecoins in its payment infrastructure, so that they can be exchanged in the same way as official currencies. Visa, for its part, has launched a set of APIs designed to allow any bank in its network to launch a crypto-currency trading platform, thanks to a technical partnership with Anchorage.

Payment Initiation – Uses are developing

• FRANCE - Generali initiates the payment of its insurance premiums by bank transfer, thanks to the Natixis solution.
• UNITED KINGDOM - TrueLayer launches its payment initiation solution.

More and more payment service providers are offering solutions for initiating transfers or "Open Banking transfers", with an ever-increasing variety of use cases. For Natixis, the Group is pursuing its strategy by targeting the insurance sector, after focusing on factoring and consumer credit.

On the UK market, TrueLayer is targeting e-merchants and marketplaces and wants to convince them thanks to conversion rates that are much higher than those of the card payments.