Patrick McConnell’s Post

Excellent piece of work on rCBDC adoption Carlos León and others https://lnkd.in/gQfR2rtd The researchers use an Agent Based Model (ABM) to simulate the actions of citizens in adopting a retail #CBDC with various configurations and various design options in (fairly) realistic situations (a 'digital twin') This approach is is completely different to those of #BIS, #ECB and Bank of England #BOE who write pieces of code and then declare victory - 'yes that works'! Interestingly, the study found "The reverse waterfall functionality (😉) and a positive remuneration spread (😉) are effective in fostering adoption; the distribution of government incentives via rCBDC is effective in fostering adoption and decreasing the use of cash; and balance limits and top-up limits are effective in restraining adoption (😉) ". Lots more work to do but adoption is critical for the success of any rCBDC Next stage, confirm results with behavioural economics studies on findings of ABM study (agents are not 'rational') #ECB pay attention!

This is exactly the sort of research the BIS should be doing (instead of playing programmers) https://lnkd.in/gigu9KpC [Minor quibble - what has this to do with the BIS Innovation Hub? This is core economic research as the list of collaborators shows]

Bear with me a moment! The BIS has belatedly discovered that simple is best, recommending and also taking credit for the idea that cross border payments should be handled by something like SWIFT that BIS calls the Nexus Scheme Organisation (NSO). Apparently BIS will create the NSO organisation and there is something really Augustinian about its ambitions "Even with just the first wave of connected countries, Nexus has the potential to connect a market of 1.7 billion people globally, allowing them to make instant payments to each other easily and cheaply." Of course, it is mere matter of choosing the right technology as the NSO will handle as many (probably far more) transactions than SWIFT and will do much better, making them instant and inexpensive. Easy peasy, the project team did a prototype and then " also consulted with central banks, standard- setting bodies, IPS operators and commercial banks from around the world to validate that Nexus is scalable and interoperable with IPS beyond those five countries". No figures were provided but clearly no reason to worry there 🤔 But maybe the new discovered sense and sensibility at BIS has not yet reached all corners of HQ In 2021, the BIS issued a paper on "Multi-CBDC arrangements and the future of cross- border payments" which suggested a set of models for discussion around CBDC https://lnkd.in/gTqiYC4s One of the models (Model 3) bears an uncanny resemblance to the latest Nexus model. But hey not innovative (so got to keep working) and the BIS has been spinning their wheels ever since Now thanks for sticking so far but here is a question? If the highly centralized architecture of Nexus is preferred for cross border, small value, very high volume retail transactions why on earth would exactly the same architecture and governance mechanisms not be used for CBDC to CBDC. There will of course be a need for higher security for CBDC to CBDC than retail but that is true anyway and retail would benefit anyway by reducing fraud risk. Second question: what has the BIS Innovation Hub being doing for the past four years bar playing at being computer programmers. Maybe they are busy burnishing their CVs for jobs about to open up at the NSO? https://lnkd.in/gTqiYC4s https://lnkd.in/g97qSQrm #CBDC

Hasn't Wise (and others) already done this? https://lnkd.in/g97qSQrm What is the BIS doing building and an Instant Payment System? (Well not yet it is only a 'comprehensive blueprint') And why are they building a parallel SWIFT organization? And why does BIS keep ignoring PAPSS? https://papss.com/ PAPSS is live and operational! Uses ISO 20022 and is Cloud base! But Not Invented Here! #BIS

Five stars ***** "Much of this is rooted in Satoshi Nakamoto’s White Paper for Bitcoin, which demonstrates little understanding of either property as a legal concept or how finance functions. " Not even Nakamoto believed in Bitcoin! "On this poor foundation has been built a quasi-religious faith in the blockchain regardless of what mainstream law or economics has taught us over several centuries. " It's a religion "Just as popular discourse on blockchains suffer from what Nobel laureate, Robert Schiller, calls narrative economics, some of these narratives also suffer from what we call folk-law, wild folkish extrapolations of all manner of consequences from often mundane legal pronouncements or outright twisted misrepresentations of the law. " What? You mean Code is NOT Law?   The authors explain "why, in spite of all the excitement over the blockchain and the pouring of billions of dollars into all manner of projects, more than a decade and a half of hype has mostly led to a damp squib." It's a religion for the terminally gullible Well Done

Gee - that Halving and those BTC ETFs really shook up Bitcoin! Driven by Hype, disappointed by Reality. To the moon? #bitcoin

One thing we can be sure of is that the Board of #ASX never learns! #ASX has just released the results of a consultation on the future of the benighted #ASX Chess Replacement project. Basically, #ASX has learned half a lesson. After fixating on a single Big Bang implementation for Chess Replacement I (CPI) it has been decided that Chess Replacement II (CPII) would be staged (really a no-brainer but at least a small step forward) #ASX has decided that CPII will be broken up into 2 Releases, named Release 1 and Release 2 Or rather CPII will be broken up into CPII- the Easy Bit and CPII- the Hard Bit While the Easy Bit is not that easy, involving a relatively stand alone Clearing Bit, the Hard Bit is "All the really difficult stuff that we could not get right last time out" . Let's just kick the problem into the long grass (sub text when we wont be here!) Some who were really hurt last time out, at least registered some scepticism "Several CS Participants, Software Providers and industry bodies noted the substantial scope of Release 2 and associated implementation risk, particularly relative to Release 1. Some respondents suggested splitting Release 2 into multiple releases or smaller sub-stages to further de-risk implementation of the second release." What was #ASX response? "Given the strong support for a staged implementation by the majority of respondents, ASX intends to proceed with its overarching approach to implementing CHESS replacement across two main releases." (Did you get the non-sequitur there?] Precisely the same sod-you attitude that prevailed during the first Chess Replacement fiasco, it appears that #ASX and, in particular the Board, has learned absolutely nothing about technology risk management over the last decade! The second 'main release' is 80%-90% of the effort that killed CPI and is a monster that should in the preference of the industry be split " into multiple releases or smaller sub-stages to further de-risk implementation of the second release". But where is #RBA and #ASIC in all of this, they were meant to be the grown-ups - MIIA , Missing in InAction?

Them tortoises still keep winning! https://lnkd.in/gbaKycEn https://lnkd.in/gFMG3r9q

Though it was inevitable, the ANZ takeover of Suncorp does nothing but solidify the Four Pillars oligopoly (doesn't even give ANZ a leg up into 3rd place!) https://lnkd.in/gYNYJukf And hardly the harshest conditions "As part of the approval, Chalmers announced requirements for ANZ that prohibit no regional Suncorp or ANZ branch closures across Australia for three years, no net job losses across Australia for three years due to the transaction, and for ANZ to make “best endeavours” to join Australia’s Post’s banking network." Plenty of room for weasels there (and we are dealing with ANZ after all😉 )

I am staying away from the AI debate (been there) but this typifies the type of nonsense that is promulgated by AI experts? https://lnkd.in/gMDibDeG I listened to this podcast on Australian ABC recently and was gobsmacked A HR expert (supposedly) said that AI would revolutionize business meetings! Why, because an employee could question an AI model (that was listening to the meeting 😗 ) as to what question they should ask to make them look good. Just think of that from either the viewpoint of the employee and/or their bosses! Let us assume that the AI gives the wrong question to ask, e.g. what is the capital of Egypt? Obviously, end of employee's contract - sheer stupidity? What if the question was even half right and the manager(s) quickly responded with, great point please explain how to implement your answer - employee becomes babbling wreck 🤔 What this HR expert(???) is saying is that the best way forward for employees is not to pay attention to what the meeting was saying but to try to deliberately deceive the meeting into believing they are smarter than they are - forget hard work and training , just get a computer to send in your homework Trust me, managers are smart and know the capabilities of their employees fairly well, sudden bursts of unconnected genius would undoubtedly invoke intensive questioning and testing. Can we please put a stop to this nonsense soon?