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Slow to take off, open banking could yet transform financial services and offer better deals for banking customers. Born in a sea of hype on January 13, open banking has so far fallen short of delivering the promised financial revolution. In the medium to long term, open banking is going to have a major impact. January 13 was the day the banks wrote the technical aspects of how we were meant to integrate with them. However, some sector observers wonder whether the banks have a hidden agenda to strangle the initiative at birth. The way the legislation is drafted, third-party providers get a huge amount of benefit, while banks have to give away exceptionally valuable data. Consumer apathy and scepticism are also delaying things. For open banking to really fly, most industry watchers believe the incumbent banks and the fintechs are going to have to collaborate better. Behind the scenes, the open banking sector is a hive of activity. E Banking Revolution World Over Banks

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Money is edging closer toward its biggest reinvention in centuries as central banks start to embrace the creation of digital currencies. That might one day mean central banks could make currencies directly available electronically for people to spend with their smartphone, backed by the integrity of the state. Before that comes to pass, a power struggle will play out over the future of money, raising issues ranging from privacy to social equality and financial stability. Elsewhere, officials from Frankfurt to Washington are watching closely, pondering experiments of their own.

Nor are they debts, as on a credit card. There is no financial middle man. That idea is conceptually different to a so-called cryptocurrency like Bitcoin, which is too volatile to be a store of value and insufficiently widely accepted to be useful for payments. Likewise, tools such as Alipay are intermediary platforms for payment, not currencies in their own right. In October, the central bank distributed the experimental currency via a dedicated smartphone app, which recipients use in a similar way to existing electronic payments.

One challenge confronting policy makers is that such a system offers less privacy than cash or other digital payments. Even in China, privacy is a lingering concern.

Such invasiveness would hardly be tolerated in Europe or the U. Another pressing issue is access. The need to use a smartphone and the Internet to spend such money could leave poorer people disadvantaged.

Central Banks Edge Toward Money’s Next Frontier in Digital World

Note: Data shows share of cash payments of total transactions; surveys WWorld conducted at varying intervals and may use Bankijg scopes this web page methodologies.

In the euro area alone, lenders are sitting on some Migrating even a small portion of that to a central-bank currency would risk the stability of the banking sector and E Banking Revolution World Over Banks ability to make loans to the economy. Few central bankers have an interest in torpedoing, or even undermining, the financial system, even if they would like to regain some control over payments and money. Officials are also mindful of the next frontier in monetary policy, in an era when conventional stimulus tools such as interest-rate cuts are losing potency.

That could offer central bankers a range of tools with features they can currently only dream about. Much discussion remains theoretical and unhurried for now. The U. Expectations of more developments are building, and a BIS survey released in January found that monetary institutions serving a fifth of the world population expect to issue a digital currency in the next three years.

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