e- Mo C-Lab in the situation for extendeed electronic control for digital money equipment if control electronic equipment for digital money electronics AMNIMARJESLOW GOVERNMENT 91220017 Okane to rōdō-ryoku wa tsuneni ichiba no sankakkei no 47 kōnā ni hirei shite imasu 02096010014 LJBUSAL until LJBUSAW whatcout LJBUSAR ___ Thanks to Lord Jesus about the parable of the godless well but inexhaustible ___ Gen. Mac Teh Zone e- S H I N to A/ D/ S tour Route of e- Mo C- Lab PART 2

                            


                 Banks as digital intermediary tools for e- Money


   


As a financial intermediary, your needs evolve along with those of your clients. It’s imperative that you remain up to date with developments that support your efforts to build ever-closer relationships.

The bank also serves as a service that serves e-Money in the sense of electronic banking is an automatic server from the e-Money network and its derivatives such as digital cash, contact eye payments, card payments and the other.

Electronic Money Institutions (EMIs), Payment Institutions (PIs) and Credit Institutions (Banks) 

 The paradigm shift from Banking to the Fintech era has produced a new dynamic mix of players. These new players are disrupting the Banking scene and together with certain new legislation in the field of payments (such as Payment Services Directive 2 – PSD2) have produced an emergence of new services and products which are creating a more competitive and technologically-driven market in the world of payments. Who are these new players and what are these new products and services driven by technology and innovation? 

PSD2, Open Banking and new third party service providers are entering the market in order to provide faster, more practical, payment solutions but within a secure transparent environment. Third parties such as Payment Initiator Service Providers[1], Account Information Service Providers[2] are now also emerging. The resultant effect of PSD2 includes:
Open Banking[3], Challenger Banks[4], Mobile Payments[5], mobile wallets, specialised payment accounts focused on budgeting, instant payments and Peer to peer (P2P) payments.
The larger resultant effect is that an increasing number of non-traditional banks are able to provide a much wider range of banking services which are being created to suit customers’ needs and demands. Fintech companies usually offer: faster, more practical and more user-friendly payment solutions! 

What issues are STOs facing?
Over time, more and more people have shown an interest in obtaining a licence to be an Authorised Payment Institution (API) and E-Money Institution (EMI) in order to provide specialised payment services or cater for specific markets. An important first step for persons interested in entering the market is first determining what services they would like to offer, then decide on what licence they should obtain. Although EMIs and PIs are similar there are a number of differences.
Firstly, I will list the activities which an Authorised Payment Institution is allowed to do. The main activities include the following:

1. Services enabling cash to be placed in a payment account[6] as well as the operations for operating a payment account; (Share capital €125k)
2. Services enabling withdrawals from a payment account as well as the operations required for operating a payment account; (Share capital €125k)
3. Execution of payment transactions, including transfer of funds on a payment account with the user’s payment service provider or another service provider which could execute debit and credit payment transactions; (Share capital €125k)
4. Issuing and/or acquiring payment instruments[7]; (share capital: €125k)
5. Money Remittance; (Share capital: €20k)
6. Execution of payment transactions where the consent of the payer to a payment transaction is transmitted by means of any telecommunications, IT or digital network or system acting solely as an intermediary on behalf of the payment service user and the supplier of the goods. (Share capital: €50k)

The Difference between Authorised Payment Institutions (API) and Electronic Money Institutions (EMIs), put simply, is that E-Money Institutions, in addition to the above- mentioned list of Payment Services that an API may conduct, can also issue electronic money or digital currency.
For clarity’s sake the Electronic Money EU Directive defines ‘Electronic money’ as "electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions [...], and which is accepted by a natural or legal person other than the electronic money issuer".
Another difference between an API and EMI licence is that for the majority of the activities for obtaining an API the minimum share capital needed is €125,000 whereas the capital requirement for an EMI is €350,000.
There is also the possibility of applying for a small EMI or small API if for example you provide evidence that your trading activities do not exceed €5 million or €3 million euros respectively. A small EMI will also have a smaller capital requirement (€50k), however, this will also be subject to other criteria such as maximum storage of €250 in relation to e-money storing services.
Side Note: These Financial Institutions (EMIs and PIs) are different from Credit Institutions (Traditional Banks). It is far more onerous to obtain a credit institution licence, requiring a higher share capital and certain additional ongoing requirements. Financial Institutions (EMIs and PIs) cannot collect and reinvest funds from the public. Actually, these PSPs may usually only be allowed to re-invest clients’ funds into low risk investments. Furthermore these financial institutions also have limited lending powers. Therefore, traditional banks as we know them are still the main source of people’s lending/ mortgage activities.
The Beauty of Passporting?
Firstly, passporting means exercising the right for a registered EU or EEA firm to do business in any other EU/EEA state by a simple notification procedure and without further authorisation. Therefore, once a licence is obtained in Malta, it can then be passported to other EU/EEA member state countries thereby allowing such firms to extend their business arms and increase revenues without any additional lengthy costly cross-border processes. 

Is Cryptocurrencies a form of Electronic Money?
Bitcoin and other E-money currencies also exist in digital form, however, cryptocurrencies such as Bitcoin although being a virtual currency just like E-Money as we know and see on our E-wallet accounts are not issued and controlled by central banks. Bitcoin, for example, is a virtual currency that has no fiat (legal tender) counterpart and is sent directly peer to peer without the bank as an intermediary needed to approve and facilitate the transaction. Although Bitcoin and other cryptocurrencies have their advantages (such as transactions being instant and sent directly peer-to-peer, doing away with the bank as a middle man) at this stage many cryptos are still highly volatile thereby not the best store of value. If you also wish to know more about cryptocurrency and blockchain related services and licences we also provide Virtual Financial Assets (VFA) services and advice.

[1] The introduction of PISPs allows a service provider to initiate a payment order at the request of the consumer with respect to a payment account held at another payment service provider thereby reducing the costs for merchants. By using an API, any authorised PISP can get instant access to all available payment initiation APIs in any EU bank. One API can amazingly integrate thousands of Bank connections, the outcome of which is faster payments and also that consumers can pay from the account of their choice in a simple convenient manner.
[2] AISP are service providers authorised to consensually access and retrieve account data held by banks and financial institutions. The banks are legally obliged to comply with these requests. This open banking framework enables years of transaction history data to be retrieved by service providers who wish to retrieve such data to povide services related to for example money management tools and loan applications.
[3] APIS are contributing to a new Era of ‘Open Banking’. Open banking is a system that provides a user with a network of financial institutions’ data through the use of application programming interfaces (APIs). Since January 2018, the EU made it obligatory to share banking clients’ financial data through open APIs when requested by Third Parties. (Example of use cases: Credit data research, gathering data, loan interest management services and more)
[4] Due to customer trust in banks declining an opportunity has arisen for Challenger Banks to step in. These qualify as Fintech participants because besides focusing on customer demands they are driven by innovative technologies. These new specialised banks have a larger return on equity compared to large traditional banks, have lower operational costs and also allow s greater degree of flexibility when it comes to lending. Example of types of Challenger Banks are: Medium Sized Banks who also use digital channels, Digital only banks (eg Starling) which pride themselves on exceptional user experiences and innovative technology platforms, and specialist banks which focus on having more call centres then actual physical presence and also focus on specific niche markets for example lending services for the buy to let market.
[5] If companies do not want to lose clients, they need to realise that they need to answer to the market demands. Mobile payments from a registered device are exempt from the PSD2 regulation which provide a great opportunity to new fintech companies competing with larger institutions. Notably 78% of payments in China are made with mobile payments – this shows where consumer markets have arrived at. Simplicity really is key!
[6] PSD2 defines a ‘payment account’ as an “account held by one or more payment service users, which is used to conduct payment transactions.” It may include savings and current accounts or accounts that combine savings with mortgage and payment facilities, so long as the account is being used to make payments.
[7] Payment instruments are instruments which are non-cash and enable the transfer of funds such as e-money and cards.

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                Money Market Account

What is a Money Market Account?

A money market account is an interest-bearing account at a bank or credit union—not to be confused with a money market mutual fund. Sometimes referred to as money market deposit accounts (MMDA), money market accounts (MMA) have some features not found in other types of accounts. Most money market accounts pay a higher interest rate than regular passbook savings accounts and often include checkwriting and debit card privileges. They also come with restrictions that make them less flexible than a regular checking account. 

How Money Market Accounts Work

Money market accounts are offered at traditional and online banks and at credit unions. They have both advantages and disadvantages compared with other types of accounts. Their advantages include higher interest rates, insurance protection, and checkwriting and debit card privileges. Potential disadvantages include limited transactions, fees, and minimum balance requirements. Here is an overview:

Pros

• Higher interest rates
• Insurance protection
• Checkwriting privileges
• Debit cards

Cons

• Limited transactions
• Fees
• Minimum balance requirement

Higher interest rates

One of the attractions of money market accounts is that they offer higher interest rates than savings accounts. For example, in early 2019, their average interest rate was 0.15%, while the average savings account paid 0.09%, according to Bankrate. The highest money market account rate was 2.01%, while the highest savings account rate was 1.90%. When overall interest rates are higher, as they were during the 1980s, 1990s, and much of the 2000s, the gap between the two types of accounts will be wider. Money market accounts are able to offer higher interest rates because they're permitted to invest in certificates of deposit (CDs), government securities, and commercial paper, which savings accounts cannot do.

The interest rates on money market accounts are variable, so they rise or fall with inflation. How that interest is compounded—yearly, monthly or daily, for example—can have a substantial impact on the depositor's return, especially if they maintain a high balance in their account.

Insurance protection

Money market accounts also provide federal insurance protection. Money market mutual funds generally do not.

Unlike money market mutual funds, money market accounts are federally insured.

Money market accounts at a bank are insured by the Federal Deposit Insurance Corporation (FDIC), an independent agency of the federal government. The FDIC covers certain types of accounts, including MMAs, up to $250,000 per depositor per bank. If the depositor has other insurable accounts at the same bank (checking, savings, certificate of deposit), they all count toward the $250,000 insurance limit. Joint accounts are insured for $500,000.

For credit union accounts, the National Credit Union Administration (NCUA) provides similar insurance coverage ($250,000 per member per credit union, and $500,000 for joint accounts). For depositors who want to insure more than $250,000, the easiest way to accomplish that is to open accounts at more than one bank or credit union. 

Key Words :

• Money market accounts are offered by banks and credit unions.
• They generally pay higher interest rates than regular savings accounts and often come with debit cards and limited checkwriting privileges.
• Many banks also offer high-yield or high-interest checking accounts, which may pay better rates than money market accounts but impose more restrictions.

Checkwriting and debit cards

Unlike savings accounts, many money market accounts offer some checkwriting privileges and also provide a debit card with the account, much like a regular checking account.

Limits on transactions

One potential downside of money market accounts, compared with checking accounts, is that Federal Reserve Regulation D limits depositors to a total of six transfers and electronic payments per month. The types of transfers affected are: pre-authorized transfers (including overdraft protection), telephone transfers, electronic transfers, checks or debit card payments to third parties, ACH transactions, and wire transfers. Depositors who exceed the limits may be assessed a fine. If they continue, the bank is required to revoke their transfer privileges, move them into regular checking or close the account

However, depositors can make an unlimited number of transfers in person (at the bank), by mail, by messenger, or at an ATM. They can also make as many deposits as they wish. 

Minimums and fees

Banks and credit unions generally require customers to deposit a certain amount of money to open an account and to keep their account balance above a certain level. Many will impose monthly fees if the balance falls below the minimum.

Alternatives to Money Market Accounts

Banks and credit unions offer many types of accounts, some with features that can make them competitive with—or superior to—money market accounts.

Passbook savings accounts

Unlike money market accounts, regular savings accounts typically have no initial deposit or minimum balance requirements. They also pay interest, although usually not as much as a money market account. Like money market accounts, passbook savings accounts are FDIC- or NCUA-insured. Both also restrict depositors to six transfers per month, with certain exceptions.

High-yield savings accounts

Many banks and credit unions also offer high-yield savings accounts and, depending on the institution, the interest rate may be better than on their money market accounts. High-yield savings accounts are also FDIC- or NCUA-insured. A potential downside compared with money market accounts is that they may have more rules, such as requiring direct deposits or at least a certain number of transactions per month to avoid penalties.

Regular checking accounts

Checking accounts have one big advantage over their money market cousins—unlimited transactions, including checks, ATM withdrawals, wire transfers, and so forth. They are also FDIC- or NCUA-insured. Their main disadvantage is that they pay a very low (often zero) interest rate.

High-yield/high-interest checking accounts

Like high-yield savings accounts, these accounts offer interest rates that rival and sometimes exceed those of money market accounts. They also share the high-yield savings accounts' principal weakness, which is that they may have more complicated requirements, such as a minimum number of debit transactions each month. Frequently they also impose a cap—for example, $5,000—above which the high interest rate does not apply. In other respects high-yield checking is like regular checking, with unlimited checks, a debit card, ATM access, and FDIC or NCUA insurance. 

Rewards checking account

This type of checking account may offer a sign-up bonus and other rewards, such as high yields, ATM fee reimbursements, airline miles, or cash back. The main downside is similar to high-yield checking: high fees unless the depositor satisfies all the rules, which vary by the institution. Otherwise, rewards checking functions like a regular checking account, including FDIC or NCUA insurance.

Certificates of deposit

A certificate of deposit (CD) is like a savings account with a fixed duration, such as three, six, nine or 12 months, or multiple years up to 10. In exchange for locking in their money for that period of time, depositors generally get a higher rate of interest than they would with a regular savings account. However if they withdraw their money (or part of it) early, they'll pay a penalty, usually in the form of lost interest. Some CDs (known as liquid CDs) don’t penalize depositors for early withdrawals but pay a lower rate of interest. CDs are FDIC- or NCUA-insured but typically offer no provision to write checks, withdraw funds with a debit card, or add to the balance after the initial purchase.

Money market mutual funds

Unlike the various bank and credit union accounts described above, money market mutual funds, offered by brokerage firms and mutual fund companies, are not FDIC- or NCUA-insured. (Banks may also offer mutual funds, but they aren't insured, either.) However, because they invest in safe short-term vehicles such as CDs, government securities, and commercial paper, they are considered to be very low risk.

Both money market accounts and money market mutual funds offer quick access to the depositor's cash. Money market accounts have the government-mandated six-transactions-per-month limitation mentioned earlier, which money market mutual funds do not. The companies that offer them, however, can place limits on how often depositors can redeem shares or require that any checks they write be for over a certain amount. The returns on money market mutual funds tend to be higher than those on money market accounts.

The table below compares some of the common features found in money market accounts and other types of deposit accounts. Because interest rates and other provisions can vary from one financial institution to another, it's worth shopping around.

Money Market Accounts vs. Four Alternatives
	Money Market Account	Savings	Checking	CD	Money Market Mutual Fund
Interest type	Variable	Variable	Variable (or none)	Fixed	Variable
Federally insured	Yes	Yes	Yes	Yes	No
Checks	Limited	No	Unlimited	No	Limited
Debit card	Yes	No	Yes	No	Sometimes
Transactions per month	Six	Six	Unlimited	Zero	Unlimited

A Brief History of Money Market Accounts

Until the early 1980s the federal government placed a cap or limit on the amount of interest that banks and credit unions could offer customers on their savings accounts. Many institutions gave out small appliances (such as toasters and waffle irons), along with other incentives, to attract deposits, because they couldn’t compete with money market mutual funds when it came to interest rates.

Introduced in the 1970s, money market mutual funds are sold by brokerages and mutual fund companies. Under pressure from the banking industry, Congress passed the Garn-St. Germain Depository Institutions Act in 1982, which allowed banks and credit unions to offer money market accounts that paid a “money market” rate, which was higher than the previous capped rate.

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                            Time Deposit

What Is a Time Deposit?

A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). The deposited funds must remain in the account for the fixed term to receive the stated interest rate. Time deposits are an alternative to the standard savings account, and will usually pay a higher rate of interest.

Time Deposits Explained

Certificates of deposit are types of savings accounts or negotiable instruments whereby the customer is paid interest in exchange for depositing funds into the account for a set period of time. CDs are issued by banks, credit unions, and other financial institutions. There are many different types of CDs with varying terms of maturity and minimum investment requirements. Those requiring a larger initial deposit usually offer a higher return than lower minimum CDs.

A customer can earn a potentially higher interest rate with the time deposit account than they would receive by depositing into a standard savings account or an interest-bearing checking account. The customer gets a higher rate because the time deposit funds remain locked until the maturity date of the account. A certificate of deposit is a type of time deposit with maturity dates from 30 days to up to five years.

These investments have Federal Deposit Insurance Corporation (FDIC) coverage of up to $250,000 per investment. Time deposit accounts sold by a credit union carry protection from the National Credit Union Administration (NCUA).

• A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD).
• The deposited funds in time deposits must be held for the fixed term to receive the interest rate paid.
• Typically, the longer the term, the higher the interest rate that the depositor receives.
• These investments carry FDIC and NCUA protection, depending on the financial institution where they are bought.

Early Withdrawal Penalties

If required, the funds can be withdrawn from these accounts without notice. However, the owner will pay the penalty for early withdrawal. This penalty could include a set fee, or the customer might lose the interest earned by the account up to the moment of withdrawal. Different banks might have specific conditions surrounding the ability to withdraw the funds. It is due to this sacrifice of liquidity that banks offer higher interest rates compared to most basic savings accounts.

 

 

Why Banks Offer Time Deposit Accounts

Time deposit accounts provide banks the funds necessary to lend money to other individuals or companies. The bank makes a profit by lending the funds held in the time deposit account for a higher interest rate than the rate paid on the time deposit. The bank can also invest the money from the time deposit in other financial securities that pay a higher return than what the bank is paying the customer.

Maturity and Interest Rates

Banks and other financial institutions can negotiate any maturity term—the length of the deposit—that a customer requests, as long as the term is a minimum of 30 days. Once the investment matures, the funds can be withdrawn without penalty. The investor may also choose to renew the time deposit account for another term. For example, a one-year CD would mature and roll into another one-year CD if the customer did not want to withdraw the funds.

Typically, the longer the term to maturity, the higher the interest rate paid to the depositor. For example, a one-year CD may offer a 1.10% annual percentage yield (APY), while a five-year CD for the same amount might provide a 1.75% APY. The annual percentage yield is the effective annual rate of return (RoR) taking into account the effect of compounding interest. 

There are two types of rates quoted for time deposits and CDs. The interest rate quoted on a CD is the rate that the customer would earn if the customer withdrew the interest amount received each month, a feature that some products offer. However, if the customer reinvested the earned interest for the term of the note, they would earn the annual percentage yield quoted. As a result, the APY quoted by a bank is typically a higher rate than the interest rate quoted.

The Downside of Time Deposits

As with most financial products, there are advantages and disadvantages to time deposit accounts. While these investments are safe and offer flexible entry points for the investor, the rate of return is usually lower than that received on other investments. The investor could invest the same funds into other stocks or bonds and receive a higher yield.

Since the investor has their funds tied up into the account, they may experience interest rate risk. Also known as market risk, this is the danger that market interest will rise to a level that is higher than what the time deposit account is returning.

Investors also face a risk in reinvestment during times of falling interest rates. When the investor gains access to their funds if market rates are less than they earned on the time deposit account they will be unable to reinvest the funds and get the same return.

Pros

• Time deposits offer investors a fixed interest rate until maturity.
• Time deposits are risk-free investments backed by the FDIC or NCUA.
• Time deposits have various maturity dates and minimum deposit amounts.
• Time deposits pay a higher interest rate than most savings and checking accounts.

Cons

• Time deposit interest rates are usually lower than other investments.
• Investors are at risk of being locked in a low-rate time deposit missing out if interest rates rise.
• Investors face reinvestment risk if rates have fallen at maturity and are unable to reinvest the funds at the same rate.
• Depositors don't have access to funds and can't break the deposit without a penalty.
• Fixed interest rates don't keep pace with inflation or rising prices in the economy.

Real World Examples of Time Deposits

Citizens Bank (CFG) is a regional bank in the U.S. that offers several types of term deposits. Below are a few of the bank's CDs along with the interest rate paid to depositors.

• A one-year CD pays 1.00% with a $1,000 deposit.
• A two-year CD 1.75% with a $1,000 deposit.

We can compare the rates offered by Citizens Bank to the rates offered by Wells Fargo Bank (WFC), which is one of the largest consumer banks in the U.S. Below are a few of Wells Fargo's CD offerings along with the interest rates paid to depositors.

• A one-year CD with a minimum $2,500 deposit pays 1.39%.
• A special CD that requires a $5,000 minimum deposit pays 2.27% for 29 months.

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                                        The Evolution of Digital Cash


he emergence of digital assets, such as bitcoin, signals a fundamental change in the way value is transferred globally.

The concepts of money and value transfer have been evolving since primitive societies adopted shells and stones for monetary exchange, but the concept of digital money has been sought after for as long as there’s been an internet and peer-to-peer networking capabilities to drive its development.

Digital Cash Today

When people say “money” and they’re referring to a medium of exchange, they usually mean conventional banknotes and bank balances. Records of these are kept secure by financial institutions — first as paper, now as digital records.

Today, for the most part, making payments is mostly facilitated by intermediaries, like banks, making accurate and secure changes to those records. So, as financial records became digital, new ways to store and exchange value have been able to emerge.

Today, there are plenty of payment methods and stores of value that are exclusively digital. For example, services like Paytm® and M-Pesa® enable mobile payments for millions of merchants and consumers in many Asian and African countries.

Different systems and processes for transacting with traditional fiat currencies in a digital manner are widely used–including PayPal®, Venmo®, and messaging applications like WeChat Pay®.

These tools do not upend the need for centralized financial institutions to ‘agree’ to transaction records among all parties in a given exchange of value. Indeed, these applications serve as innovative front-end user interfaces built on top of the traditional banking and payment systems, which largely work by translating manual record keeping into an electronic format.

Bitcoin and Other Digital Assets Are Different

Digital assets are poised to become accepted as investable assets and stores of value, tradable on global, licensed exchanges, and accessible to individuals and institutions around the world. This global decentralized framework relies on — and is powered by — distributed ledgers that eliminate the need for central intermediaries to facilitate the value exchange.

Bitcoin is the breakthrough asset of this type, and many more cryptocurrencies have emerged in its wake. But a long history of innovation and experimentation preceded it and made it possible.

Early projects had limitations and challenges that the Bitcoin community and its earliest developers learned from, improved on, and overcame. The breadth, power, and global scale of the Bitcoin network–which are key to Bitcoin’s expanding use and adoption–would not have been possible in earlier eras of the internet and without these breakthroughs in cryptography and decentralized networking.

Unlike fiat currencies (or yesterday’s centralized DigiCash coins), no central entity oversees the Bitcoin network — allowing it to be a ‘decentralized’ digital asset.

And unlike fiat currencies, Bitcoin’s supply schedule and monetary policies are fixed; once the cap of 21 million bitcoin is mined, no more can be created.

Some of these qualities are not exclusive to bitcoin among this new class of digital currencies: later digital asset projects have adopted and iterated on the Bitcoin model — such as by looking beyond proof-of-work protocols and mining to other ways cryptographic assets can be minted, moved, or managed.

As developers flock to the space and the ecosystem grows, the efforts of many innovators are converging to accelerate opportunities and applications for these assets.

The Evolution of Digital Cash

While researchers at MIT’s Digital Currency Initiative tackle some of the technological challenges, digital money — in forms both fiat and crypto — is already changing the way people interact and transact.

Money has been going digital ever since we’ve had an internet to use it on — and many view the Bitcoin network as the world’s “Internet of Money.” As more people learn about these new protocols, new ways to store and exchange value may speed into our lives much quicker than we think . 

This content was created by Fidelity Digital Assets. The trademarks and service marks appearing herein are the property of their respective owners.

Digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors in digital assets could lose the entire value of their investment. . 

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