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Industry roundup: 16 April

ECB publishes the results of the public consultation on a digital euro

The European Central Bank (ECB) has published an analysis of its public consultation on a digital euro. The analysis confirms that what the public and professionals want the most from such a digital currency is privacy (43%), followed by security (18%), the ability to pay across the euro area (11%), no additional costs (9%) and offline usability (8%).

Privacy is the most important feature of a digital euro for both the public and professionals, especially merchants and other companies. Both groups support requirements to avoid illicit activities, with fewer than one in ten responses from members of the public showing support for full anonymity.

More than two-thirds of respondents acknowledge the importance of intermediaries providing innovative services that allow access to a digital euro and indicate that it should be integrated into existing banking and payment systems. They would like additional services provided on top of basic digital euro payments.

Around a quarter of respondents take the view that a digital euro should make cross-border payments faster and cheaper. They want the digital euro to be usable outside the euro area, though with limits.

The ECB received many technical suggestions from the respondents. According to a quarter of individual respondents, end-user solutions comprising (smart) cards or a secure element in smartphones would be preferred to facilitate cash-like features. Almost half mention a need for holding limits, tiered remuneration, or a combination of the two, to manage the amount of digital euro in circulation. A similar share of professional respondents agree.

 

Emirates NBD engaged by Dubai government to cut paper from bank guarantee transactions

Emirates NBD has signed an agreement with Dubai's Roads and Transport Authority (RTA) to fully digitise the government entity's bank guarantee management process, making it completely paperless.

Paper usage for the RTA's bank guarantee transactions will be cut by 100% following the agreement with the bank’s Corporate and Institutional Banking division using the smartGuarantees product under the smartTRADE platform. The platform enables seamless end-to-end paperless handling of guarantees including viewing guarantees and transaction details online, and making amendments, cancellations, extensions or claims. 

Guarantees are routed to Emirates NBD via SWIFT for further advising, changing the current practice of issuance of paper guarantees and eliminating the requirement for manual updates. Going paperless also reduces the time taken to complete the traditionally paper-based transactions.

"We are delighted to partner with the RTA to not only help eliminate paper waste but also reduce the burden and workload on employees handling guarantees manually, while saving on financial resources," said Ahmed Al Qassim, senior executive vice president and group head, Corporate and Institutional Banking at Emirates NBD. "Smart, paperless, and straight-through processing of guarantees is faster, more efficient and more secure. We look forward to leveraging our digital innovation for more such initiatives as we continue to support the Dubai government's vision to transform into a fully digital government and the first paperless government by the end of 2021."

 

US ACH Network volume rises 11.2% in Q1

The US ACH Network saw volume soar in the first quarter of 2021, setting two new records in the process. Quarterly volume of 7.1 billion payments was an increase of 11.2% from the same period in 2020. The value of those payments was US$17.3 trillion, reflecting a nearly 19% increase from a year earlier.

The first new record was set in February, when ACH volume averaged more than 118 million payments per day, the ACH Network’s highest daily average for a month. The second was in March, when ACH volume hit 2.7 billion payments, the largest monthly volume in ACH Network history. This included approximately 110 million economic impact payments by Direct Deposit from the federal government.

The ongoing migration from cheques to ACH continued for the nation’s businesses, as business-to-business (B2B) ACH payments climbed 17.3% to 1.2 billion. 

The number of Same Day ACH payments passed the milestone of 1 billion since inception, as well as transferring more than US$1 trillion in value. Same Day ACH volume increased 88% in the first quarter as the number of payments exceeded 141 million. The value of these payments, US$187.6 billion, reflects a 133% increase over the first quarter of 2020. Operating hours for Same Day ACH were extended on 19 March 2021, and the ACH Network now settles payments four times a day.  

 

UOB prices Singapore’s first sustainability bond offering

UOB has successfully priced the first sustainability bond offering from Singapore. The US dollar-denominated issuance (notes) represents the first dual tranche senior (senior notes) and Tier 2 instrument (subordinated notes) in sustainability format globally from a bank issuer. It achieved a comprehensive investor reach and participation across Asia Pacific, Europe and the US.

The senior notes and the subordinated notes have been priced at a fixed coupon rate of 1.25% and 2.00% per annum respectively. In aggregate, UOB raised US$1.50bn, with a final orderbook of US$2.75bn. The debut sustainability format of the dual tranche issuance benefitted from the strong support from sustainability-focused investors, who contributed 60% to the final orderbook.

The deal is the bank’s inaugural issuance under the UOB Sustainable Bond Framework launched in March 20213. This framework is part of the Bank’s larger sustainability agenda that is embedded into its business strategy and integrated into its lending policy. The proceeds will be used to finance or to refinance eligible businesses and/or projects in areas such as green buildings and renewable energy, as well as eligible social assets. These include COVID-19-related temporary bridging loans extended to small businesses in Singapore to help them sustain employment and to tide over the challenges from the pandemic.

UOB’s sustainability bond offering will be issued under its US$15bn Global Medium Term Note (GMTN) Programme. BNP Paribas, HSBC, Societe Generale and UOB are joint lead managers of this transaction, with Bank of China as co-manager.

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