“Only two US states” oppose cashless society concept

Although opinions differ in the prospect of a cashless society, a study of US states by information and comparison website Merchant Machine suggests that only two — Alabama and Delaware – are strongly in favour of retaining notes and coins.

The survey covered various countries and states to assess sentiment towards a move towards a cashless society. The US is one of 54 countries that research deemed wants to go cashless, but there were 32 countries that rejected the idea, with France being the most opposed.

The results were determined by using an artificial intelligence (AI) sentiment analysis tool that calculated the proportion of negative and positive geotagged tweets on the subject, which the website concedes is not the most accurate method but says still provides a snapshot of public opinion.

Focusing on the US, where four in ten people now say they no longer carry cash at all, only Alabama (22.42%) and Delaware (20.75%) were the states were less than a quarter of the tweets analysed were pro-cashless. All others scored above this level, with a least a quarter of the tweets positive and South Dakota (39.22% of tweets positive), North Dakota (38.78%), Iowa (38.48%) and Wisconsin (38.27%) registering the highest scores.

A leading issue that results from going cashless is the problems it will cause for the poorest members of society who may not have bank accounts. The survey indicated a link to sentiment as most of the positive tweets originated in states with lower rates of unbanked people. Only 4.9% of residents in North and South Dakota have no chequing account, and the proportion falls to 2.6% in Iowa. In Alabama, which had the fewest number of pro-cashless tweets, the unbanked figure is 7.6%.

An estimated 6.5% of US households lack any sort of bank account. According to former Delaware Senator David McBride, many people in the state cannot obtain credit or debit cards. Delaware is also one of the several US cities and states where cashless stores are banned, a list that includes San Francisco and New Jersey.

In its 2022 survey issued in August of the countries most reliant on cash, Merchant Machine reported that Morocco was least ready to go cashless, with 74% of all payments in Morocco still cash based. In addition, 71% of the population does not have any bank account and only 0.2% owns a credit card, indicating that the majority of Moroccan citizens still rely on physical cash for their transactions.

Analysts offer 2023 oil price projections

Brent oil prices will hold above the US$100 level until the year-end as an impending European Union (EU) ban on Russian oil sparks uncertainty over supply but will edge lower in 2023 as economic concerns prevail, according to a Reuters poll.

A survey by the news service of 38 economists and analysts forecast benchmark Brent crude would average US$100.50 a barrel this year, and $93.65 in 2023, slightly lower than the projected figures from a similar poll in October, of US$101.10 and US$95.74 respectively. US crude was forecast to average US$95.56 a barrel this year and $87.80 in 2023.

Brent is trading at below US$87 currently, having moved 15% lower since early November, largely reflecting concerns over demand from China as it grapples with anti-Covid lockdowns and protests.

Frank Schallenberger, head of commodity research at German banking group LBBW, told Reuters that he oil market faces three major questions. “What happens to Russian supply when the EU ban becomes effective? How much will demand growth go down because of weaker economic perspectives? And how fast will OPEC+ lower oil output?”

The EU ban on Russian oil takes effect from next week along with a plan by G7 nations to enforce a low price for Russian oil sales. However, with the plan still being debated by EU leaders, analysts were divided on its likely impact and forecast a resultant supply shortfall of anywhere between 500,000 barrels per day (bpd) to 2 million bpd, with some saying Russia could find alternative routes to move its crude.

“The EU ban will mean that an uneasy balance will characterise the market from the first quarter, which will be supportive of prices in the 80s or even higher,” said Matthew Sherwood, lead commodities analyst at the Economist Intelligence Unit (EIU).

Most market watchers agreed that the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, are likely to decide to maintain current output levels when they meet in Vienna on 4 December to decide policy, although additional reductions could be considered.

A small number of respondents predicted that the oil market could be more balanced in the second half of 2023. Demand was seen growing by 1.8-2.1 million bpd in 2022 and by 1-2 million bpd next year, led by Asia.

But while prices will moderate in 2023 because of an economic slowdown, “we don't expect oil prices to fall off the cliff as supplies are tight and OPEC+ has pre-empted with additional voluntary production cuts, and some Russian oil production will also be impacted by the EU ban,” said DBS Bank lead energy analyst Suvro Sarkar.

The Reuters poll result is more conservative than the prediction this week from Jeff Currie, global head of commodities at Goldman Sachs, who said that the medium-term oil outlook for 2023 was “very positive” and the bank plans to “stick to our guns” with a US$110-a-barrel Brent crude forecast for next year. He acknowledged, however, that there’s “a lot of uncertainty” ahead.

Yuan volatility could see China widening band

With macroeconomic risks triggering unprecedented levels of volatility in China’s yuan (CNY), investors believe that the authorities may widen the currency's tight trading band for first time since 2014 to allow market forces greater say, according to reports.

The yuan is allowed to move in a narrow range of 2% against the US dollar, around a daily official midpoint fixing set by the People's Bank of China (PBOC). In the eight years since the band was defined, the currency has rarely ever moved beyond 1% on either side of the mid-point.

However in September the US Federal Reserve’s aggressive interest rate policy and robust dollar pushed the CNY to below 7 to the greenback, as foreign capital exited an economy struggling under regulatory and Covid-19 crackdowns, and the PBOC seemed relaxed in letting market forces decide where the yuan should be.

"We see a possibility of the PBOC widening the yuan's daily trading band against the dollar to 3% from 2% in 2023, given greater tolerance of increased market volatility," said Becky Liu, head of China macro strategy at Standard Chartered Bank.

Day-to-day CNY volatility was as high as 16% during October, against a 1% to 4% range previously. The currency came close to touching the lower end of the band in five out of 16 trading days in October.

The PBOC doubled the daily trading range for the currency to 2% in 2014, in what some market participants saw as a bid to get the yuan into the International Monetary Fund's (IMF) currency basket - and one that proved successful in 2016.

Reuters reports that policy sources say they have considered widening the trading band in recent years to show their commitment to China's long-term market reforms.

"If the PBOC wants to widen the trading band, it will likely happen in the latter part of 2023 when the economy rebounds visibly, and interest rate differentials with the US may also start to shrink meaningfully to favour the renminbi," said Tommy Wu, senior China economist at Commerzbank.

Binance re-enters Japan with Sakura Exchange acquisition

Binance, the world’s biggest cryptocurrency exchange, has bought a Japan-based crypto exchange service provider to re-enter a market it said will play a “key role” in the future of cryptocurrency adoption.

In a statement, the firm announced that it had acquired 100% of Sakura Exchange BitCoin (SEBC), for an undisclosed amount, paving the way for it to enter Japan as a regulated entity, Binance. The purchase will give Binance its first licence in East Asia, according to the statement.

Japan’s Financial Services Agency (FSA) was one of several regulators that last year issued warnings saying Binance was not licenced to operate in its market.
The acquisition adds to the list of countries in which the firm has some degree of regulatory authorisation. In October, Binance was accepted in Cyprus as a crypto asset service provider, having previously won similar licenses in France, Italy, Spain, Bahrain, Abu Dhabi, Dubai and Kazakhstan.

Tokyo-based SEBC offers trading of the Japanese yen against 11 digital assets, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Cardano’s ADA.

Goldman transfers traders from London to Milan

Goldman Sachs Group is relocating some of its euro swaps trading desk from London to Milan London, the latest example of roles moving to the continent after the UK’s 2016 Brexit referendum.

Reports suggest that the group is relocating staff as it bolsters European offices following the UK’s departure from the European Union (EU), according to insiders. Staff will likely move in early 2023 and Goldman will also be hiring staff locally, two of the people said. Currently around 80 employees are based in Milan

Several major global banks are under pressure to move more traders from London into EU cities such as Paris, Frankfurt and Amsterdam. In May, the European Central Bank (ECB) said that lenders that set up units in the euro area are still overly dependent on operations outside the region and found that around one in five of the trading desks it reviewed “warranted targeted supervisory action”.

“Due to changes in the regulatory framework, Milan is now capital-market friendly,” commented Russell Clarke, partner at Figtree Search in London.

Citigroup has been increasing staff numbers in Italy since 2018 due to Brexit and diversification. It now employs about 230 people in the country, while JPMorgan Chase employs about 200 staff in Italy and is continuing to add more, reports suggest.

Singapore and HK millennials prioritise responsible investing

Seven in 10 millennials in Singapore and Hong Kong agree that responsible investing is a priority for them, according to a study by UK financial firm St. James’s Place (SJP) Asia.

The study of differing wealth management approaches between younger and older investors found that 70% of those aged 25 to 39 years old in the two major Asian financial hubs actively seek responsible investments, up 6% from a previous study in 2021.

The survey also revealed that despite their reputation for internet usage and self-driven thinking, Asia’s millennials in Asia are found to be most reliant on their families as the top source of financial advice, cited by 63% of survey respondents.

In Hong Kong, this was followed by bank managers and staff (40%) and professional financial advisors (30%), while in Singapore, professional financial advisers ranked second (35%) followed by friends (34%).

Face-to-face meetings also remain popular despite the finance industry’s promotion of digitisation. The survey found that a visit to a professional financial advisor (46%) or bank (31%) were preferred for long-term investment planning over robo-advisor platforms (19%). However, responses also suggested that 54% of millennials in the two markets have no financial plan at all and just one-in three have plans that account for cost inflation. By topic, millennials in both hubs had the greatest need for financial advice and knowledge in investments (88%), property and mortgages (74%), as well as insurance (74%).

Komgo claims biggest trade finance digitalisation platform after GTC acquisition

Canadian trade finance specialist GlobalTrade Corporation (GTC) has announced its acquisition by Switzerland-based Komgo. The two companies jointly provide trade finance digitalisation solutions to over 120 multinational clients and their 11,000+ subsidiaries, connecting them to their financial institutions and trade service providers on a global basis.

“Together Komgo and GTC will provide the widest coverage, and biggest volumes, for our corporate and bank users,” said Souleïma Baddi, CEO of Komgo. “We are combining Komgo’s commodity expertise with GTC’s industry expertise, consolidating the market for digital trade services. Trade finance is moving to a digital framework, and we’re proud to be at the forefront of this transition.”

“The industry has been waiting for this consolidation,” added GTC's Chairman of the Board, Jacob Katsman. “Together with Komgo, we can now connect corporates to all their financial institutions for trade finance irrespective of what back-office system they use. Solutions offered by both companies are complementary and cover the complete range of payment instruments used in international trade, starting from detection of fraudulent invoices to automation and management of letters of credit, bank guarantees, documentary collections; integrated with a trade finance marketplace.”

Malaysia’s Al Rajhi Bank launches digibank app

Al Rajhi Bank Malaysia (ARBM), a subsidiary of Saudi Arabia’s Al Rajhi Bank, has announced the launch of its digibank app Rize. ARBM said that a wide range of services are already available on Rize, including deposits, account and personal finance management, debit card application, and ATM services.

One of the app’s key features is a personalized digital financing option that requires minimal documentation and no processing fee. Customers will only need to spend 15 minutes to have money in their account, ARBM said. The app also has a savings feature called Rize Savings Pot with a profit rate, allowing users to earn money while saving.

Launched in 2007, ARBM offers Shariah-compliant financial solutions in the retail, corporate treasury and investment segments, with a network of 13 branches across Malaysia. Rize will be competing against digital banking rivals in Malaysia including GXS Bank, which is backed by a consortium of Southeast Asia super app Grab and communications technology group Singtel.