CBDC Is A “Better” Alternative to Stablecoins, Which Are Unlikely to be Regulated Money: BoE Governor

CBDC Is A “Better” Alternative to Stablecoins, Which Are Unlikely to be Regulated Money, says BoE Governor

Andrew Bailey, the Governor of Bank of England, yet again shared his criticism of stablecoins as he said that he did not believe that stablecoins are likely to evolve into safe, regulated money, which means central bank digital currencies (CBDCs) will more likely be the future for electronic payments.

“I think we have two choices broadly,” Bailey told lawmakers in the upper house of Britain’s parliament as part of an inquiry into the future of digital payments.

“Is it going to evolve to some world of (asset-) backed stablecoins which has money-like features which could be regulated? I must say … I am sceptical about that. Or … is the better contribution, particularly to financial stability, to say the better alternative to that may be a central bank currency of digital form?”

Commenting on stablecoins, Bailey said out of the $2.5 trillion crypto market cap, which is around the level of the FTSE 100, “95% of it is unbanked crypto-assets,” and the other 5% are stablecoins, “some of which are more stable than others.”

He also warned that crypto-assets do have “all the potential to be a threat to financial stability, which is why we think we do need to take action.”

This month, the BoE and Britain’s Treasury said they would hold formal consultations next year on whether to move forward with a CBDC, which, if approved, would be introduced in the second half of the decade.

On Tuesday, Bailey said he would not expect the BoE to offer digital bank accounts directly to savers.

“We do not see this as the Bank of England moving into the retail bank account business through a central bank digital currency,” he said while speaking to the Lord’s Economic Affairs Committee.

The BoE would instead provide the means of settlements to a regulated platform on which banks and even alternative digital wallets holders would operate. The central bank, Bailey said, would need power over these firms on the platform to protect privacy.

According to him, work on a CBDC was intended to solve cash and retail transactions problems and not as a tool to implement unconventional monetary policy such as a negative interest rate.

Bailey further warned that allowing the private sector to manage the shift toward digital currency could result in the bank regulating big tech firms. “The question we’re going to face is… would we try to regulate” private tech firms creating digital money, he said.

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Author: AnTy

Apple Hiring a Manager with Experience in Alternative Payments including Crypto and Digital Wallets

Apple Hiring a Manager with Experience in Alternative Payments including Crypto and Digital Wallets

Tech giant, which is sitting at $195.57 billion in cash, is looking for a professional in global alternative and emerging payment solutions.

Tech giant Apple is now hiring for a Business Development Manager for Alternative Payments.

The Apple Wallets, Payments, and Commerce (WPC) team is looking for a Business Development Manager to lead Alternative Payments Partnerships — a professional in global alternative and emerging payment solutions.

Posted this week, the job is located at the company’s headquarters in Cupertino, CA, and they are looking for someone with over a decade of experience in financial services.

However, the most important part is more than five years of experience required in or with alternative payment providers, such as digital wallets, BNPL, Fast Payments, cryptocurrency, etc.., as per the job description.

This is an interesting development given that back in August 2019, Apple credit card launched with Goldman Sachs Group, designed to be used with Apple Pay on Apple devices, specifically stated that they would not allow the purchase of cryptocurrencies with it.

Ever since Tesla announced its $1.5 billion investment in Bitcoin earlier this year, the crypto community has been expecting another big name like Google, Facebook, or Apple to do the same, but so far, nothing of the like has happened.

In its fiscal Q1 2021 earnings report, the company with a $2.1 trillion market cap revealed that Apple has one of the largest cash piles in the US. Up 2% from last quarter, Apple has $195.57 billion in cash on hand.

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Author: AnTy

Ethereum Co-founder Proposes Uniswap’s UNI to be Used as an Oracle Token

While “Chainlink is great,” Vitalik Buterin says, “there’s room for a simple alternative specialized for high-value, okay-with-high-latency use cases.”

Vitalik Buterin, the co-founder of Ethereum, posted a new proposal on the Uniswap forum. He recommends the popular DEX and its native UNI token step in to provide a highly secure oracle modeled after the Augur or UMA design.

Such an oracle will be “specialized to providing price data that’s robust and extremely costly to manipulate and attack,” he wrote.

The proposal called “UNI should become an oracle token” says a highly secure price oracle is one of the most important pieces of a successful decentralized finance (DeFi) ecosystem as everything from algorithmic stablecoin to synthetic assets and collateralized loan depend on a price oracle.

While Uniswap already provides an “oracle” for the price of ERC20s traded on the exchange, it does not do so for anything in the outside world.

Buterin says stablecoins need an oracle for the price of ETH/USD, but workarounds like taking the ETH/USDC price are not sufficient.

“UNI is in an excellent position to be a token for such an oracle,” he said. “More broadly, Ethereum L1 needs to remain governance-minimalist, but L2 should be more ambitious, and UNI can be part of that.” Jason Choi of crypto fund The Spartan Group noted,

“Tl;dr minority voters are penalized, majority rewarded, not dissimilar to a prediction market. Interesting that only a high-value token can make this work – i.e., price is a feature, not a distraction.”

As for why Chainlink hasn’t been considered for the same as wondered by Fiskantes of Zee Prime Capital as well,

“Why not implement this design into Chainlink, which is the second biggest?

Buterin says while Chainlink is great, there’s room for a simple alternative that is specialized for high-value and high-latency use cases. ChainLinkGod, the Community Ambassador of Chainlink explained,

“Chainlink 2.0 introduces a cryptoeconomic model extremely similar to this with two-tier oracle networks where the first tier explicitly stakes tokens and the second tier consists of the nodes with the greatest financial exposure to LINK and the most skin in the game to lose.”

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Author: AnTy

Gen X Investors Overtake Millennials in Crypto Adoption: Wirex & Stellar Report

Nearly 75% of consumers view digital assets and stablecoins as an alternative to traditional money transfer services. High fees, slower transaction times, and hectic cross-border transfers are some of the reasons leading consumers to digital asset payment systems, joint research from Wirex and Stellar Development Foundation (SDF) states.

The research report titled ‘The Future of Money: Cryptocurrency Adoption in 2021‘surveyed 3,834 respondents from the two companies’ database in the past three weeks. Over 81% of the respondents hailed from Europe and 17% from the Asia Pacific region, 83% of them aged above 35 years.

The research focuses on the adoption rates of crypto across different genders, age groups, and regions and how digital currencies solve problems in the real world.

Older People are Rapidly Accepting Cryptocurrencies

The older generations are gradually accepting cryptocurrencies as a global payment system in cross border transfers, the report states. The appetite for crypto solutions in traditional payment systems is clearly there across all ages. Surprisingly, 30.2% of the respondents aged 45-54 stated they have used (are using) crypto, the largest group in the study.

Furthermore, older women are more likely to use crypto and blockchain-powered payment systems, the report shows. Slightly above a quarter (26.1%) of women respondents aged 55-64 years invested in cryptocurrency, while only 14.3% of men in the same age bracket invested in crypto.

Cryptocurrency is a Global Payment System

According to the research, the younger generation is rapidly moving towards digital assets seamlessly to transact across borders. With nearly 57% of respondents aged 18-24 years having sent money internationally, there is still room for growth as the “digitally-conscious” generation look for seamless ways to transact value across the globe.


International transfer fees remain the major issue that is pushing respondents to crypto. Despite the respondents adjusting, most complained about the international transfer fees were still too high. Over 40% of the respondents believe that paying 1% fees is still too high, with the number understandably increasing as the fees increased.

Consumers are open to switching to alternative transfer channels so long as the costs and fees drop significantly, the report states. This is a problem that crypto could solve. The authors of the report wrote that 74% of the respondents agree to digital assets as the solution to slow and expensive traditional money transfer systems.

Over 83% of the respondents stated they owned at least one cryptocurrency or stablecoin, with Europeans leading the way at 84.5% while 74.7% of the APAC region respondents owning digital assets. Fewer female respondents hold digital assets than male respondents (70.3% vs. 85.6%), with 65.7% of women who hold digital assets aged over 45 years.

A Haven for Users?

Despite the positive sentiments derived from the report and 86.1% of the respondents claiming that they “feel safe” with crypto payments, the authors still believe there’s more to be done in the industry. Unsurprisingly, younger generations feel most safe using crypto (90.6%) while older generations, those at 65+ years, feel less safe (80.7%) due to digital payments’ tech-savvy nature.

However, the survey showed some shortcomings as it focuses on the customers of Wirex and Stellar, who already have interacted with cryptocurrencies. The authors concluded that crypto converts’ views will definitely differ from those who are yet to use blockchain technology or cryptocurrencies in global money payment systems.

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Author: Lujan Odera

NY Investment Firm, AllianceBernstein Says Investor Portfolios Should Hold 1% to 10% BTC

  • New York investment firm praises Bitcoin (BTC) as an alternative to gold in investors’ portfolios in the long term.
  • Bitcoin’s lower volatility makes a case for the top crypto as a “store of value and medium of exchange.”

One of the top New York investment firms, AllianceBernstein, is finally switching its calls on Bitcoin, stating investors need to own about 1% to 10% of the crypto in their portfolios. The multi-billion investment firm had previously cautioned investors from the top crypto due to BTC’s volatility and regulatory risks.

In the latest research note to the company’s investors, first mentioned on Coindesk, Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, the research arm of AllianceBernstein, stated the current global changes in policies, investment environment, and diversification benefits is key to their change in sentiments on Bitcoin.

Previously in 2018, shortly after BTC hit an all-time high, the investment firm dismissed the coin as an investment asset, advising their clients against adding the coin to their portfolios. With BTC retesting all-time highs again on November 30, the asset manager “admits” that BTC has a role in asset allocation and diversification.

The current global pandemic has seen BTC register a less volatile price movement since a shocking dip below $3,500 back in March, the note stated. Jenkins states that the lower volatility in BTC during this period makes the asset “more desirable” for the long term investors – showing properties similar to gold as a store of value.

According to the note, during the pandemic, Bitcoin has witnessed a higher correlation with other assets, showing its promise as an investment asset. Bitcoin’s correlation with gold and the S&P 500 index reached an all-time high as BTC performance resurrected after the March crash. Jenkins said,

“From a narrow empirical point of view, the downward shift in [volatility] of bitcoin makes it more desirable, but its increased correlation points the other way.”

Notwithstanding, the research also states BTC protects the investors from inflation in a similar manner to gold. To this effect, BernsteinResearch compared the two assets. Despite BTC not “exactly moving in a way that would counteract inflation in a given fiat currency, it behaves as stores of value similar to gold.

The note advises investors to place about 1% to 10% of their portfolio in BTC following the crypto’s monthly return performance. While 1% could seem low compared to other assets, BTC is “empirically significant.” Jenkins wrote,

“The resulting allocation to bitcoin is low, but then within this simple optimization framework the allocation to some other asset classes is zero, so in that context, bitcoin seems to empirically be potentially significant.”

Jenkins’ research, however, does not give Bitcoin a free pass as an investment asset. The note lists inherent risks the cryptocurrency can face, such as government regulation, illicit use, and environmental concerns arising from mining as the currency’s adoption grows.

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Author: Lujan Odera

SGS Audit Places Crypto.com into NIST’s Highest Privacy & Cybersecurity Framework Tier

Crypto.com, the digital asset exchange and alternative traditional finance platform, has received the highest security and privacy ratings as per the National Institute of Standards and Technology (NIST) framework. The Hong Kong domiciled firm announced a recent audit by SGS placed them at Tier 4 ‘Adaptive tier’; this is the highest maturity level on the NIST privacy and security framework.

“Audit conducted by internationally recognized audit services firm SGS, which attested that Crypto.com is operating at “Adaptive (Tier 4)“, the highest tier on the scale for both NIST frameworks.” Reads the announcement.

NIST, a non-regulatory agency of the U.S Department of Commerce, released its cybersecurity framework as early as 2014. This has been instrumental in guiding the private sector players on handling cybersecurity threats, especially now that they are rampant within the tech space. This framework provides some of the guidelines that include cyber threat identification, assessment, response, and recovery.

The NIST privacy framework only came into play earlier this year to strengthen data privacy via enterprise risk management (ERM). According to Crypto.com, both the security and privacy frameworks are integral in building market trust and playing by the books regarding compliance issues. Also, lean communication amongst stakeholders in matters of privacy and security.

To receive a Tier 4 (Adaptive rating), Crypto.com was audited based on core functionalities, which include Identify, detect, protect, respond, recover, communicate, control, and govern. Notably, the four tiers of maturity in privacy and security as per the NIST framework are; Partial (Tier 1), Risk-Informed (Tier 2), Repeatable (Tier 3), and Adaptive (Tier 4).

Crypto.com Co-founder and CEO Kris Marszalek, commented on this milestone, adding that the firm’s clientele is now past the 5 million marks,

“Achieving the highest maturity level based on the NIST Frameworks speaks volumes to our commitment to security and privacy, which have been cornerstones of our business since day one.

Having recently surpassed 5 million users, we will continue investing aggressively in technology and process that maintains the highest standards of security and privacy in the industry.”

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Author: Edwin Munyui

COVID-19 Accelerated Digital Payments Growth and Fintech Regulatory Innovation: Study

A joint study by the Cambridge Centre for Alternative Finance (CCAF) and the World Bank has revealed that COVID-19 greatly accelerated Fintech regulatory innovation developments. Dubbed Global COVID-19 Fintech Regulatory Rapid Assessment Study’, the report was released on Oct 28 as part of an effort to empirically equip regulators and central banks in the digital currency era. Notably, the study highlights that increased digital payments activity did not result in a similar spike in crypto exchange use; however, these platforms also grew by smaller percentages.

The study’s results are based on responses from 118 central banks and financial regulators in 114 jurisdictions, from both developed and developing economies. Generally, there have been increased efforts to further accelerate the current regulatory innovations and introduce new initiatives to further support the burgeoning sector. According to the study, 72% of the sample has increased or debuted digital ecosystem initiatives, while 58% have already pivoted on RegTech/SupTech focused policies. Innovation offices are also on the rise, with 56% of the respondents noting progress.

Despite the bullish outlook in digital payments adoption, the study found that developed and developing economies faired differently. As per the findings, emerging market and developing economies (EMDEs) made more progress in accelerating or introducing Fintech initiatives. Most notably, EMDEs initiatives to support digital ecosystems have been focused on remittances and payments; some respondents reported waiving fees and altering transactional thresholds to mitigate the pandemic’s effects.

Crypto Exchanges Lag Behind

Although not as much as the digital payments arena that was already in place for most economies, the nascent crypto sector grew. As per stats from the study, digital payments are reported to have grown by around 60%, while activity on crypto exchanges only managed to gain 3%. Interestingly, there was a clear difference in the crypto exchange growth for developed and developing markets. The former grew by 6% while the latter saw an increase of 2% in crypto exchange usage.

Prevailing Challenges in Fintech Integration

At the core of regulators’ decision-making process is the risks associated with volatile Fintech environments, especially in upcoming markets like crypto. This study’s respondents identified cybersecurity as the top threat of digital ecosystems, followed by operational risks, consumer protection, and fraudulent activity. The report reads,

“In particular, 90 percent of surveyed regulators from advanced economies see cybersecurity as one of the top three increasing risks associated with FinTech activities.”

As for oversight, it appears that most central banks and regulators are comfortable with adopting and being resilient to innovations. Nonetheless, the respondents highlighted some shortcomings; they include the performance of core regulatory functions, access to reliable data, restriction to essential tech or information, and cooperation with local domestic agencies.

A Prospectus Future with CBDCs

This study has painted out the current status of digital payment networks globally and coincides with an increased interest in CBDC research and development. Central Bank Digital Currencies (CBDCs) are now a hot topic with the latest insights from the Bank of International Settlements (BIS) in a collaborative report with 7 major central banks.

Developed economies have currently leaped research, while some like China has gone further and launched a pilot for its prospectus digital yuan. This initiative has been in place for some months and is a reference for most ongoing projects in the space. In 2021, South Korea and Japan are also set to pioneer their CBDC tests to prepare for the virtual currency shift.

Well, UK’s Minister for Africa at the Foreign Commonwealth & Development Office, James Duddridge, is optimistic that the study will complement the current approaches to Fintech policies,

 “I trust that this report will inform and inspire countries around the world, help support their FinTech regulatory strategies, and encourage greater collaboration across jurisdictions.”

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Author: Edwin Munyui

China’s One Region Accounts for 35.76% of Bitcoin Hash Rate

A Bitcoin Mining Map is launched by the Cambridge Centre for Alternative Finance (CCAF) that allows checking the average monthly bitcoin hash rate produced by different countries around the globe.

Based on the geolocation data (IP addresses) provided by Poolin, BTC.com, and ViaBTC mining pools that collectively represent approximately 37% of Bitcoin total hashrate, this is the first geographical breakdown of bitcoin hash power distribution.

Unsurprisingly, China is the dominant force in the Bitcoin hash rate that accounts for 65.08% of the average monthly share of the total hash rate in April.

This share has decreased from 67.26% in March, 72.03% in February, and 72.82% in January.

In China, Xinjiang provided over 35.76% of this hash power followed by Sichuan (9.66%), Nei Mongol (8.07), Yunnan (5.42%), and Beijing (1.73%).

In April, the US came at second place with a share of 7.24%, followed by Russia 6.90%, Kazakhstan (6.17%), Malaysia (4.33%), and Iran (3.82%).

Canada, Germany, Norway, and Venezuela contributed less than 1% of the Bitcoin network’s hash power.

Source: Cambridge University – Bitcoin Mining Map

But this third halving that will cut the bitcoin block reward from 12.5 BTC to 6.25 coins will intensify the competition to capture the hash rate of the network and may result in a shift in hash power.

Just four days away, amidst the rising hash rate and difficulty, small and overleveraged miners would be washed out from the market and could see the balance of hash rate power tilt in North America’s favor.

Meanwhile, the number of computers running the bitcoin program is dominated by the US at 19.10% after the geographical location of 21.35% share not available, as per Bitnodes.

The US is followed by Germany(17.39%), France (5.82%), Netherlands (4.25%), Canada (3.01%), the UK (2.59%), Singapore (2.58%), Russia (2.31%), and China (2.02%).

These nodes that validate new transactions and store copies of the network’s shared transaction history have fallen to a level not seen since 2017. This decline could be because running a node is getting harder at a rate that is surpassing technological improvement.

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Author: AnTy

XRP Army Fired Up About Ripple’s Possible Involvement with SWIFT Alternative for Russia, China and India

  • Russia, India, and China are developing a payment system as an alternative for SWIFT, connecting primarily with Russia’s payment system.
  • A meeting in 2017 is leading Ripple supporters to believe that XRP will be their chosen token.

XRP, the native token of Ripple, has found itself in many places, considering the widespread network of its creator. With low fees and fast transaction times, it manages to remain in the top cryptocurrencies in the world, and that’s just the kind of flexibility that consumers enjoy. It has been used by numerous financial institutions, but it could be big enough to be a part of a new alternative to SWIFT.

SWIFT is the payment system shared throughout the world, but China, Russia, and India have decided to choose a different path. Avoiding the use of this payment system, the trio is working on their own network for fast payments, and there are some members of the Ripple community that hope to find XRP involved.

The reports from Russia today states that the SPFS system of payments will be connecting with the CIPS system, which is based in China. SPFS was originally in development in 2014 in response to the suggestion that the US could cut off the country from accessing SWIFT.

There has yet to be a new project launched in India, but reports indicate that there are local engineers that are working on one. In the meantime, India has expressed that they’ll be connecting with the Russian system as well.

With talks of the recent blockchain innovations in China, due to remarks by President Xi Jinping, some people in the XRP community believe that XRP will be the coin chosen to create necessary liquidity in the new system.

The hopes expressed by the users appear to be due to a meeting that occurred back in 2017, which involved Chinese central bank representatives and Ripple.

China’s Central Bank, PBOC, has been working on a centralized digital currency recently, which is has been referred to as “China Coin.” Huang Qifan, the executive vice president of the China International Economic Exchange Centre, made a statement yesterday that the coin is actually being called DCEP, which is an abbreviation for “digital currency electronic payment.”

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Author: Krystle M

Binance Positions Its Project Venus Stablecoin As Government-Friendly Libra Competitor

Binance, one of the largest crypto exchanges in the world, is marketing its new stablecoin Venus as an alternative to Libra that can be really friendly to governments.

The project was revealed last month, when the CEO of Binance, Changpeng Zhao, affirmed that the company would be creating several stablecoins around the world.

Now, the company is pushing forward the narrative that its token will be just like Libra, except more government-friendly. According to Zhao, Binance does not want to dominate the market, however. The main goal is to “push adoption”, not take the whole market to itself. He even affirmed that the project might end up helping Facebook’s Libra project in the long-term scenario.

Despite all the nice words, however, it is clear that Venus wants to compete with Libra. Samuel Lim, Binance’s Chief Compliance Officer, has recently affirmed that the team is talking with central banks and regulators about the future.

Many regulators are concerned that Libra could take over national currencies, especially in countries with inflation problems. Because of this, the company is sending a message that they are not like Libra and will not take the power away from them.

Especially in developing countries, many people are worried about Libra. Some of them know that they do not have the power to block Libra if the developed countries do not do a thing about it.

Unlike Libra, which will have private parties controlling it, Venus will let the local governments determine how these tokens can work. This would give them additional protection that their competitors are not interested in giving. By catering to central banks, Binance’s Venus is cleverly carving its place in the market.

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Author: Gabriel Machado