RBI Crypto Ban Hearing in India Postponed by the Supreme Court, Is This Good or Bad?

The Indian Supreme Court has postponed the hearing on Reserve Bank of India’s (RBI) case related to crypto businesses.

Ever since the RBI implemented its ban on crypto dealings at banks in April 2018, crypto firms and exchanges in India have had a very tough time. Many petitions, both public and industry-related, have been signed. More than this, the decision has been taken to courts and called unconstitutional. The Internet & Mobile Association of India (IAMAI) is the non-profit body that appeals to the government when it comes to such matters, and the one that brought the case to court.

The Court’s Action Regarded as Positive

Kashif Raza, the co-founder of India-based analysis and regulatory news platform Crypto Kanoon, says the case’s principal contention is to appeal the ban on the grounds of being unconstitutional. He also commented that the latest action taken by the court is very positive, these being his own words:

“Today RBI was supposed to reply to the representation filed by IAMAI […] It seems that the Supreme Court of India today passed over the matter primarily because the court expects there to be longer arguments in this case, which could take their entire week. They gave it a pass so as to allow in future for a full-fledged hearing of the arguments, to listen to both parties. So interesting times ahead.”

The Indian Crypto Climate is Adverse

The ban had brought quite the extensive toll for the Indian crypto industry, with exchanges like WazirX being forced to go P2P so that in-house crypto to fiat conversions are avoided, and Coindelta terminating is services altogether. Uncertainty seems to be the word of the moment, as in the fall of 2019, the Indian government had delayed introducing a contentious draft bill on crypto banning. The bill dubbed “Banning of Cryptocurrency and Regulation of Official Digital Currencies” doesn’t only intend to ban using crypto in India, but also to make things easier for RBI to launch the Digital Rupee.

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Author: Oana Ularu

China’s PBoC Completes ‘Top-Level’ Design For Digital Yuan, Launch Date Still Unknown

The People Bank of China (PBoC) has just completed a top-layer design and the testing of its central bank digital currency (CBDC) that should be released very soon.

As reported by Chinese news outlet Sina on January 10, the tests and top-layer design for the digital Yuan were accomplished and developed according to relevant standards. PBoC carried out with the CBDC research, development and testing for a while now.

The latest developments were presented by the bank in a special article that also highlights its plans on improving the financial industry network’s cybersecurity and the rules for accrediting the most important information infrastructure.

Plans to Conduct CBDC Real-World Tests Revealed in December 2019

PBoC’s plans to conduct real-world tests for its CBDC were revealed in December 2019. The pilot project was set to be conducted in the city of Shenzhen by the end of last year, with the city of Suzhou possibly being included too. At the tests, the digital Yuan was expected to enter multiple service scenarios like education, transportation, medical treatment and others. Earlier in January 2020, PBoC said its CBDC is progressing smoothly.

Digital Yuan’s Encryption Standards

China has a law on cryptographic password management, a law that sets some standards when it comes to the management of passwords and cryptography. On Rand Corporation’s China professor of blockchain technology and policy analyst Sale Lilly’s opinion, this law complements the efforts and tasks that rolling out a CBDC require. This is what Lilly commented on the digital Yuan’s progress in relation to the importance of encryption levels:

“If China’s experience in trying to unify government cryptographic standards is anything like the U.S. Military’s experience, higher standards of encryption and trust scale users at a slower rate, so onboarding oracles and trusted agents for a private or permissioned access CBDC blockchain implies a natural trade-off between key security and speed of onboarding digital economy participants; banks, vendors, and a slew of Chinese government entities in tax and finance roles.”

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Author: Oana Ularu

Reserve Bank of Australia Looks To Deny Cryptos Like Facebook’s Libra Until Regulations Are Met

When it comes to Libra and the viability of central bank digital currencies (CBDCs), the Reserve Bank of Australia (RBA) has announced it has serious doubts.

RBA officials said in December last year they don’t believe cryptocurrencies will ever take the place of money issued by governments. While Libra and CBDCs are believed to promote financial inclusion, RBA has assessed their innovation in the global fintech space and concluded they’re redundant solutions.

RBA Has a Team Evaluating New Tech for the Country’s Payments System

Since 2018, the RBA has had their own research group that assess’ new payment structures and technology involved for the country. This team evaluated CBDCs and what a “wholesale settlement system” can do on a private Ethereum (ETH) network, as to attempt understand better if tokens could be efficient when it comes to commercial banks issuing currency.

CBDCs Encouraged by Some Central Bankers

There are some central bankers, Mark Carney and Christine Lagarde included, who encourage CBDCs, not to mention the People’s Bank of China (PBOC) is currently testing the impact on the public of its future digital Yuan. However, RBA thinks an Australian digital currency would only disrupt the country’s financial system at this point, especially when it comes to the retail industry using it. It cites a research done by the accounting company EY and that discovered a CBDC wouldn’t be effective to promote Australia’s fintech sector.

The RBA Doesn’t Think Cryptocurrencies Have a Future

After watching the asset class for years, the RBA doesn’t see a future for cryptocurrencies, especially since these aren’t widely accepted or used as payment and their volatility is more popular among speculators, not among ordinary people. Philip Lowe, RBA’s governor, doesn’t see the role of Libra in a country that already has a very efficient electronic payment system like the NPP, which was introduced in 2018 and allows users to make transactions using their email or phone number. While backed by the RBA, many commercial banks didn’t support the NPP, with RBA describing it as disappointing in June 2019.

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Author: Oana Ularu

China’s Digital Currency Still has No Launch Date But Will Continue its Development in 2020

  • Research and development of digital yuan to continue in 2020 – says PBOC
  • The central bank said it made “smooth progress” on the digital currency in 2019
  • The step to create a digital currency is taken to offset perceived risks presented by Bitcoin and Libra

China’s central bank said on Sunday that it doesn’t have a launch date for its sovereign digital currency but will continue with its research and development, as per the local reports.

A report in August said the central bank-backed digital currency could be launched as early as November but that is long gone.

Last month, Mu Changchun, the official in charge of its development said the “top-level design, formulation, functional research and testing” had been completed.

The People’s Bank of China also shared during the annual work conference held last week that it made “smooth progress” on the digital currency in 2019.

In December, Caijing, a Chinese business magazine reported that the country’s four big state banks — Bank of China, Agricultural Bank of China, China Construction Bank, and Industrial and Commercial Bank of China — and three state-owned telecom firms are involved in its development.

Recently, Mu also said that the sovereign digital currency was intended as a replacement for cash and not designed for speculation.

PBOC has been one of the first central banks to promote the idea of a CBCD. Last year, after Facebook announced plans for its own digital currency Libra, the bank’s research institute stepped up its development. The officials came out to the public and shared aspects of this upcoming digital currency that they said has been ready after five years of research.

Sweden is also working on an e-Krona while Bank of Japan governor would conduct “technical and legal research” into digital currencies but has no plans to issue one because there was no demand.

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Author: AnTy

Bitcoin To Dump Near The Halving While One Crypto Will Go Parabolic: Predicts Alistair Milne

  • Bitcoin price to test ATH towards the end of the year
  • While a central bank will finally issue its stablecoin, Facebook’s Libra won’t launch
  • On the regulatory front, KYC/AML to become a requirement for major derivatives exchanges
  • 2019 is just about to end and crypto commentators have started giving out their prediction for 2020.

While the projection for Bitcoin price is just about anywhere from $5,500 to $40,000, the overall market is expected to see much growth, from increased staking, a substantial increment in the amount locked in DeFi and continued growth of Bitcoin network fundamentals to increased regulatory pressure.

Now investor and entrepreneur Alistaire Milne, CIO at Atlanta Digital Currency Fund is making his predictions for next year.

Where will BTC Price be in 2020?

To start with Bitcoin prices, he sees it getting close to the 2019 high, $14,000 before the halving only to dump near the event. This will be followed by the digital testing ATH towards the end of the year. Milne said,

“Everyone that said the halving was priced in will avoid admitting their mistake.”

Currently, Bitcoin is trading at around $7,300, the level seen before Facebook launched the whitepaper of its digital currency, Libra that has been believed to be the driver behind Bitcoin’s bull rally in the Q2 of 2019. At that time, it took us from $7,500 to $9,000 in the week preceding this news. Then, after the announcement, BTC rallied to $13,900 on the back of mainstream FOMO.

But now that it has become apparent that “Libra may never be allowed to launch by many governments,” this potential driver deflated, says Milne. Although the slow deflation he says is logical,

“the sell-off has created unrealistic and slightly irrational bearish sentiment despite the inevitable approach of Bitcoin’s production rate cut, alongside many other bullish indicators (e.g. Tether issuance at $300mil/month).”

Big Things Coming for Stablecoins

He is actually predicting USD-pegged Tether to break a $10 billion mark for assets under management (AUM). Earlier this year, it has been found that USDT is backed by only 74% of cash while the remaining reserves include assets and receivables from loans made by Tether to third parties.

Just like market analyst Tone Vays, Milne sees Bitcoin dominance getting close to 80%, excluding stablecoins which means while the flagship cryptocurrency price would soar, altcoins are expected to only fall lower.

While the leading cryptocurrency won’t be hitting a new all-time high yet, Bitfinex’s token LEO is projected by him to go parabolic. This will be the result of Bitfinex recovering some of the lost $850 million funds.

When it comes to state-backed stablecoins, Milne says a central bank will finally issue one that would be available only to banks and financial institutions. As for the social media giant, Facebook’s Libra, he doesn’t see it launching.

What’s on the Regulatory Side?

On the regulatory front, know-your-customer and anti-money laundering (KYC/AML) is expected to become a requirement on all major derivatives exchanges.

Meanwhile, Milne says major banks will launch crypto-custody solutions, which could be through acquisition.

Last but not the least, self-proclaimed anonymous Bitcoin creator, Craig Wright who has been ruled by the judge to surrender $3 billion of his BTC holdings won’t be able to do so.

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Author: AnTy

Bank of Korea Recruits Experts To Analyze The Impact of Digital Currencies

The central bank of South Korea is hiring a group of experts that will be working in order to analyze cryptocurrencies and to expand the bank’s knowledge of virtual currencies. The information was released by the Bank of Korea in a document on December 27.

Bank of Korea Hires Crypto Experts

As per the document, the goal is to understand how cryptocurrencies could improve the country’s financial system. Virtual currencies can be easily be used to reduce transaction costs and make them much more efficient.

At the same time, the central bank of South Korea will also be making a special research on blockchain technology and in the so-called Central Bank Digital Currencies (CBDCs). Many central banks consider that it is possible to make the whole financial system more efficient.

This is not the first central bank in the world that is analyzing the possible impact of CBDCs and how they can be used in the market by financial institutions. Most of the CBDCs that have been analyzed have been proposed as a currency to settle payments and make transfers for large companies and institutions.

While the whole cryptocurrency market is excited about the idea of a CBDC, governments are not planning to launch them for the general public. For example, Switzerland informed that there are more risks than benefits involved in the creation of a Digital Franc.

It is worth mentioning that the Bank of Korea may not be planning to launch any CBDC in the near future. Reports suggest that the country is not working on one of these CBDCs.

Despite that, it is clear that central banks must have more knowledge about the whole cryptocurrency market and which are the risks and benefits associated with launching a central bank digital currency.

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Author: Carl T

China’s Central Bank Digital Currency is “Digital Form of the Yuan” & “Not for Speculation”

  • Mu Changchun, central bank veteran in charge of the plan for virtual yuan says it will not need the backing of a basket of currencies
  • Chinese internet users unimpressed by no speculating on the virtual currency part

China’s new sovereign digital currency would not be open to speculation like other cryptocurrencies, said a Chinese central bank official on Saturday.

Mu Changchun, head of the People’s Bank of China’s digital currency research institute said it would be a “digital form of the yuan” that wouldn’t need the backing of a basket of fiat currency.

“The currency is not for speculation. It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies,” Mu said.

The central bank official said that the design, formulation, and functional research and testing of the Digital Currency Electronic Payment have been completed. The next step is to roll out the pilot programs before it is launched.

But Chinese internet users aren’t excited about the idea that there would be no speculating on the virtual currency.

“So there will be no fun in it,” one person commented. Another said on news portal Sina.com, “The digital currency is just another form of the yuan, but cryptocurrencies that use real blockchain technology can be treated like gold and silver.”

However, there is no time frame for introducing the central bank-backed digital currency as of yet.

Any Chinese bank or company hasn’t officially confirmed their participation in this digital currency plan either but earlier this month there have been reports that the big four state banks and three state-owned telecom companies are involved in the process.

Meanwhile, Beijing has been cracking down on trading of Bitcoin and other digital currencies and seeing Facebook’s stablecoin Libra as a potential challenge to its capital account control. As the bitcoin price climbs back above $7,600 just a few days before Christmas, it will be interesting to see what is on the 20/20 horizon for everything the crypto world has become in the last decade and will surely blossom and grow in the upcoming decade.

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Author: AnTy

ECB Builds a Proof of Concept using Corda to Explore Anonymity in CBDC

  • European Central Bank finding the balance between allowing privacy and compliance with regulations
  • The purpose of the research is to be ready should the need arise for a CBDC in the future

European Central Bank (ECB) is now exploring anonymity in central bank digital currencies that would safeguard the privacy of those users who conduct low-value transactions but ensure high-value transfers are subject to anti-money laundering (AML) checks.

The research paper published by the central bank talks about the “major challenge” for the payments ecosystem in the digital economy. This challenge is striking a balance between allowing a degree of privacy and ensuring compliance with regulations.

As such, ECB has established a proof of concept for anonymity in digital cash, which is the central bank digital currency (CBDC). The paper reads:

“The proof of concept drawn up by the ESCB demonstrates that it is possible to construct a simplified CBDC payment system that allows users some degree of privacy for lower-value transactions, while still ensuring that higher-value transactions are subject to mandatory AML/CFT checks.”

The network is developed using Corda by the ESCB’s EUROchain research network, with support from R3 and Accenture using distributed ledger technology.

The proof of concept provides the bank with a digitization solution for AML/CFT compliance procedures where central banks or intermediaries other than that chosen by the user can’t see the user’s identity and transaction history.

The limits on anonymous electronic transactions, imposed via “anonymity vouchers,” are automated and additional checks are further delegated to the AML authority.

This proof of concept, however the bank says is just part of its ongoing research on CBDC. It clarifies that it doesn’t mean that they are proceeding with the CBDC.

“There is no immediate need to take concrete steps towards the issuance of CBDC in the euro area.”

They continue to analyze CBDC with the purpose of exploring new technologies and to be ready should the need arise in the future. Also, the proof of concept will help the bank in the assessment of how a CBDC will work in practice and how the specific technical features will affect its potential implications for an economy.

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Author: AnTy

New Zealand BANK ASB Participates In $1.7 Million Seed Funding Round For Startup TradeWindow

The New Zealand Bank ASB participated in a $1.7 million seed funding round for a blockchain company called TradeWindow. The information was released on Monday by TradeWindow in a press release in which they informed that they are also planning a commercial launch in the near future.

TradeWindow Raises $1.7 Million In Funding Round

As per the official announcement, TradeWindow is a company located in New Zealand that is running a software-as-a-service (SaaS) business. Some of the investors include the Leroux family office, Te Hana consulting and the Rae Family office. New Zealand’s ASB Bank has also decided to participate in the investment.

By using a digital super-connector, TradeWindow enhances the whole supply chain and it provides higher efficiency and trust for the global trade. Furthermore, by using blockchain technology, it is possible to create a ‘single trading window’ that can be accessed by all parties involved in the export transaction.

That means that both, buyers and sellers, importers and exporters, will have access to it throughout the whole supply chain. ASB Bank participated in 2018 in a pilot conducted by TradeWindow in which they executed a trade between a meat exporter and a Korean importer.

Nigel Annet, ASB’s general manager of business banking, explained that this investment made in TradeWindow offers an opportunity to simplify the whole export process. Moreover, it also adds a secure layer for parties to share information such as data and documentation. It is worth mentioning that Nigel Annet is also on TradeWindow’s board.

Furthermore, the CEO and founder of TradeWindow informed that the new funding round is very important for the whole platform that is very close to commercial launch. This will definitely have a positive impact on the market and attract the interest of other companies in the region.

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Author: Carl T

Sweden’s Central Bank, Riksbank, Partners with Accenture to Develop CBDC Dubbed ‘E-Krona’

The wave of Central Bank Digital Currency (CBDC) is gaining momentum after China’s progress and expected coin launch in 2020. Sweden is the latest country to announce a pilot test plan for the ‘e-krona’ digital currency; this will be its CBDC in the near future as more governments continue to embrace FinTech in digital payments.

According to a press release on Dec 13 by Sweden’s regulator, Riksbank, they will partner with Accenture to implement this DLT compatible tech. The IT consulting giant will be tasked with designing and creating the UI features for e-krona digital currency in the next one year as per the contract. Riksbank however noted that they are open to work together with Accenture for as long as 7 years which is the schedule period for running pilots on its CBDC.

This move has just brought e-krona digital currency closer to being a reality especially with the Swedish shift to digital payments in recent years. Canada’s Central Bank Deputy Governor had earlier on commented on this shift as he spoke at the Philadelphia Fed Reserve FinTech Conference noting that Swedish authorities need to act before tipping point.

Riksbank started its research on a CBDC back in 2016 and has since documented two reports on this progress. The Central Bank through its Deputy governor said that they are under pressure to shift to electronic money given stakeholders within the Swedish economy have moved away from bills and coins. Events around the globe also largely catalyzed the dive into a CBDC project; notably is Facebook’s stablecoin ‘Libra’. Stefan Ingves, the Governor of Riksbank, termed the move by Facebook as catalytic and important.

It is yet to be clear if the tech that Accenture will implement will be used to run e-krona given this procurement was classified as National Security information. This development by Sweden comes as their Switzerland crypto-friendly counterparts thwarted any plans to launch a CBDC for its population.

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Author: Lujan Odera