World’s 4th Largest Bank Drops the $3B Bond Tradeable Against USD & BTC Amid Fintech Backlash

China’s Construction Bank (CCB) has withdrawn the listing of its $3 billion bond on the Malaysian cryptocurrency exchange. The bonds were to be issued by Longbond Ltd, which was to be created specifically to issue digital bonds.

The bond, which was to be tradable on the FUSANG exchange, a crypto trading platform, had CCB Lauban as its listing sponsor.

The day the bond was to be traded, the Labuan-based exchange received a letter from CCB informing them that the world’s second-largest lender “decided not to proceed” with the issuance. The reason for the suspension wasn’t given, said Henry Chong, chief executive of FUSANG. Fusang said in the statement on Monday,

“The exchange has accepted this decision, and is announcing the suspension of the listing with immediate effect.”

This month, Ant Group met with troubles with its record-breaking IPO, just 48 hours before it was to be listed.

According to South China Morning Post, with China’s central bank rolling out its own digital yuan, “CCB’s digital bonds, which can be bought and traded using US dollars or bitcoin, appear to undermine efforts to safeguard its currency sovereignty.”

SCMP is owned by the Chinese Alibaba Group, founded by Jack Ma, who is also the controlling shareholder of Ant Group. Jacky Zuo, an analyst at Hong Kong-based China Renaissance, said,

“If a retail investor could use bitcoin or other cryptocurrencies to trade such digital bonds backed by a Chinese bank, there may not be a welcoming stance from the policymakers’ perspective.”

“This could be seen as challenging the digital yuan.”

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Author: AnTy

China Trials Its Central Bank Currency, The Digital Yuan, In Shenzhen’s Gas Stations

China’s Central Bank assists Shenzhen citizens in using its digital currency as payments to refuel their motor vehicles. The community in the tech hub of China (Shenzhen) received $1.5 million in digital Yuan, airdropped to gear up the project, 11 gas stations are now accepting digital currency as payments, reported Economic Information Daily.

A leading agency, Guangdong Petroleum conducting tests and unveiled its pilot this week on 13 October. To make a transaction, QR codes are available at stations to scan and work the same as commercial payment apps like Apple Pay.

The community experienced best practices and gave positive feedback yet, as it completes transactions in a few seconds. Alongside, all the services in a station’s boundary like stores or kiosks are integrated and support digital payment methods.

The digital yuan application characteristic that makes it distinct is it doesn’t need a phone signal to transmit. Likewise, it allows users to utilize the service until the phone battery ends.

Meanwhile, other cashless payment apps like ‘WeChat’ use a different structure. It requires an internet connection to proceed and charge a transaction fee, too.

Per a report, Guangdong Petroleum is in the process of extending its boundaries to over 110 gas stations to fix the self-operated ecosystem in Shenzhen within a month. China’s digital yuan has yet another milestone to achieve, Digital Currency Electronic Payment (DCEP). It falls in the country’s Five-Year-Plan brackets to develop and deploy the world’s advanced technologies such as blockchain and artificial intelligence.

In 2019, the Chinese Parliament declared to complete the digital yuan project before the Winter Olympics in 2022. In September, China decided to position the DCEP project as a workable option to reduce its dependency on the US dollar. This plan has become a hot topic.

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Author: Hank Klinger

China’s Digital Currency Pilot Project (DC/EP) Hits Over $160M In Transaction Volume

  • China’s central bank digital currency project nears launch as its pilot project hits over 1.1 billion yuan (~$162 million) in transactional volumes.
  • The pilot project of the DC/EP project was carried out in major cities across China.

First reported by the South China Morning Post, the People’s Bank of China deputy governor, Fan Yi Fei, speaking at a SWIFT-organized virtual conference, Sibos 2020, stated massive progress in the digital currency and electronic payments (DC/EP) pilot projects.

So far, over 1.1 billion yuan (~$162 million) worth of transactions has been carried out on the central bank’s pilot programs ranging from paying bills across cities and utility bills. Additionally, over 113,000 personal digital wallets have been launched with a further 8,800 corporate digital wallets during the pilot phase.

Speaking on the progress, Fei confirmed over 3.13 million transactions had been processed so far given using the digital yuan. The PBoC tested the DC/EP project in some of China’s major cities, including Shenzhen, Guangzhou, and Xiongan, in preparation for a full launch in 2022 during the Winter Olympics.

Fei termed the digital renminbi as an “important infrastructure for the future,” citing its widespread use in payments, including facial recognition, QR code, or tap-and-go payments systems. Furthermore, Fan confirmed over 6,700 use cases had been implemented as of the end of August across the test cities.

Such a case is the government’s initiative to launch e-yuan red packets in the Shenzhen state, aiming to reward over 5,000 medical and health workers for their selfless deeds in dealing with the COVID-19 pandemic. These red packets are acceptable in several stores in the Luohu district.

Fei, the former chairman of Shanghai Bank and deputy secretary of China Investment Corporation, has long been a supporter of digital currencies replacing banks across the globe in the future. With the central bank’s launch of its e-yuan edging closer to launch, the world’s second-largest economy could move to a totally cashless society.

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Author: Lujan Odera

Euro’s Dominance at Risk of Replacement by Digital Yuan in the Next Five Years: dGen Report

The Euro might be overtaken by China’s digital Yuan as soon as 2025 if the European Union will not have launched a CBDC by then, highlights the latest research report by German-domiciled think tank, dGen. This release which was published on September 9 focuses on the ramifications a major CBDC on the Eurozone as well as the potential of a digital Euro to be ahead of the pack.

As the crypto industry comes of age, regulators have found themselves at a cross-road in the creation of oversight mechanisms. Well, China which began research in this space as early as 2014 recently launched its digital yuan ‘DC/EP’, sparking a hype towards the global adoption of CBCD’s. Since then, a number of central banks including the European Union have floated the idea of piloting their own digital currencies.

The EU progress on CBDC’s has, however, been criticized by prominent contributors in Europe’s blockchain ecosystem including the Head of Frankfurt’s School Blockchain Center, Philipp Sandner,

‘[The] ECB’s reaction has been too slow. Especially, the benefits from a CBDC for the industry, e.g., based on programmable money, are currently neglected. Given Libra and the DC/EP, the ECB has to react quickly to keep its geopolitical position’.

According to the report, the launch of a digital Euro would be strategic for the region to continue its global dominance as the second most held fiat reserve; only this time a digital Euro will be used instead. Consequently, the research notes that a digital Euro has the potential to transform the global economy while acting as the fundamental pillar of a virtual monetary ecosystem in the Eurozone.

U.S Dollar Still Safe!

Unlike the Euro whose odds against the DC/EP are less favorable, dGen predicts that the digital yuan will not unseat the world’s reserve currency, at least not yet. The research highlights China’s political unrest as one of the factors that could hinder its CBDC’s global adoption at level to compete with the U.S dollar. In addition, smaller nations are more likely to adopt a digital dollar as opposed to the yuan given its already established dominance and ease of access globally. The research reads,

“In the coming decade, with the launch of a digital Dollar, digital Yuan, and digital Euro, we predict that smaller nations will take the path of least resistance, and opt for using and storing the digital Dollar.”

Global CBDC Integration Could Hit 60% in the next Decade

Other predictions made by the German think tank include the possibility of a 60% global CBDC integration by 2030. As per the dGen insights, three out of five nations will have completely replaced their fiat currencies with a central bank backed digital asset by then. On this front, China and Bahamas in the West Indies Caribbean have already set a pace based on the CBDC progress within the two jurisdictions.

Last but not least, the report predicted that CBDC’s will have to co-exist with private stablecoins which have now been in the crypto space for quite a while. This is because of their value proposition in the volatile cryptocurrency market as well as the ability to circumvent authorities through blockchain tech, regardless of their position when it comes to digital assets.

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Author: Edwin Munyui

The Trials of China’s DCEP Focusing on Retail Transactions: Report

The experimental test of China’s sovereign digital currency is currently focused on small retail transactions and hasn’t expanded to large volume transactions yet, said the country’s central bank as reported by local media.

The central bank gave the explanation following the rumors that a housing transaction of large volumes in Shenzhen supported the use of Digital Currency Electronic Payment (DCEP).

An unnamed employee of the People’s Bank of China (PBoC) clarified that the digital yuan is the same as fiat currency in legal tender and is a two-way convertible with banknotes in a 1:1 ratio.

The pilot tests of China’s Digital Currency Electronic Payment (DCEP) are ongoing in Shenzhen, Chengdu, and the Xiongan New Area after the country speed up its research and development in the recent years “in a bid to win the global race to launch one and against the backdrop of strained relations with the US.”

The Shenzhen subsidiary of the central bank’s digital currency research unit has also ramped up it’s hiring with more recruitment positions for blockchain development and research engineers posted earlier this month.

More Chinese cities are expected to join the trials next year. Earlier this month, China’s Ministry of Commerce also shared that it will launch DCEP’s pilot test in more “qualified localities” in the Yangtze River Delta, the Beijing-Tianjin-Hebei Region, the Guangdong-HK-Macao Greater Bay Area, and central and western China.

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Author: AnTy

China’s Supreme People’s Court Releases Guidelines On Protection Of Digital Assets As Property

China’s Supreme People’s Court and the National Development and Reform Commission (NDRC) released a joint statement on the expansion of property rights around various items, including virtual property, data, and digital currencies.

The guideline released on July 22 aims at improving the socialist market to offer a stronger protection stance for private ownership of property. This document opens up regulation and legal protection for new classes of property such as digital assets, virtual currencies, and data.

The new laws focus on seven major areas, including property protection, market order, fair trade, and livelihood guarantee, He Xiaorang, a member of the judicial committee, said. The new guidelines further aim at “protecting private enterprises’ properties from illegal seizing or freezing as well as preventing wrongful rulings by public or judicial systems.”

Despite the mention of digital assets and virtual currencies, the guideline did not define fully what constitutes a digital currency. However, with the digital yuan (CBDC) development in place, the current changes point to the government setting up a solid regulation structure before its launch.

China: Digital assets as property

China’s efforts in developing a CBDC are well beyond what most of the nations across the globe have considered. The government passed its first crypto law in November 2019, aiming at standardizing the application and management of passwords. The law, adopted earlier in the year, protects cryptographic intellectual property rights and promotes the progress and innovation of cryptography and public/private key technology.

Digital assets have been classified as property in a couple of instances across China too. A court judge in April declared Ethereum (ETH) as property in a legal theft case presented. Notwithstanding, back in 2018, another judge ruled on Bitcoin being treated as virtual property across the country.

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Author: Lujan Odera

Chinese Ride-Hailing Unicorn, Didi Chuxing, to Pilot Digital Yuan; First Mass Scale Use of DCEP

China’s ‘Uber,’ Didi Chuxing, will test run the digital yuan according to an announcement on July 8. The Chinese ride-hailing unicorn has over 500 million registered users and is optimistic that a ‘strategic partnership’ with the PBoC Digital Currency Research Institute will scale the DCEP adoption.

“Under PBOC’s overall DCEP strategy and operation timeline, DiDi’s DCEP taskforce will design and implement pilot DCEP projects following rigorous safety, security and governance standards.” read the announcement.

With only a few months of being in existence, the digital yuan pilot is already making a debut in China’s shared economy. This comes barely two months since it was first used to partially pay some state employees in pilot provinces. Now that the DCEP will be integrated with Didi Chuxing’s ecosystem, it might just be the beginning of a mass scale adoption as China looks to wipe out the fiat renminbi in circulation.

Notably, Didi Chuxing’s market muscle and financial position will be a big boost for the digital yuan. Currently, this ride-hailing service dominates the Chinese market with a valuation of $56 billion, operating across 400 cities. It also enjoys the backing of big tech like Apple, Softbank, Alibaba, and Tencent. While its value proposition goes a long way in the digital yuan roll out, Didi Chuxing noted that working with the PBoC is strategic for their fundamental goals as well,

“The partnership is a key milestone in DiDi’s ongoing initiatives to enhance the interconnectivity of online and offline economic sectors in China, as the government seeks to support the development of the real economy sectors with innovative financial services,”

China Setting Stage for the Digital Currency Economy

This development is no surprise, given the recent highlights of China’s digital yuan. As other countries continue with debates on adoption, China is miles ahead and could soon launch an official version of the DCEP. A former top executive of the PBoC recently said that the DCEP backend infrastructure is almost complete. However, no comments were made on an official launch date.

Looking at the ongoing works, this date could be sooner than most stakeholders expect. For starters, the digital yuan pilot is being facilitated by China’s banking and tech giants who have been tasked with digital wallet facilities, amongst other ecosystem functions. Also, major food chain retailers like Subway, Starbucks, and McDonald’s are reportedly looking to pilot China’s CBDC as well. Could this be finally sunrise for the project, which has been in the works since 2014? Well, the COVID-19 pandemic might just favor the odds as paradigm shifts to digital economies.

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Author: Edwin Munyui

Will China’s CBDC See Strong Adoption Or Will Dollar Pegged Stablecoins Cause Resistance?

China’s digital yuan is touted as a powerful challenger to the US’s global dollar dominance, but not as a direct competitor to cryptocurrencies. However, Chinese central bank digital currencies (CBDC) may find it hard to see adoption in niches where the dollar-pegged stablecoins already have a foothold, primarily Tether’s USDT.

Speaking during the Unitize panel held on Monday, Genesis Block’s Charles Yang, gave reasons why digital yuan might not be attractive as a crypto replacement.

Speaking to Bitcoin Exchange Guide, Yang explained that there are two main aspects driving crypto adoption in Asia. First, speculation, stating that there is a large number of investors particularly from China and Korea who like taking risks. In addition, Asian traders also enjoy the borderless nature of cryptos. He explained:

“Any country that has these capital constraints — Korea is a big one, China’s obviously another major one — [where] people just can’t go through regular banking channels to send money to a different country. This is the major use case of crypto right now.”

In this regard, Yang argues that a centralized as well as bank-issued digital yuan might not be a superb replacement to USDT. Yang states that the set regulations for capital control will still apply.

Yang also brought the issue of internationalization of CBDC’s and the way other nations may react. He explained that if China introduces a digital yuan within their own blockchain insisting other nations to accept it, those nations will need to access the data. Yang remains sceptical on whether the Chinese central bank will be ready to offer the data to other nations.

Yang stated that USDT will remain to be popular in Asia as lots of dollars are being traded each day. Traders’ confidence has been boosted in the recent past in regards to its reserves.

The expert opines that digital yuan will need to establish itself among bigger crypto markets as well as exchanges for it to compete with USDT.

Lack of adoption by other countries can also make it hard for the digital yuan to have a major threat to USDT.

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Author: Joseph Kibe

Former PBoC Vice-Chair Says the Backend Infrastructure for China’s Digital Yuan is Complete

China’s much anticipated Digital Yuan backend development is complete, according to Wang Zhongmin, the former Vice-Chair of the PBoC National Council for Social Security Fund. Wang made this announcement during the virtual 2020 FinTech Forum that was held by Beijing’s Fintech 50 Forum in collaboration with Tencent FinTech Research Institute.

The initiative, which began around five years ago, is in its sunrise phase following a pilot in 4 Chinese cities. Going forward, PBoC is optimistic about replacing the fiat renminbi (RMB) in circulation with a digital yuan.

It, therefore, follows that Wang’s sentiments could signal an earlier integration with China’s monetary system. Notably, China fast-tracked the development of its PBoC backed digital currency after Facebook announced Libra last year.

With crypto assets on the rise, China is looking to emerge as a leader in this space, hoping to replace the U.S dollar as the world’s reserve currency.

According to Wang, the digital yuan would not only serve as a digital base currency but also a payment ecosystem that accommodates other crypto-assets and sovereign currencies. Its integration is, therefore, expected to spur greater cooperation and competition in the digital currency space while maintaining oversight.

Also, the move towards a digital yuan is in line with measures against the spread of COVID-19. Wang was keen to note that both governments and private entities have since taken into consideration digital payment tech.

Other notable jurisdictions that have moved to support a CBDC include Italy; the country’s banking association (ABI) recently said that they are ready to take part in the piloting of a digital Euro.

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Author: Edwin Munyui

China’s National Blockchain Service Network Integrates Chainlink; Pushes LINK Prices Near ATH

Chainlink is back to recording gains, up nearly 12% on the back of partnership with China’s national Blockchain Services Network.

The recently launched BSN will be integrating the Chainlink oracle function to its network that enables governments and enterprises to incorporate real-world data such as IoT data, weather, location information, and financial asset prices into their BSN applications. SNZ pool, a PoS operator, will run nodes to support the operation.

Chainlink will be integrated into BSN via the interchain service hub of IRITA, a consortium blockchain product. It will allow BSN blockchain to receive external off-chain data through Chainlink oracles.

The interchain service hub is the first step toward achieving easy and convenient interoperability among all the decentralized applications (Dapps) deployed on the network. Xiang Dai, Deputy Secretary of the BSN Development Association and Director of Planning and Consultation with the China Mobile Group Design Institute Co., Ltd. said,

“We believe that this integration will transform blockchain applications and foster greater growth of the BSN ecosystem – in China and around the world.”

Providing Interoperability to all DApps

This integration is said to provide BSN users reliability, interconnectivity, and additional security to help fuel the growth and adoption of blockchain applications in China and around the world. Sergey Nazarov, co-founder of Chainlink said,

“We’re excited to help build out BSN’s global infrastructure project by providing secure and reliable oracle services. By connecting BSN applications to real-world data, smart contracts can bring new levels of automation and trust to global agreements.”

A working prototype using Chainlink oracle is already underway, and BSN and SNZpool have also allocated resources to support the development of node infrastructure to run IRITA and Chainlink nodes.

BSN is designed to be a one-stop-shop for companies to access ultra-low-cost blockchain cloud computing services. It is used by the likes of China’s State Information Center, China Mobile, China Unionpay, and Red Date Technologies.

“One of the main purposes of BSN is to provide interoperability to all DApps, regardless of whether they are for permissioned chains or public chains,” said Yifan He, CEO of Red Date Technology and BSN co-founder. Also stating,

“On BSN, each Dapp should be able to call any other Dapps in a very convenient and low-cost way.”

More Bullishness

Today, Chainlink also announced that the Ontology network is working towards a mainnet deployment of Chainlink to securely access off-chain data feeds, web APIs, and traditional bank payments. Andy Ji, Co-founder of Ontology said,

“Chainlink has demonstrated a stellar track record in providing bespoke oracle solutions to leading global enterprises including Google, Oracle, and SWIFT.

This experience underlines Chainlink’s credentials as the undisputed, market-leading decentralized oracle network.

This collaboration marks another milestone in our platforms’ long-standing and fruitful relationship, and we are excited to see this integration come to life.”

LINK is today’s biggest gainer among the top 50 cryptocurrencies. The 13th largest cryptocurrency by market cap of $1.6 billion is currently trading at $4.80, just a little off from its all-time high of $4.95 hit on March 4, 2020. In 2020 so far, this hot cryptocurrency is up 160%.

Amidst this price action, people are removing their LINK from cryptocurrency exchanges. Over 285k LINK has been withdrawn from the Huobi exchange in the past 24 hours.

But this isn’t anything new. The total amount of LINK on exchanges has been declining since May 2019.

chainlink-link-tokens-on-exchange-wallets

This behavior, however, is further bullish for LINK as this indicates the investors are preferring hodling instead of taking profits.

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Author: AnTy