DTCC Urges Financial Institutions to Collaborate in Forming A DLT Regulatory Framework

U.S Depository Trust & Clearing Corporation (DTCC) published a white paper on Feb,12 calling for the establishment of a proper regulatory framework on blockchain technology. The leading American financial markets clearing and settlement company noted that this would help avoid the risks associated with Digital Ledger adoption in future.

This white paper dubbed ‘Security of DLT Networks’ highlights the opportunities and looming risks if financial industry stakeholders do not step up to oversee blockchain implementation. DTCC’s Chief Security Officer, Stephen Scharf, further emphasized on the importance of tech policy upgrades;

“DLT offers great potential, but as with any new technology, it also comes with certain risks. Traditional security measures may not be adequate, so it is critically important that this topic is top of mind for any DLT implementation.”

DTCC’s Proposed Strategy on Blockchain Implementation Oversight

According to the whitepaper, financial market players are better off collaborating to form standardized guidelines on DLT adoption. It continues to read that a coordinated approach would help address the security associated risks in detail. This will in turn assist firms operating and looking to enter the blockchain market to play by the book and grow within a regulated framework.

DLT will notably improve how data is protected, verified and processed. As a result, DTCC suggests that a more tech specific framework would be effective in integrating the DLT networks within IT legalities across the world. An industry consortium to form fundamental operational guidelines was also identified as a long-term solution to the existing legal gaps in the DTCC whitepaper.

There have been previous efforts to form a baseline regulatory framework around blockchain tech but only a few jurisdictions have achieved much. DTCC plans to capitalize on its muscle within the derivatives market to lobby as many financial players and develop a standard for DLT frameworks. Mr. Schaff noted on the importance of a global framework for all industry participants;

“As is common in IT security communities, frameworks must be widely available, generally agreed upon, and commonly adopted.” he added “As best practices mature, they can be adopted into a formal framework and used for financial industry participants and regulators alike.”

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Author: James W

DTCC Delays Blockchain Post-Trade System To Sidestep Possible Brexit Complications

Brexit is coming up and several companies in the United Kingdom are scared of it. Now, the Depository Trust & Clearing Corporation (DTCC) has recently affirmed that it would postpone the launch of its new post-trade platform for derivatives to avoid any kind of complication with Brexit.

According to the official reports, the delay is actually happening to allow more testing on the platform. Many people know, however, that Brexit is getting close, and that now is a bad time for launches.

On the official side of the story, the company affirmed that the blockchain-based project is progressing pretty well and that the company is only making sure that its product will be 100% ready when it hits the market. Coindesk, however, cited an inside source affirming that Brexit is the actual main reason for the delay.

The initial launch date for the project would be around the time that Brexit happened (if it does, indeed, ever happen, because no one truly knows at this point). With such a drastic change, the whole regulation of the country might suddenly change, which can often be a huge headache and scare investors.

During the announcement of the delay, the company did not provide any kind of exact date for the launch, which is understandable, as it will possibly wait to see what happens after Brexit.

The platform created by the DTCC is known as TIW and it works as a mainframe to cloud solution based on the blockchain. The current version of the product handles $11 trillion of credit derivatives, so the upgrade will certainly be a big deal.

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Author: Silvia A

Turkey’s Takasbank Will Launch Blockchain Platform Focused on Physical Gold Trading

The Instanbul Clearing, Settlement and Custody Bank (Takasbank), which is based in Turkey, has recently announced the launch of a new blockchain platform that would be used to trade physical gold.

According to the bank, the new platform is going to be called BiGA (which means one gram of gold) and it will enable the clients of the company to trade physical gold using the digital platform. All the gold will be secured at the Borsa Istanbul Stock Exchange (BIST).

Each gram of gold will be digitally represented as a “unit”. Each unit will be alike to a stablecoin and have its value tied to the official value of gold.

This new project was originally started last year, but it took some time before it was complete. According to Takasbank, the focus will be on confidential transactions and a way to securely store and trade gold. The platform will be compliant with local laws and the authorities and regulators will receive information about the trades.

Each user will store the units on a wallet that will work just like a cryptocurrency wallet. While the option of using the units for e-commerce will not be available at the start, the company has already revealed that there is interest in taking this idea forward.

Takasbank was created back in 1988 and the main clearing and settlement institution of the country. It is using the blockchain technology since last year and creating interesting products with it.

Several companies will be partners in the initiative. Ziraat Bankasi, the second-largest bank in the country, is one of them. Other financial institutions are Garanti BBVA, Vakif Bank, Kuveyt Turk, and Albaraka Turk.

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Author: Hank Klinger

Gemini Introduces New Settlement Product, Gemini Clearing, For OTC Trading

Crypto exchange firm, Gemini, has announced its newest offering, Gemini Clearing that will allow over-the-counter trading for its users. In a blog post, the crypto exchange announced that the new service will be accessible by everyone both retail traders as well as institutional investors.

Gemini follows other exchanges in the industry such as Huobi and Coinbase in introducing OTC trading services for all its customers.

As per the blog post, Gemini Clearing will be exclusively an off-exchange service for crypto trading. The post states that Gemini clients will be able to negotiate and agree on OTC trades and once the agreement is in place, the funds will be sent to their Gemini accounts.

Additionally, the service will allow third parties to broker the deal or two clients can arrange for the trades. The firm said that it is going to come up with various measures which will drastically reduce counterparty risk which will also make sure that the trades will be settled within the set timeline.

According to Gemini, the new OTC service will also enhance privacy since the trade details will be kept private and will not be published. This means that the trade details will only be available to the individuals or institutions involved.

To deal with fraudsters and to ensure compliance with the government requirements, all the individuals or institutions using the new service will be required to adhere with the set company KYC and anti-money laundering (AML) guidelines.

In other news, the company also announced that Noah Perlman will join the exchange as Chief Compliance Officer with the firm insisting that compliance is one of its core pillars.

Perlman is an experienced financial crime expert and previously worked as the Head of Financial Crimes at Morgan Stanley.

Coitelegraph reports that Off-exchange has been on the rise in the recent past with Kraken reporting that trading on its OTC service has increased by about 20 percent this year.

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Author: Joseph Kibe

Crypto Asset Activities Fall Under Rhode Island’s Money Transmission Laws

Rhode Island has been putting effort towards clearing defining the regulatory framework of cryptocurrencies. The main question that has since stumped the U.S. state in New England is whether the virtual asset can be classified as money or some monetary value that falls under their transmitter laws.

Since the passing of Bill 5847 in July of 2019, more clarification has been provided. Turns out, some crypto activities will now be subject to the state’s money transmitter laws as per Alston & Bird Consumer Finance Abstract.

As per Rhode Island’s statute, anyone providing “electronic money transfers for a fee or other consideration,” must register as a money transmitter, which is regulated by the Rhode Island Division of Banking.

The bill describes cryptocurrencies as

“a digital representation of value that (A) is used as a medium of exchange, unit of account or store of value; and (b) is not legal tender, whether or not denominated in legal tender.”

Some guidelines appear to have been proposed as well, which seem to be directed towards crypto businesses and individuals offering related services. In particular, said the group is required to disclose certain matters to residents while developing compliance programs. The latter is suggested mostly for personal data safety, privacy and integrity among others, such as anti-fraud and -money laundering, and security programs.

Coin Desk also reported on this matter, stressing that there are licensing exceptions for “personal, family or household” uses of cryptocurrencies, as well as for educational and escrow services. The new law will be in effective commencing January 1, 2020.

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Author: Nirmala Velupillai

ABN AMRO Clearing Bank, BUX Partner to Work on Blockchain Investment Trading App STOCKS

ABN AMRO Clearing Bank, BUX Partner to Work on Blockchain Investment Trading App STOCKS
  • ABM AMRO Clearing signs a new partnership with the mobile investment platform BUX
  • The new commission-free stock trading mobile app is expected to be released this summer

ABM AMRO Clearing, a global securities services provider, has signed a new partnership with the mobile investment platform BUX to create a commission-free stock trading mobile application. The information was released by BUX in a press release on May 29.

ABN AMRO Clearing Signs Partnership With BUX

As per the news release, ABN AMRO Clearing is one of the top three clearer for derivatives and cash securities, OTC products, commodities and other asset classes in different time zones. Indeed, the company was able to process 3.79 billion trades just in 2018 alone.

The new application is going to be called STOCS and it is expected to be launched as soon as in summer 2019. The goal is to reach the the whole European Continent and start rolling it out in the Netherlands, followed by Germany and then the rest of Europe.

The funds that clients will deposit on the platform are going to be held by ABN AMRO Clearing in a specific individual blockchain bank account. This bank account leverages the proprietary Banking-as-a-Service platform, which will allow ABN AMRO Clearing to operate as a bank.

At the same time, ABN AMRO Clearing will also provide STOCKS with a solution called Smart Order Routing that will allow clients to buy and sell orders on the platform.

According to a BUX spokesperson, the new solution is expected to work in a similar way to a bank account. However, instead of using escrow accounts, the funds will be administered in the blockchain network.

Moreover, ABN AMRO has also launched a blockchain inventory tracking platform that is used to leverage the Internet of Things (IoT) technology.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Carl T