Second Bitcoin ETF Goes Live in Canada as US Firms Await SEC Approval

Canada has approved an exchange-traded fund from Evolve Funds Global Group Inc. The country is blazing the trail, while American firms hope 2021 finally becomes the year of the Bitcoin ETFs.

Canada’s crypto space continues to grow significantly as the country marks yet another milestone in adoption.

This week, Evolve Funds Global Group Inc., a financial services firm in the county, secured approval for a Bitcoin exchange-traded fund (ETF)

Evolve Joins the ETF Club

Official documents have shown that the Ontario Securities Commission (OSC), Canada’s financial regulator, has approved Evolve’s launch of its ETFs, providing additional exposure to investors looking to get into the crypto market.

A receipt published yesterday also showed that the company had partnered with Cidel Trust Company, a subsidiary of Cidel Bank Canada, to provide custody, while the Gemini Foundation will be a sub-custodian.

Evolve only filed the prospectus for its ETF earlier this month. Per the filing, the ETF will have two ticker symbols – EBIT for Canadian-denominated units, and EBIT.U for American-denominated units. Both variants will provide exposure to daily price movements of Bitcoin in the respective country’s fiat currency.

The fund will track price data using the Bitcoin Reference Rate from CF Benchmark, which aggregates data from several BTC/USD markets into a single-day benchmark index.

The fund’s prospectus explained that it hopes to provide holders to price movement while reducing tracking error by using specific creation and redemption processes.

To achieve this goal, the fund will invest in long-term BTC holdings purchases through several platforms – including Gemini NuSTAR LLC. Evolve has also gotten conditional approval to list on the Toronto Stock Exchange (TSX).

The fund is available in all of Canada’s provinces and three territories.

Evolve’s fund is only the second ETF to be approved by the OSC this month. Last week, the agency greenlit the Purpose Bitcoin ETF, an investment vehicle from Toronto-based investment firm Purpose Investments. The fund will offer units denominated in USD and CAD, with a 0.75 percent management fee. Like the Evolve fund, it also plans to list units on the TSX.

“The ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency,” Purpose Investments said in its announcement.

Uncle Sam Lags Behind

Over in the United States, there is some hope that the new administration – and, by extension, new head at the Securities and Exchange Commission (SEC) – will be more welcoming of a Bitcoin ETF.

This year, crypto investment firm Bitwise Asset Management filed for an ETF with the SEC, hoping to make it through for the third time. New York Digital Investment Group (NYDIG), a crypto-focused investment fund, has also made a similar application, with investment banking giant Morgan Stanley acting as an authorized participant.

While several ETF applications have come and gone, none has passed through the SEC’s iron barrier. However, with the new administration showing a propensity towards progressive crypto policies, the anticipation of approval is high.

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Author: Jimmy Aki

Pakistan Regulators Look to Build Friendly Framework for Digital Assets

Pakistan seems to realize the potential of digital assets in the financial future as the country seems geared up for formulating a new framework to regulate cryptocurrencies such as bitcoin. This is highly bullish since Pakistan was among the very few countries that in mid-2018 blanket banned digital assets in any form. It wasn’t until April of 2019 that regulators started to change their minds.

The Securities and Exchange Commission of Pakistan (SECP), on November 6th, released a consultation paper about regulating digital assets. The paper mentioned that the finance ministry is looking to make new laws as they look at the regulatory frameworks set by other countries.

SECP believe digital assets is a “start of a new era of digital finance.” The consultation paper further noted that to propel this new digital finance era, a new set of frameworks would be required to drive its adoption.

“Digital assets also known as Virtual Assets, and Crypto Assets are the start of a new era of Digital Finance, and demand innovative regulatory measures and approaches by the regulators across the world.

This could only be possible by initiation of a new era that re-invents regulatory regime/measures as they are known to the regulators globally today.”

It is also important to note that many developed countries in the West are currently discussing launching a Central Bank-issued Digital Currency (CBDC); however, the consultation paper makes no mention of any such plans by Pakistani financial watchdog. At present, they are only focusing on regulating private digital assets such as bitcoin.

The paper made a note of two types of tokens, namely security tokens and utility tokens, where the regulatory body sees a security token as an important tool that might help in fractionalizing real-world assets and digitize them.

The paper mentions that they have 2 choices as regulators; restrict digital assets due to current rules or take a ‘let-things-happen’ approach. Which they mention that they are heavily leaning towards the do-no-harm approach.

The paper also welcomed feedback from the stakeholders of the decentralized space in developing the new framework.

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Author: James W

Iran to Use Bitcoin for International Trade, Bypassing the Dollar Due to US Sanctions

With the latest amendment to the legislation, Iran has become the first country to use cryptocurrencies at a state level for import funding.

The Iranian Cabinet amended legislation to redirect digital currencies into the funding mechanism of the Central Bank of Iran (CBI) for imports, as per the report by the official The Islamic Republic News Agency (IRNA). The report by the CBI and the Ministry of Energy said,

“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI.”

The limit on crypto for every miner will be decided by the level of the subsidized energy used for mining and the Ministry of Energy’s instructions.

This could create a war of hash rate in the Bitcoin space as China continues to lose its share while Kazakhstan, Iran, Malaysia, and Canada record an increase, as per Cbeci.org.

Iran’s share particularly has increased by over 2% in April 2020 from 1.74% in Sept. 2019.

Iran’s cryptocurrency move isn’t new and is a necessity for a country that is strapped for international currencies. In August 2019, it officially legalized crypto mining but banned trading in an attempt to take advantage of its subsidized electricity and extract taxes.

Iran’s fiat currency, the Iranian Rial, has also fallen as the country struggles with inflation, currently at 34%, for the past three years. Its economy has also been contracting since last year; this year, it did -10% a quarter. About a year back, Brian Hook, the US Special Representative for Iran had noted that,

“The regime is struggling to acquire the foreign currency they need to procure imports such as machinery, industrial inputs, and consumer goods.”

Earlier this year, the nation allowed power plants to operate large scale Bitcoin mining operations.

Given that Iran is also in the grip of US sanctions, it is bypassing the dollar and officially using Bitcoin. The country is also considering creating its own digital currency.

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Author: AnTy

Leading Iranian Power Stations to Supply Clean Energy to Crypto Miners

Iran has gradually become one of the leading crypto-mining hotspots in the world after China. The country turned to crypto amid growing concerns over its economy due to inflation and sanctions from the United States. The government regulated crypto mining a couple of years back, and since then, the crypto mining industry has flourished to become one of the key industries.

A few months back, the government authorized power plants in the country to mine bitcoin. It seems many power companies in the country are now willing to sell the electricity to the growing population of crypto miners in the country.

As per the latest report published in a local daily dated September 21st, Iran’s Thermal Power Plant Holding Company (TPPH) plans to sell their surplus electrical supply to crypto miners. TPPH is one of the largest power companies in Iran, and the reports suggest that the company is already in talks to hold a tender for supplying surplus electrical energy from three of its powerplants to crypto mining farms in the country.

The Iranian government’s expenditure on building an infrastructure for energy production has borne fruits, and the county has seen great progress in producing electricity. However, the government has also restricted power companies to stable price regimes, limiting these power companies from making great profits. Thus, supplying the surplus energy to crypto miners can prove a big revenue booster for these firms.

Energy Companies to Supply Only Clean Energy

The government has allowed for the distribution of surplus energy to crypto miners; however, this surplus energy needs to be clean and green. As a result, the power companies can only sell electricity produced from clean natural sources like wind and solar rather than ones generated by burning fossil fuels.

At present majority of crypto mining is done via fossil-fuel based electric power, which is available to the miners at subsidized rates. However, the move from TPPH could prove to be a big game changer and could pave the way for the use of clean and green energy for crypto mining.

In fact, Iran has single-handedly brought down the percentage of clean energy used for crypto mining due to the cheap price of fossil-fuel generated electricity. The country has also seen a significant rise in the mining operations ever since the government decided to regulate the mining industry rather than putting a blanket ban. There have been several rumors from time to time that the Iranian government is looking to launch its own central bank-backed digital currency, but nothing concrete has come out of it yet.

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Author: James W

China Should Seize the ‘First Mover’ Advantages of Launching A CBDC: PBoC

China should aim at becoming the first country to issue digital currency as part of its efforts to internationalize the yuan and lessen its over-dependence on the world’s dollar-dominated payment system, the People’s Bank of China (Chinese central bank) said.

The commentary appearing in China Finance, a People’s Bank of China run magazine, opined that the rights and capacity to offer and control digital currencies is set to become the ‘new battlefield’ among various sovereign nations. The article also claims that issuance and the circulation of virtual currency will alter the current international financial system.

The article argues that China should aim at becoming a first mover in the digital currencies space and calls for the acceleration of the development of the country’s CBDC.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” says the article.

Also, the article argues that data feedback from a Chinese central bank-issued digital currency (CBDC) would be vital for the development of a national monetary policy, which is imperative for economic recovery in the post-pandemic landscape.

The article also revealed that PBoC’s digital currency research outfit had filed approximately 130 patents related to crypto applications touching on issuance, circulation, and implementation.

The People’s Bank of China’s research institute was founded in 2015 to look at the feasibility and implementation process of digital currencies, to reduce the costs of circulating fiat currency and enhance policymakers’ grip in the money supply ecosystem.

Last month, various state-run Chinese commercial banks embarked on large-scale piloting of the digital wallet, which is a step closer to the highly awaited official launch of the digital currency. PBoC revealed last month that about 400 million people are involved in the piloting program for a digital yuan.

The Chinese central bank is looking forward to using the digital yuan during the 2022 Winter Olympic Games.

The article concludes that digital yuan can help in breaking the dollar hegemony in the international monetary system.

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Author: Joseph Kibe

CoinDCX Becomes The First Indian Crypto Exchange To Launch Token Staking Services

Indian cryptocurrency exchange, CoinDCX, becomes the first in the country to launch simple staking services for its users. First reported on Coindesk, the staking service will launch with three tokens Tron (TRX), Harmony (ONE), and Qtum (QTUM).

Speaking on the latest developments, CoinDCX CEO, Sumit Gupta, confirmed the staking service would not carry fees or hidden charges. The Mumbai based digital asset exchange is built to promote retail staking with low minimum balances required to stake. A minimum of 100 ONE (~$1), one QTUM (~$3), and five TRX tokens (~$0.1) is required with an annual return of 8-10%, 6-10%, and 5-10% respectively.

Gupta further said the exchange would pool the staking deposits from customers in a bid to increase their staking rewards while simplifying the staking process. Additionally, CoinDCX will also measure the optimal reward system by offering staking rewards through their partner exchange, Binance, or directly on the blockchain.

The exchange has raised over $5 million in 2020 in a bid to expand its products and market base. In March, following the landmark Indian Supreme Court ruling against the crypto ban, CoinDCX raised a $3 million Series A funding round from BitMEX and Bain Capital. The exchange further extended its raise by $2.5 million, led by Coinbase Ventures and Polychain Capital, to increase the company’s market share and encourage crypto adoption in India.

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Author: Lujan Odera

Deregulating Bitcoin may Increase Speculative Trading Instead of Technical Innovation

Ryozo Himino, the new top financial regulator of Japan, wants the country to take caution over promoting digital assets, arguing that instead of promoting technical innovation, it may end up fueling the speculative fire.

“Deregulating bitcoins and other cryptocurrencies may not necessarily promote technical innovation, if doing so simply increases speculative trading,” Himino told Reuters.

“We’re not thinking of taking special steps to promote cryptocurrencies,” he said. Himino became the new commissioner of the Financial Services Agency (FSA) just last month by replacing Toshihide Endo.

Last year, Himino, under Japan’s chair, spearheaded the G20 debate on regulating cryptocurrencies. Himino was in favor of setting strict regulations on the likes of Facebooks’ Libra, warning the global risks cryptocurrencies pose needs to be addressed first.

Focus on CBDC

According to him, Tokyo needs to shift the focus towards issuing a central bank digital currency (CBDC) as the ongoing coronavirus pandemic could help speed up a cashless society.

Japan has already been studying the technical obstacles to issuing a digital yen and conducting research in joint efforts with other central banks as well.

Himino welcomed these efforts and said, “We shouldn’t be worried about various challenges without even trying to design a plan (for issuing CBDCs).”

“In the end, Japan must think hard about whether to issue CBDCs because there are merits and demerits to doing so. What it can do now is to be ready so that when Japan decides to issue CBDCs, it can do so straight away.”

No “One-Size Fits All” Solution for Banks

The coronavirus (COVID-19) has been making things worse for the country’s regional banks, which are already feeling the pain of years of ultra-low interest rates and a sluggish economy.

According to Himino, there is no “one-size fits all” solution for the banks and said regional banks could use the bail-out programs of the government, cut costs, or raise capital from the markets, though the situation hasn’t been that bad, he said.

“At present, there isn’t any regional bank that is facing concerns over its financial health.”

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Author: AnTy

Venezuelan Military Confiscates 315 Bitmain Antminer S9 Bitcoin Miners Over Lack of Permits

Venezuela, the country which has been struggling financially because of hyperinflation, has had quite a love-hate relationship with Bitcoin.

The government wants to push native digital currency Petro for citizens to use. However, the poor design and technical limitations of the Petro make it hard to use. A majority of the population prefers bitcoin as a bridge currency to help them store value as the value of the national fiat keeps receding.

In a recent development coming from the country, the National Guard, the country’s military has seized over 300 ASIC bitcoin miners from local miners for the lack of necessary paperwork and documentation for possessing that equipment.

Bitcoin mining in the country is not illegal, and electricity is also quite cheap; however, due to the government’s passiveness towards crypto, local bitcoin miners often have a run-in with law enforcement agencies.

The National Guard shared the news on Twitter and noted:

“In the PAC “Toll Guayana” of @GNB_BolivarD625, 315 Bitcoin machines that were transported in a 350 truck were retained, for not having the permission issued by the National Superintendency of Cryptoactive. #6Jul#FANB GNBCCuidandoDelPueblo.“

The National guard claimed that they were undergoing a routine check when they found a truck trying to pass through the Guayana’s Toll Military checkpoint containing 315 of Bitmain’s Antminer S9 Bitcoin mining machines.

When the driver was asked to produce the documents for those mining machines failed to produce the same. The military then seized the machines and alerted the National Superintendence of Cryptoassets and Related Activities (Sunacrip), the authority responsible for regulating cryptocurrencies.

The Bitcoin Mining Industry is Underdeveloped in Venezuela

Venezuela is one of the most oil and mineral-rich countries with abundant crude oil and diamond mines present in the country. The country is also among the places with the lowest electricity rates, which make it a perfect hub for bitcoin mining; however, due to the ongoing financial crisis and the corrupt government, the industry is quite underdeveloped.

Venezuelans have found Bitcoin mining to be a profitable way to earn Bitcoin and trade US Dollars against it, as the national fiat is not worth even the paper it is printed on. Bitcoin mining is legal in the country and requires those who want to operate bitcoin mining farms to register with the authorities.

However, the entrepreneurs and firms interested in the field avoid doing so to avoid coming under the radar of criminals and even corrupt government officials. One such Bitcoin miner in the country expressed his ordeal last year saying:

“I think I’m ‘marked’ by both the police and the community.”

Despite the fear of authorities and criminals, local Venezuelans are increasingly getting involved with bitcoin mining because the reward for mining outweighs the external threats.

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Author: Silvia A

The Malaysian Securities Commission Warns Investors Against Using Crypto ATMs

The Malaysian Securities Commission (SC) has issued a warning against the use of crypto ATMs in the country. The warning stated that crypto ATMs come under Digital Asset Exchange (DAX) and thus require a clearance license from the security commission to operate in the country. Still, the SC says it has not issued any such operating license.

Crypto ATMs are commonly used to buy digital currencies using cash and debit/credit card, and their popularity has soared in the past couple of years. The same is true in Malaysia, and there are multiple crypto ATMs installed around the country.

The SC says interacting with these ATMs could lead to fraud since they are not regulated or authorized to operate. The SC released a statement stating:

“As such, we wish to caution and remind members of the public not to deal with unlicensed or unauthorized entities or individuals. Those who do so are not protected under the Malaysian securities laws and are exposed to various risks, including fraud and money laundering.”

The SC also warned the operators of these ATMs to cease their operations or face the ire of the law. Under the current securities law, the operators of these ATMs could face ten years of imprisonment or RM10 million in fine for operating without the DAX license.

The SC also released a website link that shows the names and list of verified operators from whom the users can purchase digital assets. The agency also asked the citizens to be more aware of these operators and also inform the agencies if they come across any such suspicious service providers or get any phone calls or emails.

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Author: Rebecca Asseh

Bank Of Japan (BoJ) Launches ‘Technical’ Study to Experimenting CBDCs

The race to launch a sovereign digital currency is heating up as Japan became the latest country to venture into a central bank digital currency (CBDC). In a report released by the Bank of Japan (BoJ) on Friday, July 3, 2020, the bank will start experimenting with a digital yen to check the technical feasibility of adopting a CBDC in the country.

The report, titled “Technical Hurdles for a CBDC,” will look into the launch of a digital Yen from a technical perspective with several central banks participating in the research. This marks the first time the central bank is speaking on a digital yen following in the footsteps of the People’s Bank of China (PBoC).

The latter central bank announced the plans to launch a CBDC back in 2017 and has quietly been developing its digital yuan. Reports to BEG late last month from the Vice-Chair of the Digital Yuan committee confirmed that the back end of the Digital Currency Electronic Payment project is complete with testing in some of the provinces already launched.

Japan aims at similar progress in its project, but the statement mentioned two significant challenges the digital yuan faces before development commences.

The first hurdle the CBDC faces is universal access, which means that everyone in Japan should be able to use the digital yuan whether you have access to a smartphone or not. The second is the resilience of the CBDC, which means that the stablecoin should be available at all times whether there’s an emergency, ‘earthquake’ – no lag should be in the system at any time too.

A question of governance?

The question that most central banks have to deal with is the overall governance of the CBDC. Both the decentralized systems and centralized systems have their pros and cons, hence the dilemma facing the Bank of Japan.

In the decentralized system, robustness in security is enhanced, and network failure minimized (eliminated) given the distributed nodes. However, these systems tend to be slower than centralized systems that have large capacities and faster transaction speeds. The report reads,

“In the case of massive transactions for retail use cases in advanced countries, it is better to adopt the centralized type. […] In the case where the amount of transaction is limited, and resilience and future possibility are prioritized, there is room to consider the decentralized type.”

Japan’s private sector is also trying its hand in the digital finance world. In June, we reported top banks in Japan including Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group (MUFG) joined other industry leaders to study the prospects of developing a digital payments system. The “study group” examines and solves challenges concerning digital currencies and digital settlement infrastructure.

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Author: Lujan Odera