Swedish Central Bank Finishes Phase One Of the e-Krona Digital Currency Test Pilot

Swedish Central Bank Finishes Phase One Of the e-Krona Digital Currency Test Pilot

  • Riksbank has revealed the finalization of the first phase of its digital currency project.

Today, the Swedes learned that they might have to wait a little longer to use an e-krona for their daily uses after the Swedish central bank realized that there are minor issues that need addressing after the first phase of a central bank digital currency (CBDC) project.

The Riksbank released a study that details the results of the first phase of its CBDC project that will run on the Corda blockchain.

The central bank tested several core issues of a future CBDC system, such as liquidity supply using its own settlement system dubbed RIX with the network membership being used as the e-kronor distributors. Other aspects tested were payment networks such as mobile apps, participants, and end-users.

The main challenge identified with the system was scalability, with the central bank saying further modifications were needed. The report says,

“The solution tested in phase one of the e-krona pilot has met the performance requirements made in the public procurement. But this has taken place in a limited test environment, and the new technology’s capacity to manage retail payments on a large scale needs to be investigated and tested further.”

The Riksbank also indicated that there were challenges in information privacy, stating a need to check if it meets the banking secrecy laws and whether the system protected personal data.

Swedish central bank had indicated that it would be ready to launch the CBDC system in 2018 but has postponed the launch date for years. The Riksbank now says the second phase of the project might not be piloted until next year and gives itself until 2026 to be fully ready.

The head of Riksbank’s unit in charge of the project insisted that it is not right to settle on the system before knowing the digital currency’s exact work. The Riksbank has also made it clear the project will not replace its fiat any time soon.

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Author: Joseph Kibe

Ant Financial and Tencent- Backed Banks Joins China’s Digital Currency Trials

Ant Financial and Tencent- Backed Banks Joins China’s Digital Currency Trials

Alibaba and Tencent owned banks set to launch China’s digital yuan trials. The private banks will simulate trials set across state-owned banks.

  • MYBank, an Ant-Financial-owned bank, plans to launch digital yuan trials across China as the state’s digital currency/ electronic payment (DC/EP) project edges closer to full launch.
  • Tencent-backed WeBank also announced similar plans to launch digital currency wallets.

According to a Bloomberg report, the two projects will have the same functionalities as the digital wallets already in trial across six government-owned banks. The six banks, including Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China, launched the trials across provinces in the country, allowing users to make digital payments and transfer money.

The addition of the two banks aims at increasing the adoption and utility of the digital yuan across China. MYBank, in particular, has been a key researcher in developing an electronic yuan in the past and looks forward to furthering its commitment to digital payments. The bank will partner with the People’s Bank of China (PBoC) to “steadily advance the trial” of the digital yuan in the future.

The central bank has already made massive steps in preparing for the launch of the digital yuan. Earlier in the month, BEG reported a partnership between the PBoC and SWIFT to launch a new digital payment service that could be tied to its CBDC. Additionally, the bank completed its largest yet rollout test for the CBDC, disbursing over $3 million worth of the digital currency to over 30,000 citizens.

The two firms become the first private firms to join the digital yuan trials with a potential battle with payment services such as WeChat Pay and Alipay in sight. Despite

Alibaba’s Ant Financial owns a 30% stake in MYBank, while Tencent is the largest shareholder of WeBank, holding 30% of its stake.

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Author: Lujan Odera

Bitcoin to Move Out of Consolidation Phase; Indicator Signals Downward Trend Is Losing Strength

  • Bitcoin is back to aiming for $40,000, as the digital currency moves upwards this week, but still remains range-bound between $30k and $40k.

According to Bloomberg, the GT Vera Convergence Divergence Indicator, which detects trend fluctuations, is signaling that the bear trend of the cryptocurrency may now be coming to an end.

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While Bitcoin is ranging, altcoins and DeFi tokens are taking this as an opportunity to pump hard. The total cryptocurrency market cap has also flown past the $1 trillion mark to $1.15 trillion.

Ether hit a new ATH above $1,765, but it’s DeFi tokens that are the real stars of the show. In 2020 so far, the notable gainers include COVER (8,251%), BAO (4,160%), ALPHA (1,134%), BADGER (1,036%), ROOK (533%), AAVE (466%), and CRV (416%).

However, all these gains can soon move into Bitcoin and take the leading crypto above $42,000 to new highs.

Institutions have also been piling into Bitcoin, with Grayscale buying 643.44 BTC this week. Bitcoin also continues to be moved out of the exchanges. This on-chain analyst, Willy Woo, speculates that could be the result of Michael Saylor holding a conference for companies, which was attended by more than 1,000 executives, to help them make a shift to Bitcoin just like MicroStrategy.

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Moreover, as we reported, PayPal that started supporting cryptocurrencies back in October, saw an exceptional response from its users.

“The volume of crypto traded on our platform greatly exceeded our projections,” PayPal CEO Dan Schulman said on the company’s fourth-quarter earnings call. “We’re excited to build on this early success by allowing customers to use their crypto balance as a funding source. … We hope to launch our first international market in the next several months.”

While PayPal is also investing in its crypto business unit, several crypto funds are being launched as well. Not to mention the retail investors from the traditional markets also see the appeal of the crypto market. So much so, much like CT, now Jim Cramer is suggesting Gamestop take the Bitcoin route. Cramer tweeted,

“Bitcoin! Genius!!! Gamestop needs to be a 5000 store bitcoin palace!!! I cannot believe how brilliant that would be… They can sell stock buy a ton of bitcoin, and just hold on. Call it Bitstop. Or Gamecoin. Wow!”

Moreover, one of the reasons for Bitcoin getting stuck in a consolidation phase, according to Ed Moya, senior market analyst at Oanda Corp, could also be a strengthening dollar ever since the start of the year.

But with the Senate passing the motion to progress Biden’s $1.9 trillion stimulus bill, USD isn’t expected to keep up with this strength for long. This, combined with the money to flow into the market, is further expected to push the prices of assets higher.

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Author: AnTy

Michael Saylor to Forbes Chair: “Bitcoin is Not a Currency,” Not an Alternative to the Dollar

“Bitcoin is Not a Currency,” says Michael Saylor to Forbes Chairman; Declaring BTC Not an Alternative to the Dollar

Besides being “steak one day, dog food the next, and caviar the day after,” Steve Forbes says Bitcoin’s limited supply makes it not fit to be money.

“With all due respect, Bitcoin is not a currency,” said Michael Saylor, chief executive officer of MicroStrategy, a public company that owns 71,079 BTC.

Saylor’s comment on Bitcoin not being a currency came after Steve Forbes, Chairman & Editor-In-Chief at Forbes Media, wrote an article about Bitcoin not being money.

In his article, titled “Bitcoin is Not money — Yet” on Forbes, Steve talked about the leading digital currency, which has surged more than 1,000% since its March lows, becoming the “new darling” of investors.

Although bitcoin proponents are predicting BTC to “resume its rise and head to $100,000 or higher,” Steve wrote, “that doesn’t make Bitcoin an alternative to the dollar yet.”

Steve goes on to point out that people are rushing in Bitcoin due to “a lack of faith in government currencies,” with the central banks crushing the interest rates and “printing unimaginable amounts of money,” but still “whatever Bitcoin is, it’s not money.”

“Money works best when it has a stable value,” he wrote.

Although the dollar would argue with that, given that it has lost more than 90% of its value since it got unpegged from gold. As Senator Cynthia Lummis said, “The dollar is designed to be worth less every year.”

Meanwhile, Steve said with Bitcoin; the problem is “it’s steak one day, dog food the next, and caviar the day after.” Moreover, its fixed supply is another issue as “the supply of money must be able to expand in order to meet the needs of a growing economy.”

“Although the price of Bitcoin continues to skyrocket, that doesn’t make it an alternative to the dollar yet,” wrote Steve. In agreement with Steve, Saylor responded that Bitcoin is actually “not replacing the dollar” because it is not money rather “a monetary asset rapidly replacing Gold as a store of value.”

Leading spot crypto exchange Binance chief executive Changpeng Zhao (CZ) is also in agreement as he said the point is not the replacement because Bitcoin is a new thing and it “doesn’t care about the old.” According to Saylor, Bitcoin will “coexist with fiat currencies as it attracts capital from weaker safe haven assets.” And he isn’t worried about the flagship cryptocurrency at all as he believes, “The Bitcoin Standard will outlast all of us.”

With this in mind, his company continues to acquire Bitcoin, which was also the first publicly listed company to replace cash with BTC in its balance sheet as a reserve asset. According to Saylor, it is “a 10-year investment,” a time period during which Bitcoin has been “just going up,” he said on Binance Blockchain Week today.

MicroStrategy is also conducting a seminar for other corporations to help make the same transition. Already, more than 1400 firms are joining the discussion about integrating Bitcoin into corporate strategy.

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Author: AnTy

BIS: Central Banks Should Issue Digital Currencies; Stablecoins ‘More Credible than Bitcoin”

BIS GM: Central Banks Should be the Ones to Issue Digital Currency; Find Stablecoins ‘More Credible than Bitcoin”

Fiat-backed crypto still needs to be “heavily regulated and supervised,” says Agustín Carstens, according to him Bitcoin may well break down altogether.

According to the Bank for International Settlements, Bitcoin is inherently risky, and only a central bank should be issuing digital currencies.

These latest remarks on “Digital currencies and the future of the monetary system” came from Agustín Carstens, General Manager at Bank for International Settlements.

“Investors must be cognizant that Bitcoin may well break down altogether,” said Carstens during his speech for the Hoover Institution on Wednesday.

This isn’t anything new coming from Carstens, who runs the Basel-based central bank for central banks, and has always been critical of Bitcoin, which has jumped more than 1,000% from its March lows and currently trades around $31,000.

This time, his skepticism cites the system being vulnerable to majority attacks as the digital asset gets close to its maximum supply of 21 million coins.

According to him, its volatility not only “undermines” its use as a means of exchange but also makes it a “poor store of value.”

“Bitcoin is more of a speculative asset than money,” he further noted, adding “the actual value backing is lacking” in the leading digital currency as such should be seen as a community of online gamers.

He also cited price manipulation and mining using “more electricity than all of Switzerland,” reasons for this complete breakdown.

Issues with Currency Issue

As for fiat-backed cryptos, stablecoins like Facebook’s Libra renamed Diem, Castens sees it “more credible than Bitcoin,” but finds serious governance concerns in terms of a private entity responsible for issuing it and maintaining the asset backing.

“Private stablecoins cannot serve as the basis for a sound monetary system,” he added: “They need to be heavily regulated and supervised.”

Castens basically wants central banks to keep full control of money, which, as we saw over the last year, the policymakers printed at unprecedented levels. He said,

“Clearly, if digital money is to exist, the central bank must play a pivotal role, guaranteeing the stability of value, ensuring the elasticity of the aggregate supply of such money, and overseeing the overall security of the system.”

Since the beginning of 2020, the US Federal Reserve has printed more than $4 trillion US dollars.

“If digital currencies are needed, central banks should be the ones to issue them,” Carstens said.

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Author: AnTy

Zurich Based Sygnum Becomes First Bank to Tokenize its Shares on Ethereum

Sygnum, a Zurich-based digital currency bank, has tokenized its shares according to a recent announcement on the company’s blog post. The bank touts itself as the first of its kind to tokenize shares on a distributed ledger, hence forging a path for the future of public offerings. These shares have been tokenized on the Ethereum blockchain via Sygnum’s tokenization platform dubbed ‘Desygnate.’

This means that Sygnum’s shares can now be accounted for via a blockchain ecosystem, including the associated legal rights and obligations. The blog reads,

“Put simply; this means that digital representations of Sygnum shares, together with associated legal rights and obligations, have been created and are immutably accounted for on a distributed ledger.”

With tokenization in the picture, Sygnum’s share registry will be updated automatically any time there is a capital injection transfer. According to Sygnum, this approach minimizes the counter-party risk attributed to settlements, given the bank will be using distributed ledger tech to manage both primary and secondary market transactions.

This initiative will also eliminate the administrative burden of written share transfer requests embedded in the current market structures. Sygnum Bank co-founder, Mathias Imbach, commented on the underlying value proposition in share tokenization,

“This is an important milestone towards fulfilling our mission of creating more direct and efficient access to ownership and value. This includes new engagement models with our clients and partners, and ultimately providing liquidity for our trusted shareholders.”

In the future, Sygnum plans to list its shares in Switzerland and Singapore via SIX Digital exchange and SBI digital Asset Holdings for the latter market. As reported by BEG, SIX recently completed a CBDC pilot test in collaboration with the Bank of International Settlements (BIS) and the Swiss National Bank (SNB).

It comes as no surprise that Sygnum is already eyeing a public offering in this marketplace. SIX Digital Exchange Head, Tim Grant, said that they are looking forward to the partnership,

“We are excited to partner with Sygnum on this journey and hope to facilitate a successful dual listing across Switzerland and Singapore in the future.”

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Author: Edwin Munyui

Swedish Government Launches Exploration Into Digital Krona

The Swedish government was one of the first in Europe to explore a possible Central Bank Digital Currency (CBDC). It has now moved into an exploratory phase, with a panel studying the potential benefits and consequences of digitizing its currency.

Ready to Roll

On Friday, Blomberg reported that the Swedish government had launched a formal review of a possible e-krona. The review will explore the feasibility of moving its currency into the digital standard, utilizing its current digital payments infrastructure.

The Nordic country has one of the world’s most advanced cashless payment systems, and many believe that transitioning into a full-fledged CBDC won’t take as much effort as others. The initiative will be led by Anna Kinberg Batra, a former chairwoman of the Riksbank’s finance committee.

Per Bolund, Sweden’s financial markets minister revealed that the government expects to complete the review by the end of November 2022.

Bolund emphasized the need to ensure that the country’s digital payments infrastructure functions safely and inclusively. He added that depending on the technology’s design and utilization, it could have substantial consequences for its financial system.

The Question of Time

When it comes to CBDCs, most countries are in the exploratory phase. The European Union has confirmed that plans will explore a possible digital Euro soon, with the region looking to bolster digital payments and improve its overall economy.

However, even that effort still seems to be a long shot. The European Central Bank (ECB) believes its exploratory efforts would yield results in 2021, and it will begin drafting the module for the digital Euro then.

Experts from several European banks believe proof of concept for the digital Euro could arrive in the next half-decade. The panel, titled “Upgrading Money to the Digital Age: Introducing Digital Euro,” saw everyone agree that the most pressing task will be getting everyone on board with the specifics of the digital Euro. With that in mind, implementation could take years on its own.

Austėja Šostakaitė of the European Central Bank pointed out that the bank won’t even decide on whether to pursue the digital Euro until the middle of 2021. For her, the primary issue will be introducing the asset into the European financial ecosystem and ensuring that it collaborates effectively with bank money.

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Author: Jimmy Aki

UK’s Leading Crypto Miner Increases Bitcoin Holdings by 30% in November

British digital currency miner Argo Blockchain reported an average monthly mining margin of 57% for November compared to 40% in October.

Last month was a good one for the price of Bitcoin, as it rallied 45%, and as a result, good for companies working with the cryptocurrency as well.

Argo Blockchain reported higher revenues for the period, recording a surge from £1.2mln to £1.48mln.

“This has been an extremely exciting month for cryptocurrency miners,” Argo chief executive Peter Wall said in a statement.

“We have seen the value of Bitcoin climb exponentially to over £14,000 as investors and payment service providers are turning their interest to cryptocurrencies.”

Despite the firm mining 115 Bitcoin compared to 126 BTC in October, this has been attributed to changes in the mining difficulty and Zcash halving. In total, the firm has mined 2,369 BTC year-to-date.

As of November 30, the London Stock Exchange-listed company held 178 BTC worth nearly $3.5 million, up from 137 BTC on October 31. The company also has a mining capacity of 16,000, increased from 5,000 machines in the first half of 2019. Wall said,

“At Argo, we are continuing to prioritise efficiency in our mining operations, and this has enabled us to increase our revenue by 23% this month and achieve our highest mining margin since the halving earlier this year.”

The shares of Argo are trading around $11, up 147% in the past two months.

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Author: AnTy

“Nobody’s Going to Ban Bitcoin,” says OCC Brooks; ‘Clarity’ Coming in Early 2021

The acting Comptroller of the Currency (OCC), Brian Brooks, said on Thursday that new regulations on bitcoin and cryptocurrencies are coming soon.

Brooks appeared on CNBC’s “Squawk Box” to talk about “clarity” on the leading cryptocurrency to be expected in the next six-to-eight weeks but made it very clear that “nobody’s going to ban bitcoin.”

So this is one thing out of the way, which some anti-bitcoiners like JPMorgan CEO Jamie Dimon try to blame their ignorance on.

“We’re very focused on getting this right. We’re very focused on not killing this,” Brooks said.

“And it’s equally important that we develop the networks behind bitcoin and other cryptos as it is that we prevent money laundering and terrorism financing.”

Brooks also cleared the air around potential regulation heightened by his former employer Coinbase’s CEO Brian Armstrong last month. Armstrong took to Twitter to warn the crypto community that he had heard rumors that the Treasury Secretary Steven Mnuchin was working to regulate self-hosted crypto wallets before President Donald Trump’s term ends in January.

However, Brooks clarified, “I think you’re going to see a lot of good news for crypto before the end of the term.”

Adoption is too widespread & technology too important

Bitcoin has been on a tear recently, hitting a new all-time high this week, a price level not seen since the peak of the 2017 bull market.

According to Brooks, the upcoming rules and regulations “will make it easier for crypto investors to know how to invest, to know how institutions can be in the asset class, and those are the things driving prices at this point.”

In 2020, the largest cryptocurrency continues to see increased institutional adoption, with PayPal allowing users to buy and sell cryptos on its platform and legendary hedge fund managers like Paul Tudor Jones and Stanley Druckenmiller betting big on BTC. Brooks said,

“It may have been a bubble two years ago, but with more clarity, institutions that see this as a real thing are going to adopt at scale, which they’ve already started to do.”

As Brooks further shared, the regulators are also working on bringing more clarity around the nature of the assets and convey a “positive message.” Adding,

“Adoption is too widespread, the technology is too important, the need for the currency is too important for it to go away. I’m not too worried about that.”

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Author: AnTy

Grayscale to Split ETHE Shares 9 for 1 In Its Ethereum Trust ($1.6B AUM) On Dec. 17

  • Digital Currency Group’s Grayscale Investments announced a 9-to-1 share stock split on its Grayscale Ethereum Trust shares (ETHE).
  • This aims to boost investors’ liquidity and participation as the shares become more affordable for retail investors.

In an announcement on Wednesday, Grayscale Investments plans to add eight ETHE shares to each ETHE share held on the exchange. The Grayscale Ethereum Trust share stock split will be effected on December 17th on registered users’ shares at the close of business on Monday, December 14th. No action is required from the users to receive the split shares, “and they will not be required to surrender or exchange their shares in the Trust,” the statement reads.

Grayscale’s Ethereum Trust Fund closely resembles an Ethereum ETF allowing investors to gain exposure to the cryptocurrency. The fund is listed on the stock market with a share representing a fraction of ETH (plus a hefty premium in management fees) bought using the pooled investor’s cash and held in Grayscale’s vaults.

Currently, Grayscale’s ETHE fund has a total of 29.5 million issued and outstanding shares, with each share representing 0.09284789 ETH in the pool. Following the share split on Dec. 17, one share’s total value will represent the ownership of 0.01031643 ETH, as the total number of issued and outstanding shares grows to 265.5 million Grayscale ETHE shares. This means that the total allocated value will not change once the stock split is complete.

According to the statement, one of the biggest reasons motivating the stock split is to make the share more affordable to retail investors. In 2020, the Grayscale Ethereum Trust share price has skyrocketed from $60 to $110 as the price of ETH reached a three year high of $635. This shows that a continued rise in ETH price could make it too expensive for retail investors to buy the share.

Grayscale has posted a successful year so far, growing their Bitcoin holdings to over 500,000 BTC, holding 2.7% of the total BTC supply.

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Author: Lujan Odera