Reserve Bank of Australia Sees No Rush in Launching A CBDC; Aussie Banknotes Are Working

As other nations are rushing to launch central bank backed digital currency dubbed CBDC, Australia is not joining the bandwagon.

As per the Australian local news platforms, the Reserve Bank of Australia recent payments paper indicates that the bank is taking a cautious stand when it comes to CBDCs and privately issued stablecoins.

According to the australian central bank, there is no urgent case or need to introduce a CBDC in the country. The regulator argues that the country has an efficient, real-time payment platform which eliminates the need of a CBDC.

In addition, the regulator notes that the use of cash for transactions is decreasing in the country as Australian citizens are getting rid of banknotes just like in other countries like Sweden.

According to the central bank, despite the COVID-19 crisis in the country, the demand for cash has gone up. In this regard, RBA has committed to continue making it easy for Australians to access banknotes “for as long as Australians wish to keep using them.”

The Reserves Bank’s paper also explored the projects being carried in China, Sweden and Canada – some of the countries which have taken the CBDC initiatives proactively.

When it comes to Sweden, the RBA says that the country has witnessed a significant decrease in the use of cash for a number of years hence the need for Riksbank to come up and test the use of e-krona.

In Canada’s case, the country’s central bank has been preparing itself to provide CBDC when the opportune time comes. The Canadian central bank has envisioned two scenarios when CBDC can be beneficial – a collapse in use of fiat money for normal transactions as well as a threat to the country’s monetary policy as a result of growth and development of privately issued digital money.

The RBA’s report also touches on Facebook’s Libra stating that it still remains a dream and is following closely on whether it be granted regulatory approval to operate in various jurisdictions.

The Australian central bank also opined that the Chinese CBDC project which is at an advanced stage is largely informed by the popularity of private-sector e-money wallets like WeChat and Alipay.

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Author: Joseph Kibe

The Bahamas Central Bank to Launch Its Digital Currency, the Sand Dollar, Next Month

The Bahamas are on the verge of becoming the first nation in the world to introduce a state-backed digital currency. The Bahamas Central Bank announced that it would issue a central bank-backed cryptocurrency (CBDC) next month.

Chaozhen Chen, the Central Bank of Bahamas assistant manager in charge of eSolutions, said that the virtual currency, known as ‘Sand Dollar,’ is set to enhance financial inclusion, especially the isolated islands within the country.

Chen explained that most people on those isolated islands have no access to banking and digital payment infrastructure. Based on reasoning that the central bank came up with a customized solution that will solve the problem while allowing the country to maintain its sovereignty.

The Sand Dollar transfers will be made using a mobile-based wallet app on users’ phones which will be much easier since more than 90% of the citizens use a mobile phone.

According to the official, the central bank digital currency (CBDC) will adhere to the regulations and rules subjected to the Bahama dollar. Users will have to comply with the anti-money laundering (AML) and know your customer (KYC) rules when it comes to the creation of accounts for the use of the digital currency.

The new virtual dollars will be issued by demand. Chen also revealed that the CBDC would be issued along with the withdrawal of the fiat Bahamian dollars to avoid an oversupply of money in the country.

The Bahamas Central Bank first indicated the desire to introduce a digital dollar in June 2018. At that time, the regulator noted that most smaller islands had witnessed a massive downsizing and closure of commercial banks, which left them with no banking services.

The central bank started a pilot project dubbed ‘project Sand Dollar’ last year in the islands of Exuma and Abaco with a population of 7,314 and 17,224, respectively.

Chen explained that every Sand Dollar would be pegged on the Bahamian dollar pegged on the US dollar.

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Author: Joseph Kibe

Bermuda-Based Digital Asset Bank, Jewel, Partners With Crypto Custodian Anchorage

Jewel, a proposed digital asset bank in Bermuda, has been added as one of the clients to Anchorage’s digital asset custodial services. The yet to be approved digital asset bank announced on September 16, noting that the move will be beneficial to crypto companies based on the island.

Anchorage, licensed in the U.S, significantly increases the value proposition of Jewel digital asset bank as a prospectus entity in the Bermuda crypto banking space. Jewel’s chairman and founder, Chance Barnett said,

“Our relationship with Anchorage enables us to serve our clients with the rigorous security and product standards needed for bank-level safety, service, and compliance.”

Leveraging Anchorage as its crypto custodian will help Jewel run operations smoothly; the target functions include the provision of checking accounts and other crypto banking services to firms in this niche. Consequently, Anchorage is set to play a fundamental role in the custody of digital assets entrusted to Jewel by its clients.

It is quite noteworthy that Anchorage’s custodial services are relatively liquid, given that the firm does not use cold storage. Jewel is optimistic that this position will further facilitate its product scaling to feature lending services for crypto-oriented entities. The company’s Chief Revenue Officer, Jill Richmond, added that they intend to increase operations to other jurisdictions as well,

“We are at the forefront of being able to service global markets … We have existing letters of intent at the moment with a number of the top Tier I, Tier II digital asset exchanges.”

Bermuda’s Progressive Blockchain and Crypto Approach

While Jewel will probably be the first approved digital asset bank in Bermuda, the island has been a leader in the blockchain adoption and regulatory space. Some notable milestones include developing a blockchain identification system in collaboration with the Shyft network and Perseid. The small island is also becoming a crypto business hub with exchanges shifting operations from stiff regulatory jurisdictions like the U.S.

Interestingly, Bermuda’s government is also one of the few authorities that accept tax payments in crypto, the USDC coin, to be specific. If Jewel is given the go-ahead, the crypto payment options will probably scale based on this digital asset bank’s ability to spur integration by acting ‘as the banking bridge between digital assets and traditional fiat currency (USD) held in banking accounts.’

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Author: Edwin Munyui

French Multinational Bank to Launch a Digital Euro Pilot Using Tezos Blockchain

Blockchain firm Tezos has been selected to spearhead the French central bank’s digital currency pilot program, one of a kind in Europe.

Societe Generale – Forge, a tech startup founded by French investment bank giant Societe Generale, has opted for Tezos to spearhead the central bank digital currency (CBDC) pilot program.

The French central bank Banque de France selected Societe Generale – Forge in July after a successful review of applicants in development of a CBDC to ease interbank settlements. France is carrying out an experiment to become the first European country to launch a digital Euro.

Tezos is a peer-to-peer public blockchain that has features such as on-chain governance, capacity to verify smart contracts as well as consensus algorithm that is primed on proof of stake. The blockchain platform comes with a vibrant ecosystem inclusive of research and development offshoot dubbed Nomadic Labs that is located in Paris and will play a vital role for the CBDC piloting. Nomadic Labs President, Michel Mauny explained about the deal:

“The Tezos project, strengthened by its technical capabilities, its adaptability, and its strong community, is already present in various projects, both in France and abroad. We are especially pleased to see this technology selected by Societe Generale – Forge, and to reaffirm, once again, that the quality and expertise of our engineering is rewarded.”

Francois Villeroy de Galhau, Banque de France’s governor, in December last year said that he was optimistic that France will be the inaugural European country to offer digital currency. The governor explained that the central bank is exploring how technology can be leveraged in enhancement of the financial markets more so when it comes to interbank regulations.

Although France seems to be on the forefront in development of a CBDC, other European countries such as Italy, Netherlands and Lithuania are also exploring the idea of CBDC. Additionally, the European Central Bank is also working on trials although details remain scanty.

Currently, Tezos is only one of the handful public blockchain platforms participating in development of a CBDC that could culminate to a digital euro.

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Author: Joseph Kibe

Lithuania’s LBCOIN, The World’s First Collectible Digital Coin, is Sent to the ECB Council

The world’s first collectible digital coin called LBCOIN was sent to the email inbox of European Central Bank policy makers on Monday from one of their colleagues.

The coin came to Governing Council members as a link to an e-wallet with six digital tokens. These tokens feature a portrait of one of the 20 signatories of Liithunai’s 1918 declaration of independence.

“I’m curious how popular this is going to be among Governing Council members,” said Vitas Vasiliauskas, Lithuania’s central bank governor. “I’ve asked for feedback,” he added.

Just last week, ECB President Christine Lagarde said that they would soon discuss whether or not the eurozone should create its very own digital currency.

Currently, finance chiefs of the euro region are working on devising a regime to regulate fiat-backed stablecoins.

Call for a Digital Euro

Before being sent to the colleagues, the LBCOIN was demonstrated at last week’s Governing Council meeting about how it works.

Based on blockchain technology, the project took three years to complete, Vasiliauskas said.

“We’re the first to issue” such a coin, he said. “The whole experience gave us ample possibilities to comprehend the technology.”

The users of the tokens can also trade them among themselves after activating the tokens. The specific set of them can also be exchanged for a credit card-sized physical coin that has a nominal value of 19.18 euros.

The central bank governor believes the LBCOIN experience will help ECB in reaching the decision on a digital euro. According to him, it was the social media giant Facebook’s stablecoin Libra that helped euro-area central banks in recognizing that digitization can revolutionize the financial system.

“We absolutely need to move forward, we see the Chinese are already testing it in practice, launching the CBDC in certain regions,” he said. “Europe shouldn’t sleep through this again.”

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Author: AnTy

Nigeria to Regulate Cryptocurrency Trading; SEC Says Digital Assets Are Securities

The Securities and Exchange Commission (SEC) of Nigeria will start regulating trade in digital currencies to ensure investor protection and that transactions are transparent. The authorities said on Monday,

“The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices.”

The agency said it’ is required to regulate “when the character of the investments qualifies as securities transactions.”

In the past, the West African nation declined to recognize digital currencies as legal tender. In 2018, the Central Bank of Nigeria said that cryptocurrencies, including Bitcoin (BTC), Litecoin (LTC), XRP, Monero (XMR), and Onecoin, weren’t considered money.

The Abuja-based regulator said in a statement that it views digital currencies as exchangeable securities and that the issuers or sponsors of these virtual assets “shall be guided by the commission’s regulation.”

The country is now coming to acknowledge the growing presence of digital assets, and Ayodeji Ebo, managing director at Afrinvest securities in Lagos, said, “the earlier it is regulated, the less havoc on the economy.”

“It’s another way to provide alternative assets to investors,” he told Bloomberg.

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Author: AnTy

Euphoria Back in the Market? Bitcoin to Hit $11,000 But Ether is Struggling This Time

The leading digital currency is approaching the levels seen right at the beginning of this month before we went down under $10,000 to hit as low as $9,800.

In a bullish start of the week, bitcoin first hit $10,750 yesterday, and now today, the crypto asset recovered some more and went further up to as high as $10,945 on Bitfinex, for now.

At the time of writing, BTC/USD has been trading at $10,900 in the greens, with real trading volume also slowly climbing to $1.9 billion. The greens have also turned market sentiments from “fear” to “neutral.”

Ether’s Lack of Upside

This time, Bitcoin is leading with Ethereum slow on the uptake, barely in the green at $375.

Just like Ether’s gains have been attributed to the success of DeFi, the underperformance is linked to DeFi as well. Meanwhile, with the Ethereum network already clogged up, the trading activity across DEX will suffer yet again because of the elevated fees.

“This double edged sword notion is nothing new,” said Denis VinoKourovo of London-based broker Bequant but noted, with Ethereum 2.0 on track for a November 2020 launch, it “may soon cause a bit of a stir in the derivatives market place.”

While the much-needed upgrade is on track, Ethereum Foundation also announced the impending launch of a second parallel testament called Spadina, which will run alongside the currently active Medaala testament.

The second “dress rehearsal,” Spadina has a mainnet like configuration. It will last for three days, giving everyone another chance to go through the process of deposits and the launch of the genesis block. VinoKourovo added,

“If markets are indeed underpricing the success of Ethereum2.0 launch, then vol spread between Ethereum vs. Bitcoin will narrow, as it stands 1m IV ETH vs. BTC is 77% vs. 55%, whereas 6m out the same spread is at 82% vs. 72%.”

Rest of the Market

Just like Ether, DeFi tokens aren’t feeling as euphoric either.

In the DeFi space, bZx Network is currently down 22%, which has been because of yet another hacking that resulted in the theft of $8 million worth of cryptocurrency.

Other notable losers include RUNE (8%), CRV (7%), SUSHI (5%), SNX (4%), and COMP (2%).

Meanwhile, YFI is trading in the green by 6.42% at $41,843, along with LPC (3.59%), BAL (3%), UMA (2.35%), and CREAM (1.24%).

But it is KIMCHI, which is leading with 46% gains and YAMV2 with over 13%.

Among the top digital assets, Bitcoin Cash (BCH) is up by 4.43% and Crypto.Com Chain (CRO) 3.73%.

Meanwhile BNB (-8.47%), Tron (-4.60%), and LINK (-2%) are recording losses.

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Author: AnTy

Switzerland Passes Blockchain Legislation Unanimously; Will Take Effect Early 2021

  • Switzerland has finally approved legislation for blockchain and digital assets, making it one of the major financial hubs to have a formal regulatory reference point for the upcoming crypto market.
  • The country’s parliamentarians voted unanimously for the ‘Blockchain Act’ that had been passed earlier in summer.

According to a report by the international unit of Swiss Broadcasting Corporation, SWI, this legislation on DLT’s and blockchain is likely to come into effect at the beginning of 2021. The milestone will open up doors for Swiss crypto-savvy investors to participate in the latest tech, including decentralized finance (DeFi); companies will also be able to tokenize shares within the law amongst other assets.

These new blockchain-oriented laws for Swiss crypto companies define several events and the probable course to follow, should such situations arise. Given the new dynamics underpinning crypto ecosystems, some underlying laws on bankruptcy and security trading have been amended to accommodate the digital assets.

The legislation goes to the extent of providing clarity on trading security tokens as well as due diligence procedures by service providers. The clarifying is an effort to curb money laundering and terror financing activities that appear to be thriving in crypto networks. Speaking to Decrypt, Urs Bolt, a leading Swiss FinTech influencer, noted that the new laws would be a big boost for the country’s burgeoning crypto space. He commented,

“Overall, it will create one of the most favorable regulatory environments in the world. It will allow the financial center to lead in the digital asset space and hopefully attract new business into CryptoValley.”

Interestingly, this latest legal advancement comes just after Switzerland’s Canton of Zug decided to accept tax payments in crypto. The town, which has earned a nickname ‘Crypto Valley’ due to the high blockchain and crypto activity, said that residents can now pay their taxes in Bitcoin (BTC) and Ethereum (ETH) via QR codes; the initiative will roll out in Q1, 2021.

It is quite noteworthy that Switzerland joins its neighbors Malta and Liechtenstein, which had already enacted comprehensive legislation for blockchain-related tech. However, the country’s position on a CBDC remains unclear despite global hype and China’s debut of its digital yuan.

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Author: Edwin Munyui

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

Crypto Exchange, Luno, Is Now a Wholly-Owned Subsidiary of Digital Currency Group (DCG)

Cryptocurrency exchange Luno has been acquired by New York-based digital asset firm Digital Currency Group.

London-based Luno, which also has hubs in Singapore, Cape Town, Kuala Lumpur, Lagos, Jakarta, and Johannesburg, has about 400 employees and caters to more than five million customers. The company, which is also backed by technology investor Naspers and others, will continue to be led by CEO Marcus Swanepoel.

Barry Silbert’s DGC, which backs more than 160 blockchain companies and is the parent of Grayscale Investments, Genesis, Foundry, and Coindesk, first invested in Luno in its seed round in 2014. Now, Luno has also become the independent, wholly-owned subsidiary of DCG.

“Luno is a high growth, global business, and there is a massive opportunity to expand organically and through acquisitions,” said Silbert, founder, and CEO of DCG.

With a long term vision to “upgrade the world to a better financial system,” the company targets bringing 1 billion people into the mix by 2030.

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Author: AnTy