G20 Leaders: Stablecoins Could Be Beneficial But Libra May Pose A Serious Risk To Public Policy

The recently concluded G20 Finance meeting highlighted regulation of stablecoins as an area that needs to be addressed soon. This follows the rise in popularity of digital assets with Facebook’s Libra being the most discussed.

Finance Representatives from G20 states were in agreement of the risks posed by the creation of digital coins. They noted that digital currencies are very likely to cause a disruption in the financial system, especially in Monetary policy functions.

Furthermore, other areas like Financial Crime are a good fit for digital money which leaves the question of how regulators can curb practices like illicit financing and money laundering if they give the green light.

According to Japan’s Central Bank Governor, Haruhiko Kuroda, the G20 is set to start discussions on how to effectively regulate digital assets. The decisions will mostly be reliant on the Financial Action Task Force and Financial Stability Board proposals that will be presented based on research. These two standard-setting bodies are expected to deliver in the course of 2020 which leaves Libra’s fate unknown till then.

Monetary Effects of Stablecoins

The G20 has involved the IMF to conduct research on implications that stablecoins might have on the current financial systems. A few emerging countries have expressed their concerns on the uncertainty of new assets that could take over transactions.

Besides being a challenge on developing economies, stablecoins also pose a threat to the most developed economies as well. Therefore, the U.S senate and Bank of Japan are among the stakeholders looking for solid solutions in regulation.

Recent developments especially the negative reactions from authorities have seen Libra lose major partners like PayPal and Mastercard. Bank of Japan’s Governor was keen to not that G20’s discussions did not touch on the issuance of digital currencies by Central Banks as well.

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Author: Lujan Odera

French Finance Minister: Libra Will Take Away State’s Power To Control Currency

French Economy and finance minister Bruno Le Maire attacks Libra again this time claiming that Facebook’s led stablecoin will intrude on one of the most important national government mandates, issuance of currency.

In an op-ed to Financial Times, Le Maire stated if Libra was allowed to take off it will take away the sovereign power of states to issue and control their own currencies which will have unprecedented repercussions to the world’s economy and financial system.

Le Maire’s opinions are similar to his German counterpart, Olaf Scholz who has maintained that Libra should not be allowed in Europe as it will infringe on the sovereignty of the countries.

Le Maire stated that he can’t imagine one of the most powerful tools of a state, monetary control, and policy, being taken over by private companies that are not subjected to any democratic control.

The finance minister explained that after the creation of the euro in 1999, the EU member states gave up some aspects of their sovereignty to a more powerful European project. He pondered whether states are ready to allow Facebook together with other members of the Libra Association to provide private currency and undermine the effort made by EU member states.

Le Maire reiterated his sentiments in a tweet claiming that sovereignty, both political and monetary, can never be shared with private companies.

France has been one of the harshest critics of Libra which is facing intense pressure from policymakers around the globe. Politicians and regulators have been raising concerns with the Libra project fearing that Facebook will have immense power on money issues around the world.

In the past, Le Maire has categorically stated that France will never allow Libra to operate in the country as it is a threat to the EU’s financial systems among other risks.

According to CoinDesk, Le Maire, the EU needs to move faster and come up with innovative cross border payment systems as well as central bank-issued digital money to counter Libra’s threat. He explained that China should not be left to be the only player in the market on the issue.

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Author: Joseph Kibe

French Finance Minister: Develop Euro Zone Crypto Rules And Create A ‘Public Digital Currency’ For EU

Bruno Le Maire, French Finance Minister, has called on European Union member states to come up with rules and regulations that can be used in the zone as well as consider a public digital currency which is capable of rivaling Facebook’s Libra currency, Reuters reports.

Speaking at the sidelines of EU finance ministers conference in Helsinki, Le Maire disclosed to reporters that he will propose a discussion on a probable European public digital currency with other ministers in the region from next month.

Le Maire also raised his concerns about the upcoming Libra stablecoin saying that it may be a major risk to consumers, global financial wellbeing as well as the sovereignty of the European nations.

The French Finance Minister also pleaded with the EU members to expedite the implementation of the measures to reduce cross border payments costs. Reuters states that the eurozone real-time payments has been available from the start of 2017, however, only a bunch of few banks from the zones have embraced the scheme. In addition, the scheme largely deals with domestic payments.

Le Maire also urged the EU block to consider its approach when it comes to regulating cryptocurrencies arguing that it needs to be done at the EU level. The minister said that Libra should not be launched at the EU states until the regulators can come up with a single common framework on how to regulate it. In the recent past, European regulators have been debating on whether cryptos should be regulated as securities, payment platforms or currencies.

Based on the legal framework confusion, European Commission spokesperson said that based on the available information about Libra, it was difficult to confidently say the type of EU regulations that would apply.

Le Maire has also ruled out the launching of the Faebook’s project among the EU members until the lingering concerns are fully addressed.

Cointelegraph reports that previously Le Maire had indicated that he will seek guarantees that Libra would not be utilized for illicit financial activities.

Meanwhile former International Monetary Fund (IMF) head, Christine Lagarde, who is poised to become the next president of European Central Bank’s (ECB) is pushing for a European digital currency and it could be a matter of time before it comes to fruition.

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Author: Joseph Kibe

Personal Crypto Finance App Aximetria Gets License From Swiss Regulator VQF

Crypto-Finance-App-Aximetria-Gets-License-From-Swiss-Regulator

Aximetria is offering a new app for its clients, a personal finance application that is focused on crypto as well as fiat. Now, the company has just received a license from the Swiss Financial Services Standards Association.

According to Coindesk, which reported on this story, the company was officially recognized by the local Financial Market Supervisory Authority (FINMA). This means that the product offered by Aximetria is fully compliant with the laws from the country. Because of this, the company can now start its own crypto operations without depending on other intermediaries.

The organizations are responsible for dealing with money laundering in the country and terrorism financing. Because of this, they only give the license to companies that have proven that they will not facilitate any kind of illegal activity.

Aximetria’s CEO Alexey Ermakov has affirmed that the Swiss license is one of the most desirable licenses for a fintech company. According to him, this is because Switzerland is a country with several businesses. This gives the company access to a whole world that includes money loans, forex trading, e-money and much more.

The app created by the company will somewhat similar to TransferWise. The main difference is that it will let people use crypto instead of fiat in order to make international payments. There are three fiat currencies supported right now: the dollar (USD), euro (EUR) and the Japanese yen (JPY), as well as many different cryptos (including most of the popular ones).

In order to be a client of the company, someone needs to pass a rigorous Know Your Customer (KYC) procure first. If the person is not whitelisted, it cannot send or receive any token at all.

Now that the company is regulated, the work is just beginning. According to the CEO, now is the time to upgrade several processes in order to boost compliance and continue to offer great services for the clients. This could enable the company to score a fintech license in the future.

Ermakov also affirmed that the company was started with a sandbox model and then they started to find the business model that could perfectly fit the needs of the company. The company believes that being compliant with regulation is the best step to continue growing without problems.

He also talked about how getting the Swiss license was ideal in order to reach more European customers and affirmed that the company is also focusing on other continents such as Latin America, Asia, and Africa.

For instance, the app of the company was recently launched in Portuguese and Spanish in order to cater to countries in Latin America such as Brazil and Argentina.

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Author: Gabriel Machado

Bitcoin Suisse Crypto Startup in Switzerland Bids For Swiss Banking Licence

Bitcoin Suisse Crypto Startup in Switzerland Bids For Swiss Banking Licence

Crypto finance firm Bitcoin Suisse announced today that it has applied for a banking license. Bitcoin Suisse has applied for a license from the financial supervisor and is also seeking authorization to trade securities.

In a press statement, Bitcoin Suisse AG announced that it has submitted an application to the Finma (Swiss Financial Markets Supervision Authority) for a Swiss banking license according to the Swiss Banking Act Art. 1a, combined with an application for a securities dealer license, regulated under the Stock Exchange and Securities Trading Act (SESTA).

These licenses would allow Bitcoin Suisse to further expand its offering with regulated services and products, thereby strengthening its position as a key provider of crypto financial services. Bitcoin Suisse is adapting to a changing regulatory landscape, where more and more crypto assets and services fall under securities and banking law.

Bitcoin Suisse joins two other crypto-based firms, SEBA, and Sygnum in bidding for a banking license from FINMA. The three firms are focusing on the crypto-assets market, although the authorization they are seeking is no different from any other banking or securities dealer license.

The company’s head of risk management who is coordinating the license application, David Riegelnig, said the application was to help the company adapt to the rapidly changing regulatory landscape in Switzerland and enhance the company’s market. He explained:

“A securities dealer license would enable us to trade crypto tokens that have been classified as securities by the financial regulator. This would include our own crypto franc product. And we anticipate more securitized digital assets arriving in the marketplace.”

The manager indicated that a banking license would open the door to Bitcoin Suisse to offer structured products and derivatives such as swaps. It would also consider offering corporate banking services for blockchain start-ups, but says it would be selective in choosing firms.

In readiness for the license, Bitcoin Suisse has placed 45 million Swiss Franc ($45.7 million) that will soon be extended to 55 million Swiss Franc with an anonymous Swiss bank, as collateral for a default bank guarantee, securing client fiat deposits and pooled crypto deposits.

FINMA Yet To Respond

FINMA has remained tight-lipped about when – and indeed if – it will grant such licenses. Some observers believe the financial supervisor will announce several license awards together to avoid giving anyone company a competitive advantage.

Although Bitcoin Suisse is several months behind the applications of other budding banks that are starting from scratch, the company believes its six-year track record of business growth will stand it in good stead.

Riegelnig said that the firm already has working anti-money laundering control and has demonstrated prudent balance sheet management, which he believes will assist the firm to acquire the license.

Cointelegraph reports that earlier this year, Bitcoin Suisse published financial results for the first time, reporting revenues of 44m Swiss Franc ($44.4m), a net income of 25m Swiss Francand total equity of 50m Swiss Franc for 2018. The equity of Bitcoin Suisse is projected to further grow in 2019.

Currently, the Zug-based company has 95 employees based in Switzerland, Denmark, and Liechtenstein. It plans to apply for a Liechtenstein banking license in the future, having opened a branch there last year.

Will Bitcoin Suisse become the first crypto-based company to acquire a banking license in Switzerland? Let us know in the comments section.

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Author: Joseph Kibe

France Finance Ministry Agrees with President Trump’s Stance On Libra and Monetary Sovereignty

France-Finance-Ministry-Shows-Support-For-Trumps-Stance-On-Libra

There are reports coming from France’s Finance Ministry that confirms that they have the same stance as Trump when it comes to Facebooks Libra.

President Trump claimed on Thursday that Facebook should have to register as a bank and submit to banking regulations if it plans to move forward with Libra, which company officials have touted as a faster, cheaper platform than traditional financial services. Trump’s objection reflects bipartisan investigation in Congress, where representatives in both houses have called on Facebook to submit to public hearings.

U.S. Federal Reserve Chairman Jerome Powell said on Wednesday that Facebook’s plan to build a digital currency called Libra “cannot go forward” until serious concerns are addressed, comments that pressured the project and dented the price of the original cryptocurrency bitcoin.

Now France’s Finance ministry reflects the same views. The anonymous source says:

“We will not allow private enterprises to give themselves the attributes of state sovereignty… the means of monetary sovereignty.”

Facebook has already taken steps to reassure regulators about “Libra,” which was announced amid lingering concerns over the company’s data privacy practices. The company has stressed that it will not exercise direct control over Libra. Rather, Facebook will be one of 29 companies that participates in the Libra Association, an independent Switzerland-based entity that will manage the cryptocurrency.

Libra has been facing regulatory hurdles with many governments across the globe. The Indian government has made sure that Libra does not see the light of day in India, and now the social giant has confirmed that it has no plans of launching its crypto project in India.

[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: Sritanshu Sinha

Fidelity International Will Soon Enter the Cryptocurrency Space with Digital Asset Trading Desk

Fidelity International Will Soon Enter the Cryptocurrency Space with Digital Asset Trading Desk
  • More companies in traditional finance sector are launching projects that connect them with the cryptocurrency industry.
  • Fidelity International exec Anne Richards discussed a crypto-based trading game within the company while at a conference.

With the increased popularity of the cryptocurrency market, it should come as no surprise that traditional finance companies are choosing sides. Fidelity Investments is one of the more innovative companies, as their subsidiary Fidelity International gets closer to entering the cryptocurrency space. According to reports from Ethereum World News and others, Fidelity Investments has already set up Fidelity Digital Assets, a custody operation.

Reports from Financial News indicate that someone close to this matter confirmed the company’s interest in blockchain technology. The same source added that the trading desk for the company is almost prepared to go live. The fact that the company has its own fantasy crypto trading game for staff at the international extension is proof enough that the fund manager is welcoming to cryptocurrency.

Players of this game have to build a crypto portfolio, starting with £10,000 in virtual money. To be eligible for cash prizes, the participants have to gain the biggest returns. Presently, there are already two-thirds of the 1,200-member staff at Fidelity International that have gotten involved.

This trading game was only recently publicized by chief executive Anne Richards at an industry conference last month. Richards stated,

“We have a bitcoin trading game that we use internally, as a way of teaching people about distributed ledger technology and digital tokenization, which ultimately will be an important part of the whole financial system going forward.”

Based on these comments, and if Facebook had anything to do with the recent surge in Bitcoin’s price, then Fidelity’s impact on Bitcoin’s price could show a similar effect.

Many institutions are starting to get involved in the cryptocurrency market, and specifically Bitcoin, which is why some experts believe that they were the key buyers on the sidelines during the crypto winter. With Fidelity’s work in their Digital Assets platform, they will be helping other institutions to get involved in the sector.

If Fidelity were to finally launch products or even just use distributed ledger technology, it would easily establish the brand as a leader in the fund management industry. There are still major legacy costs in this industry, and paper documentation is still maintained. Interoperability concerns are a big reason why the implementation of blockchain has been delayed for this long but choosing to get involved could easily be a big moment for the whole financial sector.

Furthermore, Fidelity’s actions could impact both retail and institutions, which could bring on the launch of mutual funds. However, as the SEC continues to shut down the idea of implementing an exchange-traded fund, these efforts could ultimately be thwarted.

Teana Baker-Taylor, the executive director with Global Digital Finance, spoke with Financial News about the plans that Fidelity International is involved in. Baker-Taylor said,

“This signals to the market that traditional financial investment in digital assets is likely to increase and they intend to maintain their institutional first-mover advantage, providing access to digital assets to their mutual fund and pension clients, as well as private and institutional investors.”

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Author: Krystle M

Cardano Allowed to Join CDF to Participate in Promoting Regulatory Guidelines

Cardano-Allowed-to-Join-CDF-to-Participate-in-Promoting-Regulatory-Guidelines

Cardano Foundation is the latest highly-ranking company to join the Global Digital Finance (GDF). By joining the famous industry membership body whose core mandate is to preach about the need to embrace the best practices on crypto assets, Cardano expects to be part of the push.

According to the official announcement, Cardano was reportedly granted membership on Thursday having gone through every single step companies go through to be admitted. In the end, the Global Digital Finance, through their Twitter outlet, welcomed Cardano.

CDF Works Hard to Promote Adherence to the Best Practices for Cryptoassets

Global Digital Finance, or simply GDF, as it is popularly called, is an industry membership body based in London. It mostly creates a full code of conduct and work principles that govern token sales, tokenization platforms, funds as well as fund managers. The body also reviews members’ websites to ensure that they are always complaint with a particular set of standards.

GDF, however, doesn’t operate like a dormant organization in the crypto industry. With Teana Baker-Taylor as its Executive Director, Global Digital Finance regularly participates in popular meetups and discussions in the industry.

In fact, Baker-Taylor is set to be a panelist at the Barcelona Trading Conference slated for later this year. Others on the panel will include Rivver’s Samuel Katz, Agada Nameri from 21M Capital and the founder and CEO of Cytexlabs, Tomar Weiss. One of the key points they’ll be discussing is the legal landscape in the industry.

Being Part of Those Setting the Rules in the Industry

For Cardano Foundation, however, GDF isn’t the only organization is has joined. It is firmly in a host of GDF-allied working groups, especially those that are involved in all-things KYC/AML, custody, Stablecoins and all issues relating to security tokens. Cardano is also keen on being part of organizations working hard to promote integrity in the market and tax treatment.

Speaking after getting admitted to GDF, Cardano’s director of global PR, communications, and marketing, Bakyt Azimkanov said they would use the newfound collaboration to help further the body’s quest to create the best practices. He said Cardano Foundation would help strengthen the group’s ongoing push to initiate robust governance policies and improve the crypto asset market develop.

Cardano Foundation, alongside IOHK and EMURGO, is working hard to develop the Cardano blockchain further. The Foundation is also working hard to expand its reach and attract more crypto enthusiasts into its ecosystem.

Cardano’s founder, Charles Hoskinson, is optimistic that their project could even dwarf Facebook once they release their Blockchain products. At the moment, Cardano is banking on its partnership with AlgoZ to boost the liquidity of its native coin, ADA.

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Author: Lillian Peter

BFIA Releases Notice, Warns about Risks of Virtual Currency as Market Warms up

BFIA-Releases-Notice-Warns-about-Risks-of-Virtual-Currency-as-Market-Warms-up
  • Beijing Internet Finance Industry Association (BFIA) on “Risk warnings about continuing to be vigilant when investing virtual currency”
  • Companies vigorously promoting their virtual coins under the guise of academic research
  • Illegal investment behavior, claiming “the currency value is rising again” while manipulated by criminals.

Beijing Internet Finance Industry Association (BFIA) released a notice on June 28 titled,

“Risk warnings about continuing to be vigilant in investing in the virtual currency market.”

In this notice, the association, not a government department, that is established by dozens of company from the internet finance industry stated that the current scenario of the international virtual currency market is warming up once again.

This has some companies like Algorand project, DVS publicizing their virtual currency under the guise of academic research promotion and “confuse domestic investors to participate in virtual currency transactions.” The ICOs and ICO variants continue to conduct cross border financial activities as well.

Moreover, perpetrators are claiming that “the currency value is rising again” and that “the investment period is short, the income is high, and the risk is low,” which in practice is actually manipulated by criminals, to attract investors and illegally profit, states the notice.

This month, Bitcoin has risen from around $8,400 to $13,900 before taking a drop and currently trading at $11,744. Since April, BTC/USD has been surging, recording more than 190 percent gains in the past 90 days.

“Do not blindly follow the trend, always be alert to speculative risks and avoid loss of property,”

advises the Association.

Reiterating the 2017 ICO ban and other warnings, BFIA said IEO, IFO, IMO and others are of extreme risks that use ‘“financial innovation” as the gimmick.” Most of these fundraising, it says are not really based on blockchain technology rather are speculative, pyramid schemes, and frauds.

BFIA urges the relevant companies to strictly abide by the laws and regulations and report to the financial regulatory authorities or industry association if anyone finds any organization involved in such illegal financial activities.

“The Association advocates that members and social institutions should strengthen self-discipline, resist illegal financial activities, and not participate in any “ICO” and its variants or speculative “virtual currency” illegal financial activities.”

As reported, it’s just an association’s warning notice and is not a law or regulation.

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Author: AnTy