Crypto Asset Reform to Place Australia “Firmly” in the Lead, Bringing More Consumer Interest & Entrants, says Treasurer

“It represents the most significant reforms to our payments system in 25 years,” said Treasurer Josh Frydenberg.

Australia is now planning for a central bank digital currency (CBDC).

The government will consult on a digital version of the fiat currency, Treasurer Josh Frydenberg said in a speech in Melbourne.

Besides the CBDC, the government is already working on crypto regulation. On Wednesday, Frydenberg also said that they would consider a licensing framework to allow crypto transactions within a regulated environment and the best way to introduce a new and appropriate crypto taxation policy.

“The comprehensive payments and crypto-asset reform plan I am announcing will firmly place Australia among a handful of leading countries in the world,” Frydenberg said in an interview with 7NEWS Australia. “It represents the most significant reforms to our payments system in 25 years.”

For this modernization, the new regulations will “broaden” the definition of products and services that can be regulated, which will take crypto “out of the shadows” and into their “world-leading” regulatory framework.

Advice on both is expected to be received by the end of next year.

Regulatory Clarity, Enormous Opportunity

Australia needs to leverage the new technology to gain an advantage, said Frydenberg, noting that the crypto-asset market has surpassed $2 trillion. He further said that more than 800,000 Australians, about 3% of the population, own crypto in some form.

“These are significant shifts which we need to be in front of,” he said. “What is clear is that if we embrace these developments, Australia has an enormous opportunity to capitalize on the convergence between finance and technology.”

The government will also be looking to introduce more regulations over fees being charged to users of digital wallets and ‘Buy Now Pay Later; which accounts for 20% of online retail transactions, with more than 5 million active accounts, in Australia.

While about half of Australia’s population now make payments on their phones, services like Google Pay, Apple Pay, and AfterPay don’t fall under the Payment System Regulation Act, making it difficult for the authorities to oversee the fees charged by them or to promote competition.

As such, they will begin the consultation on modernizing the payment system framework next year.

For consumers, this will establish a regulatory framework to underpin their growing use of crypto and clarify the treatment of new payment methods, and for businesses, these changes will address the tax treatment of crypto assets, new payment methods, and of course, the regulatory ambiguity.

“In doing so, it will drive even more consumer interest, facilitate even more new entrants and enable even more innovation to take place,” said Frydenberg.

BOT Worried About Blank Coins

This week, Thailand’s central bank meanwhile warned commercial banks from being directly involved in trading digital assets, citing the risks arising from high price volatility.

“We don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public, and there is risk,” said Chayawadee Chai-Anant, a senior Bank of Thailand (BOT) director at a news conference.

Last week, the central bank also warned companies from accepting crypto as payment as it will impact their ability to oversee the economy.

“For digital assets, we are not afraid of everything,” said BOT senior director Sakkapop Panyanukul, “but there is a spectrum – most worrying are blank coins,” those cryptos not benign backed by assets.

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Author: AnTy

Indian Finance Minister: No Plan to Recognize BTC As Currency; Indians Want Crypto Taxed but Not Legalized

India does not plan to recognize Bitcoin as a currency, said Finance Minister Nirmala Sitharaman on Monday, in response to a question in the Lok Sabha, as per the local report.

When asked whether the government has a proposal to recognize the leading cryptocurrency as a currency in the country, Sitharaman gave a “No.”

On Monday, another minister asked the Ministry of Finance whether the government is aware of the cryptos that are traded in India. He further asked whether crypto trading is legally permitted in India and if the government has allowed crypto exchanges to operate legally in the country.

“Government does not collect information on trading in cryptocurrency. Cryptocurrencies are unregulated in India,” said Pankaj Chaudhary, Minister of State (MoS) in the Ministry of Finance.

Chaudhary further pointed to the Reserve Bank of India’s circular from May 2021 that advised its regulated entities to continue to carry out customer due diligence processes in line with regulations governing standards for KYC, AML, CFT, and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA) and ensuring compliance with provisions under Foreign Exchange Management Act (FEMA) for overseas remittance.

High Court Asks For An Update

On Monday, Bombay high court also directed the Center to update it on the proposed crypto legislation expected to be tabled during Parliament’s ongoing winter session.

The Indian government plans to introduce a new bill, ‘Cryptocurrency and Regulation of Official Digital Currency Bill 2021’, that could bar most private cryptocurrencies.

According to a legislative agenda released recently for the winter session of Parliament, the government will only allow certain cryptos to promote blockchain technology and its uses.

Meanwhile, the direction from the court came as the court is hearing public interest litigation that says in the absence of appropriate legislation, aggrieved persons do not have a redressal mechanism for their complaints.

The petitioner, Advocate Aditya Kadam, said investors face problems as their rights were being violated, and their investments were at risk due to the crypto business being unregulated.

No Legalization Please

Meanwhile, according to an opinion poll, 54% of the people surveyed in India don’t want the government to legalize cryptocurrencies.

More than half of the respondents want the government to tax them like a digital asset held in a foreign country.

The poll was conducted by LocalCircles involving 56,000 people in the last 15 days.

The findings revealed that only 26% of them said crypto should be legalized and then taxed, while the remaining 20% didn’t have a view on it.

“While many Indian citizens have invested in cryptocurrencies, the absence of a robust framework leaves investors open to high risks. This is confirmed by the study findings as 71% of the study respondents have low or zero trust in the same,” said Sachin Taparia, CEO at LocalCircles.

The survey further revealed that about 87% of families don’t have anyone trading or investing in crypto assets, while only 1% have high trust in them.

The majority (74%) also believe crypto advertisements are not highlighting risks effectively, and only 5% are in favor of crypto platform continuing advertisements.

Half of the survey respondents (about 51%) also support the central bank rolling out its own digital currency.

According to a report from the Economic Times (ET) on Monday, RBI is working on the phased implementation of a CBDC.

Entering The Indian Market

Despite the regulatory uncertainty, Singapore-based crypto exchange Coinstore has begun operations in India. It launched its web and app platform and planned branches in New Delhi, Mumbai, and Bangalore for its expansion in the country.

“With nearly a quarter of our total active users coming from India, it made sense for us to expand into the market,” Charles Tan, head of marketing at Coinstore told Reuters. Tan expects the government to come out with a healthy framework for crypto.

There are an estimated 15 million-20 million crypto investors in India, with total crypto holdings of around 400 billion rupees (over $5.3 billion), according to industry estimates.

The exchange further plans to spend $20 million for hiring as many as about 100 employees for the marketing and development of crypto products and services in the Indian market.

Before Coinstore, CrossTower launched its local unit in India in September. Besides India, Coinstore also plans to expand into Korea, Japan, Vietnam, and Indonesia.

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Author: AnTy

DCG Raises $700M in the 2nd Largest Crypto Investment Round from Google and SoftBank

Bitcoin is “unstoppable at this point,” while 99% of crypto have no reason to exist, said DCG CEO Barry Silbert, but he’s “a believer in creative destruction,” so that’s okay.

Digital Currency Group, the parent company of the largest digital asset manager Grayscale Investments, raised $700 million at a valuation of more than $10 billion.

The company announced a secondary round on Monday, in which existing investors sold shares to new backers.

This was an opportunity for some early investors to take profits and exit. But no one sold their entire stake, said DCG.

After FTX’s $900 million at an $18 billion valuation, the second-largest funding round in the cryptocurrency market was led by SoftBank and counted Google’s venture capital arm Capital G, Ribbit Capital, Vision Fund 2, Latin America Fund, and GIC Capital among its investors.

Founded in 2015, the company previously raised $25 million in primary capital. Besides Grayscale, which has $50 bln under management, DCG also owns prime brokerage and institutional lending firm Genesis, data firm TradeBlock, mining company Foundry, news outlet CoinDesk, and has backed over 200 blockchain companies.

“We’re the best proxy for investing in this industry,” said Barry Sibert, founder, and CEO of Digital Currency Group, in an interview.

“We were looking for the type of backers that could be, and hopefully will be with, with us on this journey for the next couple of decades.”

Diversity Of Exposure To Crypto

While Softbank brings with itself the ability to turbo-charge portfolio companies, Capital G brings in Google’s expertise in data and consumer companies, said, Silbert.

It was only about three months back that Softbank started investing in the crypto sector. “We hadn’t made any investments in crypto because we didn’t think it was ready,” said Marcelo Claure, chief executive of SoftBank Group International.

“It is basically the single-best asset that gives us the diversity of exposure to crypto, A-Z.”

To Capital G, which has invested in Robinhood, Airbnb, Snapchat, and Lyft, this $100 million investment in DCG is a way to back a potential winner in crypto-financial services.

“When I think back to the nineties, very few companies I met still exist — it’s very hard to evolve as quickly as technology evolves — you need to be a pretty nimble company to take advantage of it.” “DCG has a lot of flexibility to make investments and to get into new businesses.”

David Lawee Capital G Founder & General Partner

Believer In Creative Destruction

While DCG wouldn’t rule out an IPO, it is “not in the plans and not being discussed right now,” given that already, the company is on track to top $1 billion in revenue for the year, said Silbert, who did not sell shares in this second round. He owns slightly less than 40% of the company.

Additionally, the company holds various crypto assets, including Bitcoin, which according to the CEO, is “unstoppable at this point.” To Silbert, it wasn’t until this year that he fully expected crypto to have a viable future.

Bitcoin’s rebound from 2020 lows and growing acceptance among investors gave him confidence in its future.

“Prior to that, I’d still wake up not sure if bitcoin was going to be around the next day.”

But 99% of digital assets currently existing are also “overvalued” and have no reason to exist.

“But I’m also a believer in creative destruction and that’s okay that they aren’t going to be valuable — what’s going to come out of it is some incredibly valuable, impactful protocols.”

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Author: AnTy

Grayscale Hires its Global Head of ETF After SEC Chair Pours Cold Water on Physically-backed Bitcoin ETF

ETF Veteran David LaValle said Grayscale is “in a unique position” because they “actually have a product in the marketplace, so it puts us in a great spot” while emphasizing that it’s now just a question of when and not if there’s going to be a Bitcoin ETF.

Grayscale Investments, the world’s largest digital asset manager, has hired ETF veteran David LaValle as its global head of exchange-traded funds.

LaValle, the former CEO of custom index provider Alerian, will drive the effort to convert the $25 billion Grayscale Bitcoin Trust (GBTC) into an ETF, to which CEO Michael Sonnenshein has said they are “100% committed.”

“This is an inspired hire IMO as Dave has been key person at Nasdaq, State Street, and more recently Alerian,” commented Eric Balchunas, Senior ETF Analyst at Bloomberg.

In addition to the ETF head, the asset manager is seeking to fill at least 10 other related roles. Just last month, Grayscale partnered with Bank of Mellon for ETF services following GBTC’s conversion.

“We’re focused on creating a number of products to be a world-class ETF issuer.”

“We’re in a unique position. We actually have a product in the marketplace, so it puts us in a great spot.”

If converted, GBTC would immediately become the third-largest commodity ETF with $60 billion SPDR Gold Shares (GLD) being the largest and $29 billion iShares Gold Trust (IAU) in second place.

GBTC is currently a closed-end fund, and this lack of ability for shares to be redeemed is why it trades at such hefty premiums and is currently at an 11.84% discount. This discount is very likely to collapse once it is converted into an ETF, LaValle said.

Grayscale has been ramping up its efforts to build out its ETF arm even as the US Securities and Exchange Commission (SEC) is showing no signs of approving a single Bitcoin ETF yet.

“Despite the fact that there isn’t a bitcoin ETF, it doesn’t mean there isn’t investor demand more broadly in the asset class.”

Support for the Unwanted

Meanwhile, US SEC Chair Gary Gensler gave a speech at the Aspen Security Forum on Tuesday where he shared that he is open to a Bitcoin ETF which complies with the SEC’s strict rules for mutual funds — one focused exclusively on Bitcoin futures, rather than a physically-backed one as the industry wants.

“SEC is like that one house on Halloween that gives out apples,” commented Balchunas on Gensler’s openness to a non-physical Bitcoin ETF.

The problem with this is Gensler is basically “open to approving something that investors don’t want,” Balchunas added, such a product will flop as seen with gold futures ETF DGL, which have less than 1% of the assets of physically-backed gold ETFs.

The Bitcoin Strategy ProFund is already experiencing this with only having a mere $500k worth of assets in a week. In comparison, the first bitcoin ETF approved in North America, the Canada-based Purpose Bitcoin ETF, amassed more than half a billion dollars in a week, which means in the US, these numbers could easily surpass a billion dollars.

“The “race” for bitcoin MFs, a weak undercard to the headline race for a physically backed bitcoin ETF. People forget NYDIG had a MF and it flopped,” said Balchunas.

“They are all going to flop. Gensler let these through because of the protections afforded by the 40 Act – and their ability to close if too much assets – but the irony is there won’t be any investors in them to protect.”

While in the last eight years, the SEC has yet to approve a single Bitcoin ETF, LaValle is hopeful, much like the majority of the crypto industry, and believes “now we’ve gotten to a place where it’s really not a question of if there’s going to be a bitcoin ETF, it’s just a question of when there’s going to be a bitcoin ETF.”

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Author: AnTy

El Salvador’s Law Making Bitcoin Legal Tender to Take Effect in September, Paraguay to Follow

El Salvador’s President Nayib Bukele said in a national address that a recently passed law making bitcoin legal tender would take effect on September 7, noting that its use will be optional.

The countries’ Congress has already approved the proposal to embrace the cryptocurrency with a supermajority, making El Salvador the first country in the world to do so. Bukele said,

“The use of bitcoin will be optional, nobody will receive bitcoin if they don’t want it… If someone receives a payment in bitcoin, they can choose to automatically receive it in dollars.”

Salaries and pensions will also continue to be paid in USD, he added.

“One of the reasons we passed the bitcoin law is precisely to help people who send remittances,” said Bukele, adding the usage of crypto for remittance will eliminate the high cost of commissions involved in sending money across borders.

El Salvador relies heavily on money sent back from workers abroad. Remittances to the country made up nearly $6 billion, about a fifth of its gross domestic product (GDP) in 2019, one of the highest ratios in the world, showed World bank data.

According to Kenneth Suchoski, US payments and fintech analyst at Autonomous Research, less than 1% of the volume of global cross-border remittances are currently in cryptocurrency, which is expected to account for a larger share in the future.

On Thursday, Athena Bitcoin said it plans to invest over $1 million to install 1,500 crypto ATMs in El Salvador, especially where residents receive remittances from abroad.

President Bukele “presented us with a tough challenge of 1,500 ATMs, we will go for that, but in phases. We are a private company and we want to ensure that our development in the country is sustainable,” said the firm’s director for Latin America Matias Goldenhörn.

Athena installed its first crypto ATM in the country’s El Zonte beach as part of an experiment called Bitcoin Beach.

Amidst this, Paraguay is working on becoming the second country in the world to accept Bitcoin as legal tender.

Lawmaker Carlos Rejala is leading a bid to implement legislation to make Paraguay the second country to follow in El Salvador’s footsteps. Rejala announced on Twitter that he would be introducing a bill in the national Congress in July.

The bill that will be published on July 14 and seek to establish Bitcoin as legal tender will also introduce measures to make Paraguay a hub for foreign crypto investors.

Rejala first outlined his vision early this year when he said he was working with the crypto community in the country to make it a hub for the crypto investors and “subsequently to be placed among the ones on the cutting edge of digital technology.”

Juanjo Benitez Rickmann, the CEO of crypto exchange, then confirmed that he collaborated with the congressman to make Paraguay a crypto-friendly country and take “advantage of the renewable and inexpensive energy provided by hydroelectrics.”

Rejala, too, has emphasized Paraguay’s access to renewable energy as an impetus for attracting investment. Nearly 100% of the country’s electricity needs are served by hydroelectric plants, while 90% of all energy it produces is exported to neighbors Brazil and Argentina. Rejala while speaking to La Nación newspaper on Friday said,

“We are proud that since we announced that we are working on a bill that legalizes the use of digital assets… as legal tender in Paraguay for any type of commercial transaction, various Paraguayan companies have already joined and taken a step forward into the new era of transactions.”

Last week, a Paraguay-based large entertainment holding company said that 24 of its businesses would start accepting crypto as payment options from July.

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Author: AnTy

Balancer Labs Launches V2 With Promises Lower Fees, Higher Yields, and Easy Interface

Balancer Labs, a DeFi protocol operating on the Ethereum blockchain, said in a press release that its long-awaited V2 is live.

Balancer’s Governance Execution

The project, which has been one year in development, will see the automated market maker (AMM) switch its governance execution to a community multi-sig.

This will see new signers like Jake Brukhman of CoinFund, David Hoffman with Bankless, Alexander Langer of Inflection, and eight more signers forming the new community.

Alongside this, the upgrade comes with a new clean user interface to make it simpler for users to execute trades. Also, the V2 offering will see users enjoy lower gas fees, faster exchanges, and improved liquidity – major challenges the Ethereum network is hoping to address with its ETH 2.0 launch.

Speaking about the expected gas savings the upgrade will facilitate, Balancer Labs said users would enjoy a 40% gas reduction fee for simple swaps. They will also get a 53% gas reduction fee if they execute trades with internal balances.

Balancer Labs also noted that all liquidity pools would be managed within a single vault in the new V2.

However, Balancer Labs says users should continue using the V1 pool since it provides the best prices. This is until enough liquidity is moved to the new V2 protocol. The development team notes that once enough liquidity is in the latest version, all trades would be routed through its Protocol Vault so users will enjoy low gas costs and better pricing.

Concerning V2 liquidity mining, Balancer Labs said liquidity providers (LPs) would switch to a new and trustless program to mine its native token BAL. This will see LPs stake positions in different pools to receive BAL. Balancer said these pools are divided into three tiers, and each tier slot will be getting a fixed amount of BAL token per week.

DeFi Is Booming

In the run-up to its V2 launch, Balancer Labs highlighted the key contributions of a few industry players and said it had signed agreements with a few. Some of its launch partners are Gnosis which handled its user experience focusing on price, UX, and transparency. Others are Ocean Protocol, Element Finance, Aave, Gyroscope, PowerPool, Enzyme Finance, and Techemy Capital.

AMMs like Balancer Labs are hugely popular in the DeFi sub-sector, given their competitive prices and user-friendliness. In a new report by DeFi data aggregator DeFi Pulse, the UniSwap rival has racked up over $2.77 billion total value locked (TVL) in the last 90 days.

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Author: Jimmy Aki

UK Tax Authority HMRC Updates Guidance on Crypto Taxation

Meanwhile, Britain’s financial services minister said the focus is on regulating stablecoins, and intervention in the wider crypto markets is “less immediately pressing.”

HM Revenue and Customs (HMRC), UK tax authority, published fresh guidance on the taxations of crypto assets, an update to late 2019 issued guidance that aims to provide clarity on the taxation of cryptocurrency assets.

the update involves the trading of tokens, conversion to fiat currency, mining transactions, and staking for both individuals and corporations.

According to the guidance, If a company or business is carrying out activities that involve tokens, they are liable to pay tax on them whether buying and selling them, exchanging them for other assets, mining, or providing goods or services in return for tokens.

When it comes to mining transactions, it will be a taxable trade based on a range of factors such as degree of activity, organization, risk, and commerciality.

“Staking” has been addressed as a type of mining “which weights the entitlement to newly forged tokens.” Yet again, the taxability of them depends on several factors like mining.

The guidance says, if the mining activity of the business does not amount to a trade, the pound sterling value of any crypto assets awarded for successful mining will be taxable as miscellaneous income subtracting the expenses.

Profits will be “calculated according to the relevant tax rules” if the activity does amount to a trade.

When it comes to individuals, HMRC says that “only in exceptional circumstances” would it expect “individuals to buy and sell exchange tokens with such frequency, level of organization and sophistication that the activity amounts to a financial trade in itself.”

If the miner, either business or individual, keeps the awarded assets, they may have to pay Capital Gains Tax when they dispose of them later.

Not the Pressing Concern

On Tuesday, Britain’s financial services minister said they would first focus on regulating stablecoins than the broader crypto market.

“We need to manage risks to competition,” John Glen told a City & Financial conference.

“There is the potential for some firms to swiftly achieve dominance and crowd out other players, due to their ability to scale and plug into existing online services.”

According to him, the case for intervention in the wider crypto markets is “less immediately pressing” while saying it is a “once-in-a-generation opportunity” to make “vast strides in the efficiency of financial services.”

Separately, Britain’s financial watchdog said imposing existing electronic money rules that authorize cashless payments on stablecoins won’t be suitable.

“The e-money regime isn’t a perfect match for crypto,” said Alex Roy, head of consumer distribution policy at the Financial Conduct Authority, at the same conference.

In other news, this week, the Iowa House of Representatives also passed a bill to legally recognize smart contracts. Democratic Representative Steve Hansen suggested the bill’s implementation would lead to broader regulation of crypto.

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Author: AnTy

Genesis Report Shows Investors’ Varying Views on Bitcoin’s Value By 2030

Much has been said about Bitcoin and its recent price rally. The asset’s performance has drawn praise and criticism alike, with multiple speculations floating around on what could happen soon.

While proponents believe this is the beginning of a march towards a six-figure valuation, detractors claim that it is just another bubble waiting to drag investors down. However, a new report shows that many investors are feeling more conservative in their outlook towards it.

A Great Year for Investors

Genesis Mining published its Bitcoin Investor Prediction for 2020. The report shows a varying view of what investors expect to happen to BTC. While some investors are bullish on Bitcoin’s long-term potential, others remain conservative with their predictions.

Genesis Mining started on an explanatory note, giving reasons why Bitcoin has rallied so much in 2020 despite the pandemic. The firm highlighted three reasons: investors’ desire for a safe haven asset, increased institutional adoption, and the decentralized finance (DeFi) market growth.

Genesis Mining also sought the opinion of other Bitcoin investors. The goal was to gain insights into why and how these investors think. Questions asked included their investment level, when they decided to join the Bitcoin market, and why they chose to take the plunge.

Not So Bullish on Long-Term Price

While these questions provided different insights into who the investors were, their price predictions were quite startling. Despite the optimism surrounding Bitcoin’s ability to blitz through alternative assets in the coming years, only 17 percent of surveyed investors expect BTC to surpass $50,000 in value by 2030.

As Genesis’ report showed, there was no visible consensus concerning where Bitcoin’s price will be in the next decade. However, about 16 percent of investors see Bitcoin oscillating around the $10,000 to $20,000 price range.

In general, only 50.2 percent of investors believe that Bitcoin will have risen above the $20,000 mark by 2030.

Those who held incredibly bearish positions gave several reasons for their views. These included the threat of stringent regulations and a possible ban on Bitcoin’s use. They also mentioned reduced market hype and the possibility of CBDCs replacing BTC.

The bulls believe increased adoption and declining trust in traditional currencies would be instrumental to Bitcoin’s rise.

Such a disparity also appears to be the distinction between this rally and the 2017 bull’s run. Investors are more realistic in their predictions than blindly thinking that the gravy train will keep moving.

While the opinions on Bitcoin’s exact value varied, there was more consensus about whether it is the best asset class.

As the Genesis report showed, 66.3 percent claimed that the asset is a better investment option than the dollar. 52.3 percent believe that the asset will bring higher returns than real estate, and 54.5 percent claim the asset beats the United States stock market.

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Author: Jimmy Aki

Former PBoC Governor: China Doesn’t Have ‘An Ambition to Replace Existing Currencies’

China’s former head of the central bank said digital yuan could be useful for cross-border trade and support its efforts to promote yuan as an international currency.

Zhou Xiaochuan, who stepped down as governor of the PBOC in 2018, spoke at the Shanghai Financial Forum on Friday. According to him, digital currency allows payments and currency conversions in real-time and “brings new possibilities for interconnection.”

“If you are willing to use it, the yuan can be used for trade and investment,” said Zhou, who has been a leading advocate for China’s sovereign digital currency. He also noted that the digital yuan isn’t intended to replace globally accepted fiat currencies like the US dollar.

“We are not like Libra and we don’t have an ambition to replace existing currencies.”

China has learned a lesson from Diem and took a more cautious approach. The idea is to persuade consumers and merchants to accept digital yuan payments as it quickly resolves “the problem of cross-border remittances.” He said.

“Some countries are worried about the internationalisation of yuan.”

“We can’t push them on sensitive issues and we can’t impose our will. We must avoid the perception of great power chauvinism.”

China is preparing for cross-border testing of digital yuan in partnership with Hong Kong. Additionally, over $3 million in digital yuan was airdropped to 10k residents of Suzhou on Friday. Trials are being run in other cities, including Chengdu, the Xiong’an New Area, and Hong Kong, in collaboration with companies like Didi Chuxing, Meituan, and Bilibili.

Central Banks Divided on Private Sector’s Role

According to a survey by the Official Monetary and Financial Institutions Forum (OMFIF), more than half of the central banks surveyed expect countries to collaborate with the private sector to build and run payments systems.

The central banking and economic policy forum found that central banks are split over whether to work with private sectors in payments as three-quarters of the banks said it was the state’s job to govern such systems.

The survey by the think tank involved 20 central banks and regulators in advanced and developing economies. Bhavin Patel, OMFIF’s head of fintech, said,

“It’s up to the central banks to balance how they approach collaboration – whether it’s setting joint projects together … or if it’s more just making sure that what comes to the market is properly regulated.”

The report was produced with fintech firms that include PayPal, Citigroup, Mastercard, and Novi, the digital wallet division of Facebook. Patel said,

“Regulators need to keep pace with these innovations. New, non-traditional payment entities will emerge as systemically important components of the financial system. Proactive central banks and regulators, keen to harness the benefits of payments innovation without undue policy risks, engage more with industry.”

Demand for more efficient payments is growing, a trend that has accelerated during the coronavirus lockdowns but regulators fear that the wide use of private currencies could lower their control over monetary policy. Just last week, German Finance Minister Olaf Scholz said,

“We must do everything possible to make sure the currency monopoly remains in the hands of states.”

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Author: AnTy

Standard Chartered Bank CEO: Digital Currencies Will ‘Inevitably’ Become Mainstream

Standard Chartered CEO, Bill Winters, has said that digital currencies will soon become mainstream as more people adopt this new tech. Winters shared his sentiments during the Singapore FinTech Festival, where he signaled that the bank would soon be announcing some exciting developments in this field.

Speaking at the virtual conference, the Standard Chartered Bank CEO touched on matters CBDC and private stablecoins. Winters’s approach on both digital asset classes as relaxed as opposed to recent takes by monetary authorities to phase out private stablecoins like Tether (USDt).

According to the initial reporting by CNBC, Winters particularly highlighted that,

“I think there is absolutely a role for central bank digital currencies as well as non-central bank-sponsored digital currencies.”

Giving an example of the voluntary carbon market, Winters noted that the concept of having crypto assets to represent an underlying is more intriguing to him,

“The exciting development for me is to have currencies that don’t match a currency in and of itself but are intended to capture either a superset of a subset.”

Despite being bullish on the fundamentals, the CEO was also keen to highlight the existing gap in merging the world of traditional finance and crypto. Per Winter’s view, the two industries can only merge if organizations embrace critical fundamental cultural shifts. He also hinted at they may be developing their own digital currency, stating, “I think there is a whole new world that’s opening up for us.”

Standard Chartered & UnionBank $187 Million Tokenized Bond

Meanwhile, the bank is still making strides through blockchain tech itself; an update yesterday by both Standard Chartered and UnionBank revealed that the two completed a PoC bond issuance worth 9 billion Philippines pesos ($187 million). This bond targeted retail investors and was issued within a blockchain ecosystem to make it more accessible.

Standard Chartered head of capital markets ASEAN, Aaron Gwak, said that this innovation changes the bonds market dynamics, where institutional investors dominate the game.

“The bond infrastructure around the world has been designed primarily for institutional investors and involves several intermediaries to buy and subsequently trade bonds, making it less accessible to retail investors.”

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Author: Edwin Munyui