South Korea’s Central Bank to Test Digital Won Distribution In 2021; CBDC’s Gain Momentum

The Central Bank of South Korea has announced that it will commence the distribution phase of its CBDC next year, marking the final stretch of the 22-month scheduled initiative. First reported by the Korea Herald, the Bank of Korea (BOK) intends to run the distribution of its blockchain-based CBDC up to December 2021. This will allow the BOK to assess its CBDC performance in a virtual environment.

As earlier reported by BEG, the ‘digital won’ recently entered its second phase, which involves consultation with industry stakeholders to build a sustainable CBDC infrastructure. Now that the BOK has confirmed the distribution phase slated for next year, Korea’s digital won could soon be a practical CBDC just like China’s DC/EP. An official from BOK has, however, said that the monetary body will not involve 3rd parties yet,

“The CBDC will be issued and circulated in the virtual world, and we are going to test a number of transaction scenarios under a variety of circumstances.”

Korea, which embarked on intensive CBDC research earlier in the year, appears to be on track with its milestone timelines. BOK completed the first phase, ‘designing & reviewing’ in July, and has since accelerated efforts into the ongoing phase two. Given this pace, the country might as well muscle out with already piloted CBDCs not limited to the ‘digital yuan.’ However, the BOK has previously signaled that it is not looking to launch a CBDC, but hedge should these digital assets become popular soon.

While South Korea’s progress is laudable, China still dominates the CBDC race, having piloted the PBoC backed digital RMB back in April. It was initially rolled out in four test cities but has since been scaled to prominent Chinese cities, including Beijing and Hong Kong. Many jurisdictions, including the European Union, are now looking to follow China’s lead in the CBDC space; the EU recently applied to trademark ‘digital euro’.

Read Original/a>
Author: Edwin Munyui

ECB Files for a ‘Digital Euro’ Trademark as Central Banks Turn Focus to CBDCs

The European Central Bank (ECB) filed an application last week to trademark the name ‘digital euro’ as the CBDC craze gains momentum. A report by Bloomberg revealed that the ECB applied for the ‘digital euro’ trademark through its German-based legal representatives, Bock Legal. This development comes barely a week since ECB president Christine Lagarde confirmed that the regulatory body is exploring the potential benefits and downside risk of issuing a ‘digital euro.’

Speaking at the European Parliament, Lagarde highlighted that the EU is yet to make a decision on whether it will issue a digital euro. However, she was also keen to note that the bank is actively exploring the CBDC space as per its mandate in monetary oversight,

“We are exploring the benefits, risks and operational challenges of doing so … We have a duty to play an active role in balancing the risks and benefits of innovation in payments, so that money continues to serve Europeans well.”

While a practical digital euro phase may take some time, the move by ECB to trademark this name further shows the underlying potential of CBDC disruption. A newly released report by Deutsche bank estimates that around 80% of the world’s central banks have already embarked into some CBDC activity, even if its minimal research. In Europe for instance, Italy and France have already committed to participating in a digital euro-pilot.

China on the other hand is setting the pace for a tokenomics dominance, having begun the digital yuan pilot back in April. This initiative had been ‘under the hood’ for close to five years but was only piloted post-lockdown. People’s Bank of China (PBoC) is in charge of the digital yuan ‘e-RMB’ and intends to gradually replace fiat currency in circulation as part of scaling its monetary effectiveness in the age of cryptocurrencies.

Other jurisdictions that are likely to be at par or slightly behind China include the Bahamas and Thailand. The former is set to launch its CBDC ‘Sand Dollar’ this month while Thailand has partnered with Hong Kong to build a cross-border CBDC. This initiative is currently in the second phase where ConsenSys is set to lead product development, working alongside PWC and Forms HK.

Also Read: Fed Researching CBDC & Planning to Deposit ‘Digital Dollars’ Directly To the Digital Wallets of Americans

Read Original/a>
Author: Edwin Munyui

Bitfinex Launches Perpetual Contracts Settled In Tether (USDt) for Europe 50 and Germany 30

  • The renowned crypto exchange, Bitfinex, is expanding its product line beyond crypto assets and is rolling out an equity index derivatives which will settle in the controversial stablecoin Tether (USDt).

According to a press release shared with Bitcoin Exchange Guide, the perpetual contracts will be on Europe 50 and Germany 30 and are set to go live on Monday. The firm also clarified that the new offering would provide its clients with exposure to conventional stock markets.

Europe 50 represents the STOXX Europe Index that covers about 50 stocks based in 18 countries in Europe. On the other hand, Germany 30 is a representative of the Deutscher Aktien Index (DAX), which covers Germany’s 30 most significant stocks listed in the Frankfurt Stock Exchange.

According to the press release, every contract will provide up to 100x leverage, and USDt will be used for settling.

An equity derivative can be equated to a traditional futures contract; however, it comes with no expiry and operates like a margin-based spot market. Bitfinex Derivatives CTO, Paolo Ardoino explained:

“This is the first time that an exchange from the digital asset space has launched a product that bridges the gap with traditional stock markets, representing a significant milestone in the evolution of crypto as an established asset class.”

Ardoino also explained that Bitfinex was motivated to move to the traditional markets by CME moving to Bitcoin futures. Ardoino says that the new product will help in improving cross-asset trading initiatives in the crypto space.

Ardoino also explained that since the new offering will settle in USDt and will help in the reduction of forex as well as interest rate risks. This will also aid in ensuring that the trading is seamless as well as efficient, said Ardoino.

The new product will be available in the selected countries and only for verified users. This means that traders wishing to trade the new product will need to go through the various due diligence aspects to verify their source of funds, identity, and banking history.

Read Original/a>
Author: Joseph Kibe

Coinbase Wallet Targeted by New Trojan Malware Dubbed ‘Alien’

The Coinbase wallet is among 226 Android applications targeted by a recently discovered Trojan dubbed ‘Alien.’ This malware mostly targets the financial services space and is a by-product of the dreaded Cerberus Trojan. According to ThreatFabric, which discovered the malware, this specific strain had caused a lot of trouble in Google play to an extent where the team in charge had become complacent.

Alien is quite an advanced malware given that the malicious players behind it can steal user credentials, intercept notifications, and alter the state applications on the compromised device. ThreatFabric noted:

“Most importantly, it offers a notifications sniffer, allowing it to get the content of all notifications on the infected device, and a RAT (Remote Access Trojan) feature (by abusing the TeamViewer application), meaning that the threat actors can perform the fraud from the victim’s device.”

The blog highlights that the next probable moves by those running ‘Alien’ would be to improve the Random Access Trojan or build an ATS function for automation of the fraudulent process. Nonetheless, it points out that the number of new banking Trojans will undoubtedly increase and come with more advanced features.

“The last quarter of 2020 will probably come with some additional changes to the threat landscape, especially since the source code of the Cerberus Trojan has been made publicly available. In the coming months, we can definitively expect some new malware families, based on Cerberus, to emerge.”

With crypto space growing aggressively, Trojan attacks have become more common as fraudsters move to capitalize on the shaky security ecosystems. IT security firm Eset had also recently discovered a Trojan malware targeting crypto traders who use Apple’s MACOS. Other instances include a cryptojacking ‘shellbot,’ which targeted Linux users back in 2019.

Read Original/a>
Author: Edwin Munyui

Bureau Of Fiscal Service Revisits Blockchain Technology Development To Streamline Grants

The Bureau of Fiscal Service, BFS, is focusing its energies on innovative technologies such as blockchain technology in a bid to enhance the government’s fiscal policies and “streamline its financial processes.” BFS will launch two projects – Digital End-to-End Efficiency (DEEE) and Blockchain for Grants – in a re-imagining strategy on how federal governments carry out day to day businesses.

According to the release, the Blockchain for Grants project was started back in 2017, aiming to create digital solutions to ease the tokenization, redeeming and transfer of grant payments from the government.

Blockchain technology offers a transparent, public, and secure platform to enhance the disbursement of grants by reducing the financial costs and setting up better internal controls. According to the statement, the blockchain for grants project “will focus on evaluating the functional and legal implications of using blockchain technology for helping grant payments.”

Fiscal Service Supervisory Program Manager Craig Fischer said,

“By tokenizing relevant grant award information and combining it with grant payment information on the blockchain, we attain new payment transparency that we couldn’t reach previously without significant and burdensome reporting.”

The BFS office has launched both innovative projects for a six-month period.

The latest blockchain interest from the Bureau of Fiscal Service follows a blockchain-based initiative to track office tools across the country.

Read Original/a>
Author: Lujan Odera

Homeland Security Calls On Freelancers to Design A Digital Wallet Interface; $25k to Finalists

  • The Science and Technology Directorate (S&T) division of the US Department of Homeland Security has allocated up to $25,000 in prizes as an incentive for designing a digital wallet user interface.
  • Prospective applicants will be required to create a user interface compatible with DHS projects in the blockchain niche.
  • Notably, the DHS has been quite active in this area and previously supported innovations focusing on the decentralization of identity records.

According to the technical director of S&T’s Silicon Valley Innovation Program (SVIP), Anil John, participants who get to the final stage are expected to demonstrate ‘ease of use and visual consistency, while supporting interoperability, security, and privacy.’ Digital wallets that stand out might ultimately increase the value proposition of the DHS blockchain projects once integrated.

John highlighted that one DHS client is already leveraging blockchain to build a decentralized credential network for the issuance of digital green cards. Despite its active involvement in funding blockchain projects, this is the first time the DHS is taking a design challenge to the public, according to S&T’s program manager, Kathleen Kenyon.

She was keen to highlight that they are trying to get that ‘freelance designer’ given that their foothold in this space is less significant than corporate contacts; this was the main reason for a low budget digital wallet crowdsource. As for the prizes, three finalists will be allocated $5,000 each while the winner gets an extra $10,000. Applications are still open, with the first stage finalists announced on October 27 via an online SVIP event. Overall winners will be announced later in the year.

This incentive by the DHS is not the first of its kind; just recently, the IRS issued a bounty of up to $625,000 to developers who will crack Monero’s anonymity and the lightning network. In similar efforts to boost compliance and oversight, the U.S Financial Crimes Enforcement Network (FinCEN) has floated an Advanced Notice of Proposed Rulemaking (ANPR) targeting the amendment of AML policies.

Read Original/a>
Author: Edwin Munyui

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.

Read Original/a>
Author: Joseph Kibe

US FinCEN Set to Upgrade AML Guidelines in Wake of Evolving Illicit Financial Crimes

  • The US Financial Crimes Enforcement Network (FinCEN) has issued an advanced notice of proposed rulemaking (ANPRM) to amend its anti-money laundering (AML) guidelines, ensuring that all covered financial institutions maintain an efficient AML program.
  • This includes crypto entities that run under the Money Service Business (MSB) licenses, amongst other approvals, to offer this line of service to US residents.

According to the announcement on September 17, FinCEN is seeking feedback from stakeholders affected by changes to the AML requirements. This bureau of the US Department of the Treasury has since issued 60 days for interested stakeholders to have commented on prospectus regulatory amendments.

FinCEN noted that this move is particularly important in the combat of evolving illicit financial crime and will therefore set the stage for more solid AML practices,

“The regulatory amendments under consideration are intended to modernize the regulatory regime to address the evolving threats of illicit finance, and provide financial institutions with greater flexibility in the allocation of resources, resulting in the enhanced effectiveness and efficiency of anti-money laundering programs.”

Upon implementation, the prospectus changes will affect compliance and reporting by US domiciled financial institutions. FinCEN highlighted that the amendments are expected to be detailed enough, such that there is clear clarification on risk assessment methods, coupled with the consideration of oversight requirements under the US Bank Secrecy Act and AML priorities.

Crypto Businesses Amongst the Targets!

With a decade gone by since crypto made a debut, regulators appear to be paying more attention now that the trend is no longer a hype but a threat to traditional financial ecosystems. One of the areas that have proved incredibly difficult for oversight agencies is crypto in money-laundering and terror-financing activities.

It, therefore, comes as no surprise that FinCEN is joining its counterpart agencies like the IRS, which recently issued a $625,000 bounty for anyone who would crack Monero’s anonymous ecosystem. Going forward, more financial oversight authorities are likely to take a similar route as crypto gradually goes mainstream.

Read Original/a>
Author: Edwin Munyui

EU’s Draft Regulation to Fragment the Crypto Market with Special Focus on ‘Subset’ Stablecoins

The 168-page long leaked version of the draft legislation of “Markets in Crypto Assets (MiCA)” by the European Commission provides legal certainty about digital currencies.

To be issued later this month, the set of regulations will be covering the issuance and trading of digital assets across the bloc.

Europe is basically planning to regulate crypto-like other financial instruments with the purpose to “further enable and support the potential of digital finance in terms of innovation and competition while mitigating the risks.”

However, the European Commission is putting a particular focus on stablecoins, a “subset of crypto-assets” leading to market fragmentation.

This is no surprise given the calls for regulating them for some time now. As we reported, this month, first, Bank of England governor and then five of the European countries supported regulatory oversight for asset-backed coins like Facebook’s Libra.

Additionally, regulators believe stablecoins have the potential to become widely accepted and potentially systemic, and of course, the plans for CBDC are behind the decision.

The new regulation will establish specific rules for ‘stablecoins,’ including when these are e-money.

Read Original/a>
Author: AnTy

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.”

Read Original/a>
Author: AnTy