Ripple Contributes $10M to Mercy Corps at Swell; US Giving Advantage to Chinese Tech

Ripple is wrapping up its annual event, Swell. The two-day event, held on Oct. 14-15, was virtual for the first time and is overall the fourth one.

Usually, a driver for a spike in XRP prices, this time not only was there not much hype around the event, but the price of XRP is also in the red by .34% at $0.247, down 93.73% from its all-time high.

Today, during the Swell event, Ripple announced a $10 million contribution to the NGO Mercy Corps to “expand financial inclusion and increase economic empowerment.”

With this contribution, Mercy Corps, which helped about 28 million people last year, will support solutions that use digital financial technologies such as cryptos and distributed ledgers.

In this three-year initiative, the idea is to bring large numbers of people in emerging markets into the global economy.

“The existing financial system is fragmented, antiquated, and exclusionary–leaving 1.7B people unbanked and disproportionately excluding women. Emerging fintech, crypto, and blockchain technologies have the potential to radically transform it,” which will be leveraged to ensure vulnerable populations are not left behind in the fintech revolution, said Scott Onder, Senior Managing Director at Mercy Corps Ventures.

US’s Regulatory Disadvantage

Amidst this, in an interview, Ripple CEO Brad Garlinghouse talked about the lack of regulatory clarity in the US putting companies like Ripple at a disadvantage forcing them to consider “should we relocate the company to a country where it is clear?”

The regulatory landscape of the US, according to Garlinghouse, is so scattered that it is “actually advantaging Chinese technologies.”

Not just the US but the world is “in a race with China,” which is “leaving others in the dust,” he said.

“I think the Chinese communist party is being very strategic, and it’s very focused on dominating this technology,” Garlinghouse said. China’s President Xi Jinping cleared his stance on the technology last year when he said, the country must “take the leading position in the emerging field of blockchain.”

However, not just China, but the US is behind many other countries, G20 markets like the UK, Singapore, Japan, Switzerland, and the UAE where there’s a clear regulatory framework, said Garlinghouse.

“Part of the success of the United States around the internet was because there was clarity for companies to invest.”

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Author: AnTy

Europe Based Exchange, Bitpanda, Launches the First ‘Real’ Cryptocurrency Index For Investors

  • Europe-based cryptocurrency virtual asset trading platform Bitpanda is launching its own crypto assets index.
  • The Bitpanda Crypto Index (BCI) will include top cryptocurrencies aiming to make it simpler for investors and traders to trade complex crypto products.

In a press release statement emailed to the BEG desk, Bitpanda confirmed it would launch ‘the world’s first real crypto index’ on October 6th. The index aims at making the purchase and selling of crypto assets easy, allowing traders to buy multiple cryptocurrencies with a single click.

According to the statement, the BCI is centered on traders and investors who aim to enter professional crypto trading without the hustle. Users can buy a selected list of cryptocurrencies in three main indices – the BCI Top 5 (BCI5), BCI Top 10 (BCI10), and the BCI Top 25 (BCI25) index. The portfolio then rebalances automatically every month based on the market liquidity and the price and market capitalization. The statement reads,

“The Index automatically adjusts the weightings of assets in portfolios over time, so users never feel like they’re missing out on “the next big thing.”

Over the past year, cryptocurrency trading has once again taken a front foot in traders’ minds across the world. Despite this increasing appetite, there is a lack of suitable financial products for users to invest as a whole, rather than individual assets. This reduces the overall volatility while keeping the portfolio diversified and balanced.

Eric Demuth, Co-Founder and CEO of Bitpanda, praised the BCI regulated product will index initiative stating the index “brings the world one step closer to the mass adoption of cryptocurrencies.” Eric further said,

“Apart from making crypto investments super easy, our Indices will help you build a diversified portfolio of assets by tracking the market as a whole. Think of it as a more grown-up, guess-free version of crypto investing.”

The index launch follows a $52 million Series A funding raised by Bitpanda in 2020 led by Valar Ventures. This is the largest European funding round in 2020, yet with a plan to scale its market base and increase its trading platform. The raise will further allow the Vienna-based exchange to start offering stock exchange markets to its customers.

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Author: Lujan Odera

Mastercard Launches a Virtual Testing Platform for CBDCs

  • Global payments company Mastercard launched a virtual testing platform for central banks to test out their CBDCs.
  • The technology company invited central banks, commercial banks, techs, and advisory firms to evaluate the suitability of CDBDs through its custom testing platform.

As the Bank for International Settlements survey revealed, a whopping 80% of central banks are engaged in some form of Central Bank Digital Currencies (CBDCs). In the race to embrace digital payments, central banks clearly don’t want to lose its control of the monetary policy in issuing and distributing currency while supporting innovation.

Supporting central banks modernizing payments, Mastercard announced this “proprietary virtual testing environment” today where the use cases for the digital fiat currencies could be evaluated.

“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem,” said Raj Dhamodharan, Executive Vice President, Digital Asset, and Blockchain Products and Partnerships at Mastercard. And with this new platform, the company wants to support that decision.

On this virtual platform, the interested parties can simulate the issuance and distribution of the CBDC along with the exchange ecosystem with banks and customers.

It can be used to demonstrate how CBDC can be used to pay for goods and services anywhere Mastercard is accepted.

The development efforts of the CBDC that includes the technical, design, and security aspect, can also be evaluated while to determine its value and feasibility in the market, use cases and tech designs can be examined as well.

“Mastercard wants to harness its expertise to enable the practical, safe and secure development of digital currencies.”

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Author: AnTy

Louisiana Senate Proposes Virtual Currency Businesses Act; Crypto Companies Would Need to Register

A virtual currency business licensing bill (HB701) sponsored by state Rep. Mark Wright was cleared unanimously by the state House of Representatives and now has been forwarded to the Senate Committee on Commerce, International Affairs, and Consumer Protection.

If the bill is passed by the Senate, Louisiana would become the first state in America to approve crypto licensing for virtual currency businesses.

Rep Mark Wright has been a steadfast advocate of digital currencies. Back in 2019 itself, the Rep.Wright asked the OFI to study the various nuances of digital assets and regulations to govern their use. Back then, he introduced another crypto bill that failed to pass the House committee.

If HB701 is approved, crypto businesses would be required to apply to the state’s Office of Financial Institutions (OFI), pay a non-refundable fee, and submit their business premise along with experience, general fitness, and character for the investigation.

OFI estimated that the application charges could be around $2,000 and the annual renewal of the license would cost $1000. It is estimated that the bill would cost the state $150,000 in the first year and around $1.3 million over the next 5 years.

Individuals dealing with less than $35,000 in capital would not be required to obtain an operating license, and would only be required to be registered with the OFI.

The New Bill is Derived From Virtual Currency Business Act (VCBA)

The new virtual currency business licensing bill seems to be derived from the Virtual Currency Business Act (VCBA). VBCA has been drafted by the non-partisan Uniform Law Commission (ULC), which is known for drafting model laws.

These laws are meant to bring statutory uniformity across states and currently, Oklahoma, Hawai, and California are looking to implement a version of VBCA.

Andrew Hinkes, a lawyer by profession explained how ULC formulated laws work:

“The ULC releases model laws which sometimes are quickly adopted by multiple states and sometimes are not adopted at all.

State legislatures ultimately make policy decisions for their states and decide whether model laws are appropriate.”

However, the bill sponsored by Rep. Wright is significantly different from the ULC drafted VBCA bill.

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Author: Rebecca Asseh

FalconX Exchange Raises $17M to Enhance Trading Services For Its Growing Demand

FalconX, the US-based virtual assets trading startup that offers its customers best execution via data science, has announced that it has raised $17 million from different investors.

The firm stated that the funding round comprised Coinbase Ventures, Accel, Fenbushi Capital, Accomplice VC, Lightspeed Venture Partners, Flybridge Capital Partners as well as Avon Ventures.

According to a press release shared with Bitcoin EXchange Guide, the money will be utilized in rolling out fresh products, enhancing FalconX’s crypto trading services, as well as, enhancing its infrastructure in order to serve the expanding institutional clients in the market.

According to FalconX CEO, Raghu Yarlagadda, the firm’s technology is set to offer the right infrastructure that will define the future of digital assets.

According to the firm, in the last 10 months, it has processed over $7 billion in worldwide trading volume, which also translates to 600% quarterly growth rate which is fueled by tight spreads, removing spillage as well as hidden fees. The firm also attributes the exponential growth to high levels of enterprise-grade security.

The San Francisco, CA-based Exchange FalconX provides digital asset trading and has developed robust liquidity via various liquidity pools or exchanges as well as proprietary dark pools. Currently, the firm boasts more than 100 financial-based institutions ranging from crypto miners, hedge funds, payment gateways, and exchanges. The firm also revealed that it was seeking licenses in different jurisdictions in efforts to expand its footprint in the world.

FalconX was started in 2018 by Prabhahar Reddy as well as Raghu Yarlagadda. Before founding FalconX, Yarlagadda, an engineer and renowned entrepreneur, held various leadership positions including an executive role at Google. Yarlagadda played a vital role in scaling Chromebooks, helping to turn it into a multi-billion dollar venture. On the other hand, Reddy previously worked at Accel, a venture capital firm.

The FalconX team is made up of experienced individuals from Silicon Valley as well as Wall Street.

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Author: Joseph Kibe

FINTRAC to Enforce Stricter Rules for Crypto Companies to Comply with FATF’s Regulations

The Canadian financial crimes watchdog is making preparations for the implementation of its new powers on virtual currency oversight before the June 2020 deadline set by the Financial Action Task Force (FATF).

This means the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC) is going to be more strict when it comes to regulating companies that use virtual currency, also the activities and transactions taking place after June 1, when the new rules will start to take effect. Here’s what a FINTRAC report from early March reads:

“A major priority in the near term will be the implementation of new regulations arising from recent legislative change.”

Sweeping Powers Are an Amendment to Criminal Finance Framework

The sweeping powers are an amendment to the Canadian criminal finance report and passed in June 2019. They’re expected to enhance the AML/ATF regime in the country, says the FINTRAC. FINTRAC is for Canada what the Financial Crimes Enforcement Network (FinCEN) is for the US.

Canadian companies registered as money services businesses and that have at least $10,000 CAD in crypto will have to comply with the new regulations and provide documentation for their crypto transactions of more than $1,000 CAD, in some cases. This information will include the names, addresses, birth dates and phone numbers of the sender and the receiver of transactions. The transactions of $10,000 CAD or above will require even more documentation. The amendments classify the violations of regulations as minor infractions.

FINTRAC Responds to FATF’s 2015-2016 Assessment

Canada imposes new amendments of virtual currencies after the FATF made in 2015 – 2016 an assessment of its AML and CFT frameworks and deemed them as deficient. Being a FATF member, the country should meet some specific thresholds. In its report from March, the FINTRAC said Canada’s interests should be served by the legislative and policy framework while international expectations are being met. Other countries are also hurrying to comply with FATF’s demands until the June deadline.

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Author: Oana Ularu

Hong Kong Financial Authorities To Apply FATF Regulations To Crypto Exchanges, Brokers

  • Hong Kong proposes new regulations to target Virtual Asset Service Providers (VASP) in accordance with FATF recommendations.
  • This is despite Hong Kong being miles ahead of its Asia-Pacific peers and receiving high ratings from the financial agency.

Reports have emerged that the Hong Kong government is looking to increase its efforts in the regulation of the crypto space. This is in a bid to increase adherence to the global Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) guidelines.

In a speech by Paul Chan, Hong Kong’s Financial Secretary the government is going to use the recommendations by Financial Action Task Force (FATF) assessment to better their AML/CTF agenda. Notably, they plan to include Virtual Asset Service Providers (VASP) and precious metal merchants into their AML/CTF framework with plans to include the public’s input on the same.

The new regulations are to unsettle crypto exchanges and Over the Counter Brokers (OTC) in Hong Kong which has so far been crypto-friendly. In a memo from Hong Kong Money Authority (HKMA) official Carmen Chu to heads of all Authorized Institutions (AI) where she indicated that AI should treat the VASP’s different depending on the risk assessment for individual VASPs.

“Assessing the AML/CFT controls of the VASP as appropriate The extent of customer due diligence measures should be commensurate with the assessed ML/TF risks of the VASP”

In June last year, the FATF updated its guidelines in regards to the AML/CTF standards. The proposal stipulated that countries would now hold virtual assets to the same regard as property or funds.

The FATF would also obligate VASP’s to share detailed transactional information such as the sender and destination of funds for transactions above USD/EUR 1000. This information should be readily available for the next five years in case the regulators come calling.

Hong Kong rated highly compliant by FATF

This is despite Hong Kong ranking highly in the global watchdog’s FATF assessment. They rank as the first jurisdiction in Asia-Pacific to have aced the FATF assessment. Countries are now racing towards achieving FATF compliance standards with reports of private partnerships among countries to collaborate efforts to monitor cryptocurrency transactions.

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Author: Lujan Odera

Ripple and Azimo Partner to Speed Up Cross-Border Payments Into the Philippines

  • Ripple Partners With Major European-Based Virtual Money Transfer Service Azimo For Easier International Payments To Philippines

Enterprise blockchain payments solutions provider, Ripple, revealed on Wednesday that it had inked a deal with a major European-based virtual money transfer services provider, Azimo. As per the announcement, Azimo has just rolled on Ripple’s On-Demand Liquidity (ODL) platform opening a corridor to the Philippines. The deal means that the London-based money remittance services firm will now use XRP as the bridge currency.

Ripple’s CEO, Brad Garlinghouse, has always maintained that only the digital assets which have a real use case are likely to survive in the long-run. He has also maintained that XRP aims at solving real-life issues.

The recent partnership with Azimo is a testament that XRP has multiple uses other than being a speculative virtual asset that has made the founders of Ripple labs extremely rich. According to Azimo’s CEO, Richard Ambrose, the ODL service has so far enabled them to save on money transfer costs. Ambrose explained that his firm was able to save about 30-50% of the money transfer costs on customers sending money from Europe to the Philippines. He stated:

“Ripple’s ODL solution has significantly reduced the cost and delivery time for cross-border transfers, and our customers are seeing the benefits.”

Ambrose also revealed that Ripple will pay his firm in order to offset the infrastructure expenses. Ripple also paid MoneyGram about $8.9 million last year in order for the firm to use the ODL platform to transfer money.

More Partnership Deals

Ripple also revealed that it had made more deals with South Korean-based remittance startups with the aim of enhancing the local cross-border money transfers industry. However, the startups will not use the ODL platform.

Azimo is the latest addition to a growing number of RippleNet members who include such firms as MoneyGram, FlashFX, and goLance. These firms use the XRP-based payment service for cross-border transfers.

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Author: Joseph Kibe

UK’s Financial Conduct Authority (FCA) Revises Crypto-Based Business Registration Fee

Following a series of consultative forums with the virtual assets community, UK’s Financial Conduct Authority (FCA) has revealed that its revising crypto businesses registration fee upwards. The regulator has henceforth rolled on two distinct registration fees for crypto-based businesses according to their sizes AMBCrypto reports.

The regulator announced that enterprises with a net income of £250,000 from crypto assets activities will be levied a fee of £2,ooo. In addition, the regulator said that firms with more than £2,000 net income from crypto activities will have to pay £10,000 registration fee.

The revised registration fees requirements comes after a discussion of the proposals by the regulator that were released last year in October. Initially, the regulator had proposed a flat fee of £5,000 for all crypto-based businesses. The new fee structure was arrived at following protests from start-ups and smaller businesses.

The new fee structure from the regulator still raised some protests from the smaller businesses operating in the UK. However, the regulator has remained firm about the updated fee structure explaining that the agency is fully funded by the levies and fees it collects from the businesses it regulates. As per the press statement, the operation costs have increased in the last couple of years owing to the increased amount of work that the agency has to undertake while regulating the crypto-based businesses, hence the need to update the fees and levies upwards.

The regulator told off the protestors saying that anyone getting into business is aware that there are costs to be taken care of and it is normal for businesses to even anticipate losses in their nascent years.

Last month, the regulatory body announced that it is set to take up an enhanced mandate in regulation of cryptocurrencies in the country. The regulator also revealed that it will assume fresh supervisory mandate when it comes to virtual assets.

As per the press release, businesses already involved in crypto assets activities have until January next year to register with the regulator. Such businesses have to hand over completed registration applications before the end of June this year.

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Author: Joseph Kibe

Bank of France Gov: Central Bankers Should Issue Digital Currencies, Not Private Companies

Villeroy de Galhau, Governor of the Bank of France, said on Saturday that virtual currency can be useful especially when cash transactions are decreasing in various nations, however, it should be the prerogative of central banks to issue it and not private firms, Reuters reports.

In the wake of the popularity of cryptocurrencies as well as the anticipated Facebook led Libra stablecoin, most central banks around the world are now exploring ways they can introduce their own digital currencies to avert a possibility of losing their grip over money matters.

However, Villeroy said his comments are not inspired by Facebook’s Libra plans saying that it is a response to advancement in technology and the demand for digital money by various banks. He also added that soon people will start demanding an alternative to fiat money.

The governor who was speaking to France Inter Radio explained that some countries in Europe such as the Netherlands and Sweden are already experiencing a decrease in the use of fiat banknotes. In this case, there has been a debate on whether the central banks in Europe on whether to issue virtual currencies which have similar qualities like banknotes, notably central bank’s security.

The governor was asked if private firms can issue virtual currencies and he categorically stated that money can never be private. He added that money can be equated as a public good which guarantees a state of its sovereignty.

Villeroy revealed that plans are underway among different central banks to pilot digital currencies and the topic will be studied by the central banks within the eurozone.

France has been at the forefront in opposing the launching of Libra in Europe vowing that the stablecoin will never be allowed to operate in any European country. In the recent past, France Finance Minister has stated that Libra and other cryptocurrencies, if allowed to operate as currently designed, will rob nations of their financial sovereignty. France’s sentiments have also been echoed by Germany’s Finance minister.

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Author: Joseph Kibe