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Romanian National Bank: Crypto Won’t Fulfill Basic Roles of Currency

Romanian National Bank_ Crypto Won’t Fulfill Basic Roles of Currency

“Cryptocurrencies won’t replace the currency issued by central banks,” says an official of the Romanian National Bank, Daniel Daianu, as reported by news outlet Business Review.

In a conference on Tuesday, Daianu who was more pro digital currencies issued by central bank than decentralized currencies emphatically talked about the important roles of state-backed institutions such as the banks and other financial institutions, and how even though technologies have been instrumental to the functions of these institutions, they need not necessarily replace them. He said:

“We must be aware of the difference between institutions and the roles they have. It is important for these roles not to disappear. Of course, technologies ensure business models and they have always done so.”

In his opinion, the fintech industry has in no small way helped financial business processes, and that this is part of market segmentation; each component of the market compartmentalized to function in its capacity to aid the overall market objective. However, in the light of innovative technologies like the blockchain and cryptocurrencies, there is a need for distinction.

“Blockchain and cryptocurrencies are financial assets, not cryptocurrencies,” he said, suggesting that since these instruments cannot be seen as bank replacements. In his reasoning, “currency is always backed by a last-resort lender”, adding that in the market, “the state is the only possible last-resort lender”. This reechoes Aviya Arika’s (Chief of Blockchain and Head of Strategic Initiatives at Aviya Innovative Law) view, who once said: “No crypto, not even bitcoin, is still mature and monetarily logical enough to behave like a fiat currency. The fact that it is used by people as a means of payment still doesn’t mean it qualifies as a currency.”

Perhaps making reference to the last financial crisis, Daianu said: “When the banking system was saved, it wasn’t crypto banks that were saved. Central banks intervened by issuing base currency, which was followed by non-conventional measures.” In his understanding of the market, and the roles played by both institutions and technologies, he is convinced that the ultimate height would be for central banks to issue digital currencies as technological trends continue.

One thing though, he made a positive remark on decentralization, recognizing that “new technologies lead to disintermediation”, and credited the feature to decentralized network benefits.

Central bank digital currencies (CBDC) are trailed by mixed sentiments for most countries, with extremes like the Bank of Korea and Bank of Italy suggesting no urgent need for the emerging digital currency class, and others like the Bank of England indicating the possibility of a future central bank with cryptocurrencies.

 

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Forbes “Blockchain’s Billion Dollar Babies” List Released

Forbes “Blockchain’s Billion Dollar Babies,” List Released

Forbes has released its high flyer list of blockchain users which indicates which of these companies has valuations or revenues of USD 1 billion.

The usual high flyers are as expected including Amazon, Walmart, Facebook, ING, Mastercard, Microsoft, and Nestle, with crypto-companies such as Coinbase, Ripple, and Bitfury putting in a show.

Interestingly Forbes goes a bit further on the blockchain front by flagging the use of blockchain in the non-crypto domain. The list points to where the action is and who the players are when it comes to blockchain protocols, with a nod to companies such as the Depository Trust & Clearing Corp (DTCC) which records a mammoth 90 million transactions daily.

Firms using R3’s Corda protocol and the Ethereum network are also listed on Forbes’ breakdown, and blockchain based solutions utilized across many different sectors including food companies, supply chain management firms and others including banking. R3 itself leads a consortium of more than 200 financial institutions in research and development of DLT usage in the financial system and other commercial sectors.

Corda was designed for dealing with complex transactions and security and is expected to have many of the benefits of the blockchain. A new version of Corda was released earlier this year aimed specifically at businesses, called Corda Enterprise, it includes a blockchain applications firewall.

It was unsurprising to see Walmart on the list. The US retail giant has applied for numerous blockchain patents and has become a leader in applying new technology to the supply chain sector. Both Walmart and IBM have been at the forefront of DLT supply chains since its conception and both companies are eager to promote the use of the new technology in sectors including business and commerce.

 

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Australia’s First Government-Funded Blockchain Incubator Gets One Up on State Rivals

Australia’s First Government Funded Blockchain Incubator Gets One Up On State Rivals

The first crypto lab in South Australia to receive government funding is hoped to boost the industry and catch up with other states such as New South Wales and Victoria.

The new lab due to open in September has been awarded Federal Government funding to the tune of AUD 170,00 offering 10 blockchain startups both workspace and mentoring services.

Although Australia has a forward-thinking approach to cryptocurrency in general, the government is still slow coming forward to promote the industry. Currently, under a Liberal Government the Digital Transformation Agency (DTA) whose aim is to deliver world-leading digital services for the benefit of all Australians, feels that the technology needs more research before it can be described as the real deal.

South Australia is playing catch up with its state neighbors, but it is moving forward after holding the ADC Global Blockchain Summit in Adelaide last month, giving it the added credibility of holding Australia’s first international blockchain technology summit.

Adelaide crypto lab’s co-founder Yawn Rong claims that since the summit blockchain interest has “exploded”. He said that “South Australia may never be an industry leader, but that doesn’t mean it can’t be successful”. Rong was clearly happy to get one over on Sydney and Melbourne arguing:

“There are co-working spaces for blockchain in Melbourne and Sydney but there are no acceleration programs there… There are think tanks with blockchain departments, as well as university courses, but there are no specialized incubator programs in Australia that support the development of the proof of concept after their preliminary blockchain studies.”

Crypto SA’s federal government funding formed part of the Incubator Support program, which provides new and existing business incubators with grants of up to USD 500,000 to assist Australian startups to compete in international markets.

The Commonwealth Scientific and Industrial Research Organisation’s (CSIRO) Data 61 is continuing to examine blockchains capability within government and private use, claiming that Australia has the potential to lead the world in further developing the technology.

Australia’s major banks maintain cautious policies when it comes to cryptocurrencies, despite wide public interest, but many banks now permit the purchasing of cryptocurrency using credit cards.

 

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Lithuania to Announce Tough New Crypto Laws

Lithuania To Announce Tough New Crypto Laws

Lithuania is reported to be working on cryptocurrency regulations which surpass Europe’s Anti-Money Laundering Directives for their prohibitive impact.

The new changes are likely to put pressure on the cryptocurrency space as the government in Vilnius attempts to tighten its control.

Lithuania’s central bank has also been canvassing commercial banks and exchanges to get a clear picture of cryptocurrency and the role it may have in the future of the country’s financial sector, which is seen as encouraging for entrepreneurship in the space. However, the Bank of Lithuania recently declared that financial market participants should not get involved in crypto-related activities and should refrain from providing any crypto related services.

The country has recently become a growing center for ICOs and crypto projects. Latest figures show that Lithuania is now attracting an impressive 10% of all global ICO investments, with cryptocurrency bringing in half a billion euros from such activities. This in part to the government’s liberal stance on regulation, which is clearly about to change.

The new rules will require a far more rigorous registration process requiring that companies applying to operate in Lithuania adheres to comprehensive know your customer (KYC) and anti-money laundering procedures. Also, large transfer will now need to be reported to the country’s Financial Crime Investigation Service (FCIS).

The rules will cover both crypto-to-crypto transactions as well as fiat-based business, and all companies acting as intermediaries in any such deals will need to check client identity under Lithuania’s laws on the Prevention of Money Laundering and Terrorist Financing. Sigitas Mitkus, Director of Lithuania’s Finance Ministry’s Financial Market Policy Department explained:

“We want to create a transparent legal environment for virtual currency exchanges, depository wallet operators and ICO initiators. We also want to contribute to ensuring better consumer protection.”

 

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Could IMF’s “Learning Coin” Mean a Shift from Fear and Loathing to Acceptance?

Could IMF’s “Learning Coin” Mean A Shift From Fear and Loathing to Acceptance

The International Monetary Fund (IMF) and the World Bank’s recent announcement suggest that they are not quite going crypto, but are nonetheless launching a private blockchain complete with a coin. And this could have major implications for world finance.

Although the “Learning Coin” may be a new concept that the two financial giants have carefully designed to carry no monetary value, but with plenty of stored intellectual content, this could be seen as an indication that change is in the air when it comes to the financial establishment’s tolerance-come-actual-interest in cryptocurrency as 2020 approaches.

When these two agencies make a murmur, the financial establishment pricks up their ears. The intention seems clear when the IMF states that “the development of crypto-assets and distributed ledger technology is evolving rapidly, as is the amount of information (both neutral and vested) surrounding it”, without accompanying it with the usual criticism of abuse and misuse. That said, IMF chief Lagarde’s concerns are still clear. Her views indicate that it is very much about treading carefully and testing the water at this stage:

“…we don’t want innovation that would shake the system so much that we would lose the stability that is needed.”

Of course, the IMF is always ready to cast one keen protective eye across the global financial landscape, such as in the agency’s recent warnings to Malta regarding its rate of blockchain and cryptocurrency adoption, saying that unchecked proliferation carries “significant risks” for money laundering and terrorism. during a recent financial assessment carried out on the island.

Another hint that the financial establishment may be leading from the top in its softening attitudes towards cryptocurrency can be seen in its recent online poll, on its own website, asking the question asking “How do you think you will be paying for lunch in 5 years?”  — a clear attempt to measure public feelings on cryptocurrency.

This needs to be balanced with the IMF’s stance regarding state cryptocurrencies. To date, it has come down hard on countries considering the move. There is a critical view held by economists in some countries whose governments may be considering moves to adopt a national cryptocurrency, that a mass decentralization of financial power may result in the diminishing of IMF’s authority.

A warning by IMF deputy director Dong last year clearly suggests that the organization may be secretly worried at the movement towards global digital currency adoption. While admitting that cryptocurrency had an advantage over banks when it comes to speed, anonymity, and divisibility, Dong claimed then that Bitcoin’s fixed supply was a disadvantage since that would lead to deflation, which is theorized to reduce economic activity due to money hoarding. According to him, a stable monetary system must protect against deflation.

It remains to be seen how long the IMF can tread this middle path of warnings and dabblings, caught between fear and acceptance of what many in the crypto space see as the inevitable global adoption of cryptocurrency. What of its latest toe in the water; its so-called “hub for knowledge”? It could be just a possible novelty or distraction for the agencies’ Washington-based employees at first glance, but although the two giants watching over the world’s monetary control are not predicting a permanent place for blockchain anytime soon amongst the worlds banking system and even less for cryptocurrency, they are nonetheless peeking under the carpet; not quite fear and loathing, but apprehension with interest.

 

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Major Banks at US Congress Meeting Express Guarded But Tolerant Views on Crypto

Major Banks at US Congress Meeting Express Guarded But Tolerant Views on Crypto

Bank CEOs assembled before the United States House of Representatives Financial Services Committee on 10 April to give their spin on banking’s status quo following the 2008 financial crisis, including the position of cryptocurrencies and blockchain.

Rep. Warren Davidson’s view was that blockchain had found its place in addressing cybersecurity and transforming outmoded financial systems, but felt that regulation was still dragging behind other jurisdictions where progressive measures were being introduced to facilitate the blockchain industry.

A less accusative view than expected was expressed by Jamie Dimon. The chairman and CEO of banking giant JPMorgan Chase suggested that the bank was “supportive of cryptocurrencies as long as they are properly controlled and regulated”. It was noted that Dimon was one one of cryptocurrencies greatest detractors at one time and with the recent issuance by JPMorgan of its JPM coin showed a markedly different view, given prior comments elsewhere. Dimon’s latest spin is that blockchain can work over time, although he still felt that there was “no value behind it (cryptocurrency)” other than what the next person pays.

JPM Coin is the first dollar-backed cryptocurrency from a major bank. It was announced by JP Morgan Chase in February, 2019 as an institution-to-institution service. A permissioned blockchain variant of Ethereum called Quorum is used as the distributed ledger platform.

The Chairman and CEO of the Bank of New York Mellon, Charles Scharf, voiced a guarded approach regarding cryptocurrency’s position in the global financial system, suggesting:

“Cryptocurrencies are very early in their existence. They are not significant today to speak of in terms of being used as a real currency to move value, and so we are actively thinking about what we want to do. One of the biggest issues that we have relates to any money laundering and KYC.”

 

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India Crypto Enthusiasts Protest as Supreme Court Delays Bank Case

Tron Founder Hints at Ethereum Collaboration Copy

In the month of March, the streets of Delhi, Mumbai, Hyderabad, and Bangalore vibrated as thousands of cryptocurrency and blockchain enthusiasts expressed their distaste of the industry’s situation in the locale.

According to reports, Blockchained India co-founder and observer of the protest Akshay Aggarwal, opined that “the street demonstrations are occurring mainly because the whole crypto space represents a world different than we currently live in — a more efficient one, a more evolved one”, which apparently, as with other enthusiasts in other nations are striving for inclusion in the emerging economy. During the protest, the crowds that gathered in Delhi didn’t mind challenging the authority, and those in Mumbai were more about showing how valuable the blockchain is since they took out time for the protest. Meanwhile, in Hyderabad, citizens were more open to discussions about the pros and cons of the emerging industry.

We ain’t stopping! It’s working and we are all set to get more crypto folks involved. Let’s together contribute to the cause. #IndiaForOrAgainstCrypto #IndiaDappFest #IDF @NischalShetty @Shaanush @mohitmamoria @DesiCryptoHodlr @ThatNaimish https://t.co/6pE4CHDhmT

— Akshay Aggarwal (@howdy_akshay) March 26, 2019

Though the industry is completely different from the current economic standards and status quo, it is clear that the eventual impact of widespread adoption is currently unknown. Aggarwal observed:

“None of us is able to figure out if it would directly do more positive impact than the negative… We do not understand it completely, especially its multifold effects, and we always fear what we don’t understand.”

It’s about a year since the conflict of interest between the emerging crypto industry and the central bank of India – the Reserve Bank of India (RBI), and cryptocurrency enthusiasts are becoming wary of the undue delay in the court’s ruling on the decision of the RBI’s effective ban of custodial services to crypto related ventures. It appears the RBI may be using delay tactics to further their goal of stalling the growth of the industry when the Counsel sought a regular day for the hearing.

However, despite the current outcome, cryptocurrency enthusiasts remain optimistic as key players striving for regulation and adoption had provided somewhat positive sentiments. One of which is a general consensus among members of the inter-ministerial committee that cryptocurrency cannot be dismissed as completely illegal. More so, in late February, the Supreme Court had issued a 4-week deadline to the Union of India to come up with a regulatory framework.

Despite several ongoing crypto-related discussions in India, there appears to be no apparent headway for the industry at the moment, with the Court’s postponement only agitating the industry more. Meanwhile, the possibility of the destabilization of the rupee and the financial system became a major concern should cryptocurrency be legalized. However, the government has considered seeking external legal assistance to put the dilemma to rest.

 

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HSBC Freezes Pensioner’s Payments Online After Bitcoin Purchase Denied

HSBC suspended payments for a couples account when they attempted to purchase Bitcoin online so that the husband could buy medical cannabis for his 70-year-old wife.

This is not the first time that HSBC has queried customers activity connected with the purchase of Bitcoin, despite banks, in general, becoming more flexible as cryptocurrency begins to reach more customers using high street banking. The HSBC customer told Tony Hetherington, a Financial Mail investigator, that:

“I tried to buy Bitcoin using my online account with First Direct, which is part of HSBC. Not only was the transaction declined, but the bank froze all my online payments and insisted I had to phone them instead. I was then told I could make online payments again, but only to previously existing accounts.”

The bank claimed that although the customer claimed that he was in his 60s and his wife was in her 70s and unwell, the attempted online purchase of medicinal cannabis was made through a dealer who would only accept Bitcoin as payment, which the bank’s system flagged as suspicious.

Not to be frustrated by the bank the customer tried again a week later, this time giving a different reason for buying Bitcoin using his account, but was turned down again by the bank claiming that it was for the customer’s protection. Hetherington suggested that rather than protecting its customers it was trying to save itself embarrassment.

He argued that the bank would have felt that it was acting as a money launderer, albeit over a legitimate transaction, and would have suffered humiliation had the drugs been intercepted in the post, resulting in the bank having to admit to investigating police that it sanctioned the transaction.

Statistics Canada says sales at cannabis stores in the two weeks following that country’s landmark legalization of cannabis totaled USD 43 million with different retail structures in each province and territory affecting the availability of cannabis across the country.

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National Bank of Cambodia Pushes to Claim First Place in Blockchain Race

A World Economic Forum (WEF) report has indicated that the National Bank of Cambodia could become the first central bank in the world to utilize blockchain technology.

After piloting DLT since 2017, the South East Asian central bank hopes to deploy a blockchain payment system later this year, with the aim to overtake other banks around the world which so far have limited their involvement to simply studying the new disruptive technology.

The issues that the National Bank of Cambodia are hoping to address is to improve banking through effective uses of mobile devices and addressing the bank’s rather fragment domestic payment system which has been a cause of confusion for some time.

More fluidity is sought by the bank to ensure efficient payments for its customers by resolving such issues. And if successful, could become a beacon for other larger more established banks around the globe. The WEF has pointed out in its report that Cambodia is not alone as more than 40 banks are hoping to utilize blockchain technology in order to improve its operating procedures, and some are even considering their own national cryptocurrencies; the most popular of these being CBDCs (central bank digital currencies)

Banks cited in the new report included the Bank of England, Bank of Canada, and the Monetary Authority of Singapore. The Central Bank of Lithuania is one that plans to launch its cryptocurrency as a pilot in the near future.

Both Saudi Arabia and the neighboring United Arab Emirates (UAE) have announced that their central banks are to cooperate on the trial of a new cryptocurrency. The digital currency named Aber was announced in a joint statement released by The Saudi Arabian Monetary Authority (SAMA) and the Central Bank of the UAE. The proof-of-concept trial will be an attempt to lower the cost of transfers using a blockchain-based settlement solution.

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Multi Company Blockchain Initiative Launched In Brussels

Multi Company Blockchain Initiative Launched In Brussels

A European Commission initiative called the International Association of Trusted Blockchain Applications (INATBA) has been launched in Brussels.

With over 100 firms represented in the new project which is designed to bring developers in tandem the newly formed INATBA sees itself as a “global multi-stakeholder forum” aimed at further promoting blockchain across different sectors in Europe.

With members such as SWIFT, IBM, Ripple, banks such as Barclays, and notables from the cryptocurrency space such as ConsenSys AG, crypto mining firm Bitfury, wallet leader Ledger, and IOTA, the new body packs a punch.

The project has been an initiative in waiting for some months up to yesterday’s launch in Brussels. The European Commission itself has been proactive launching its won initiatives with a similar aim to the INATBA, most notably forming the European Blockchain Partnership (EBP) along with 22 member countries to support the delivery of cross-border digital public services. Also last year, the EU launched the Blockchain Observatory and Forum, also including ConsenSys amongst its membership.

INATBA has laid out its specific aims as protecting and ensuring both “legal predictability”, and “integrity and transparency” in blockchain by dialogue between regulators, policymakers and participants in the industry.

Also in Europe, the German Federal Office for Migration and Refugees (BAFM) has praised blockchain’s potential to “support Europe’s unity at a fundamental level” by improving the union’s asylum protocol.

BAFM published findings of its study on 26 March in a white paper, detailing how blockchain could be used in the case of identifying refugees using the immutable technology.

 

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