Daily Archives: July 6, 2021

Financial Watchdog FinCEN Recruits First-Ever Chief Digital Currency Advisor

Financial Watchdog FinCEN Recruits First-Ever Chief Digital Currency Advisor

Following the Financial Crimes Enforcement Network (FinCEN) explaining the misuse of cryptocurrencies is a national priority last week, the bureau announced on Tuesday it hired its first-ever chief digital currency advisor. FinCEN’s acting director Michael Mosier detailed that Michele Korver will be the bureau’s new crypto expert and she brings “a wealth of digital currency expertise.”

FinCEN Enlists Former DOJ Digital Currency Counsel as New Chief Digital Currency Advisor

FinCEN, the U.S. regulator that combats domestic and international financial crimes, has announced the organization has hired the first chief digital currency advisor (DCA). Michele Korver will be FinCEN’s first DCA after she worked for the Department of Justice (DOJ) and as a former federal prosecutor for 20 years.

Korver will serve as the DCA to the director of FinCEN and she aims to “advance FinCEN’s leadership role in the digital currency space by working across internal and external partners.” FinCEN is ready to double down on the illicit use of cryptocurrencies, as the financial watchdog talked about “the misuse of virtual assets that exploit” in last week’s priorities report.

“Michele brings a wealth of digital currency expertise, and will be a tremendous leader in coordinated efforts to maximize FinCEN’s contribution to the innovative potential for financial expansion of opportunity while minimizing illicit finance risk,” Mosier said on Tuesday.

While working with the DOJ, Korver served as Digital Currency Counsel for the department’s criminal division. She has advised federal employees on matters involving crypto assets in cases that involved “charging decisions and other prosecutorial strategies.” As far as digital currency policy is concerned, Korver has also worked with the Treasury’s Financial Stability Oversight Council and the Financial Action Task Force (FATF).

Michael Mosier was recently named acting director and new deputy director on April 2, 2021, and he too has a background with cryptocurrencies. When FinCEN named Mosier as the current director the regulator’s Office of Strategic Communications noted Mosier worked with Chainalysis.

As far as hiring Korver and a new FinCEN director of strategic communications, Mosier remarked: “These are incredible people for an incredible moment for FinCEN and the financial integrity space writ large.”

What do you think about FinCEN hiring a digital currency advisor? Let us know what you think about this subject in the comments section below.

Bitcoin Taproot Support Lags at 27% — Even Though Soft Fork Is Opt-in Supporters Beg Nodes to Update

Bitcoin Taproot Support Lags at 27% - Even Though Soft Fork Is Opt-in Supporters Beg Nodes to Update

On June 12, the crypto community celebrated the fact that the Bitcoin network locked in Taproot support in order to activate the largest upgrade the protocol has seen in four years. 24 days later, Taproot support via Bitcoin nodes has only reached 27.55% and upgrade supporters are pleading with the community to update their nodes.

It’s Your Duty to Upgrade Nodes, Say Numerous Bitcoin Taproot Threads

Data stemming from the Twitter account called Taproot Signal shows that Taproot-supporting nodes only represent a touch over 27% of the known public node count. 72.45% have not updated their Bitcoin nodes to support the upcoming activation period in November. The upgrade, however, is a soft fork which means nodes don’t necessarily have to upgrade to remain within Bitcoin’s ruleset. Similarly, the soft fork Segregated Witness (Segwit) suffered from a lack of node adoption as well, when it was activated in 2017.

Segwit’s adoption rates didn’t kick in with much higher levels until March 2018. Segwit adoption levels tapped a high of 53% on February 23, 2021 and today levels have risen higher, reaching 71% according to Segwit usage data recorded on July 6. After Segwit was implemented many bitcoiners pleaded with node operators and major crypto businesses to adopt the soft fork. The same can be said about Taproot today, as crypto supporters are posting on forums telling node operators to update to a Taproot supporting node as soon as possible.

Over two weeks ago, one Redditor wrote: “Less than 25% of nodes enforce Taproot, UPDATE your nodes.” In the forum post, people argued over what would happen to a node that hasn’t upgraded to 0.21.1. One person said that if a node hadn’t upgraded to 0.21.1 after block 709,632, and “a miner were to produce a block that violates the Taproot rules” they may “see that block as valid while anyone who has upgraded sees it as invalid.” Another Redditor responding to the comment disagreed with the person’s assessment.

“As far as I understand there’s no way to produce a block that ‘violates the tap root rules though,’” the individual wrote. “It’s a soft fork. Old nodes and updated nodes both see pre-taproot and post-taproot blocks as valid. Old nodes will see taproot UXTOs as ‘anyone can spend’ outputs… but in reality, they aren’t. It works on all versions.”

‘Upgrade Your Nodes to Taproot and Get Your Friends to Do It Too’

On July 5, 2021, another Reddit post on r/bitcoin appeared pleading with bitcoiners to update their nodes. “If you run a node, remember to update it to support Taproot, only 27% do so far,” the Redditor’s thread said. Again this thread was met with debate after a few Redditors told the post’s author that Taproot is a soft fork and these upgrade posts are useless.

“Taproot is a soft fork, so opt-in,” the most up-voted comment on the thread says. “You don’t have to upgrade. That being said, I run two full nodes both of which contain the latest bitcoin core version. Why not [support] freedom of speech? Even though I might not have to say anything that important, at least at the moment.”

The popular Twitter account @mikeinspace also discussed the Taproot upgrade subject on Tuesday. Referring to the 27% support thread on Reddit, he told his 11,000 Twitter followers he’s been seeing a number of these types of Taproot upgrade posts on social media.

“I’m seeing a lot of this ‘it’s your duty to upgrade’ lately,” he tweeted. “I thought soft forks were meant to be optional and you can happily go about enforcing consensus while ignoring vendor extensions.” The Twitter handle Mike in Space also mentioned the notorious Chris DeRose, former host of the broadcast “Bitcoin Uncensored.” Mike in Space added:

There was a great DeRose rant about the immaculate Bitcoin that is now lost down the memory hole. It involved Mircea Popescu, Bitcoin vendor extensions and the bitcoin dot foundation, the one true Bitcoin.

On Twitter, there is a great number of people asking or telling node operators to support Taproot as soon as possible. “Upgrade your nodes to Taproot and get your friends to do it too,” Francis Pouliot told his 68,000 Twitter followers.

“The financial incentive for nodes to upgrade to Taproot is that it increases the value proposition for Bitcoin, and hence helps your stash appreciate,” another individual said on June 13. In fact, on June 13, a great swarm of posts on Twitter shows a number of tweets pleading with bitcoin node operators to update.

What do you think about the lack of adoption Taproot is seeing today and the posts pleading with node operators to update as soon as possible? Let us know what you think about this subject in the comments section below.

STASIS and Free TON DeFi Alliance Partners to Boost the Development of Free TON DeFi Ecosystem

Free TON, a decentralized proof of stake blockchain powered by its community and STASIS, a EU compliant EURS stablecoin project, partnered to make DeFi more functional and affordable for everyone.

The STASIS team will be deploying their protocol to the Free TON ecosystem, so that their stablecoin EURS can be minted natively on Free TON.

This partnership will be implemented in two stages:

  1. Farming: Addition of EURS-WTON pair to native Free TON DEX – TonSwap.io, developed by Broxus, a multi-level turnkey platform for crypto exchanges, e-commerce, trading platforms. Sound TON rewards will be applied to users, providing liquidity to that pool.
  2. EURS deployment on Free TON: porting EURS smart-contract to Free TON, so that users can natively receive EURS on Free TON in exchange of their EUR.

The partnership will allow users both from Free TON and STASIS EURS ecosystems to access highly scalable, stable, and on-chain money with low transaction costs and high TPS.

“I am thrilled to see such astonishing projects as STASIS joining the FreeTON community. Together, we will bring the Free TON DeFi ecosystem to a new height! – says Vladislav Ponomarev, CEO of Broxus.

“We are excited to partner with Free TON, the fastest blockchain, which allows everyone to easily enter the DeFI ecosystem”, – says Gregory Klumov, founder of STASIS.

About Free TON

Free TON is a fast, secure and scalable blockchain, which is capable of handling millions of transactions per second and is on a mission to drive wide adoption of decentralized solutions by millions of users. Unique features of Free TON include infinite sharding paradigm, instant hypercube routing, proof-of-stake mechanics to validate new blocks, ability to configure network parameters by voting, and more.

About STASIS

STASIS is a revolutionary step towards combining the vast potential of the cryptocurrency market with the stability and reliability of traditional currencies. STASIS is backed up by a team of cryptocurrency pioneers, quantitative experts, serial entrepreneurs and financial professionals that provide the synergetic background to stable coin platforms.

About TON Swap

TON Swap operates liquidity pools represented by separate smart contracts. Unlike Ethereum contracts, Free TON contracts are distributed and benefit from the infinite sharding mechanism. As a result, transaction gas fees are several orders lower than average and do not depend on the network workload. Anyone who contributes to those pools with their liquidity are eligible to participate in the yield farming program by the Free TON DeFi Alliance.


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Brazilian ‘King of Bitcoin’ Arrested for Involvement in Alleged $300 Million Fraud

king of bitcoin

Claudio Oliveira, owner of the Bitcoin Bank in Brazil and known as the ‘King of Bitcoin,’ was arrested yesterday for his alleged participation in a fraud scheme involving $300 million. According to inquiries from federal authorities, Oliveira faked a Bitcoin hack back in 2019 in which his company lost a significant amount of bitcoin. More than 7,000 customers lost their funds in this fake hack.

‘King of Bitcoin’ Apprehended in Brazil

The Federal Brazilian Police apprehended Claudio Oliveira yesterday for his supposed involvement in a $300 million fraud scheme. Oliveira, who owned the Bitcoin Bank, reported a bitcoin hack on his company back in 2019. But according to police investigations, this was a staged crime to cover the withdrawal of these cryptocurrencies. Brazilian police also seized eight luxury cars and jewels.

Operation Daemon, which cracked down on the Bitcoin Bank scheme, resulted in the arrest of four more individuals. The police searched 22 locations in one of the biggest operations against a cryptocurrency organization in the country. 90 police officers participated in the sting.

The police organized this task force after the Bitcoin Bank failed to collaborate in the investigations of the alleged fake Bitcoin hack. While the authorities investigated the crime, the organization received a judicial order allowing them to keep operating. Oliveira is now facing charges of embezzlement, money laundering, criminal organization, and crimes against the national financial system.

Bitcoin Bank Had a ‘Private Blockchain’

The police found that the Bitcoin Bank was running a so-called private blockchain. If the customers deposited their funds, the system faked operations that showed customers making gains on arbitrage. But the funds going in and out showed inconsistencies with audits made to the system by forensic investigators. After the seizure, Federal Police took ownership of the cryptocurrency accounts managed by the Bitcoin Bank. However, they claim there are not enough funds to pay all creditors.

This alleged Ponzi scheme affected more than 7,000 investors, including employees and service providers from the group. However, this is not the first time Oliveira has had a run-in with justice. The King of Bitcoin committed crimes of the same nature in the U.S., according to Brazilian investigators. Also, Oliveira committed embezzlement and document forgery in Switzerland back in 2000.

What do you think about the alleged $300 million fraud operated by the King Of Bitcoin? Tell us in the comments section below.

Gold Spikes Higher as Fed’s Minutes Report Looms, Central Bank Bullion Purchases Begin to Swell

Gold Spikes Higher as Fed's Minutes Report Looms, Central Bank Bullion Purchases Begin to Swell

After a long break, monthly purchasing data shows that central banks are buying gold again. The World Gold Council says throughout March and April, the organization recorded a higher level of central bank monthly gold purchases and the latest data from May shows the exact same trend.

Gold Rises After Data Shows Central Bank Gold Purchases Trend Higher

The price of gold per ounce is hovering just above the $1,800 zone, after seeing some fresh gains following the weekend. Gold’s value jumped above its 100-day moving average and is changing hands for the highest price in two weeks. In late June, gold dipped to a two-month low and since then, the precious metal has gathered 3% in gains.

On Wednesday, the Federal Reserve plans to release the Federal Open Market Committee (FOMC) minutes from the latest committee meeting and the outcome could shake markets. The mid-June gold price drop took place when the Fed revealed its hawkish interest rate changes and the U.S. dollar gathered some strength.

Gold Spikes Higher as Fed's Minutes Report Looms, Central Bank Bullion Purchases Begin to Swell

One reason why gold may be gaining on the dollar is because some of the world’s central banks have been actively purchasing gold since the start of the year. Central bank gold purchases are much higher than in 2020 already. After the Covid-19 outbreak and throughout 2020, central bank gold purchases were cut in half in comparison to the two previous years.

Today, data from the World Gold Council (WGC) shows higher levels of gold purchased by central banks throughout March and April. Kitco statistics also show that in May, the world’s central banks purchased “56.7t during the month, down 11% M/M but 43% above the YTD monthly average.”

The chief precious metals analyst at HSBC, James Steel, told Bloomberg this week that the central banks moving into gold is a positive trend. “If a central bank is looking at diversifying, gold is a marvelous way of moving out of the dollar without selecting another currency.” Steel further said that bullion purchases by central banks will likely continue. The HSBC precious metals analyst stressed that because crude oil prices have risen dramatically, it has amplified central bank bullion buys.

Countries purchasing large quantities of gold for central bank reserves include Ghana, Turkey, Serbia, Thailand, Brazil, India, and Kazakhstan. This past week, Serbian President Aleksandar Vucic explained why the National Bank of Serbia was increasing gold purchases.

“Long term, gold is the most significant guardian and guarantor of protection against inflationary and other forms of financial risks,” Vucic told the press. Serbia’s central bank said it intends to add to its 36.3 tons and increase to 50 tons of gold.

Crude Oil Taps a 2021 Price High, Physical Gold Demand Resurfaces

Kitco statistics for May indicate that Thailand was the biggest buyer of gold bullion, as the country captured 82% of the month’s net gold purchases worldwide. The same month, Brazil increased gold reserves for the first time since 2012.

Gold bug and economist Peter Schiff agrees that crude prices have risen significantly in recent times. “In case no one in America is paying attention to the oil market on a Federal holiday,” Schiff said on Monday. “The price just hit a new high for the year of $76.39.” Schiff continued:

We are about 50 cents from hitting the highest price since Nov. of 2014. Low oil prices were transitory. Get ready for much higher prices.

American investors are anticipating this week’s minutes report from the Federal Reserve in order to get a clearer view of what the U.S. central bank will do next. Joseph Stefans, head trader at MKS (Switzerland) SA says demand for physical bullion has reappeared in recent times.

“Physical demand has begun to resurface a bit, U.S. real yields continue to drift lower, which has brought some dollar selling to the market,” Stefans noted on July 6. Gold is trading 0.83% higher than yesterday’s $1,791 per ounce price at $1,806 per ounce on Monday morning. A few other analysts believe it’s still too early to get clarity on gold’s future performance before the Fed’s minutes.

“It seems like the gold price has bottomed out recently after its mid-June sell-off. However, it’s still too early for a clearer picture ahead of the Fed minutes,” Alexander Zumpfe, a senior trader at refiner Heraeus Metals Germany GmbH & Co. KG. told Bloomberg on Monday.

What do you think about gold’s recent performance and central banks regaining their appetite for it? Let us know what you think about this subject in the comments section below.

$55 Billion Hedge Fund Firm Marshall Wace Planning Investments in Crypto Sector

Hedge Fund Giant Marshall Wace Planning Investments in Crypto Sector

Hedge fund firm Marshall Wace, with $55 billion in assets, is reportedly gearing up to launch a portfolio investing in the crypto sector.

  • London-headquartered hedge fund firm Marshall Wace is planning investments in the crypto sector, the Financial Times reported Tuesday.
  • Founded by Sir Paul Marshall and Ian Wace in 1997, Marshall Wace currently manages $55 billion in assets.
  • The firm is launching a digital finance portfolio that will invest in privately owned, late-stage digital finance companies, the publication detailed, citing people familiar with the plan. It will target investments in areas such as blockchain technology, payments systems for digital currencies, and stablecoins. A particular area of focus for the firm is the infrastructure around stablecoins.
  • Marshall Wace is currently talking to potential investors for the new portfolio, which will be headed by Amit Rajpal, CEO of Marshall Wace Asia and co-founder of Indian fintech firm Niyogin.

  • Marshall Wace has recently been looking to hire staff in the crypto sector, the sources added. At the end of May, the company participated in a funding round for crypto firm Circle. Noting that the new business is still at an early stage, the publication conveyed:

The group plans to expand it rapidly in a move that could include other forms of investment, for instance potentially trading digital currencies.

What do you think about Marshall Wace’s crypto plans? Let us know in the comments section below.

Musk Trolls Buffett With Fake Quote on Twitter, Then Deletes It

Musk Trolls Buffett With Fake Quote on Twitter, Then Deletes It

Elon Musk went after Bitcoin hater Warren Buffett recently, sharing what looked like a bullish crypto quote attributed to the billionaire investor. The tech entrepreneur, whose comments on social media have been moving crypto markets this year, later removed the post with the obviously fake Buffett statement.

Elon Musk Finds Buffett’s ‘Best Financial Advice’

Tesla CEO Elon Musk tweeted a meme of the famous American business magnate Warren Buffett with a quote underneath reading “Find as many coins as you can. And fast!” Musk attributed the statement to Buffett, describing it as his “best financial advice.” The entrepreneur turned-crypto-influencer said he found it on the internet.

Musk Trolls Buffett With Fake Quote on Twitter, Then Deletes It

In just a few hours, Musk’s latest crypto tweet gathered thousands of likes and comments early on Tuesday but the post later disappeared from his Twitter account. The quote in the tweet is most likely fake or wrongly attributed to the 90-year old legendary investor who is a well-known critic of Bitcoin, to say the least.

Warren Buffett has maintained a negative stance on cryptocurrencies over the years. In 2019, the Oracle of Omaha said “bitcoin has no unique value at all,” calling it a “delusion.” In 2018, the CEO of Berkshire Hathaway stated that those who put money into bitcoin were not investing but speculating and gambling. “Probably rat poison squared” is arguably Buffett’s most famous description of Bitcoin, which he gave at the company’s annual meeting in May of that year.

On the other hand, Elon Musk has been a prominent supporter of cryptocurrencies, with few exceptions such as this year’s decision to suspend BTC payments for the vehicles produced by his electric car company, due to concerns about the increasing use of fossil fuels to power bitcoin mining. The crypto-economy lost billions following his announcement on Twitter.

However, Tesla’s $1.5 billion investment in bitcoin earlier this year gave crypto markets a serious boost. Then in May, Musk reaffirmed his allegiance to decentralized money stating that in the battle between fiat and crypto, his support goes to the latter. He also said that Tesla would resume accepting bitcoin upon confirmation of a “reasonable” 50% clean energy usage by cryptocurrency miners.

Musk and Buffett have in the past clashed over business models. In 2018, the Spacex founder said that “moats are lame” referring to a term popularized by Warren Buffett, and emphasized the importance of innovation. Buffett responded by warning Musk to stay away from his moated ventures. Musk then announced he is starting a new candy company to take on Berkshire-owned moat See’s Candies that he’s going to call “Cryptocandy.”

Why do you think Elon Musk removed his Warren Buffett tweet? Tell us in the comments section below.

India’s Finance Minister Says Crypto Bill Ready for Cabinet

India's Finance Minister Says Crypto Bill Ready for Cabinet

India’s finance minister has provided a status update on the country’s cryptocurrency bill that the government has been working on. “We have done a lot of work on it. We have taken stakeholders’ inputs,” she was quoted as saying.

Status of Indian Crypto Bill

Indian Finance Minister Nirmala Sitharaman has provided a status update on the country’s cryptocurrency bill in an interview with Businessline published last week.

Sitharaman was asked about the status of “the Cryptocurrency and Regulation of Official Digital Currency Bill 2021” and when it is likely to be passed. The Indian minister of finance replied:

We have done a lot of work on it. We have taken stakeholders’ inputs. The Cabinet note is ready. We have to see when the Cabinet can take it up and consider it so that then we can move it.

“From our side, I think one or two indications that I have given is that at least for fintech, experiment and pilot projects a window will be available. The Cabinet will have to take a decision,” she clarified.

The bill was originally listed to be introduced during the budget session of parliament earlier this year but was not. According to its description on the parliament’s website, the crypto bill aims “To create a facilitative framework for [the] creation of the official digital currency to be issued by the Reserve Bank of India. The bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”

However, the government has since provided some more information about the bill. The finance minister said in May: “There will be a very calibrated position taken … [The] world is moving fast with technology. We can’t pretend we don’t want it.” In May, the government reportedly set up a panel of experts to re-examine the recommendations within the bill.

Do you think India will ban cryptocurrencies after all? Let us know in the comments section below.

Nigerian Twitter Suspension Has Unintended Effects on Country’s Crypto Community

On the surface, it looks like Nigeria’s suspension of Twitter operations on June 4 may have been triggered by the microblogging company’s decision to take down a controversial tweet — from President Mohammed Buhari. However, as some observers have noted, the removal of the tweet may have presented the Nigerian government with the perfect excuse for targeting Twitter CEO, Jack Dorsey.

Nigeria’s Anti-Tech Policies

As widely reported, social media mogul Dorsey tweeted his support and endorsement of the EndSars protests back in October 2020. In a tweet that enraged Nigerian officials, Dorsey asked his followers to donate bitcoin to organizers of the protest after the movement’s bank accounts were frozen. Also, in addition to supporting the protests, the CEO recently tweeted and shared articles that call on Nigerian authorities to pursue what he calls the “bitcoin standard.”

Therefore, when Twitter deleted the President’s tweet after alleging that it had violated its policies, this proved to be the final straw. The Nigerian government responded to the tweet’s removal by suspending the company’s operations and by threatening to arrest Twitter users that defied an order to stop using the platform. While this decision has been condemned by many including the U.S. government, President Buhari’s administration remains undeterred.

Still, others are viewing Twitter’s suspension as a continuation of Nigeria’s anti-tech policies that appear to have started with the targeting of the crypto industry. Starting on February 6, 2021, Nigerian financial institutions have been adhering to a Central Bank of Nigeria (CBN) directive that requires them to stop extending their services to businesses or individuals that deal with cryptocurrencies.

De Facto Home to the Crypto Community

As a result of this directive, players in Nigeria’s crypto industry have had to resort to platforms that cannot be censored by the government. However, unlike the CBN directive, the suspension of Twitter in Nigeria appears to have indirectly created an even bigger challenge for the country’s crypto industry. As one Nigerian media outlet explained, Twitter has acted as “the voice of the crypto world and has been recognized as the de facto home of the crypto community.” The outlet warns that with Twitter now blocked, Nigerian crypto enthusiasts can no longer “get insights and perspective from some of the greatest minds in the crypto space.”

This view is shared by Adedayo Adebajo, who is the managing director of Jerulida Africa DLT. In response to inquiry sent by Bitcoin.com News, Adebajo said:

Most crypto influencers and news are obtained and spread on Twitter. The social media platform is the best source for one to get real-time updates on market trends. The Twitter ban has for example affected all businesses including blockchain and crypto-related enterprises who carry out their outreach and marketing using Twitter.

When the CBN directed financial institutions to stop offering their services to crypto entities earlier in the year, crypto exchanges and traders responded by moving their business to P2P platforms. As previously confirmed in a report by Bitcoin.com News, Nigeria’s P2P bitcoin volumes surged following the imposition of the CBN directive. Similarly, some Nigeria-based Twitter users have responded to the Twitter ban by installing virtual private network (VPN) applications on their mobile devices.

Use and Impact of VPNs

This growing use of VPNs by Twitter users in Nigeria has been confirmed by Nigeria-based crypto enthusiasts like Aniekan Fyneface, a Nigerian blockchain enthusiast and content developer. In his response to an inquiry from Bitcoin.com News, Fyneface notes that many Nigerians are still active on Twitter despite the suspension. Still, this use of VPNs has not had the desired results, according to Adebajo. He explained:

Yes, VPN still allows people to use Twitter, but a huge percentage of the population either don’t have the luxury of money, time or tech know-how on how to go about it, so they just stepped back. The Twitter ban is a huge blow in the heart of all businesses and crypto. Tweets are not getting as much engagement as before while many people are in the dark on the trends.

Meanwhile, Fynface tells Bitcoin.com News that the Twitter ban is unlikely to have a big impact on the industry. He insists that Nigerian crypto users will still find alternative ways of accessing information just like they have found ways of using their bank accounts to buy cryptocurrencies even after the CBN directive was issued.

Do you think the suspension of Twitter by Nigerian authorities is hindering the growth of the country’s crypto space? Tell us what you think in the comments section below.

Japanese Ruling Party Official Says Digital Yen Clarity Will Be Revealed in 2022

Japanese Ruling Party Official Says Digital Yen Clarity Will be Revealed in 2022

While the U.S. ramps up discussions of a digital dollar and China’s central bank digital currency (CBDC) draws near, Japan’s CBDC, otherwise known as the digital yen, is getting closer to its realization as well. Japan’s ruling Liberal Democratic Party member, Hideki Murai, explained in a recent interview this week that more clarity on the digital yen would be revealed next year.

Ruling Liberal Democratic Party Member Hideki Murai Says Clarity on the Bank of Japan’s CBDC Is Coming Next Year

In recent times, Japan has been discussing the creation of a digital yen and the country’s politicians have been mentioning the subject more frequently. In November 2020, the head of Japan’s Monex Group, Oki Matsumoto, told the press that a Bank of Japan (BOJ) issued digital version of the yen would “significantly enhance the interoperability of cryptocurrencies.” Monex Group purchased the Tokyo-based digital asset exchange Coincheck for $34 million in 2018.

Hideki Murai, Harvard graduate, former member of Japan’s Ministry of Finance, and the Liberal Democratic Party’s lead on digital currencies, says clearer information on Japan’s CBDC will be ready by late next year. In an interview with Reuters on Friday, Murai said that the digital yen wouldn’t “meddle in private businesses.”

“By around the end of next year, we’ll have a clearer view of what Japan’s CBDC would look like,” Murai explained during the interview. Even though Murai stressed that the CBDC will not meddle with the private sector, “more details on its design may spur debate on how CBDC issuance could affect financial institutions,” the Reuters report noted. Still, Murai emphasized that financial players may feel some impact from the digital yen.

“If the BOJ were to issue CBDC, it would have a huge impact on financial institutions and Japan’s settlement system,” Murai said. “CBDC has the potential to completely reshape changes occurring in Japan’s financial industry.” Murai also discussed the relationship between Japan’s theoretical CBDC and the digital yuan produced by the People’s Bank of China (PBOC). He added:

If a digital yuan becomes so convenient it’s frequently used by tourists or becomes a main settlement means for trade, the relationship between the yen and yuan could change.

Murai concluded that the digital yen must be able to intermingle with CBDCs developed by other nation-states. The Liberal Democratic Party’s lead on digital currencies mentioned China’s rapid progress with the digital yuan. China’s CBDC is moving fast, and just recently Beijing and Suzhou railways announced they now accept digital yuan payments for ride fares.

In the U.S., the Federal Reserve said at the end of March that it planned to unveil digital dollar prototypes in July. The Fed’s vice chairman of supervision and the chair of the Financial Stability Board (FSB), Randal Quarles, also spoke about the digital dollar recently. However, Quarles’ opinion of a digital U.S. dollar differed significantly from Murai’s vision for a Japanese CBDC.

While Quarles said an American CBDC could pose a risk to the U.S. banking system, Murai said that a digital yen could possibly shift data and business solutions back to the Japanese banking system.

What do you think about Hideki Murai’s comments regarding a clearer picture of a digital yen in late 2022? Let us know what you think about this subject in the comments section below.