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World’s Central Banks Are Dipping into Blockchain – What’s Ahead for Fintech?

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The term blockchain, or more conveniently known as distributed ledger technology (DLT) to traditional finance is increasingly becoming a popular household name in the banking sector. There may well be more than 200 investment, commercial, and Central Banks as well as other financial institutions including big names such as Bank of America, Bank of China, Bank of England, Bank of Canada, Deutsche Börse, Reserve Bank of India, HSBC (Hong Kong Shanghai Bank), JP Morgan Chase, Morgan Stanley, among others who are currently integrating or planning to incorporate a part of the technology with their business operations.

Heralded as one of the most transformative technologies for financial services, the blockchain could be the key to unlocking a new economic era. Here’s how Harvard Business Review puts it:

“The blockchain will do to the financial system what the internet did to media.”

Redefining the Narrative for Blockchain

The Bank of England may have been the first Central Bank to venture into the DLT space and in partnership with the Bank of Canada and Monetary Authority of Singapore (MAS) published a paper on Cross-border interbank payments and settlements.

With sixty-five percent of the world’s Central Banks reportedly exploring blockchain technology and DLT, what does this mean for the future of finance? Firstly, the true scope of blockchain exploration by these traditional financial institutions can only be truly appreciated when considering the combined weight of their valuation alongside the core value proposition of the technology. This supposedly gives the blockchain industry a stupendous valuation that dwarfs current estimates. Blockchain and finance are often considered to be two peas in a pod – giving this an alternate meaning, perhaps, in the future, anything related to finance will have a string of blockchain technology attached.

This possibly explains the stiff competition among tech giants like IBM, Microsoft, Amazon, Facebook and others vying for a future stake in the blockchain industry – and not settling for small portions. R3 Corda apparently has a stake as a major player across most of these financial-enterprise deals, having well over 250 institutional partners across the world, the blockchain hype may indeed be off the charts.

But the story wasn’t always this glittery, as legacy financial institutions always slighted cryptocurrencies – the premier products of blockchain during its limelight; mostly due to Bitcoin – a decentralized entity, and largely considered to be a repulsive aberration of financial principles. However, over the years, most traditional financial institutions have warmed up to the idea of a distributed ledger technology and have found useful applications in operational efficiency. For them, it’s more about the blockchain and less of Bitcoin – still a wonder though how they justify that unholy separation.

The Potential for Banks

For Central Banks, the DTL has several use case parameters set to address numerous pain points. As detailed in a whitepaper published by World Economic Forum, there are about 10 use cases. However, major areas of interest seem to revolve around cross-border payments, securities settlement, fraud detection/security and trade finance. Banks tend to focus more on border payments – how to ease the transfer of cross-border payments, as DLT is known for speedy transactions that could cut down the time spent in processing transactions in incumbent systems.

The Bank of Canada is currently running several partnerships to exploit the most out of DLT. Its current flagship projects – to include project Jasper – looks to transform wholesale payment systems and possibly integrate their findings with “other assets such as foreign exchange and securities.” Other initiatives would include exploring the opportunities in “securities settlement system using central bank money, cross-border/cross-currency settlement system as well as Digital Fiat Currency projects.”

According to the Bank of Canada:

“One estimate suggests DLT could enable banks to save as much as USD 20 billion a year in global back-office costs if applied to cross-border payments, securities trading and regulatory compliance.”

For this reason, the development of Central Bank Digital Currencies (CBDC) became a subject of focus for most banks. A report by Bank for International Settlements (BIS) revealed 40 central banks around the world are supposedly researching CBDC. The central bank’s design of a digital currency typically involved the use permissioned blockchain
network, granting only participants with access to participate in consensus.

Last year, talks about CBDC perhaps made more news than other financial innovations these banks could have thought of. Though, the subject of CBDC still remains sketchy at best as a study between IBM Blockchain World Wire and the Official Monetary and Financial Institutions Forum (OMFIF) revealed mixed results on the subject of CBDC among 21 banks. However, there were growing sentiments towards using DLT and smart contracts.

Moreover, considering the size of the digital currency market, it still remains to be known how an actual retail cryptocurrency issued by the bank will impact economies. For now, the versions of bank-issued digital currencies such as JP Morgan Coin are intended for inter-bank settlements with only institutions in mind.

Between banks are rising opportunities to share resources to develop CBDC protocols that would enable inter-bank transactions. In May, the central banks of Thailand and Hong Kong signed an agreement to research CBDC in the hopes that their experience sharing will foster the development of quality financial services through the platform.

CBDCs could change the narrative for digital currencies as a whole. Should it be widely adopted, on one hand lies the possibility of the acknowledgement of cryptocurrencies and thereby create massive adoption and at that make the already volatile cryptocurrency market spike further in valuation. On the other hand, a CBDC coupled with strict digital currency regulations could oust non-regulated cryptocurrencies and create a huge problem for Bitcoin and a host of other altcoins; perhaps it won’t be extremely destructive considering the decentralized nature of Bitcoin.

Still Hesitant

Despite the potential DLT could serve the banking industry, possibly saving banks billions of dollars, developments and adoption seem rather slow considering the amount of investments sunken in the research and development of DLT-related products. Having come this far with several initiatives and collaborations, could banks begin to resent their initial thrust into DLT – after all they were only super enthused because such a system like Bitcoin going on a decade seemed efficient thus far. McKinsey describes the current stalemate as blockchain’s Occam problem;

“By late 2017, many people working at financial companies felt blockchain technology was either too immature, not ready for enterprise level application, or was unnecessary. Many POCs added little benefit, for example beyond cloud solutions, and in some cases led to more questions than answers. There were also doubts about commercial viability, with little sign of material cost savings or incremental revenues.”

As for retail banks, the hesitation may roost on Bitcoin’s extreme volatility, as with other wild roller-coaster-rides in the digital currency markets, largely due to the unregulated nature of these emerging assets. Besides, for some banks like the Bank of Korea, CBDC may appear to be a moonshot project at best, and do not consider it a matter of urgency; the Bank would rather gather more information on the benefits and costs of CBDC implementation first. With Italy, it clearly stated that it had no inclination to embark on a CBDC despite vouching for its qualities. A few others are well concerned about the overall impact of the CBDC on their fiat system.

Another huge deterrent stems from the uptick in competitive solutions being offered by legacy institutions, thereby making DLT traction a bit slow. One of such includes SWIFT’s global payments innovation initiative (GPI), which is reportedly tackling initial pain points with an attempt at providing higher transaction speeds and increased transparency between transaction parties.

One of the world’s top bank Citibank has dumped its Citicoin project which it had been developing for about 4 years. It announced earlier this year that it is now considering SWIFT on the premise that SWIFT already has a ready market with about 10,000 financial institutions already onboarded.

It’s Inevitable

It’s not all gloom for the banking industry, as the competition with emerging digital assets gets stiffer – and it will probably get worse for banks. Recently, Facebook’s cryptocurrency became an important subject as its founding infrastructure could threaten the future of legacy financial services.

The International Monetary Fund (IMF) has predicted that central bank digital currencies (CBDC), or state-backed crypto, would soon be a reality, with central banks already issuing them in the near future. This means the end to the struggles for an inclusion into the DLT market may not be too far off.

On the off chance that digital asset regulations kick off almost simultaneously around the globe, the developments of DLT-related banking products may surge, however, the industry has to fine tune its scaling strategies as the world gravitates from fiat currencies to emerging systems of value exchange.

There’s still so much more to be done by banks before incumbent systems can fully trust DLT. Therefore, more research and contingency methods would have to be in place before a complete shift occurs. However, the psychological shift is first, banks need to come to terms with the changing system as peer-to-peer systems are taking over, soon there would be lesser demand for banking services – which for the most parts lack the allure to keep customers.

Other emerging doubts could be stemmed through standardization of DLT objectives and strategies. Above all else, banks venturing into the blockchain space must do so for the long-haul, as the nascent technology still has room for growth, and perhaps evolve into a more suitable system for the banking industry.

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Facebook Reveals Radical GlobalCoin Plans to Defeat Bitcoin

Facebook Reveals Radical GlobalCoin Plans to Defeat Bitcoin

Social media mammoth Facebook has set out daring plans to launch its new cryptocurrency, GlobalCoin, and has apparently detailed its strategy to beat Bitcoin as the world’s most popular and most used cryptocurrency, according to Forbes.

It has been reported that Facebook will not directly manage this latest rival to Bitcoin. Instead, “an independent foundation” will be the one controlling GlobalCoin, a move likely to deflect centralization concerns and improve their compliance with financial regulators.

Bitcoin News has written about Facebook’s busy work in discussing and negotiating with financial and tech institutions over the past months. Its founder, Mark Zuckerberg, had been in a meeting with Bank of England governor Mark Carney in April to talk about the risks and opportunities of launching such a crypto. They later even met with Coinbase and others, trigerring all kinds of speculation about possible partners. Then, it was planned to launch GlobalCoin in 2020 but things have seemed to been sped up.

All this news came on the back of Facebook recently registering a new financial tech firm, Libra Networks LLC, in Geneva, which will offer financial services such as payments, identity management, financing, big data, data analysis, and blockchain.

The cryptocurrency is said to appear much like Bitcoin, but is linked to a Facebook project codenamed Libra and is thought to be focused at developing countries, where national currencies are less stable and its people will use the crypto as a “borderless currency”.

It is also accepted that GlobalCoin will be a so-called stablecoin pegged to the US dollar, and is widely expected to a payment option, integrated into Facebook’s popular messaging app WhatsApp and Messenger, as well as on photo-sharing app Instagram.

 

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Facebook Targets 2020 for “GlobalCoin” After Bank of England Meet

Facebook Targets 2020 for

A BBC business report has just released fresh details on near-finished plans by social media giant Facebook to launch its own cryptocurrency next year; the coin has been dubbed internally as GlobalCoin.

According to the report, Facebook’s founder Mark Zuckerberg had held meeting with Bank of England governor Mark Carney last month to talk about the opportunities and risks associated with launching such a currency. The company also met with the US Treasury to seek advice on regulatory and operational issues, alongside discussions with money transfer institutions such as Western Union in a bid to find solutions for transferring money for people without bank accounts.

More details have been promised this summer, but GlobalCoin testing has been scheduled for the end of 2019 and digital payment systems will be installed for around 12 countries by early 2020.

Dubbed Project Libra, the plans for Facebook’s digital currency, nicknamed Facebook Coin, first surfaced late last year. Much speculation had surrounded its use and extent, but it is now understood that GlobalCoin will work together with banks to help people transfer dollars and other international currencies into a digital network for further use. Some co-founders are expected to launch the new association based in Switzerland in the coming weeks.

Venture capitalist Tim Draper is thought to be in discussions with Facebook to consider possible investments into the crypto project.

 

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Brexit, Binance and Bitcoin: A New Era for Crypto in the UK?

Brexit, Binance and Bitcoin: A New Era for Crypto in the UK?

With the clock ticking on Britain’s much-debated exit from membership of the EU and all that means if a decision is finally agreed by September, where will this leave the UK in European Crypto Space? In a position of strength, or cut-off from its legislative support on the other side of the channel?

Well, no man is an island according to English metaphysical poet John Donne, but at this moment in time, it appears that the UK is digging its own hole in the sand as each week passes towards the latest agreed date of departure, when Great Britain and Northern Ireland hopefully get its rules back from the longtime European partners; the leaver’s much heralded and acclaimed  “taking back control.”

Does this even matter when it comes to cryptocurrency trading? In the UK the banks are aware of it, the Bank of England is monitoring it, and the man on the street pretty much knows about it. Bitcoin continues to be classified as private money, with VAT applied and also subject to capital gains tax, where profits and losses are involved.

However-and Britain has illustrated with great clarity to a dumbfounded Europe with its Brexit machinations-it is often slow to make decisions and enforce regulations; in fact, the UK now risks falling behind its European partners regarding cryptocurrency regulations unless it acts with more clarity and decisiveness, and guess who has taken up the leading role in this regard? The French…that must hurt.

Yes, the UK’s Financial Services Authority (FSA) did release a recent update of its progress which is currently in the hands of the specially selected Cryptoassets Taskforce.  However, a series of final guidelines or policy guidelines are still awaited from the FSA after the release of this consultation paper as far as regulatory dynamics go. With France now happy to lead Europe on a regulatory charge, Britain could be left counting its fingers after Brexit.

There are those in the UK however who like what they see in terms of crypto’s future after Brexit. Mike Romanov chief executive of Digital Securities Exchange (DSX) feels it can continue its dominance in the financial markets and crypto could come under the UK rather than EU legislative control. Others see an opportunity too, with a dent left in the Euro cryptocurrency market as Britain goes into its own crypto shell, out of reach from the EU’s legislative grasp, opening the door for new smaller players outside of the EU to leap in and plug some holes.

This is the Bitcoin bull’s stance, Britain hopes for friendlier digital currency regulations than it has at present. Another consideration is what might happen to the price of BTC with the impact of a final departure or possible vote to remain (the usual suspects) this year. There is a general feeling that it is simply the Brexit debate which is pinning the economy down and any kind of departure from this pain will be a release for both traditional and digital financial markets. According to the Bank of England, the economy has been shedding about £800M every week since they made the verdict in 2016.

There is one man who is just happy at what he sees, and if it continues, well then long may it do so. Enter Binance CEO Changpeng Zhao who, having now set up in Jersey is in the right place at the right time; well located for Europeans and Brits alike, whatever the outcome. With the existing offshore legal and regulatory framework for cryptocurrency, it is made to measure, given that there is now more than just a hint that Brits could turn to cryptocurrency come the predicted economic fallout given a no deal Brexit this year, and for this event, Zhao sees himself in the front line.

When it comes to crypto, the front line is always the place to be.

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Venezuelan Turmoil Sees $10 Million Spurt on LocalBitcoins

Venezuelan Turmoil Sees  Million Spurt on LocalBitcoins

With the country in turmoil and Venezuela‘s future more uncertain than at any point since 1999 when Hugo Chavez first became president, the trade in Bitcoin has peaked, recording USD 10 million in trading on P2P platform LocalBitcoins in just seven days.

In the past week, the country was thrown into turmoil when Juan Guaido proclaimed himself unofficially as the country’s new president. With Nicolas Maduro still incumbent, Bitcoin P2P trades hit their second-highest weekly total ever. The cryptocurrency, albeit driven underground by the Maduro regime, has been supporting many of those nationals choosing to remain in the country rather than fleeing to neighboring Columbia in order to escape poverty.

As the situation becomes more explosive by the day, and with both Iran and Russia warning the US, who have backed the Maduro presidency, to stay out of Venezuela, nationals are again putting their faith in Bitcoin. In the last week, more Bolivars for Bitcoins were traded than ever before, despite the weakness of the national currency.

It can’t be confirmed if perhaps some of this activity may be due to Guaido’s liberal stance on cryptocurrency and the possibility of a new regime, but the rush on Bitcoin, coinciding with a dump of the bolivar, is unprecedented.

Maduro’s attempts to withdraw the country’s gold supplies this week, having already expelled US diplomats, was thwarted by the Bank of England who currently holds Venezuela’s USD 1.2 billion reserves. As Harvard economist explained, having communicated with Guaido:

“The first rule of business as we speak is to stop the Maduro government from liquidating international assets of the country and steal them.”

 

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Mixed Bitcoin Messages From Davos World Economic Forum

Bitcoin was the talk of the town in Switzerland last year when the world’s movers and shakers assembled at Davos for the 2018 World Economic Forum, but this year the cryptocurrency demands a far less prominent position at the table.

The comparison is startlingly obvious. From getting a fair degree of attention a year ago at the 2018 Conference, albeit on the way down even then, the cryptocurrencies are less liable to attract the attention of delegates this year, particularly given the current trials of leaders from the US, UK, and France all entangled in their own domestic issues, some of them shared.

Angel Versetti, CEO of blockchain-based company Ambrosus observed: “While last year, people were talking about crypto and blockchain anywhere and everywhere, this year there is comparatively little discussion around it.”

Hardly surprising given Trump’s domestic battle and government shutdown, May’s Brexit squabbles and Macrons’ sea of yellow vests. The subject still comes up though, some fairly hopeful of a market revival, some less, like the advisor to the Bank of England, Huw van Steenis who said that cryptocurrencies weren’t on the list of priorities at this year’s summit, “I’m not so worried about cryptocurrencies,” he commented not unexpectedly, “They fail the basic tests of financial services, they’re not a great unit of exchange, they don’t hold value and they’re slower.”

Not the case at all, according to Jeremy Allaire — CEO of Circle, the Goldman Sachs-backed payments and tech company as he argues that fintech will be dependent on decentralized technology moving forward:

“Crypto is fundamental to the future, and so crypto computing, which is what these blockchain platforms really are, they’re open computing platforms — we need tamper-proof, resilient, decentralized infrastructure if we want society to survive the digital age.”

Allaire went on to argue that Circle was also a huge supporter of central-bank digital currencies, suggesting that the private sector will be the leader in setting the pace for the creation of these centralized crypto assets. However, Jeff Schumacher, founder of BCG Digital Ventures was less optimistic during a CNBC panel discussion as he mentioned, “I do believe it [cryptocurrency] will go to zero,” adding, “I think it’s a great technology, but I don’t believe it’s a currency. It’s not based on anything.”

Next year could be an embarrassment for some of these commentators if Bitcoin hits its expected heights this year as Wall Street comes on board.

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CBDC Report Identifies Cross-Border Payment Practicalities

A joint research report conducted by three central banks has concluded that Central Bank Digital Currencies (CBDC) have the capacity to upgrade cross-border payments and settlements.

Hypothetical proposals

Titled Cross-Border Interbank Payments and Settlements: Emerging Opportunities for Digital transformation, the paper was collaboratively authored by the Bank of Canada (BOC), Bank of England (BoE) and the Monetary Authority of Singapore (MAS). With them, a number of experts from commercial banks “led by HSBC”.

Specifically, the research project the proposal for three possible models to address issues and achieve what it calls “future-state capabilities”; these are the desired outcomes which have been gathered from research into “challenges and root causes of issues associated with cross-border interbank payments and settlements”.

Appraising the limitations of technological innovations within this space, the report acknowledges present initiatives that are taking place that “go some way” to address obstacles. However, it describes these as “incremental changes” and in order for a long-term solution to be established, there “may need to be a more fundamental paradigm shift” which are “enabled by new technology platforms”.

A study from IBM and the Official Monetary and Financial Institutions Forum (OMFIF) recently revealed that central banks have been exploring and trialing CBDCs with “mixed results”.

W-CBDCs

There are two types of CBDCs; firstly the “retail CBDC” which is designed for public use, and secondly “wholesale CBDCs”, which are limited to financial institutions and markets.

The report offers two approaches based on legacy models with one referring to the collection of initiatives currently underway or in the making and a second which is based on the expansion of real-time gross settlement (RTGS) operators roles for cross-border settlements, eliminating intermediary banks.

Weighted approach

A third model comes with three nuanced variations and focuses on the utilization of wholesale central bank digital currencies (W-CBDCs) for this process.

The first of the W-CBDC models is one that can only be “transmitted and exchanged only within their home jurisdictions”. This would require commercial banks to open wallets across multiple central banks should they desire to hold a number of currencies. The second broadens the scope a little further by suggesting for a W-CBDC that can operate “beyond their home jurisdictions”. For commercial banks, this would entail adopting multiple wallets within their respective central banks, and would require “each central bank to support multiple CBDC tokens”.

Finally, the third variation is ideal yet ambitious, and suggests a universal W-CBDC, “backed by a basket of currencies and accepted by all participating jurisdictions”. Conclusively, the report found the first jurisdiction-specific model offered few benefits as they are simply tokenized versions of existing models.

The other models that do not limit the scale of the system are, however, solid options to reduce counterparty credit, settlement and payment risks; also broadening access to RTGS systems. That said, the report identifies all of the W-CBDCs models as having particular drawbacks including not performing to present standards and that they “degrade” existing governance frameworks.

In discussion

The concept of CBDC’s has been around for some time, however, now it appears as though there is significant potential on the horizon, as a few nations around the world such as Thailand begin to embark on the CBDC journey.

This is also not the first time that the BoE or BOC have spoken publicly about CBDCs. Furthermore, Managing Director of the International Monetary Fund (IMF) Christine Lagarde recently gave a speech in Singapore on the matter, highlighting the several positives that can be drawn from this new fintech frontier.

 

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UK Crypto Taskforce Suggests Update to Regulations, Definitions

A report shared by the UK Cryptoassets Taskforce cites several proposed changes in the nation’s cryptocurrency regulations, in addition to categorizing and defining the different variations of cryptoassets.

New opportunities, new dangers

Published Monday 29 October, the taskforce’s paper stipulates that using cryptoassets as investments can raise new opportunities in business. Although, as regulations currently stand, these opportunities are at ”inappropriate levels” of risk, including dangers associated with illicit activities.

The UK taskforce praised initial coin offerings’ (ICOs) ability to bring a new format of investment options to startup companies, promoting innovation, improving efficiency and developing a new ”type” of investor.

The report does state, however, that the risks cryptoassets pose on these investors is notable, particularly because of their susceptibility to market abuses such as pump and dump scheme and other forms of price manipulation.

This could be changed in the future though if the industry takes on the Financial Promotions rules that the report proposes, giving the product or service in question a more ”balanced impression”, according to the taskforce.

Defining and categorizing

Another proposal in the report includes clearly defining the various forms that cryptoassets take and sorting them into categories thereafter. The framework it offers lays out three types of cryptoassets: security tokens, exchange tokens, and utility tokens.

While none of these types may be recognized as money right now due to their high volatilities, the task force lays out a progressive approach in that it believes the decentralized technology systems behind them may allow cheaper and more efficient financial transactions to be conducted in the future.

The Cryptoassets Taskforce was launched in May this year, constituting members from the Bank of England and the Financial Conduct Authority (FCA).

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G20 Crypto Report: Preserve Benefits of Innovation, Contain Risk

The G20 Financial Stability Board (FSB) is rarely upbeat when it comes to cryptocurrency and its latest report won’t disappoint, although there are indications that the regulatory board is beginning to accept that crypto is here to stay.

It states that its observations are primarily based on a “monitoring framework… predominantly based on public data” and it would be interesting to uncover exactly where this data is gathered.

The usual risks to financial stability in that crypto lacks sovereign currency “attributes” and concerns about digital currencies’ price volatility are all to be found in the report, with little reference to their benefits. It also refers to a lack of regulation due to the range of jurisdictions in which cryptocurrency exchanges operate.

The FSB is formed by an amalgamation of 68 finance departments and central banks of the G20 and chaired by Bank of England’s head Mark Varney who has expressed his concerns about cryptocurrency on more than one occasion.

The G20 financial watchdog noted in its July report that previous analysis of crypto-asset markets, which included initial coin offerings (ICOs), had brought forth awareness surrounding significant challenges such as rapid market development, lack of transparency (with regard to identity and location if token issuers), as well as governing laws for white papers and gaps in data.

This latest report has upgraded some of these concerns from early in the year calling for “vigilant monitoring” suggesting that institutionalized cryptocurrency may erode confidence in financial institutions; a clear concern being shown that banks fear an alternative option for their customers. This may not be imminent, but a likelihood that this becomes the status quo in future years is bound to concern major banking institutions around the globe, as represented by the G20 body.

However, it appears there is some consensus from within the group about the value of innovation, if not the benefits of crypto, although this may be limited to the respect currently being shown for the rising swathe of DLT in the fintech space and elsewhere. The report stated:

“FSB members have to date taken a wide variety of domestic supervisory, regulatory, and enforcement actions related to crypto-assets. These actions are balanced between preserving the benefits of innovation and containing various risks, especially those for consumer and investor protection and market integrity.”

The report also goes on to refer to the widespread use of crypto as a payment system but plays down the level of its impact in the financial and commercial sector by using the word “some”, perhaps unaware of crypto’s growing stature as a payment system:

“Importantly, crypto-assets are neither backed by any government or other authority nor are they legal tender in any jurisdiction. However, some private enterprises and some public sector entities have chosen to accept some crypto-assets as payment.”

 

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UK Financial Regulator Wants Balanced Crypto Approach

The chief executive of the UK’s Financial Conduct Authority (FCA) addressed the issue of cryptocurrencies at a speech in London on Tuesday, a subject with which he said requires a balanced approach.

Speaking at the 2018 regulator’s Annual Public Meeting, Andrew Bailey initially brought up crypto assets as one of four operational risks significant in the regulators’ current work. While he said that the FCA was ”keen to see the potential of their underlying technology,” he recognized that there are also evident risks, citing a lack of education from consumers who do not understand the price volatility of their investments.

Bailey added that the FCA would not ”rule out roles for cryptoassets themselves”, an approach far from calling for a ban or restriction on trading operations. Combined with his statement that ”the FCA is firmly a supporter of innovation,” UK investors can rest assured that the FCA is not looking to impose any radical changes to the current regulations any time soon.

The section of Bailey’s speech referring to cryptocurrency came to an end with his assurance that the regulatory body was working closely with the Treasury and Bank of England to address any related issues and find ”appropriate responses”, a reference to the Cryptoassets Task Force set up earlier this year in May.

The UK task force held its first meeting on 21 May to discuss the future of blockchain and cryptocurrencies, and to establish ways to mitigate any risks that the growing industry might bring.

Alongside the FCO, the task force includes several senior government officials, the Bank of England and HM Treasury, although they have said they welcome the opinions and input of trade bodies, consumer groups, and investors in order to gain a broader perspective.

The UK has already begun establishing itself as a leading country in the blockchain industry; the outcome of these discussions are crucial in deciding whether this can remain the case in the future.

 

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