The Reserve Bank of India (RBI) is launching a wholesale pilot program involving its Central Bank Digital Currency (CBDC) also dubbed the Digital Rupee.
According to a Press Release published by the apex bank, this first pilot phase is centered on the use of the Digital Rupee for the settlement of secondary market transactions in government securities.
The RBI wants to see if the potential legal tender can reduce some of the drudgeries that are being experienced in the inter-bank market and make it generally more efficient.
“Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk,” the RBI said in the issued release, setting the focus for future pilots by asserting that “other wholesale transactions and cross-border payments will be the focus of future pilots, based on the learnings from this pilot.”
The motivation to float CBDCs has been a central push for many Central Banks around the world. With more than 110 already conducting one form of research into the new form of money. With the evolution of financial technology as popularized by the advent of cryptocurrencies, a scenario that made preempted RBI to move to ban crypto in favor of the Digital Rupee.
India comes off as one of the countries whose RBI has maintained a steady course in the design and development of its Digital Rupee.
The apex bank has been interfacing with financial institutions and it confirmed that this current wholesale pilot will enjoin participation from Nine banks including but not limited to the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, Yes Bank, IDFC First Bank, and HSBC have been identified for participation in the pilot.
The RBI said the retail pilot for the Digital Rupee will be launched within a month and will see select participation in select locations across the country.
Apollo Global Management, an American private equity firm with more than $30 billion in assets under management has inked a new partnership with Anchorage Digital for its crypto custody options.
The partnership between the duo has been an evolving one and as revealed by the latter firm, it will solely be in charge of safeguarding the crypto holdings of Apollo which is now deepening its feet into the Web3.0 world.
“Apollo is a leader in the alternatives industry, so their use of Anchorage’s custody platform is incredibly validating, and we expect this collaboration can set the bar for how institutions work with regulated digital asset banks like Anchorage to provide custody and other services for their crypto holdings. Being both nimble and secure with digital asset portfolios doesn’t have to be mutually exclusive–and we are confident this partnership will prove that,” said Diogo Mónica, Co-Founder and President, of Anchorage Digital.
The era where mainstream investment firms consider the crypto ecosystem as an alien offshoot of the financial industry is passed. Many institutional investors today are now exploring new and unique avenues by which they can join the bandwagon, and fulfill the demands of their existing customers while attracting new customers.
Apollo remains one of the major investment outfits pushing its boundaries with a steady entry into the Web3.0 space. While its custody relationship with Anchorage Digital dates back to 2021, the company dipped its feet into the industry some more when it joined the investors that bankrolled Anchorage when it raised $350 million in Series D funding last December.
While its crypto embrace is still shaping up, Apollo said its choice of Anchorage Digital as its primary strategic partner is based on the firm’s “strong emphasis on security and segregation of client assets,” as well as the “ease of use for asset managers to hold digital tokens.”
Crypto exchange FTX founder Sam Bankman-Fried said that, unlike the West, although Asia does not have a key web3, blockchain and cryptocurrency hotspot, Hong Kong could emerge as a leader in that sector.
Speaking virtually during the annual Hong Kong FinTech Week 2022, Bankman-Fried said that other potential locations in Asia are Singapore and Busan.
“If you look at what the crypto hubs will be in the world, I think the Bahamas looks like one of them, Dubai looks like one of them, but if you look at the East, it’s not as obvious. It could be Singapore, could be somewhere like Busan in Korea, but I think there is a real chance it ends up being Hong Kong,” Bankman-Fried said.
Furthermore, the world’s youngest billionaire Bankman-Fried added that the Hong Kong government’s crypto initiative to start a consultation on legalising crypto trading by retail investors is a positive sign for a brighter future for crypto in the region.
Hong Kong is planning to issue tokenised green bonds and prepare for the development of the digital Hong Kong Dollar.
Financial Secretary of HKSAR Paul Chan spoke virtually during the Fintech Week on Monday to introduce the latest policy statement on virtual assets to the public, saying that “we want to make our policy stance clear to global markets, to demonstrate our determination to explore financial innovation together with the global, virtual-assets community,” hoping to maximise with the advantages and innovation of Fintech in terms of virtual assets.
Regarding the upcoming tokenisation of green bonds, Eddie Yu, Chief Executive of the Hong Kong Monetary Authority (HKMA), spoke at the same event and disclosed that the authority is planning to issue the first batch of green bonds this year globally, aiming to promote the product to retail investors on a small scale first. Details will be announced further later.
FTX was relocated from Hong Kong to the Bahamas in 2021 due to regulatory uncertainty.
Bankman-Fired also confirmed last week that FTX is planning to launch its own stablecoin.
Speaking in an interview with Web3 news media, The Big Whale, Bankman-Fried discussed several of the industry’s perceptions concerning the exchange’s position atop the ongoing crypto winter.
As against the popular belief that FTX is the biggest winner in the industry based on its success in snapping up Voyager Digital and BlockFi, both crypto lenders that got riled up as prices of assets tumbled, Bankman-Fried reiterated that its role, irrespective of the perception is to help maintain industry balance which will, in turn, benefit everyone.
Acknowledging that this current crypto winter is the “first real Bear Market we’ve been through,” the FTX boss acknowledged that the market downtime is not affecting its business as such as it is always innovating.
“One of the main characteristics of crypto platforms is that our operation is not impacted by the market downturn any more than that,” he said, “Every day we continue to grow the business, and create services and new tools for customers. So, yes, the markets are less dynamic, things are a little tenser, but in the end, it doesn’t take us off course.”
Meanwhile, neighbouring Singapore is building measures to tighten its crypto regulations on retail investors.
Last week, the Monetary Authority of Singapore (MAS) unveiled a proposal to restrict retail participation in digital assets. Following this, small investors will be banned from funding coin purchases through borrowing.
Singapore’s central bank echoed sentiments similar to that of the MAS by asking companies to stop using tokens deposited by retail investors for lending or staking to generate yield. However, the restrictions proposed by the two regulatory bodies will not be applicable to high-net-worth investors.
However, Singapore is taking these moves to ensure positive growth of the crypto industry with security measures that will provide safety to investors.
The HKSAR government published its latest policy statement Monday related to the outlook of virtual assets development, including the issuance of tokenized green bonds and the preparation of developing the digital Hong Kong Dollar.
Over 200 key finance entrepreneurs joined the Fintech Week that started on Monday in Hong Kong, which is one of the critical events for the city to show its confidence in developing its economy amid the recovery from COVID-19.
Paul Chan, Financial Secretary of HKSAR, spoke to Fintech Week virtually due to his infection with Covid 19 during his overseas trip to Saudi Arabia. Chan introduced the latest policy statement on virtual assets to the public, saying that “We want to make our policy stance clear to global markets, to demonstrate our determination to explore financial innovation together with the global, virtual-assets community,” expecting to catch up with the advantages and innovation of Fintech in terms of virtual assets.
“The policy statement explains in detail our vision and approach, regulatory regimes, thoughts on investors’ exposures, and our pilot projects to embrace the technological benefits and financial innovations brought by virtual assets.”
Per the latest policy statement issued by the government. Serval pilot projects are ongoing, including:
(a) NFT issuance for Hong Kong Fintech Week (“HKFTW”) 2022: A proof-of-concept project on our part to engage the Fintech and Web3 community;
(b) Green bond tokenisation: Tokenising Government Green bond issuance for subscription by institutional investors;
(c) e-HKD: The potential “backbone” and anchor bridging legal tender and VA, offering price stability and confidence needed to empower more innovations.
Green Bond Tokenization
Regarding the tokenisation of issued green bonds, Eddie Yu, Chief Executive of the Hong Kong Monetary Authority (HKMA), spoke at the same event and disclosed that the authority is planning to issue the first batch of green bonds this year globally, aiming to promote the retail product investors on a small scale first. Details will be announced further later.
Meanwhile, cross-border payment with digital Hong Kong dollars, or e-HKD, is also ongoing. The head of the regulator said the pilot tests of mBridge were going well. Over $170 million in Hong Kong dollars with 160 crosses broader transactions has been conducted, which are associated with around 20 commercial banks in four regions.
Opening market for VA ETFs trading
Given the increasing acceptance of virtual assets as a vehicle for investment allocation by global institutional or individual investors, the policy statement reads that Hong Kong’s recognition would open the possibility of allowing Exchange Traded Funds (ETFs) on virtual assets in Hong Kong.
Yet, the turmoil and the volatility triggered by the so-called crypto winter in the first half year resulted in significant exposure to investors and hampering the performance of the crypto market. In terms development of cryptocurrency trading, Yu, the head of HKMA, said Hong Kong is capable of developing the ecosystem of virtual assets, given that supported by sufficient education for investors and a comprehensive regulatory system.
The fintech Industry welcomes policy statements in general.
Adrian Cheng, CEO of New World Development, welcomes HKSAR’s latest stance on the development of virtual assets in the city.
Speaking to Blockchain.News through a statement, Cheng said that he fully supports the government’s issuance.
“With our unique position in Greater Bay Area, Hong Kong will dominate regional development of GBA cross-border blockchain infrastructure and blockchain ecosystem.”
New World Development believes in virtual assets financial markets, CBDC payment, and GBA blockchain infrastructures would be key strengths and pillars for the city, transforming the city to be a digital financial centre.
Cheng suggested regulations in Hong Kong “would need to further evolve and expand beyond the current regimes of SFC Type 1 & 2 client asset holding licenses and trustee license.”
The property company is actively engaged in the crypto community and NFT projects. In August, Cheng purchased an NFT of 101 Azukis but also invested in RTFKT and Animoca Brands.
