Tag: Central Bank

South Korea Grants Central Bank More Power Over Crypto

by Blockchain News

The Bank of Korea (BoK) has been granted increased power to investigate cryptocurrency service providers and issuers, as discussions on virtual asset legislation continue in South Korea. According to a report by The Korea Herald, the BoK will now have the right to scrutinize cryptocurrency-related businesses and request transaction data from digital currency operators.

The BoK has been in competition with the country’s financial regulator, the Financial Services Commission (FSC), over who should govern the regulation of the digital asset sector. While the BoK has expressed concerns over the financial stability risks associated with stablecoins, the FSC has warned that if the central bank governs crypto, it will send the message that digital assets have the same standing as traditional finance.

Despite the ongoing debate, the BoK’s right to request data from crypto exchanges has been confirmed by an official from the National Assembly’s Political Affairs Committee. The FSC will express its official position at a subcommittee meeting on April 25, which is expected to accelerate the rollout of South Korea’s virtual asset laws.

The South Korean government has been trying to push forward crypto legislation, but there have been arguments between the central bank and the FSC over who should control it. Democratic Party lawmaker Kim Han-gyu, who proposed the Crypto Assets Act, said that while the FSC admits it is necessary for the BoK to have the right to request data, it is refusing to include it in the bill.

The latest development means that both the South Korean central bank and its financial regulator will have increased power to investigate crypto operators and have full access to transaction data. This move follows several years of disagreement between the two institutions over crypto regulations.

The FSC has been active recently with enforcement actions against crypto companies and takes the same position as the United States Securities and Exchange Commission in that it considers crypto assets securities. South Korea’s Financial Supervisory Service, which operates under the FSC, announced the creation of an investigative body called the Digital Assets Committee in mid-2022.

In conclusion, the South Korean government is continuing its efforts to regulate the cryptocurrency sector. The Bank of Korea has been granted more power to investigate cryptocurrency-related businesses, and the Financial Services Commission is expected to accelerate the rollout of South Korea’s virtual asset laws. Despite disagreements between the two institutions, both will now have full access to transaction data and be able to investigate crypto operators.

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UAE’s Central Bank Nears Launch of Digital Dirham

by Blockchain News

The Central Bank of the United Arab Emirates (CBUAE) is taking significant steps towards the full launch of its central bank digital currency (CBDC) known as the digital dirham. As announced on March 23, the CBUAE has signed an agreement with Abu Dhabi-based G42 Cloud and digital finance services provider R3 to be the infrastructure and technology providers for the CBDC implementation. This is a crucial milestone in the development of the digital dirham and is expected to address the challenges of domestic and cross-border payments, while also promoting financial inclusion and supporting the country’s goal of becoming a cashless society.

The first phase of the CBDC strategy involves the soft launch of “mBridge,” a platform that facilitates CBDC transactions for international trade. The CBUAE is also working on proof-of-concept projects for bilateral CBDC bridges with India, as well as domestic CBDC issuance for both wholesale and retail use. These initiatives are expected to be completed within the next 12 to 15 months, according to the CBUAE’s announcement.

The digital dirham has been in development since 2019, with the CBUAE conducting extensive research and analysis to ensure the successful implementation of the CBDC. The CBUAE has also engaged with various stakeholders, including financial institutions, merchants, and other entities, to gather insights on the requirements and potential benefits of a CBDC.

The digital dirham is expected to bring numerous benefits to the UAE’s economy and financial system. One key advantage is the increased efficiency and speed of domestic and cross-border payments, which will enhance the country’s competitiveness in the global marketplace. The digital dirham is also expected to boost financial inclusion by providing greater access to financial services for underserved populations, such as low-income individuals and small businesses.

Moreover, the digital dirham is expected to reduce the cost and complexity of financial transactions, thereby promoting innovation and entrepreneurship in the UAE. The digital dirham’s transparency and security features will also help combat financial crime and money laundering, which are key priorities for the UAE’s government and financial regulators.

The CBUAE’s partnership with G42 Cloud and R3 is a significant step forward in the development of the digital dirham. G42 Cloud is a leading provider of cloud and artificial intelligence (AI) services in the UAE, while R3 is a global blockchain software firm. The collaboration between the three entities is expected to leverage their respective expertise and technologies to ensure the successful implementation of the digital dirham.

In conclusion, the UAE’s central bank is making significant progress towards the launch of its digital dirham CBDC. The implementation of the digital dirham is expected to bring numerous benefits to the UAE’s economy and financial system, including increased efficiency, financial inclusion, and innovation. The CBUAE’s partnership with G42 Cloud and R3 is expected to be a key driver of the digital dirham’s success, and the future looks promising for the UAE’s digital currency.

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G20 To Establish Standards For Global Crypto Regulatory Framework

by Blockchain News

It was announced on February 25 by the group of the 20 largest economies in the world, known collectively as the G20, that the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) will deliver papers and recommendations establishing standards for a global crypto regulatory framework.

The Financial Stability Board (FSB) is expected to publish its recommendations by July 2023 on the regulation, supervision, and oversight of global stablecoins, crypto asset activities and markets, as stated in a document that provides a summary of the outcomes of a meeting with finance ministers and governors of central banks.

The next set of guidelines is not anticipated to be released until September 2023. At that time, the FSB and the IMF are scheduled to jointly provide “a synthesis document incorporating the macroeconomic and regulatory aspects of crypto assets.” Another research on the “possible macro-financial ramifications of the broad adoption” of central bank digital currencies is scheduled to be published by the International Monetary Fund (IMF) in the same month (CBDCs). The following is an excerpt from the statement that was released by the G20: “We look forward to the IMF-FSB Synthesis Paper which will support a coordinated and comprehensive policy approach to crypto-assets, by considering macroeconomic and regulatory perspectives, including the full range of risks posed by crypto assets.”

Additionally, the BIS will provide a paper that discusses analytical and conceptual concerns in addition to potential risk reduction techniques associated with crypto assets. The text does not include any information on the deadline for this report. The use of cryptocurrency assets to finance terrorist operations will also be investigated by a financial task group established by the G20.

During the course of the event, United States Secretary of the Treasury Janet Yellen said that it was “essential to put in place a solid regulatory framework” for activities relating to cryptocurrencies. In addition to this, she emphasized that the nation is not advocating for a “outright ban on crypto activity.” In a brief conversation with reporters on the margins of the main event, the managing director of the IMF, Kristalina Georgieva, suggested that the G20 nations need to have the option of outlawing cryptocurrencies.

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The IMF Releases a Report on Jordan Preparations for a Central Bank

by Blockchain News

After the International Monetary Fund (IMF) has finished its technical assessment on the country’s markets, the Central Bank of Jordan is one step closer to taking the next step that is necessary to launch a retail central bank digital currency. This action was necessitated as a consequence of the International Monetary Fund’s (IMF) conclusion of the research that they commissioned (rCBDC). In order to give assistance in the development of a CBDC feasibility study the previous year, the International Monetary Fund (IMF) sent a mission to the bank that lasted for a combined total of three months and lasted for the whole of the preceding calendar year. During the course of the preceding calendar year, this mission was carried out. On February 23rd, the research was made available to the public by the International Monetary Fund.

An investigation on the current condition of the retail payment sector in the country was carried out by the International Monetary Fund (IMF) during the months of July and September 2022. After looking at their data, they came to the conclusion that the market was “extremely linked.” According to the findings of the study, the nation has a high smartphone penetration, and there are two non-bank payment service providers (PSPs) that provide goods that are “generally accessible and appropriate.” Additionally, the country has a large number of people who own smartphones. In addition to this, a sizable portion of the population of the nation has a computer and access to the internet.

Despite this, a rCBDC would expand people’s access to financial services by making them available to them even if they do not have telephones. This would make it possible for more people to benefit from these services. Because of this, it will be feasible for a greater number of individuals to make use of these services. There are a few other ways, besides those already mentioned, in which a rCBDC may be of aid to the domestic payment system. These include decreasing the costs associated with transferring money internationally and making the infrastructure of a rCBDC accessible to payment service providers (PSPs).

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IMF Urges Countries to Consider Banning Cryptocurrencies

by Blockchain News

During a meeting of the Group of Twenty (G20) that took place on February 25, United States Treasury Secretary Janet Yellen emphasized how important it was to develop a robust regulatory framework for cryptocurrencies.

Yellen stated it was “essential to put in place a solid regulatory framework” while she was speaking to Reuters. In addition to this, she emphasized that the United States is not advocating for a “absolute prohibition on crypto activity.”

Yellen’s comments follow earlier ones made by the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, who stated that prohibiting cryptocurrencies should be an option: “There has to be very strong push for regulation… if regulation fails, if you’re slow to do it, then we should not take off the table banning those assets, because they may create financial stability risk.” Yellen’s comments follow Georgieva’s earlier statements.

In addition, Georgieva emphasized to the media that it is essential to distinguish between stablecoins and cryptocurrencies, which are issued by private enterprises, and central bank digital currencies (CBDCs), which are issued by central banks.

Nirmala Sitharaman, who serves as India’s Minister of Finance, has advocated for a unified approach to be taken at the international level to deal with the widespread economic effects of crypto assets. Throughout her time in office, Sitharaman has been a proponent of developing cryptocurrency legislation in collaboration with other governments. For a number of years, the government of India has been debating whether cryptocurrencies should be regulated or outright prohibited.

The International Monetary Fund (IMF) on February 23 issued a plan of action on crypto assets, in which it urged governments to remove cryptocurrencies from their status as legal cash. A framework of nine policy principles that addresses macrofinancial, legal and regulatory, and international coordination challenges was detailed in the study that was named “Elements of Effective Policies for Crypto Assets.”

Following a visit to El Salvador earlier this month, the International Monetary Fund (IMF) made a recommendation to the nation that it reconsider its plans to increase its exposure to Bitcoin. The IMF made this recommendation citing the risk that cryptocurrencies pose to El Salvador’s ability to maintain its fiscal sustainability, protect its consumers, and maintain its financial integrity and stability.

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The Fed Rejects Custodia Bank’s Membership Application

by Blockchain News

Custodia Bank, a bank that deals in cryptocurrencies, asked the United States Federal Reserve to reconsider its membership application to the Federal Reserve System. However, the United States Federal Reserve turned down this request. A district court has allowed a lawsuit between Custodia Bank and the United States Federal Reserve to continue.

Custodia’s application “was inconsistent with the requisite elements under the law,” according to an earlier decision made by the Federal Reserve Board, which was cited in the central bank’s announcement on February 23 on the denial of membership.

The Federal Reserve rejected Custodia’s membership application in January, about four years after the company first submitted the request in 2019. Applicants have the right, according to the regulations of the board, to request that membership choices be reconsidered.

The reason the Fed gave for rejecting Custodia’s application was that the company’s management structure was “insufficient.”

In addition to this, it referred to a joint statement that it had prepared jointly with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. In this declaration, it said that cryptocurrencies were “inconsistent with safe and sound banking practices.”

Custodia has said that it would want to become a member of the Federal Reserve System in order to be subject to the same regulations that are imposed on conventional banks. In addition, this would pave the way for other cryptocurrency institutions to be subject to the same stringent requirements.

This week, on February 22, a judge in a district court in Wyoming dismissed a petition by the Federal Reserve board to dismiss a complaint filed by Custodia about a delay of more than two years in the opening of a master account with the Federal Reserve.

With a master account, Custodia would be able to access the payment systems of the Federal Reserve without having to use any other banks as intermediaries. Custodia’s request for a master account with the Fed was turned down on January 27, more than two years after the company first submitted its request for the account in October 2020.

After that, the Fed made a motion to dismiss the case since the account rejection rendered the complaint meaningless. Custodia, on the other hand, submitted a proposed amended complaint to the court on February 17, alleging that the Federal Reserve unfairly singled out and rejected its application as part of a “concentrated and coordinated” effort with the administration of President Joe Biden and requesting that the court reverse the decision.

Nathan Miller, a spokeswoman for Custodia, was quoted as saying in a statement that was released on February 17 that the case “zeroes in on the main legal issue: whether Congress ever authorized the Fed jurisdiction to determine master accounts at all.” He also said that the Fed “pressed the hand” of the cryptocurrency bank, stating that the institution “tried every avenue to find a sensible route ahead.”

A deadline of March 1 has been set by the judge for Custodia to submit its first revised complaint to the court.

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BIS has long taken a cautious approach

by Blockchain News

Bitcoin (BTC) and other cryptocurrencies have been regarded with suspicion by the Bank for International Settlements (BIS) for a considerable amount of time. According to the BIS, however, there is no longer any need to exercise care since the “war has been won” between fiat and cryptocurrency.

In an interview with Bloomberg, the general manager of the BIS, Agustn Carstens, who is responsible for making the assertion, emphasized that “technology does not make for trustworthy money,” among other objections of cryptocurrency.

The Bank for International Settlements (BIS), which serves as the central bank for central banks, has emphasized the need for regulation and risk management in the cryptocurrency space. However, the BIS’s assertion that the battle between cryptocurrencies and fiat currencies has been won sparked outrage, satire, and corrections within the Bitcoin and cryptocurrency community.

“Want to irritate those fools to no end? Ignore their fear, uncertainty, and doubt (FUD) bait and put all of your attention on what’s occurring in the global south and on the streets of Nigeria.

In the meanwhile, Lady Anarki, an advocate for Bitcoin who recently shut down a firm that provided Bitcoin Security Education, said that “fiat and crypto are fundamentally the same exact swindle.”

“In the case of fiat currency, it is a group of wicked elite oligarchs who are building a rigged game system in order to benefit themselves at the expense of everyone else. Bitcoin is a system that was created with incentives and good economic concepts in mind, and it is meant to empower anybody who contributes value to the world.

As Carstens said, this is another another allusion to the fact that Bitcoin has been proclaimed dead, dead, and dead again. It is also a reference to the reality that Bitcoin lost the “battle” for money. The bear market in 2022 and 2023 is not going to be any different, and Bitcoin supporters on Twitter have been quick to embrace the chance to ridicule financial gurus who are dancing on the fictitious grave of the decentralized currency.

Despite this, Bitcoin has gained more over forty percent from its lows in 2022, and adoption of the Lightning Network is thriving as the community looks to be becoming more outspoken.

This week, the Bitcoin Information Service (BIS) issued another incendiary remark, and the famous podcast What Bitcoin Did, which is hosted by Peter McCormack, tweeted some helpful numbers to rectify the statement. Notably, the BIS said that “almost all economies incurred losses on their Bitcoin holdings” between August 2015 and December 2022. This is an important point to note.

In spite of the BIS’ best attempts to the contrary, it seems like the price of bitcoin will continue its upward trajectory.

The Bank for International Settlements (BIS) has been an outspoken opponent of cryptocurrencies, expressing worries about the volatility, scalability, and energy consumption of these digital assets. In contrast to Carsten’s statement in the Bloomberg interview that “technology does not make for trustworthy money,” the BIS has conducted research on stablecoins and is leading the creation of central bank digital currencies in conjunction with numerous nations.

Willem Middelkoop, an author and enthusiast for Bitcoin, recently emphasized that the conflict between fiat currencies and cryptocurrencies is not yet resolved. If one were to skim over the comments on the initial tweet from Bloomberg Crypto, one would get the impression that the conflict is just beginning to heat up.

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CBN is continuing to develop its eNaira

by Blockchain News

The Central Bank of Nigeria (CBN) is making progress on the development of its central bank digital currency (CBDC), the eNaira; nevertheless, the CBN is seeking assistance this time around.

The Central Bank of Nigeria (CBN) is reportedly in discussions with new “technology partners” to establish a new and better system to administer the eNaira, as stated in a story published by Bloomberg on February 21.

According to people with direct knowledge of the situation, the Nigerian financial authority has reportedly discussed these intentions with the technology company R3, which is situated in New York.

The CBN will have full control over the effort thanks to new software that will be developed for the eNaria; nevertheless, the source who did not want to be identified said that the information on this topic is private.

In 2021, with the assistance of the financial software business Bitt, efforts were initiated to establish a digital currency known as the eNaira. According to the article, the new partner will not instantly take over Bitt’s function but would assist phase in absolute responsibility for the Nigerian central bank. This will take place over the course of many years.

Bitt has acknowledged, in a statement, that it is cognizant of the fact that the CBN collaborates with a variety of partners on its technical advancements. It affirmed that it continues to maintain strong collaboration with the CBN and that it is “actively developing further features and upgrades.”

Despite the fact that Nigeria was one of the first nations to introduce a CBDC, the country’s digital currency, the eNaira, got off to a slow start, and adoption was minimal. Only 0.5 percent of Nigerians are reportedly utilizing the CBDC, which leads some to conclude that the grandiose initiative has been “crippled.”

In January, a Nigerian entrepreneur became the first person in the nation to create an operational Bitcoin Lightning node. Not long before that, the government made public its intention to develop a regulatory infrastructure for stablecoins as well as initial coin offers (ICOs).

Nigeria is one of over 90 nations across the world that is investigating the usage of CBDCs. Among the others are Russia and Japan, both of which are making preparations to launch their own currencies before to the summer. Additionally, the city of San Francisco is investigating the potential for the establishment of a CBDC system.

However, CBDCs are facing opposition from activists who refer to them as “surveillance instruments.” This opposition is now being actively pursued.

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Bank of Russia to Debut Digital Ruble in April 2023

by Blockchain News

The first consumer pilot for the nation’s central bank digital currency (CBDC) will be rolled out by the Bank of Russia on April 1, 2023, as part of preparations for this day.

According to the first deputy governor Olga Skorobogatova, the Russian Central Bank is getting ready to launch the first real-world digital ruble transactions very soon. These transactions will include 13 local banks and many retailers.

According to a report by the regional news agency TASS, the official said that the future CBDC pilot would include genuine activities and real consumers in Russia, but that it will be restricted to a set amount of transactions and clients.

At the Ural Forum on Cybersecurity in Finance, Skorobogatova said that “We expect to begin the digital ruble project on April 1 with transactions including individual transfers as well as payments in trade and service organizations.” She went on to say that the financial institutions who were taking part in the pilot program had technically shown that they were prepared to begin testing the digital ruble.

The deputy governor provided clarification that regular consumers would not be allowed to participate in the pilot in the first stage, since banks would begin the pilot with clients who have been picked in advance. According to what Skorobogatova said, when the first stage of the pilot program is completed, the Bank of Russia intends to evaluate how to further grow the digital ruble.

The most recent declaration made by Skorobogatova is in line with the implementation strategy for the digital ruble that was publicly presented by the central bank in June of 2022. Because of Western economic sanctions against Russia, the consumer CBDC pilot was pushed up to a date that was originally planned for 2024 but was brought up to a date that was earlier because the Russian central bank was seeking for an alternative to the SWIFT payments system.

This information comes at a time when some Russian authorities are stating that the Bank of Russia is examining the possibility of a gold-backed coin that would target international commerce. Vladimir Chistyukhin, the first deputy governor of the Bank of Russia, is of the opinion that the creation of a “golden token” would assist Russia in the development of a new investment product that is appealing to investors and a payment mechanism that is required for international settlement.

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CBUAE Plans to Launch Central Bank Digital Currency

by Blockchain News

As part of the first phase of its recently initiated financial infrastructure transformation (FIT) initiative, the Central Bank of the United Arab Emirates (CBUAE) has plans to introduce a central bank digital currency (CBDC) that will be valid for both international and local transactions.

The Central Bank of the United Arab Emirates (CBUAE) has recently made a statement in which it announced the FIT program and underlined its goal to assist the country’s financial services industry. The UAE’s Central Bank underlined the fact that the scheme will boost digital transactions and help the UAE to become more competitive as a financial and digital payment centre.

The issue of a CBDC is required in order to go on to the next level of the FIT program. The issuing of a CBDC would, in the words of the central bank, “address the difficulties and inefficiencies of cross-border payments and assist spur innovation for domestic payments, respectively.” The Governor of the CBUAE, Khaled Mohamed Balama, said that the FIT program would “help a flourishing UAE financial ecosystem and its future expansion.”

During the first stage of the program, in addition to a CBDC, the government intends to launch a unified card payment platform to “facilitate the growth of e-commerce” as well as an instant payments platform to “support financial inclusion and enable a cashless society.” Both of these platforms are intended to be implemented in order to “facilitate the growth of e-commerce.”

Included in the nine initiatives that make up the FIT program are the ones that will be put into action during the first stage. Following the first stage, other initiatives will be implemented, such as an e-Know Your Customer portal and an innovation centre.

The long-awaited “Full Market Product Regulations” were finally published on February 7 by the Virtual Asset Regulatory Authority (VARA) of Dubai. These regulations offer detailed instructions on virtual asset operations for projects that are operating inside the emirate. The restrictions include a prohibition on the issuance of “anonymity-enhanced cryptocurrencies,” which are also sometimes referred to as “privacy coins,” as well as actions that are similar.

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