Advancing Slowly but Steadily (Regulatory Digest, Nov 16—22)

Crimea and international trading center, Estonia licensing crypto products, CBDC to lessen risks for cross-border payments, Canada's and Romania's regulation ideas, SWIFT expelling Central Bank of Iran, Catalonia to vote via a blockchain, Philippines, Thailand, Cambodia and China on digital currencies

  • The Crimean Republican Association of Blockchain Investment Technologies (Krabit) plans to set up an international training center to teach students from economically and politically sanctioned countries about blockchain – the underlying technology behind cryptocurrencies. The course will be taught as part of the university curriculum and lecturers will include members of the association.
  • According to Bitnovosti, Estonia issued licenses to almost 500 cryptocurrency exchanges and 400 wallet providers. A law firm called Njord studied data from the country’s Registrar of Economic Activities and found that procuring a license for cryptocurrency-related businesses is easy and uncomplicated. To keep exchanges and other related businesses in check, the lawmakers of Estonia created the Estonia Money Laundering and Terrorist Finance Prevention Act.
  • According to a joint report by the Central Banks of Canada, Singapore, and the UK, a Central Bank Digital Currency (CBDC) will lessen risks for cross-border payments. The report delved into existing challenges presented by extra-territorial payments and the disadvantages of the current correspondent banking model.
  • Canada’s House of Commons Standing Committee on Finance (FINA) proposed cryptocurrency regulation measures to thwart money laundering. The country’s Members of Parliament recommends crypto-to-fiat exchanges to register as a money service business.
  • Oxfam, a global charity organization, spearheads BlocRice in Cambodia to boost the transparency and tracking of the country’s rice logistics. BlocRice is an app that applies the distributed ledger technology for implementation of smart contracts. The ledger will record the fresh from the farm price of organic rice, its trade volume and the means of transport.
  • Global financial payments system, SWIFT, expels the Central Bank of Iran. This will present a challenge for Iran when it comes to effecting clean intercontinental transactions. To mitigate this, Iran will launch its own state-backed cryptocurrency: the Crypto-Rial.
  • Romania’s Directorate for Investigating Organized Crime and Terrorism (DIICOT) is probing if the ‘Rezist’ movement is being financed through cryptocurrency. The DIICOT is examining crypto transactions that moved through several organizations. The public prosecutor responsible for the investigation is looking into the possibility that every transaction might have originated from the Stefan Batory Foundation located in Poland.
  • Erol Yarar, chairman of International Business Forum – a Muslim-focused lobby group, said the US currency has become a ‘sanctioning tool’ losing its function as a tool for international trade. Yarar further says that because of this, a common cryptocurrency for Muslim countries will be made to impair US dominance in the global financial system.
  • UnionBank of the Philippines is in the works to launch an island-to-island (i2i) blockchain project to give provincial banks the means to obtain access to the central banking network. It also intends to reach those without access to banks in the country’s rural areas.
  • Singapore’s Central Bank, the Monetary Authority of Singapore (MAS), completes the basic regulatory bill for the country’s payment services, and it includes cryptocurrencies. The Payment Services Bill was forwarded to the Singaporean parliament. MAS detailed the bill as bestowing a welcoming environment for innovation in the area of payments services. At the same time, it will lessen the probability of risks in the payments value chain.
  • Information from La Vanguardia, a Spanish newspaper, tells that the government of Catalonia is prospecting blockchain technology for electronic voting. The Director of Citizen Participation of the Government of Catalonia, Ismael Peña-López, disclosed the plan for the e-voting system will be introduced in the year 2020.
  • Bloomberg reports that Silver Castle, an investment company in Israel, set in motion two crypto funds, while another is pending. It is anticipated to gather $50 million by the end of this year.
  • The Thai News Agency (TNA) reports that the Bank of Thailand (BOT) governor has said that replacing money with a Central Bank Digital Currency, or CBDC, will take time. The complicated nature of the process, technological efficiency, and the eagerness of citizens to adopt such a change are components that have to be considered. Thus, Thailand is not likely to make the switch in the next 3 to 5 years.
  • A document written by the Minister of Industry and Information Technology of China encourages hastening the development of blockchain standards within the country where he relays that the technology has the potential be applied not only to finance, but also to social welfare, logistics, and entertainment industries. He invites his country to ‘play a key role’ in the technology’s international development, whilst restructuring the standards to fit China’s general environment.
  • China’s Ping An Bank will establish a boutique bank operating on the blockchain, IoT, and cloud services. The cutting-edge, sophisticated technologies will enhance management and service capabilities.

... And Not to Miss Out

  • The US SEC issued a public statement on 16 November regarding the issuance and trading of digital asset securities. According to the statement, the SEC is encouraging innovations within the field but market participants are called to conform to the federal securities law framework. The statement cited its most recent actions against various crypto companies and exchanges, which includes AirFox, Paragon, and EtherDelta’s founder.

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The digital currency will allow anonymity to users… but only to an extent. Analysts are predicting the government-backed crypto will be out early next year. Blockchain efforts by the People’s Bank of China have ramped up in recent weeks. China has brushed aside concerns that its planned government-backed crypto will be used to keep tabs […] The post China Guarantees Citizens On-Demand Anonymity With State Digital Currency appeared first on To no one's surprise China's state digital currency will be used to monitor transactions and could potentially be used to spy on citizens.

Bitcoin Headlines in China’s Most Influential News Organization

The most influential media organization in China, Xinhua News, ran an article on Bitcoin ⁠— introducing the technology to millions. The reporting follows what appears to be a thaw in China’s authoritarian stance toward cryptocurrency. Crucially, Xinhua News Agency is the official state-run press agency for the People’s Republic of China. It is the sole channel for the distribution of important news related to the Communist Party and Chinese central government. Given the importance of the publication it may indicate the government in China is warming to Bitcoin and blockchain. This is consistent with Xi Jinping’s recent comments about blockchain. He recently stated: “[China] must take blockchain as an important breakthrough for independent innovation of core technologies” and “accelerate the development of blockchain.”  Bitcoin’s Usefulness and Ingenuity Outlined The article, which mostly sheds a positive light on Bitcoin, outlines the characteristics, functions, and usefulness of the technology. Undoubtedly, this format would seem natural as this is one of the first state-sanctioned introductions to Bitcoin — and blockchain in general. The article lists the basic requirements for a “currency” and demonstrates how this revolutionary technology fits the bill: “The transaction records of the traditional financial system are kept in the database of the bank center, and the blockchain is the book of Bitcoin. The ownership of the Bitcoin generated at any time and the transaction record are recorded in the blockchain book. Anyone who downloads the client can receive the relevant information.” In addition to a limited supply, subsequent halving, and anonymity, Bitcoin’s use of blockchain paints a prosperous future for the “new” technology. Interestingly, a very pragmatic view of the cost of decentralization is explained: “The total computing power of the top 10 mining pools in the world accounted for 75% of the Bitcoin computing power. The computing power is highly concentrated and maintains distribution. Decentralized accounts require a lot of energy.” Report Concluded With Caveat The negative aspect of high energy cost and price fluctuation are overshadowed by illegal activity, cited as the main problem of Bitcoin and similar anonymous digital assets: “This feature also makes Bitcoin widely used in illegal transactions such as money laundering. Currently, the most important uses of Bitcoin payments are black market transactions and ‘dark net’ transactions.” This warning, however, is merely stated as a fact, and does not comment on possible regulatory measures or planned legal action. Other Optimistic Measures Earlier this month, Bitcoin mining was reportedly removed from a list of business practices that would prevent companies from receiving government subsidies and assistance. This reversal could be a telling sign that China is slowly accepting the implications and possibilities of blockchain technology. Additionally, China has long been considering its own digital currency. A Washington Post report outlined the motivation behind a Libra-like digital version of the yuan being China’s need for control in a rapidly growing digital economy. Although not a cryptocurrency per se, it would be a sign that one of the largest obstacles to blockchain implementation — China — may be the catalyst necessary for the next step towards adoption. Perhaps these concessions are China’s way of maintaining control of blockchain technology within its borders and beyond.  This could also be yet another sign that the train has departed and China does not want to be left behind. The post Bitcoin Headlines in China’s Most Influential News Organization appeared first on Crypto Briefing.

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