The World Tightens Crypto Laws While Japan Lets its Crypto Industry Regulate Itself

HKEX plans to create a blockchain platform, Taiwan implements new amendments to AML and CFT laws, SEC ceased over dozen illegal ICOs, RFB demands monthly reports from crypto exchanges, Petro recognized as a legal tender, crypto industry to regulate itself in Japan, HSBC and RIL settle India’s first LoC transaction on blockchain, ASB settles New Zealand’s first export deal using blockchain

The problem at present is that there is a very short time period between when you execute a trade and the settlement cut off time, usually just four to five hours, during which asset managers need to decide how to allocate that trade to their funds, and pass that information down the chain to brokers and custodians.

Lukas Petrikas, co-head of HKEX’s innovation lab, said in advance of the announcement

He said It! #Live / President Nicolas Maduro: Oct 1st, Petro will go live to be used as a convertible currency. A digital currency from Venezuela to the World

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What will it take for Facebook’s Libra to help the unbanked and gain traction in Venezuela?

You might expect the woeful state of global financial inclusion to be a concern for the UN or a non-profit, but not necessarily a social media giant like Facebook. But banking the unbanked is now apparently a core mission-statement for Mark Zuckerberg's baby, via its cryptocurrency, Libra. "1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone," Facebook's documents about Libra point out. It's a statistic that is easy to forget in a world of ubiquitous ATMs and credit cards.  One country Facebook could be targeting when it launches the token in 2020 is Venezuela. According to The World Bank's 2017 figures, 9.5 million Venezuelan adults are currently unbanked, just under 30% of the adult population. That proportion increases if you count their dependents. Meanwhile, those who are banked currently face extreme levels of inflation, meaning the worth of their bolivars, sitting in national vaults, diminish in value every day. No doubt, having access to a stable global currency could help encourage savings and accumulate wealth. But it's worth unpacking the practical reality at play. What would Facebook need to do to "bank" people, and get them using or storing funds? Or is this just so much PR bromide? What it takes: on-ramps The main question here is how the unbanked will get money on to the platform. In other words, if I have Venezuelan bolivars, how do I convert that into Libra?  One solution they might take inspiration from is "Mobile Money", which launched in 2007 in Kenya, masterminded by Vodafone. Here, subscribers simply exchange cash for mobile credit (like from Vodafone) at one of thousands of telecoms kiosks located across host countries. Independent, small agents effectively act as cash depositors, allowing users to digitally store their earnings, receive wages and social welfare. They can also pay their bills with a simple text message thanks to a synergy between regional telecom giants and banks, which allows credit to be transferred into a working currency. In Kenya alone, where Vodafone initiated the service with the launch of “MPESA”, the percentage of unbanked citizens has halved in the ten years hence. In that time, it has spread to 92 countries and counting, with a reported half-billion people from Eastern Africa to Latin America granted banking access through its phones. Perhaps Facebook plans to let users exchange their bolivars for Libra tokens at kiosk providers? Still, that doesn't solve the issue for the most rural parts of the world however, which even mobile money providers are struggling to access.  Another theory is that Facebook will reward social media users with Libra, rather than having people solely "cash in". If users can simply "earn" Libra for liking photos and other engagements, then theoretically Venezuelans can pay their local Caracas grocer digitally too - meaning users totally bypass cash and rely solely on Libra. Still, that doesn't seem entirely realistic considering it would take a lot of Facebook engagements to feed a family. The other option is to partner with existing fintech firms in emerging markets, who can simply integrate Facebook's digital currency. It's not totally crazy; Philippines-based Coins and dLocal, a b2b payments provider for emerging markets, already seem to be ready to embracing cryptocurrencies. Libra may be their next chosen solution, although it'll be a slow process. What it takes: friendly institutions  Although Facebook says that Libra will be global and therefore without regulation, there are limits to that sentiment, because their associates will have to ensure they implement appropriate KYC (Know Your Customer) procedures. "It will be very hard for Facebook to launch something like Bitcoin. Think about it – they haven't even done anything yet and they are already getting pushback from the U.S. Senate Banking Committee," says Nevin Freeman, co-founder of Reserve, whose stablecoin is also hoping to lift Venezuela out of disarray. "Are they going to operate a service that they maintain control of, which can be accessed anonymously by anyone, and withstand pressures from the government to add KYC and exclude high-risk users? Are they going to publish a decentralized system that works like Bitcoin, and then tell the government they should not be held responsible since they can't change it anymore? Both of these outcomes seem unlikely," he added. That means Venezuelan residents without identification won't be able to be KYC'ed if that's the way local regulators swing. And regulation does have an impact even on the unbanked. Indeed, Mobile Money failed in India in part due to bureaucratic restrictions, where mobile subscribers were forced to register with banks. Conversely, PayPal now shuts down Venezuelan accounts with no warning because they are legally high-risk, according to Freeman. The French government has already urged an investigation into the possible effects of Libra. Meanwhile, the ever-cautious Financial Times warns that "the very act of encouraging people to invest in Libra en masse, may spark...local currency depreciation", which if true, could be used by states as a scapegoat or a reason to block it entirely. The reality Facebook hasn't got all the answers yet, and that's to be expected considering the news isn't even 24 hours old, but there are clearly practical issues when it comes to the unbanked that no amount of idealism can ignore.  One possible answer here is that Facebook is trying to apply a sweeping solution to a global economy that is diverse in more ways than a single launch, app, or product can grasp. "It seems likely that Libra will be the next generation of WeChat Pay – a fantastic and convenient product...for people who are already able to access financial services...But for people in countries with capital controls, people who don't have government documentation [] – it just won't apply," Freeman concluded.
The Block Crypto

SEC Moves to Relax Investment Prohibitions

The United States Securities and Exchanges Commission (SEC) has opened a 90 days consultation period on whether they should relax investment prohibitions. According to a statement just released, they say:... The post SEC Moves to Relax Investment Prohibitions appeared first on Trustnodes.

HSBC uses Identitii’s tech to build HSBC DART

HSBC has launched Digital Accounts Receivable Tool (HSBC DART) built on Identitii’s tokenisation technology to create a tool for India-based corporate clients, Identitii announced in a press release. HSBC is planning to launch the project in new Asian markets for its corporate clients, the project will provide them with a “secured digital information exchange channel and ecosystem.” The next phase of the project will see new functionalities added to HSBC DART to facilitate rolling it out in other geographies. The tool integrates with receivables technology infrastructure already in place, providing a secure way of sending information associated with payments. The technology allows automating the accounts receivable process. “HSBC has a commitment to innovation and to finding the best ways to constantly enhance the service we provide to our clients. Developing HSBC DART with Identitii has helped us solve a key pain point in receivables by digitising the client experience and creating an ecosystem where our clients and their customers connect to improve efficiency through the secure exchange of information,” said Nicholas Soo, Head of Payment Products, Asia-Pacific, HSBC.
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