Digital Currency

Kenyan Capital Markets Regulator Wants Better Coordination With Other Bodies When Testing Crypto Assets

07/05/2021 by Idelto Editor

Kenya’s Capital Markets Authority (CMA) says the country needs a more encompassing approach that enables it to leverage other regulators’ expertise when testing crypto assets.

Kenyan Crypto Interest

Also, the Kenyan body, which favours a joint financial sector regulatory sandbox, says it is keen to forge “a common stance and joint-messaging with the Central Bank of Kenya (CBK)” when it comes to cryptos.

The CMA’s latest commentary on cryptocurrencies follows the release of the Capital Markets Soundness report of Q1, 2021. According to the quarterly report, which itself relies on the Chainalysis 2020 Geography of Cryptocurrency Report, Kenya “is the top 5 in global crypto-trading activity.” The country’s interest in cryptos is also reaffirmed by a Blockchainnenter.net report which places Kenya’s bitcoin search interest at 94.7%.

Investor Protection Mandate

Yet, despite this acknowledgment of crypto assets’ growing popularity, the Kenyan regulator insists it still has an investor protection mandate to uphold. Concerning its position on this, the regulator says:

This an area of keen interest to the Authority given its investor protection mandate also given the prevalence of scams on this front.

While the CMA concedes that many Kenyans consider cryptocurrencies “an alternative investment class”, it nevertheless insists that such digital assets are now an “area of interest” since they will likely “impact the soundness of Kenya’s capital market.”

With this latest report, the CMA becomes the latest African regulatory body to reiterate an earlier position on crypto assets. Another African regulator to recently restate its stance on cryptocurrencies is Ghana’s Securities and Exchange Commission. As reported by Bitcoin.com News, this regulator wants Ghanaians to stay away from cryptocurrencies. Similarly, Nigerian regulators have issued several statements warning residents of the risks of trading in cryptocurrencies.

What are your thoughts on the latest statements by Kenya’s CMA concerning crypto assets? You can share your views in the comments section below.

An ECB Board Member Attacks Bitcoin, Says It ‘Does Not Fulfill the Basic Properties of Money’

10/04/2021 by Idelto Editor

Isabel Schnabel, a board member with the European Central Bank (ECB), has attacked bitcoin claiming the crypto asset “does not fulfill the basic properties of money.” She also describes bitcoin as a “speculative asset without any recognizable fundamental value and is subject to massive price swings.” Schnabel also surmises that trust in “cryptocurrencies might rapidly evaporate,” and this, in turn, causes “disruptions in financial markets.”

The Digital Euro

In remarks made during a recent interview, Schnabel also reveals how she and her colleagues at ECB think “it is wrong to describe bitcoin as a currency.” Still, when Schnabel is reminded of billionaire Elon Musk’s views on bitcoin, the ECB board member answered: “He is at liberty to do so.”

Meanwhile, Schnabel uses the interview opportunity to reiterate the ECB’s resolve to create its own digital currency. However, she says a “great deal of preparatory work needs to be done to enable the project to be properly set up.” Schnabel also tries to justify claims that consumers would be more amenable to a digital currency issued by the ECB than one issued by private entities. She said:

Nobody can offer a similar degree of security and data protection as the ECB. People find that topic important: as consumers, to whom do we want to disclose our data? They are surely more likely to trust the ECB than Facebook or other private operators.

As expected, Schnabel’s comments sparked a quick reaction from some bitcoiners and cryptocurrency supporters on Twitter. For instance, responding to Schnabel’s remark that the ECB is a trusted institution, a Twitter user Plan B said:

“People in Zimbabwe, Venezuela, Lebanon, Turkey beg to differ (after what central banks did to their money).”

Human Rights and Data Protection

Alex Gladstein, the chief strategy officer at Human Rights Foundation, also weighed in by posing a question to the ECB board member. He asked:

Isabel, how much have you looked into the human rights implications of Bitcoin? I have many examples from around the world here of individuals and groups in high inflation and authoritarian environments benefitting from using this new money.

Meanwhile, other users attacked Schnabel’s assertion that “no other institution can offer a similar degree of security and data protection as the ECB.” For instance, user Ryan Cwynar reminds Schnabel that “literally any cryptocurrency chain provides more security than any system your organization could design.”

Still, a few users like Micheal Reilly, believe there is a place for both privately issued digital currencies and the one the ECB intends to create. He said:

“Central bank policy is the least of the issues with any of those countries. Institutional failure or any institutional issue will and can affect everything in a country. CB is not the issue. I own Bitcoin and believe it has a use case and a digital euro is a good idea too.”

What is your reaction to Schnabel’s remarks about bitcoin? You can share your views in the comments section below.

The Fed Plans to Unveil Digital Dollar Prototypes in July

28/03/2021 by Idelto Editor

The Federal Reserve is actively working on a central bank digital currency and some prototypes are near completion. The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) plan to unveil two prototypes of a digital dollar as early as July.

Digital Dollar Prototypes Coming Soon

Federal Reserve Chairman Jerome Powell said last week as part of an event held by the Bank for International Settlements (BIS) on central bank digital innovation that the U.S. central bank is actively exploring the launch of a digital dollar.

The U.S. Federal Reserve has been actively working on a central bank digital currency (CBDC). At least two prototypes of a digital dollar are near completion, developed by officials at the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT). They plan to unveil their research as soon as July, said James Cunha, who leads the project for the Boston Fed. He told Bloomberg:

The Boston Fed and MIT hope to unveil some of their work in the third quarter, including at least two prototype software platforms that could move, store and settle transactions made with digital dollars.

Once the prototypes are released, others will be able to see and build on the code, Cunha explained.

There are major issues that the central bank, the Treasury, and Congress must address regarding the digital dollar, Cunha explained. These include whether the Fed should host customer accounts itself, whether to allow anonymity and what protections consumers would have in case of a cyberattack or erroneous transaction. He added that the Fed’s work is meant to show what’s possible without taking a stand on these major issues.

“We think it’s important that we not wait for the policy debate because then we’ll be a year or so behind,” Cunha was quoted as saying. “This will take significant outreach to the industry and serious debate.”

Fed chair Powell said the central bank would fully adopt a digital dollar only with the support of the nation’s elected leaders. In February, he said that the digital dollar is a “very high priority project” for the Fed. “We would need buy-in from Congress, from the Administration, from broad elements of the public,” Powell emphasized last week, adding:

We would not proceed with this without support from Congress, and I think that would ideally come in the form of an authorizing law, rather than us trying to interpret our law to enable this.

Do you think the Fed should issue a digital dollar? Let us know in the comments section below.

Chinese Citizens Can Now Apply for the Digital Yuan Wallet Through 6 State-Owned Banks

26/03/2021 by Idelto Editor

Following the interview with Ma Changchun, the head of the People’s Bank of China-run Digital Currency Research Institute, a recent report indicates that residents from Beijing and Shanghai can now apply for a digital yuan wallet. According to the report, six different Chinese banks will participate in the process.

Beijing and Shanghai Residents Can Apply to Test the Digital Yuan Wallet

A recent report published by China’s Securities Times, explains that residents from China are now able to apply for the digital yuan wallet. The wallet is compatible with the People’s Bank of China’s digital currency project.

The report indicates that residents who live in Shanghai and Beijing can now apply for the wallet through six state-owned financial institutions.

The regional report also says that the banks involved with the digital wallet application procedure include the Agricultural Bank of China, Bank of Communications, Bank of China, Bank of Communications, China Construction Bank, and the Postal Savings Bank of China.

6 State-Owned Banks to Start Whitelisting Clients at Certain Branches

The central bank digital currency (CBDC) also known as “DCEP” has already started to see acceptance from various merchants in China.

Individuals can spend the digital yuan at vending machines in the Shanghai subway and the Xujiahui shopping center as well. Huijin department stores are also accepting the People’s Bank of China’s CBDC.

Internet platforms have also been experimenting with the digital yuan with platforms such as Meituan. After various tests throughout the past year, China’s central bank approved the six banks to start whitelisting clients at certain branches.

The Securities Times’ report also details that interested users can simply scan a QR code to access the application link to apply for the CBDC wallet. The guidelines also say that customers can bundle their bank card funds into the wallet too. The digital yuan wallet has a maximum payment limit of 1,000 yuan per day and customers can upgrade for higher payment tiers.

What do you think about the Chinese residents from Beijing and Shanghai being able to apply for the digital yuan wallet? Let us know what you think about this subject in the comments section below.

Jamaica Plans to Pilot a Central Bank Crypto, CBDC to Work Alongside Notes and Coinage

26/03/2021 by Idelto Editor

While a number of countries are working on central bank digital currencies (CBDCs), on Tuesday, the Bank of Jamaica (BoJ) announced it will soon be piloting a CBDC project. The BoJ is working with a firm called Ecurrency Mint Incorporated and plans to pilot the cryptocurrency in May.

Jamaican CBDC to Pilot this May

Jamaica, the island country situated in the Caribbean Sea has plans to pilot a CBDC this May as it has been working with an “extensive procurement process.” The country’s central bank, the BoJ, has chosen a technology provider to help with the CBDC solution. The startup the bank found dubbed Ecurrency Mint Incorporated stems from the BoJ’s Fintech Regulatory Sandbox.

“Ecurrency Mint will also be the provider when the national CBDC roll-out begins in early 2022,” the central bank’s announcement notes. The CBDC pilot will be tested thoroughly in May and all the way until the end of December 2021. According to the central bank’s notice, the CBDC will work alongside paper notes and Jamaican coinage.

The BoJ explains:

Ecurrency Mint is a global thought leader and pioneer of the hardware, software, and cryptographic security protocol technology to enable central banks to securely issue, distribute and supervise CBDC, a digital fiat currency that will operate alongside notes and coins as digital legal tender.

Ecurrency Startup Working With the BoJ Developed a New Distributed Ledger Technology

The BoJ’s announcement adds the island country of Jamaica to the growing list of countries building CBDCs. While the socialist nation of Venezuela under Nicolás Maduro’s regime was one of the first CBDCs to go live, many other nations are getting awfully close to releasing cryptocurrencies backed by a nation-state. This includes countries like China, Sweden, EU, Marshall Islands, and the Bahamas.

Additionally, a number of other countries have been contemplating building CBDCs or at the very least started discussions about the development. Countries that have been contemplating CBDC builds include countries like the U.S., Singapore, U.K., South Korea, Japan, and Canada. The startup Jamaica’s central bank is working with says that it has developed a pioneering digital currency protocol.

Ecurrency pioneered [the] Digital Symmetric Core Currency Cryptography (DSC ) technology for central banks to issue and distribute Central Bank Digital Currencies (CBDCs) securely and efficiently,” the company’s website details.

What do you think about the BoJ introducing a CBDC pilot this May? Let us know what you think about this subject in the comments section below.