Finance

SEBA Bank is now fully operational with a range of services to bridge the gap between the crypto world and traditional banking. Licensed in Switzerland, the bank’s crypto services include asset management, trading, custody, and financing. Its wallet app, e-banking, and card enable customers to convert between cryptocurrencies and traditional investments such as stocks, bonds, and foreign exchange.

Also read: Crypto-Friendly Silvergate Bank IPO Debuts on NYSE

SEBA Bank Now Fully Operational

Headquartered in Zug, Switzerland, SEBA Bank AG announced on Tuesday that it is now fully operational and has started onboarding customers in Switzerland. Formerly called SEBA Crypto AG, the bank obtained a banking and securities dealer license from the Swiss Financial Market Supervisory Authority (FINMA) in August and began testing its products with a selected group of customers. Noting that Swiss clients can now officially open an account, the bank elaborated:

As a bank licensed by a reputed supervisory authority, it can offer a comprehensive range of services in the field of digital assets and cryptocurrencies, as well as in traditional banking.

With the aim of building a bridge between the traditional banking world and the new crypto world, the bank is offering a range of integrated services in the areas of asset management, trading, custody, and financing.

“SEBA customers can invest in both traditional and digital assets, store them, trade them and take out loans – now via an integrated interface,” the bank described. “Regulation is crucial for the protection of investors – the idea of an integrated and supervised bank with focus on digital assets arose from the growing demand for investment alternatives and the increasing affinity for technology and process engineering.” In its Tuesday announcement, the bank further revealed that it plans to offer services to “clients from selected foreign jurisdictions” in December.

Crypto Services Offered

Founded in April last year, the bank raised CHF 100 million (~$100.7 million) from investors five months later to build a licensed bank and securities dealer. According to its website, the bank has partnered with Julius Bar, Finstar, Smarttrade Technologies, Geissbuhler Weber & Partner, Loomis International, Jaeksoft Sarl, and BPC. Its services are aimed at professional investors, family offices, banks, asset managers, and blockchain companies.

In addition to custody storage, trading and liquidity management, asset and wealth management, and transaction banking, the bank has been developing tokenization solutions that “will help clients to issue and manage financial assets on multiple blockchain protocols and connect them to investors in an easy and cost-effective way.” The bank plans to offer the tokenization of fiat, precious metals, as well as alternative assets including real estate, commodities, and art. It will also help companies with security token offerings. “The tokenisation of investment products, real assets, rights and primary financing constitutes another mainstay,” SEBA reiterated.

Other services include e-banking, a wallet app, and a card; they allow customers to manage BTC, ETH, ETC, LTC, and XLM, and convert them into traditional investments and vice versa online. The traditional asset classes offered include equities, bonds, and foreign exchange. According to the bank, its card can be used at 42 million points of sale worldwide. “The SEBA card represents an important step towards the mass introduction of cryptocurrencies,” CEO Guido Bühler remarked.

What do you think of SEBA Bank’s crypto services? Do you think the crypto industry needs more licensed banks like SEBA? Let us know in the comments section below.

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Images courtesy of Shutterstock and SEBA Bank.

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China has been sending mixed signals about its preparedness to issue a national crypto. Despite the new blockchain push, there is still no timeframe for the anticipated launch of the digital yuan and few details have been revealed so far. However, a senior official from China’s central bank pulled the curtain back slightly this week.

Also read: Turkey Becomes the Latest Nation to Work on Digital Fiat

China’s Semi-Blockchain Based Currency to Start a ‘Horse Race’

Beijing’s Digital Currency Electronic Payment (DCEP) project, which will be similar to Facebook’s Libra as Chinese officials have previously indicated, will only partially employ blockchain technology as it would need a higher transaction capacity to achieve retail adoption. The People’s bank of China (PBOC) will use a two-tier approach with its implementation, first issuing the currency to commercial banks, which will then distribute it to the public.

Mu Changchun, head of the central bank’s digital currency research institute, told a forum in Hong Kong that the launch will start a “horse race” among banks and other financial institutions competing to offer better and more efficient services with the digital yuan. “The front runner will take the whole market,” Mu predicted. Quoted by Reuters, he added that if an institution takes the lead, the technology it uses will be adopted by others.

The PBOC representative pointed out that as the new digital currency is designed to substitute coins and paper banknotes in circulation, holders of the currency will not receive any interest payments. That means the DCEP system will not affect inflation in the People’s Republic and the monetary policy of its government. At the same time, the project will allow Chinese regulators more oversight over money flows in comparison with the traditional financial system.

The opportunity to exert greater control over financial transactions, including cross border transfers, is one of the main drivers behind the digital yuan project. Beijing’s view, reiterated by Mu Changchun’s statement, is that currencies such as Libra would present a threat to the country’s currency sovereignty and could facilitate illegal flows. The central bank official stressed that other stablecoins would have to abide by China’s existing foreign exchange regulations.

Beijing Aiming to Have the First CBDC

Protecting China’s monetary sovereignty is a motive Mu Changchun emphasized a couple of months ago. During a lecture in September, he remarked that the problem with currencies issued by platforms such as Wechat and Alipay is that a bankruptcy is always a possibility with corporate entities and one could cause users to lose money. He assured that the digital currency minted by the People’s Bank would be just as safe as paper money and revealed that the digital yuan will even function offline.

A month earlier, the senior official stated that the state-sponsored coin was ready after five years of research and development and that the PBOC will soon roll out the crypto. However, PBOC governor Yi Gang said later that the bank had no timetable for the launch. Nevertheless, China has been gearing up to become the first nation with a central bank issued digital currency (CBDC) and it has to hurry up as according to a report by the Bank of International Settlements (BIS), 70% of 63 surveyed central banks are exploring the issue of CBDC.

There has been much talk and pressure recently in the U.S. and the EU to speed up research and development in the same direction. The BIS study published in the beginning of this year concluded that five projects had advanced to the pilot phase. Some banks have since gone further in the development of their systems and it turns out China might not be the first to deploy a digital fiat currency.

According to a report by Izvestia, the central bank of Tunisia has already issued a CBDC based on a Russian blockchain platform called Universa and even made test transactions on Nov. 7. The digital dinar can be used in online mobile payments and Tunisia hopes to implement it in international settlements in the future. By introducing the cryptocurrency, the country’s central bank hopes to save on printing costs for paper notes.

When do you expect the People’s Bank of China to issue its digital yuan? Share your thoughts on CBDCs in the comments section below.

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Images courtesy of Shutterstock.

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The post Holders of the Digital Yuan Will Not Be Paid Interest appeared first on Bitcoin News.

The U.S. Securities and Exchange Commission (SEC) has declared the IPO of pro-crypto Silvergate Bank effective. Its shares started trading on the New York Stock Exchange on Thursday. The crypto-friendly bank works with 756 customers in the crypto space, including Coinbase, Gemini, Circle, Bitstamp, Kraken, and Bittrex. The bank has attributed significant growth to its crypto business.

Also read: 23 Central Banks Divulge Their Digital Currency Requirements

Silvergate Bank’s IPO

The U.S. SEC declared the initial public offering (IPO) of crypto-friendly Silvergate Bank effective on Wednesday. Its common stock subsequently began trading on the NYSE on Thursday under the symbol SI. The shares opened at $12.75, a 6.25% increase from its IPO price of $12, and closed at $12.62.

Opened in 1988, Silvergate Bank is a commercial bank with a focus on “creating the banking platform for innovators, especially in the digital currency industry, and developing product and service solutions addressing the needs of entrepreneurs,” the bank’s SEC filing describes, elaborating:

We intend to continue focusing on our digital currency initiative as the core of our future strategy and direction.

As of the end of September, the bank had total assets of $2.1 billion, total deposits of $1.8 billion, and total stockholders’ equity of $230.6 million.

Go-To Bank for Crypto Industry

Silvergate Bank began focusing on providing services to the crypto industry in 2013. Over the years, it has become a go-to bank for the industry. “We believe our first-mover advantage serving the digital currency industry has led to numerous strategic advantages, many of which are significant barriers to entry for potential competitors,” the bank explained.

According to its registration statement, the bank has 756 customers in the crypto industry as of the end of September. Among its customers, 69 are exchanges, 468 are institutional investors and the rest are other crypto companies such as mining operators and protocol developers. Its clients include Coinbase, Genesis, Bitstamp, Gemini, Sofi, Circle, Kraken, Bittrex, and Paxos.

The bank also revealed that approximately 77% of its eligible cryptocurrency-related customers are enrolled in the Silvergate Exchange Network (SEN), its proprietary payment network for the crypto industry. The system was developed and tested in 2017 and made available to all of the bank’s crypto customers in early 2018. “The core function of the SEN is to allow participants to make transfers of U.S. dollars from their SEN account at the bank to the bank account of another SEN participant with which a counterparty relationship has been established, and to view funds transfers received from their SEN counterparties,” the bank detailed, adding:

Because of our focus on the digital currency industry in recent years and the unique value-add solutions and services we provide, we have achieved improvements in our deposit base and significant growth in key operating metrics.

What do you think of crypto-friendly banks like Silvergate Bank? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Images courtesy of Shutterstock and Silvergate Bank.

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The United States Federal Reserve is looking to employ a Manager, Retail Payments, part of whose responsibilities will be to oversee the research of digital currencies and distributed ledgers. The job ad has been published amid pressure from Capitol Hill to explore the possibilities of issuing a digital dollar.

Also read: Why Central Banks Are Not Designed for Democracies

Federal Reserve to Hire Retail Payments Manager

Geopolitics is a fast paced, high stake game and no major player can afford to ignore the surprising moves of their opponents. The Chinese leadership is now betting on blockchain while the People’s Bank of China is working on a digital yuan. Calls for a digital greenback, still the world’s main currency, have been issued in the corridors of power in Washington. This is all happening on the backdrop of a raging trade war with Beijing in which global dominance is at stake.

The potential benefit of integrating digital currencies into retail payments has caught the attention of the Federal Reserve. A job opening posted on Nov. 4 shows that the U.S. central bank is now planning to expand research in the field. The Fed’s Board of Governors is seeking to hire a professional who will be in charge for overseeing its Retail Payments Section. Facilitating financial and digital innovation is part of the job description.

Candidates must bring at least a bachelor’s degree but a master’s or other advanced degree is preferred. They are also expected to have at least seven years of relevant experience. The position is based in Washington, D.C. and the Fed provides support for relocation. Although it’s a regular job, it involves a decent amount of travelling – 25% of the time according to the ad.

The new Manager, Retail Payments will direct the section’s routine activities and will be tasked to lead, develop and execute administrative supervisory duties for its staff. The annual salary for the managerial post will be between $120,600 and $250,700. The federal salary grade is low 28 – high 29.

The job posting further details that the Retail Payments Section oversees the Federal Reserve Banks’ check and automated clearinghouse services and deals with policy and regulatory issues concerning retail payment systems. Its head will be responsible for “Facilitating and contributing to innovations research including digital currencies, stable coins, distributed ledger technologies, and broadly financial/digital innovation in retail payments,” among other duties.

US Dollar’s Primacy in Jeopardy

The job announcement, which indicates the Fed’s interest in digital currencies, comes after recent media reports that America’s central bank is exploring the idea of developing a digital version of the dollar. Furthermore, at the end of September two members of the U.S. Congress sent a letter to the Chair of the Federal Reserve, Jerome Powell, urging the Fed to look at creating a national digital currency.

Bill Foster (D-IL), chair of the AI Task Force and Congressional Blockchain Caucus co-chair, and French Hill (R-AR), ranking member on the AI and Fintech Task Force, expressed concerns that “the primacy of the US Dollar could be in long-term jeopardy” in competition from digital fiat currencies and their private sector equivalents. They asked a number of questions about the Fed’s current activities and plans regarding the potential development of a U.S. dollar digital currency.

The two congressmen cited a study by the Bank of International Settlements which found that 40 countries around the world are looking into developing or have already developed a digital currency. Their letter provides examples such as Sweden’s e-krona and Facebook’s Libra project while highlighting expectations that the Chinese central bank is going to launch a digital yuan as early as this year. According to an ad published in October, the People’s Bank of China is looking to hire six professionals with a background in cryptography and other tech disciplines to work on a digital national fiat.

Do you expect the U.S. Federal Reserve to develop a digital dollar? Share your thoughts on the subject in the comments section below.

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Images courtesy of Shutterstock.

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