Fintech

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.

Swiss SEBA Bank Dives Into Defi Expanding Its Offering With 3 Tokens

05/05/2021 by Idelto Editor

Switzerland-based crypto bank SEBA is adding support for three defi tokens, bringing the number of cryptocurrencies available on its platform to a total of nine. SEBA clients are able to buy, store and trade with fiat any of these cryptos.

SEBA Bank Supports the Coins of 3 Defi Protocols

With the new tokens, SEBA Bank is not only expanding its offering but entering into the decentralized finance (defi) world, the fintech noted in an official announcement published this week. The financial company believes it’s now supporting “the tokens of the most important defi protocols available on the market.”

According to the press release, the three newly introduced coins belong to Synthetix (SNX), a decentralized finance protocol providing on-chain exposure to a wide variety of assets, Uniswap (UNI), a popular decentralized trading protocol facilitating the swap of crypto assets, and Yearn.finance (YFI) which is a decentralized financial aggregator optimizing yield farming returns. The innovative bank emphasized that clients will be able to benefit from these new tokens in all provided services such as investment solutions, custody and trading.

The startup’s offering is supported by its research arm, SEBA Research. The unit provides analytics, insights, and access to the new asset class in compliance with the Swiss Bankers Association guidelines. “Digital assets are selected according to a rigorous process combining quantitative metrics and in-depth qualitative analysis,” SEBA detailed. “The value accrual mechanism, tokenomics, and the underlying protocol play a central role in this process.”

Crypto Bank Committed to Adding New Currencies

According to its website, the bank maintains a commitment to continuously add new currencies. BTC, BCH, ETH, LTC, XLM, and USDC are already in the list, along with a number of fiat currencies – CHF, USD, GBP, EUR, HKD, SGD, PLN, and JPY. The platform provides rates and supports trading pairs between these crypto and fiat currencies.

SEBA Bank, headquartered in the canton of Zug, was founded in 2018 when it raised 100 million Swiss francs (around $110 million) in a funding round in September. It launched in late 2019 with an array of services aimed at building a “seamless, secure and easy-to-use bridge between digital and traditional assets.”

The fintech startup was granted regulatory approval by the country’s Financial Market Supervisory Authority (FINMA) in August of that year. It became one of the first licensed “bitcoin banks” operating out of the Swiss Crypto Valley, together with another banking solution provider for the crypto sector, Sygnum AG.

The banking and securities dealer license allows SEBA to offer its clients – professional individuals, companies, and financial institutions – opportunities to invest, keep, trade, and borrow against traditional as well as digital assets in a regulated environment. The bank also serves the growing blockchain industry of Switzerland by providing accounts and custody for fiat and crypto-assets.

What do you think about SEBA Bank’s decision to add support for three defi tokens? Tell us in the comments section below.

Ghana Regulator Labels Crypto Transactions Illegal— Urges People to ‘Stay Away From Them’

04/05/2021 by Idelto Editor

Ghana’s Securities and Exchange Commission (SEC) recently warned residents of the West African country to avoid cryptocurrency transactions of any form. In the warning, the regulator reiterated that “cryptocurrencies are illegal in the country and are not regulated by the commission hence Ghanaians should stay away from them.”

Risks Associated With Crypto

In remarks made during an interview, Paul Ababio, the Deputy Director-General of the (SEC) asserts that “there are risks associated with cryptocurrencies and people have lost funds to such transactions.” However, despite issuing the warning, Ababio does hint that his organisation might eventually decide to regulate the crypto space.

(The) Bank of Ghana does not treat it as a form of payment, it is not a legal tender but we will be engaging further to come out with frameworks.

However, until that happens, the regulator urges Ghanaians to “desist from participating (in cryptocurrency transactions.)”

Paul Ababio, Ghana’s Deputy Director-General of the (SEC).

Master Plan

In the meantime, Ababio reveals that “the commission is forming a fintech round table as part of its master plan to look into some of these innovations and the approach to take.” However, he cautions that this is still a work in progress.

A number of countries in Africa are leading the race when it comes to the global adoption of crypto assets. Aside from places like Nigeria and South Africa, Ghana is one of the top countries in Africa with rising peer-to-peer crypto trade volumes.

Ghana’s government has noticed the adoption and the SEC has witnessed ostensible stories of citizens losing funds. The SEC official also took time to explain why the regulator has undertaken to study cryptos further. He said:

There are clear risks to the nature of it. People have lost their keys and they can no longer access their funds so it is something that we are studying.

While Ababio has promised “some action on that front”, he still fails to give the exact timeframe within which “the commission is expected to come out with a final decision on the matter.”

What are your thoughts on Ghana’s latest crypto warning? Please share your views in the comments section below.

US House Passes Bill Mandating SEC and CFTC to Establish Working Group Focused on Digital Assets

22/04/2021 by Idelto Editor

The U.S. House of Representatives has passed a crypto-related bill introduced by pro-bitcoin Congressman Patrick McHenry. It requires the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to establish a working group focused on digital assets.

Bill to ‘Ensure Collaboration Between Regulators and Private Sector’ on Cryptocurrency

The U.S. House of Representatives passed several bipartisan bills on Tuesday, including H.R. 1602, introduced by pro-bitcoin Congressman Patrick McHenry, the Republican leader of the House Financial Services Committee.

H.R. 1602, entitled “Eliminate Barriers to Innovation Act of 2021,” will “establish a digital asset working group to ensure collaboration between regulators and the private sector to foster innovation,” the committee described.

McHenry explained:

[This bill] requires the Securities and Exchange Commission and the Commodity Futures Trading Commission to establish a working group focused on digital assets. This is the first step in opening up the dialogue between our regulators and market participants and move to needed clarity.

The bill states that the working group shall be established no later than 90 days after the date of its enactment.

In addition, the bill requires that the members of the working group include at least one representative from fintech companies that provide digital asset products or services, financial firms regulated by the SEC or CFTC, institutions engaged in academic research or advocacy relating to digital asset use, small fintech businesses, investor protection organizations, and institutions that support investment in historically-underserved businesses.

The working group shall submit a report no later than one year after the enactment of the bill to the SEC, the CFTC, and the relevant committees, the bill notes.

The report must contain regulatory analysis and recommendations related to the laws and regulations under the jurisdiction of the SEC or the CFTC. The recommendations are “for the creation, maintenance, and improvement of primary and secondary markets in digital assets, including for improving the fairness, orderliness, integrity, efficiency, transparency, availability, and efficacy of such markets.” They must also cover the “standards concerning custody, private key management, cybersecurity, and business continuity relating to digital asset intermediaries.” The bill, which now heads to the Senate, can be found here.

What do you think about this bill? Let us know in the comments section below.

Bank of England and HM Treasury Launch a Central Bank Digital Currency Taskforce

19/04/2021 by Idelto Editor

Her Majesty’s Treasury and the Bank of England have revealed the establishment of a central bank digital currency (CBDC) taskforce. According to the announcement, the group’s purpose aims to explore a potential UK CBDC.

UK Entities Invoke a CBDC Taskforce to Explore a Central Bank-Issued Digital Currency

Central bank digital currencies (CBDCs) have been popping up throughout a number of countries and most are still in the exploration phase. A few countries like Venezuela, Sweden, and China are ahead of the game by a longshot in comparison to countries like the U.S., Canada, and the United Kingdom. On Monday, the HM Treasury and the Bank of England (BoE) published an announcement indicating that it plans to join the CBDC race.

The two UK entities have established a CBDC taskforce as the Exchequer says the group will be dedicated to “the exploration of a potential UK CBDC.” The press release wants the public to know that bureaucrats and the BoE have “not yet made a decision on whether to introduce a CBDC in the UK.” However, the taskforce is meant to strategically approach the idea and “promote close coordination” between officials exploring a UK-based CBDC.

The CBDC taskforce will be co-chaired by Jon Cunliffe the Deputy Governor of the Bank of England and Katharine Braddick the HM Treasury’s Director General of Financial Services. “Full membership of the taskforce will be limited to relevant individuals from the Bank of England and HM Treasury,” the announcement details. “Other UK authorities will be involved in the taskforce’s work on CBDC as appropriate, and will be invited to meetings when relevant. The Bank of England and HM Treasury will jointly provide secretariat duties,” the Exchequer’s announcement notes.

A CBDC Will ‘Secure the UK’s Title as a World Leader for Fintech Innovation’

In a note to Bitcoin.com News, Jorge Lesmes, Global Head of Blockchain Banking Practice at Everis believes the HM Treasury’s and BoE’s recent announcement is positive. “The UK is a world leader for fintech, and the implementation of a Central Bank Digital Currency (CBDC) would help secure this title,” Lesmes explained. “With the Covid-19 pandemic accelerating our transition away from physical fiat and enhancing the customer appetite for convenient, tech-driven access to financial services and digital payments, the introduction of a CBDC would be key in meeting these shifting consumer demands,” he added.

The Everis executive continued:

However, the first stage of implementation is likely to arrive with commercial banking, for interbank settlements, before retail banks benefit from the uses of a digital currency. Of course, the introduction of a CBDC will not come without its risks. For this partnership to succeed, the newly established taskforce must examine how the UK government will work alongside the Bank of England, to ensure that all potential risks have been considered and that the correct regulation is in place to eliminate threats and maintain value.

Members of the HM Treasury and BoE effort plan to evaluate design features to achieve specific goals. The CBDC will need “rigorous, coherent and comprehensive assessment,” the Treasury insists. Both entities will also participate in engaging with CBDC stakeholders. Furthermore, the organizations will monitor the CBDC developments in order to make sure the UK “remains at the forefront of global innovation.”

What do you think about the HM Treasury and BoE effort introducing a CBDC taskforce for the UK? Let us know what you think about this subject in the comments section below.