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Argentina’s Central Bank Set to Prove Non-Crypto Use Cases of Blockchain Technology with its New Clearing System

The Central Bank of Argentina (BCRA) is now looking to test a blockchain-based clearing system to be used by the country’s major financial institutions. The aim of the blockchain clearing system is to provide efficiencies for fiat payments and enable them to be more reliable and to provide end-to-end traceability.

A proof-of-concept for the permissioned blockchain network has been created, based on RSK Smart Contract network, along with the major commercial banks in Argentina, including Santander and BBVA, according to a blockchain developer IOV Labs. One of the major goals of the proof-of-concept was to show that there are other use cases for blockchain such as smart contracts, other than just cryptocurrencies.

The clearing system is currently in its testing phase, while Diego Zaldivar, the CEO of IOV Labs emphasized the importance of using technology to optimize processes and provide better services to Argentinian citizens during these global circumstances. Banks, clearinghouses, BCRA, and other financial institutions will be participating in the network.

Although the central bank is willing to look into blockchain as a technology to be incorporated into its clearing system, the BCRA has issued a statement in 2014 to citizens to remind them that digital assets such as Bitcoin were not a form of legal tender.

Other central banks have been propelling towards a blockchain-based currency to be used in the nation.

Bank of France launches program of experiments testing out CBDC

The Bank of France (Banque de France) has launched a program of experiments testing out a potential central bank digital currency (CBDC) aimed for interbank settlements. Potential participants are being invited to submit their applications, as the Bank of France is calling for applications to experiment with the use of a digital euro.

The French central bank is open to test out new technology, although it did not specify using blockchain. The three main objectives of the CBDC experiment includes identifying benefits, analyzing potential risks, and modeling as CBDC-based interbank settlement.

Sweden’s Sveriges Riksbank tests out CBDC

Sweden’s Sveriges Riksbank announced that it had started testing an e-krona, taking one step closer to the release of a central bank digital currency.

The e-krona aims to simulate everyday banking activities, including payments, deposits, and withdrawals from a digital wallet on a mobile phone. The pilot testing program has been scheduled to operate for one year, until February 2021 and will be running on blockchain.

Image via Shutterstock

Ripple-Backed BBVA Bank to Launch Cryptocurrency Trading in 2021

Banco Bilbao Vizcaya Argentaria (BBVA), Spain’s second-largest bank, announced that it plans to introduce cryptocurrency trading and custodial services in early 2021.

Currently, the Spanish bank is working on the technicalities. According to people familiar with the talks, BBVA is planning on introducing a Europe-wide cryptocurrency initiative, that will ideally see multiple nations leveraging its crypto services. It will begin to enter the crypto space officially from Switzerland, as the country has pre-established cryptocurrency regulations drawn up by the Swiss Financial Market Supervisory Authority (FINMA). A crypto pioneer on Twitter said:

“Spain’s 2 largest bank BBVA will offer Cryptocurrency Trading – Hello Ripple and #xrp user BBVA – We see you.”

The list of cryptocurrencies that will be available for trade through BBVA services remains unknown, but it may not be surprising if Ripple’s XRP is added to the list of fiat-to-crypto trades.

Previously, BBVA had partnered with Ripple and leveraged its distributed ledger technology (DLT) to conduct a cross-border payment between Spain and Mexico. The transfer took a matter of seconds and was praised by BBVA executives for how efficient, transparent, and quick it was. A transaction that would have taken days to process was issued in seconds.

Ripple’s cross-border payment solutions for banks

Marcus Treacher, Global Head of Strategic Accounts at Ripple, had been ecstatic about the partnership, touting BBVA for being tech-forward and for committing to blockchain through Ripple’s network.

Ripple blockchain firm has been known for partnering with banks to deliver seamless cross-border payment experiences using its XRP ledger. The fintech company provides incredibly open-source technology and On-Demand Liquidity (ODL) financial services, which leverages their XRP token as a bridge currency between fiats, other digital currencies, and CBDCS.

There have even been talks that Ripple’s XRP Ledger may be superior to SWIFT financial network for cross-border payments, although the latter is adopted by banks worldwide. Its “secret weapon” may be partially attributed to its conformity with ISO 20022 standards, in comparison with SWIFT, which has yet to adopt it.

Spain Bank BBVA Launches Bitcoin Trading Service in Switzerland

Spanish banking giant BBVA has announced that the financial institution launches a new Bitcoin trading service on Monday for private banking clients in Switzerland interested in digital asset investment.

The Spanish Bilbao-based bank stated that it is starting to operate its new Bitcoin trading and custody services on Monday and plans to roll out services of other cryptocurrencies soon. However, the multinational bank said that it would not provide advice on such types of investments.

After six months of testing the Bitcoin service with a selected group of users, BBVA is now making the trading available to its customers in Switzerland.

BBVA Switzerland’s Chief Executive Alfonso Gomez stated that the bank had noticed a significant appetite among investors for cryptocurrencies or digital assets to diversify their portfolios despite their high risk and volatility.

On Friday, BBVA stated the new Bitcoin trading services would only be available to customers in Switzerland because the nation has clear regulation and widespread adoption of digital assets. The bank sees Switzerland as having relatively comprehensive regulations around digital assets, set out by the nation’s Financial Market Supervisory Authority(FINMA ).

“It’s an extension to new countries, or other types of customers will depend on whether the markets meet the appropriate conditions in terms of maturity, demand and regulation,” Gomez said.

BBVA is present in Switzerland through a wholly-owned franchise focused on international banking services. The bank, an international bank in 35 countries globally, has more than 130,000 employees and serves 66 million globally.

Bitcoin Coming to Banks

Currently, an increasing number of large investment banks are showing interest in launching Bitcoin trading and custody for their customers. In April, Goldman Sachs and JPMorgan announced plans to make cryptocurrencies more accessible to the public. Last month, Citi Group revealed that it is offering crypto trading services after witnessing surging client interest.

Efforts to offer Bitcoin trading services come amid rising institutional interest in cryptocurrency. Investors and firms see Bitcoin as a hedge against inflation as central banks and governments turn on the stimulus taps.

El Salvador has become the first nation to adopt Bitcoin as a legal tender currency. However, central banks across the globe have frequently warned investors about losing their money in crypto investment.

In recent weeks, major countries like China and the US have signalled a stricter approach to cryptocurrency regulations while building their plans to create their own central bank digital currencies.

BBVA Adds Ethereum Trading Services for Private Clients

The Switzerland franchise of Spanish banking giant BBVA has added Ethereum trading and custody to its digital currency investment portfolio.

According to an update from the bank, the Ethereum service is open to its private customers with a New Gen Account and will be able to manage both Bitcoin and Ethereum through the account.

The trading of cryptocurrencies will be managed through the BBVA app from which customers can manage both digital currencies and traditional investments at the same time. While BBVA floated the Bitcoin trading service back in June this year, it currently ranks as the first financial institution to incorporate Ethereum into its services.

“We decided to add ether to our crypto asset ‘wallet’ because, together with bitcoin, they are the protocols that spark the most interest among investors, while also offering all the guarantees to comply with regulation,” said Alfonso Gómez, the Chief Executive Officer of BBVA Switzerland.

Since the bank launched its crypto custody services earlier this year, it has gained a lot of patronage from its private banking customers, and the Ethereum integration helps the bank to complete its pioneering offering in the fast-growing world of digital currencies.

BBVA said it intends to expand its crypto services but noted it would look into regions that have established laws governing the digital currency ecosystem the way Switzerland does.

“The goal of BBVA Switzerland is to continue expanding the portfolio of digital assets in the coming months. With this innovative offer, BBVA has positioned itself as a leading bank in the adoption of blockchain technology, thus making it easier for its customers to invest in this new digital world,” the announcement reads.

BBVA has been at the forefront of blockchain innovation and development with the firm launching a cryptocurrency wallet integration feature with a digital investment account back in September this year.

Other multinational banks are also pushing for plans to join the blockchain bandwagon with outfits such as JPMorgan, Citibank, BNP Paribas, and Actinver going live on the CLS blockchain bilateral payments netting platform last year.