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What Global Regulators Think of Libra: The Asia Pacific Edition

Libra, the new cryptocurrency by social media giant Facebook, has generated controversy with lawmakers and regulators globally since its announcement in June of this year. Concerns were mostly revolved around the stablecoin potentially disrupting the global financial system. The scrutiny towards Facebook aims at the fear that the new digital currency could possibly take power away from the governments.

Around the globe

Data protection chiefs from around the world have come together to express concerns regarding Libra’s privacy risks. Issued as a joint statement published on Aug. 5 by the United Kingdom Information Commissioner’s Office (ICO), data privacy commissioners from Australia, Albania, Burkina Faso, Canada, the EU, the UK, and the US declared their concerns regarding the information handling practices ensuring security and to protect personal information.

Here’s what the Asia Pacific regulators think of Libra.

China

After the announcement regarding Libra in June this year, discussions have been sparked among Chinese financial regulators. Steering away from the attention on Libra, China announced that the country’s state-owned bank, the People’s Bank of China (PBoC), would be launching its own central bank digital currency (CBDC).

Yang Dong, the director at the Research Center of Finance Technology and Cybersecurity at Renmin University, mentioned that further testing is needed before launching the Chinese CBDC after gaining inspiration from Libra.

In the past, China has not been a friendly jurisdiction with cryptocurrencies like Bitcoin, perceiving them as a threat to financial stability in the country.

Mu Changchun, the lead at Digital Currency Research Institute, claimed that the CBDC would be able to process more than 300,000 transactions per second. He added, “even Libra can’t do this.”

Singapore

Singapore’s regulatory take on Libra will depend on the details of the launch of the cryptocurrency offered by Facebook. The Singaporean government says it is “open” to new innovations in the sector of these do not threaten the stability of the local ecosystem.

Tharman Shanmugaratnam, the Senior Minister of the Monetary Authority of Singapore (MAS), said that the central bank is in talks with Facebook about its plans with Libra. He clarified that “appropriate regulatory responses” would be made once the details of the cryptocurrency were provided.

Japan

Haruhiko Kuroda, Governor of Bank of Japan, stated that international cooperation was essential in regulating stablecoins similar to Facebook’s Libra. He told business leaders in Osaka, “if Libra is introduced, it could have a huge impact on society.” Kuroda reiterated that policymakers should ensure that they have the highest level of regulation for stablecoins.

The Japanese authorities set up a liaison conference in July of this year, with Bank of Japan, the Ministry of Finance, and the Financial Services Agency to investigate the potential impacts of Libra on the monetary policy and financial stability.

Australia

The Australian Privacy Commissioner warned Facebook to reflect on its past mistakes and asked for an explanation of how the firm would be able to protect people’s financial information when the cryptocurrency is launched.

Last year, a major political scandal revealed that Facebook was sharing personal data of millions of people’s profiles without their consent, with a now-defunct political consulting firm, Cambridge Analytica.

Angelene Falk, Australian Information Commissioner and Privacy Commissioner, stated that there was a “significant risk” with Facebook’s involvement in Libra, as the social media giant has access to an extensive supply of personal information. A significant concern has been highlighted with regards to transaction histories being passed back to Facebook.

Falk added that the public has to be certain consent will be fully informed and explicitly given, “individuals really need to be given the details on this so they can decide whether or not they’ll engage with the product and will they really be able to exercise choice and control.”

At this stage, Falk said she is not objecting to the idea of Libra but pointed out that Facebook needed to show it can meet community expectations. “This is an opportunity to show to the 17 million monthly Australian users of Facebook how it’s going to secure and protect personal information, so we will get that information and go from there.”

New Zealand

New Zealand’s main regulators, the Reserve Bank of New Zealand (RBNZ) and the Financial Markets Authority (FMA), have indicated a strong interest in digital currencies so far. The RBNZ has been keeping an open mind to Libra, emphasizing on the value within the Libra system regulation surrounding it would link back to the existing banking system.

The RBNZ has been focusing on monetary policy and financial stability on private crypto and how the public reacts to them. According to a report, the view in June of last year was that “globally, the current demand for private cryptocurrencies has been too small to pose any threat to the transmission of monetary policy.” Facebook’s current daily active users have estimated to over 1.56 billion will likely change that view this year.

The guidance issued by the FMA in 2017 highlighted that cryptocurrencies might touch on New Zealand’s regulatory regime for financial products and financial services, including fair dealing and anti-money laundering. Taking this guidance into consideration, Libra would likely be a financial product under the Financial Markets Conduct Act 2013, while Calibra, the wallet provider for Libra, would probably be operating a value transfer service.

New Zealand’s privacy legislation is currently under review; the new legislation is expected to come into force on the 1st of March in 2020. Given the use of Libra will raise other legal concerns, the new Privacy Bill was suggested to increase requirements for cross-border data transfers.

Fidelity Launches Cryptocurrency Custody Business

This article is contributed by our content partner, Nexchange NOW.

Watch out Coinbase, Fido has you in its sights.

In a rare interview with Fidelity Investments CEO Abigaile Johnson, the Financial Times revealed that the Boston-based asset management giant is “now engaged in a full rollout” of its cryptocurrency custody and trading service.

The service, called Fidelity Digital Assets, was originally available to a limited number of clients on a trial basis but is now open to all qualified investors. Johnson called the launch “a boon to what is a fragmented and complicated industry.”

“[The cryptocurrency industry] is not going away. As long as the value is there, people will look to preserve that value,” Johnson said.

“There are people out there with significant amounts of wealth in cryptocurrencies, probably bitcoin, and they’re looking for somebody to hold those coins for them because in the event of their passing.”

Fidelity Digital Assets’ launch pits the company against several other platforms, most notable of which is San Francisco-based Coinbase. Johnson, however, sees her trillion-dollar company’s large client base and network as obvious advantages against them.

Coinbase, Johnson said, “is still a company that most people had never heard of, and they don’t have the existing relationships with the independent advisers.”

Image via Nexchange NOWOriginal Article: http://www.nexchangenow.com/news/fintech/71196/fidelity-launches-cryptocurrency-custody-business/

CZ: I Personally Believe in Two Coins, BNB and BTC, That’s It

This article is contributed by our content partner, Nexchange NOW.

On a rainy Monday night in Moscow, on October 21st 2019, the famous influencer, game-changer, and billionaire, CEO of Binance cryptocurrency exchange Changpeng Zhao, widely known as CZ, met with 700+ Russian blockchainers during a special Binance Super Meetup Russia. To everyone’s delight, CZ started his speech confirming that Binance is going to launch crypto-fiat trading pairs, and the debut trading option would be tied to the Russian ruble.

*applause*

After patiently posing for selfies with a long line of attendees, CZ went on stage to get bombarded with questions from the audience, and here are his most interesting quotes.

On whether «USDT is fake»:

“Whether USDT is really backed by something, I don’t know. It’s a «black box» for most people. I haven’t seen any auditor reports or heard anyone reliable saying that they’ve done that. But Bitfinex is a long-running exchange, and they have had many issues in the past and they always resolved it. That’s as much as I know.”

On crypto debit cards:

“We are working with a number of partners in the crypto space, there are a number of solutions that let you spend crypto with a debit card, and we plan to white label it with Binance. But fundamentally it’s just a white label and not our own service. In the future, we hope we can issue a debit card linked to your Binance account, so you can spend directly from that account.”

On whether the altcoins are going to go extinct:

“The alt-season of 2017, of thousands of ICOs, is probably not going to come back. That time has passed. Fortunately, the market is much healthier now. Now the investors are much more rational, which is good. And the blockchain fundraising is a killer app, and it will stay. However, I do think that there will be a lot of new projects in blockchain space that won’t be successful.”

On whether Binance would provide information about Russian users activities to Russian regulators, if they ask to:

“That’s a tough one. I don’t know what the correct answer is. In general, we have not provided any information to a regulator. But we do comply with law enforcement on specific cases.”

On whether he ever recommended selling or buying crypto:

“I almost never say to sell or buy crypto. I personally believe in two coins, BNB and BTC, that’s it. But don’t follow me, I’m often wrong.”

On whether indexes of crypto would be issued on Binance:

“Indexes, or ETFs, or baskets – many exchanges apply that, and none of them are very popular. And many of the exchanges that tried it, stopped doing it. That probably means that demand is not that strong. It’s a pretty easy thing for us to do, but I don’t think there is demand. Demand for ETF can be stronger when Bitcoin dominance is smaller than 50%.”

On the BitWIse report and crypto exchanges faking trading volumes:

“I do trust the Bitwise report quite a bit. But overall, the fake trading volume issue is very hard to measure. Especially from a third-party point of view. But I think most of the techniques used in the Bitwise report make sense. It’s technically possible that one of the traders on those exchanges caused those patterns to be abnormal.”

On whether dApps are any good:

“For dApps, we have a couple of issues right now. Number one: the popular platform Ethereum has capacity bottle necks. To be honest, overall, most of these smart contracts are relatively simple. It’s still very early stage for dApps. I actually think that centralised games will integrate cryptocurrency, and there is a higher chance of success of adoption in the short term.”

Image via Nexchange NOWOriginal Article: http://www.nexchangenow.com/news/blockchain/71233/cz-i-personally-believe-in-two-coins-bnb-and-btc-thats-it/

Bitwala Incorporates CryptoTax for Better Tax Reporting

On Oct. 22, Bitwala, a German Licensed Bitcoin Banking Service App, announced its new integration with CryptoTax, an entity that assists crypto users to adhere to yearly tax declaration deadlines.

Bitwala asserted that crypto tax headaches would become a thing of the past based on the introduction of CryptoTax that is deemed the brand new tax remedy.

The new integration would enable Bitwala users to enclose cryptocurrency statements with their tax reports. This process will be as easy as attaching a PDF-file to an email. Additionally, the banking service offered will be the first-ever to integrate crypto tax reporting solutions to users directly through an app.

Bitwala’s co-founder and CEO/CTO, Benjamin Jones, noted:

“Taxation is a part of life, and cryptocurrencies are not exempted. Both trading gains and losses impact your tax balance, yet most cryptocurrency exchanges fail to provide any tools for proper reporting.”

Bitwala customers in all 31 nations of the European Economic Area (EEA) will enjoy the fully compliant and ready-for-use tax statements for any transaction. Additionally, Swiss and German taxpayers will be availed with country-specific tax reports, whereby all legal requirements will be met.

On the other hand, Bitwala’s CEO, Klaus Himmer, said, “Even tax advisors are struggling with reporting cryptocurrency trades to the tax authorities the right way. With CryptoTax, standardized reports leave no room for ambiguity. Bitwala customers will be the first to benefit from our solution, which makes the taxation of cryptocurrencies as user-friendly as possible.”

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eToro CEO: Central Banks will Inevitably Establish Digital Currencies

eToro has proven to be a reckoning force in the multi-asset brokerage sector based on its popularity. It deals with crypto, free stock trading, and social trading.

The establishment of Central Bank Digital Currencies (CBDC) has gained a lot of traction in 2019. Moreover, Facebook announced its Libra Project in June, but it has become very contentious.

Yoni Assia, eToro’s CEO, recently weighed in on the issue of Central Bank Digital Currencies in an exclusive interview conducted by LearnBonds. He noted that this matter was no longer an issue of “if,” but of “how and when” because the development of digital currencies by central banks was inevitable.

He noted:

“For me, the question is when and how, not if central banks will launch digital currencies – it is inevitable. Whether they will call it crypto is the big question as it is likely to involve permission and government control, whereas crypto is permission-less and decentralized. However, the creation of digital currencies by central banks will help legitimize crypto as it will enable the conversion between them.”

Assia is of the idea that central banks will be instrumental in validating crypto usage, as well as propel mediation between virtual currencies and traditional institutions. He also highlighted that the impact of blockchain would be monumental on the worldwide financial spectrum. As a result, traditional institutions had to join blockchain’s bandwagon to be “future-proof.”

Assia stated:

“I believe that blockchain technology will facilitate the greatest transfer of wealth ever seen, not from one group of people to another, but from privately held databases to publicly available distributed ledgers.”

eToro’s CEO has shown optimistism about the future of blockchain and digital currencies.

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World First Crypto Bank Sygnum Receives Approval To Offer Banking Services In Singapore

In a report posted by the Sygnum official blog site on Oct. 31, it has been stated that the company has been granted approval by the Monetary Authority of Singapore (MAS) to operate digital markets services in the country which complemented their recent obtainment of banking and securities dealer license in Switzerland from the Swiss Financial Market Supervisory Authority (FINMA).

With this dual location – Singapore and Switzerland, Sygnum, as the world’s first crypto bank, empowers institutional and private certified investors, banks, corporates, and other financial bodies to invest in the crypto economy with unalloyed trust alongside their scalable, independently controlled, and future-proof regulated banking solution.

“Our dual location – in Singapore and Switzerland – is one of the cornerstones of our strategy. This is reflected across the team, advisory council, the board of directors as well as investor base. All have been instrumental in our achievements so far across both countries,” said Sygnum Co-Founder and CEO Singapore Mathias Imbach.

As stated in the report, Sygnum’s obtainment of the capital market license will give the company the ability to conduct asset management activities, focusing on crypto investment strategies for institutional and private certified investors. In this regards, Stefan Mueller, Head of Asset Management at Sygnum, said:

“The CMS license is an important milestone for establishing our asset management arm, leveraging the vibrant financial environment in Singapore. This is complementary to our banking services in Switzerland and will also benefit our Swiss institutional and private qualified investor clients.”

Sygnum’s first product will soon be accessible in Switzerland. The product as a multi-manager fund apportions investments across a group of managers that utilize the global digital asset opportunity using varied investment procedures.

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Bitcoin Gets Integrated into the French Education Curriculum

Cryptocurrencies, such as Bitcoin, are continuously being embraced across the globe. As a result, they have instigated interest from different sectors, and education is not an exemption.

French high school students will have the opportunity to learn about Bitcoin soon. This follows the inclusion of cryptocurrency into the Economics and Social Sciences syllabus.

The French education ministry has outlinedthe integration of Bitcoin into the curriculum, as it noted that cryptocurrency would be used to assist students in comprehending the characteristics of money.

Bitcoin to be taught as an introductory overview

It has been stipulated that Bitcoin will not be explored deeply as this will be beyond the high school students’ capabilities. It will, therefore, be taught as an introductory overview as this will help the French students understand the idea of decentralization in the context of major financial systems.

Nevertheless, the course is informative and detailed because the ministry has also included four explainer videos, such as “Is Bitcoin the currency of the future?” and “Can Bitcoin replace the Euro?” They are intended to give the students a better grasp of how cryptocurrencies work, as well as how different they are from fiat.

France has been making notable steps to inculcate cryptocurrencies into the education structure. For instance, in October 2018, Financia Business School started accepting Bitcoin payments.

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Oxfam's Blockchain-Based Agricultural Insurance Firms in Sri Lanka Pay Farmers with Crypto

As stated in a report, the Agricultural Insurance firms in Sri Lanka announced to have made their first payment to smallholder farmers with cryptos. These firms include; Oxfam, Etherisc, and Aon Plc. While Oxfam is an organization that works to alleviate poverty, Etheriscis an InsurTech startup which centers on developing a protocol for decentralized insurance applications: and Aon Plc is a leading professional services firm that provides a wide range of health solutions, risk, and retirement.

Michiel Berende, the Chief Inclusive Officer at Etherisc said: “We are proud to have real-world, on-the-ground success from a blockchain solution for microinsurance. We are delighted with the first phase results, and we are excited to drive on and help more farmers.”

The said farmers were paid by the system in this initial operations phase. The farmers being about 200 were enrolled earlier this year because they had been involved in the risk of losing their crops owing to extreme weather.

The report also outlined the major challenges that prevent farmers from utilizing insurance. These barriers are: unavailability of cost-effective and trusted insurance products, unavailability of understanding about how insurance would help a farmer survive, coupled with knowing when and how a claim would be paid. Interestingly, recent blockchain technology meets up with these challenges.

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Iconic Funds to Issue First Exchange Traded Product for Bitcoin on a Regulated Market

Iconic Funds, a global crypto asset management firm, has said it will issue an exchange-traded note (ETN) for Bitcoin of up to 100,000,000 notes, tracking the NYSE Bitcoin Index (Ticker: NYXBT). The notes may be subscribed to by qualified investors with both EUR and BTC, with a minimum subscription size of 100,000 Notes and an issue price of €1,00 per Note. Iconic Funds will apply for admission to trading of the notes on the regulated market of the Luxembourg and Frankfurt Stock Exchanges in Q4 2019. The notes will have a German ISIN.

This ETN on Bitcoin is the world’s first genuine exchange-traded product with a crypto asset as the underlying on a regulated, major global exchange.

The issuer will hold BTC, more commonly known as Bitcoin, and store them with institutional-grade custodians, such as Coinbase Custody, to meet its payment obligations under the ETN. The ETN will be available for trade to retail and institutional investors. The ETN does not have a fixed maturity date. However, the Issuer has the option to call the ETN, and investors have the option to put the ETN on a quarterly basis. Iconic will charge a 0.5% quarterly management fee for its services managing the ETN.

Bitcoin, the world’s leading crypto asset, is seen by many as an asymmetric, non-correlated, digital store of value with investors likening it to “digital gold.” Leading German financial institution, Bayerische Landesbank recently published a report concluding that due to the stock-to-flow ratio of Bitcoin, it “was conceived to be an even harder asset than gold.” Bitcoin has been one of the best-performing assets of the past decade, realizing a 5-year and year-to-date return on investment of roughly 3,240.9% and 114.1%, respectively, as of Oct. 18, 2019, according to the NYXBT Index.

“Financial Institutions and large investors have been clamoring for a seamless way to invest in Bitcoin and other crypto-assets for many years and, thus far, they have not had an institutional-grade product through which to do so,” said Patrick Lowry, CEO and Managing Partner of Iconic. “While the SEC continually rejects Bitcoin ETP proposals in the U.S., Iconic has developed such investment product in Europe and are excited to offer the first on regulated markets such as the LuxSE and FSE. We look forward to expanding our portfolio of structured products for crypto assets in the near future and have many new issuances planned on the horizon for leading crypto assets.”

Structured as a traditional ETN, the investment product removes the technical complications of investing in and holding Bitcoin for investors. White & Case LLP acted as the Issuer’s counsel, with Iconic’s General Counsel, Liquet Associates, facilitating the entire process. Baader Bank (ISIN: DE0005088108) serves as the settlement, listing, paying and calculation agent for the ETN, with WSB as the tax advisor. Deloitte performed the initial audit of Iconic’s issuing entity.

Iconic is perpetually at the forefront of crypto-asset adoption, has been investing in the space since 2017 and issuing the EU’s first fully-licensed crypto asset index fund earlier in 2019. By issuing the first Bitcoin ETN, Iconic has further cemented itself as one of the top and most innovative asset management firms in the world.

Iconic Funds is the issuer of a series of enterprise-grade crypto asset index funds and exchange-traded products. Structured as a Joint Venture between Iconic Holding and CRYPTOLOGY ASSET GROUP, Iconic Funds’ portfolio of regulated crypto-asset investment products offers investors passive and diversified exposure to the world’s fastest-growing asset class. Iconic Fund’s investment products are issued through the AMaaS ecosystem, leveraging licensed third-party service providers and fund administrators as the group champions traditional asset management best practices. The marriage of state-of-the-art technology, innovative investment products, and uncompromising professionalism places Iconic Funds at the vanguard of crypto asset investing.

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Chinese Police Put MicroBT CEO Under Microscope Over Alleged Dispute With Bitmain

As stated by a local news outlet, the Chinese Police have just resumed its investigation of intellectual property infringement involving Yang Zuoxing, CEO of Shenzhen Bit Microelectronics Technology and Bitmain.

In the course, Yang was being arrested to help in the investigation of the patent of Bitmain he allegedly infringed upon and if found guilty, would be sentenced to prison.

The news about his arrest was revealed by insiders who were around when the police took hold of him on the basis of intellectual disputes in Bitmain.

Bitmain, a Chinese-based privately-owned company located in Beijing, which designs technology for bitcoin mining, was founded by Jihan Wu and Micree Zhan in 2013.

Yang was once staff in the company; working as the director of processor design, he developed the Antminer S7 and S9 models. However, Yang exited the company when the talk over equity stake was a debacle.

Zealous about having a mining firm, he raised funds to start Shenzhen Bit Microelectronics Technology, MicroBT. Since then, Bitmain and MicroBT are being seen as a rival company.

Following from this, Bitmain took MicroBT to court alleging that Yang has infringed upon their patent.

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