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Malaysia’s Prime Minister Seeking a New Gold Standard

Reportedly Malaysia’s Prime Minister Dr Mahathir Mohamad indicated that he is agreeable to a single currency for the East Asian region backed by gold but critically it would not become the national cash of any current nation.

Speaking recently in Tokyo at the 25th International Conference on The Future of Asia he stressed that the currency would be mainly used for bilateral trade between countries. The new currency would relate to the local currency exchange rate indicating the economic performance of that country and clear evidence of how much each country owes to each other to be paid in the ‘special currency of East Asia’.

How much appetite there is for this outside of Malaysia is yet to be seen as under a classic gold standard a country’s purchasing power is directly proportional to the real strength of its economy. When an economy generates wealth, the wealth is generated in gold however the crunch comes when wealth contracts because you don’t have the option to create more gold out of thin air.

Mahathir has considered the use of digital currencies in the past, but he favours gold as a universal commodity especially as it is free from the control of any one government – or more accurately its value cannot be influenced by any one government. A common currency for East Asia is an ambitious vision from Mahathir who surely must have studied the economic frailties famously displayed by the Euro before putting forward such an idea.

Meanwhile, the Securities Commission Malaysia (SC) recently registered a number of exchanges which now nine months to achieve compliance with the SC. Luno Malaysia, Sinegy Technologies and Tokenise Technology become the only digital asset exchanges registered to operate out of Malaysia with Malaysian Finance Minister, Lim Guan Eng said that all cryptocurrencies must go through the country’s central bank, before being issued to the public.

The aim is to make Bank Negara Malaysia the ultimate authority for anybody seeking to introduce any form of digital currencies in a move widely regarded as one to protect from users from less reputable coins. Lim Gaun Eng stated that Malaysia doesn’t want to obstruct digital currencies but added “it is still subject to existing laws” but has not yet made it clear precisely how regulation will (or could) be applied. If you can look past the irony that digital currencies have to gain approval from the Malaysian central bank before being issued perhaps we are seeing the birth of regulation in Asia which may trigger a ‘fight or flight’ response that will be heard around the world.

US Congressmen Ask Federal Reserve to Create National Digital Currency

Two members of the United States House of Representatives Financial Services Committee recently asked the Federal Reserve if it has any plans to create a U.S. dollar digital currency.

Fed Must Ensure Monetary Stability

On Sept. 30, U.S. Representatives French Hill and Bill Foster sent a letter to to Federal Reserve Board Chairman Jerome Powell outlining their concerns that the “primacy of the U.S. dollar could be in long-term jeopardy from wide adoption of digital fiat currencies.”

The two lawmakers cited concerns that the Fed may be moving too slowly in this regard as over, “40 countries around the world have currently developed or are looking at developing a digital currency.”

The congressmen warned that relying on the private sector to develop digital currencies carries a lot of risks and may result in a “loss of control of monetary policy as well as the ability to implement and enforce effective anti-money laundering and counter-terrorism financing measures.”

The lawmakers noted that the Federal Reserve not only has the capability but also a mandate to ensure stability and safety in the financial system and believe the Fed should “take up the project of developing a U.S. dollar digital currency.”

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Wales Eyes Own Digital Currency for Speedy Business Transactions

Wales has set its sights on creating a complementary digital currency according to an official government announcement on Oct.7th. It has been speculated that it could enhance the nation’s economy by approximately £250m in the next ten years.

The digital currency network known as Celyn is set to enhance business transactions necessitated in the exchange of products or services without the urge for traditional payments, such as the British Pound.

Notably, the Celyn mutual credit system to be used is founded on a Sardinian model known as the Sardex, a business-to-business electronic credit system. Using the Foundational Economy Challenge Fund, the Welsh Government awarded Circular Economy Wales with £100,000 for the project.

The CEO of Circular Economy Wales, Eifion Williams, is optimistic that the Sardex model will be instrumental because it helped the Sardinian SME economy leap 50 million euros in 2018 alone.

According to Lee Water, the Deputy Minister for Economy and Transport, the Economic Action Plan put in place is pivotal in laying the direction needed for a more balanced and broader approach for economic growth.

The Minister also noted:

“The Foundational Economy Challenge Fund is fundamental to this, and I’m intrigued to see the results of this mutual credit system pilot by Circular Economy Wales.”

Blockchain and digital currencies are continuously being embraced across the globe by different nations and institutions. As earlier reported by Blockchain.News, Bank of America, the second-largest bank in the United States, recently announced various blockchain job openings, another strong indication that more banks are now looking at ways to embrace blockchain technology in their operations.

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New Ride-Hailing App to Transform Payments by Offering Blockchain Direct Transactions

Bayride has revealed RideNode, a new transportation virtual, and blockchain currency, which seeks to transform the payment structures in this sector.

America’s ride-hailing industry is touted to be revolutionized due to the fact that RideNodewill offer direct transactions between the service provider and consumers. Expressly, it will be incorporated into the BayRide mobile application as a digital currency payment option.

RideNode is engineered by a token called RIDE. The transactions between the passenger and driver will be facilitated by BayRide, and the latter will not be charged any commission for utilizing this platform.

Drivers will be able to bid for real-time prices uploaded by passengers on the platform with the help of a proprietary technology called SMARTFARE.

RideNode to transform the ride-hailing industry

RideNode is expected to be advantageous to all stakeholders in the ride-hailing industry, such as service coordinators, riders, and drivers, already utilizing services like Lyft and Uber.

Notably, it will avail of a complete platform that will offer credential verification, incident responses, payments, and logistics. RideNode will also present special emphasis on the security and safety of both drivers and riders.

Additionally, it is expected to avert some of the challenges witnessed in the ride-hailing sector, like low remuneration for drivers. RideNode seeks to present a sustainable system that prompts a win-win situation for all stakeholders in the ride-hailing industry.

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British Virgin Islands Aims to Rollout a New USD-Backed Digital Currency

The government of the British Virgin Islands, in partnership with LIFElabs.io, aims to develop a digital currency that will be peeled at the ratio of 1:1 against the United States dollar to be used with the territory. The digital currency is dubbed BVI~LIFE™, and there was a digital economy symposium organized by the British Virgin Islands government on 3rd, where LIFElabs.io was meant to explain the details of the proposed digital currency.

According to the press release, Premier Andrew Fahie, stated: “We welcome this innovation with open arms. Our partner, LIFElabs, has demonstrated with their proven track record that their ideology is not just mere words, and we look forward to continuing our partnership with them on the rollout of BVI~LIFE, our digital currency.”

The government of the British Virgin Islands has embarked on having a digital currency because it believes the currency will increase transaction speed, minimize transaction fees, and be readily available and accessible to BVIslanders and tourists alike.

“This partnership puts us in a unique position to make a massive impact in a place that really stands to benefit. The foundation of a digital currency is necessary groundwork for the British Virgin Islands to continue to serve the global economy as it has in the past with the onset of the blockchain revolution,” said Sanjay Jadhav, LIFELabs.io CEO.

Alongside the digital currency, there is also the development of a Rapid Cash Response™ (RCR) fund which is meant to offer support in the event of a national emergency and which according to David Pugh-Jones is a valuable tool that will enable the government to fight against disaster and shield its nationals from the aftermath.

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Mauritius Jumps on Digital Currency Bandwagon

The issuance of Central Bank Digital Currency (CBDC) has been making airwaves with major players such as the U.S. and China, leading the race.

The Bank of Mauritius appears to be jumping on this bandwagon based on an announcement that it wants to introduce a digital currency.

Its governor Yandraduth Googoolye acknowledged that the institution had begun engaging with various international institutions about the provision of a digital currency to be used for retail payments.

The Mauritian Government’s Blockchain and FinTech Commitment

Suyash Sumaroo, the co-founder of Horizon Africa, a Mauritius-based blockchain startup, noted: “Personally, I think that during the last 2-3 years, there has been a lot of focus on FinTech and blockchain technology from the Mauritian government and the private sector.”

He added: “I believe that there will be more large-scale projects of this nature which will help the country and region develop.”

As per the Bank of International Settlement (BIS) definition, CBDCs act as new variants of a central bank’s liability denominated in an existing unit of account. As a result, they act both as a store of value and medium of storage.

Moreover, CBDCs are founded on four main properties of money, namely accessibility, form, technology, and issuer.

Mauritius has been witnessing a myriad of activities in the blockchain and FinTech fields due to considerable government support.

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South Korean Telecom Giant and City Government Teams Up to Launch Major Digital Currency

KT, the largest telecom company in South Korea, is planning to launch its blockchain-based digital currency in the second biggest city in the country, Busan.

According to news outlet dongA, the currency is called Dongbaek Currency, which means Camellia flower, when directly translated to English, and is set to be launched on Dec. 30.

Yoo Yong-gyu, the Blockchain Business Center Director of KT, said, “With our know-how of operating a regional currency and blockchain security, KT will work towards establishing Dongbaek Currency and contributing to the growth of Busan’s economy.”

A contract was secured between KT and the government of Busan in February to develop the digital currency and payment system for local retailers to encourage the adoption of blockchain technology. Yoo explained, “To operate a regional payment network that facilitates hundreds of millions of dollars in transactions, stability and security of the platform are the most important.”

The digital currency is also compatible with Hana Bank and Busan Bank, along with other major banks. When using the digital currency at local stores, existing credit card readers would be used to process the payment.

With Busan’s request to help small stores and merchants, users cannot transact with blockchain-based currencies at department stores and large malls.

KT and Busan are looking to release $260 million worth of Dongbaek Currency, and users will be provided with 6% cashback for using the digital currency.

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US Fed Chair Jerome Powell Grilled Over FedCoin Digital Currency Progress

Federal Reserve Chairman Jerome Powell testified before the US House Financial Services Committee on the state of the US economy and monetary policy.

Rep. Bill Foster of Illinois spent his entire five minutes asking Powell about the progress being made regarding the topic of CBDC or central bank digital currencies.

Foster questioned Powell concerning the potential for a CBDC and how it can impact the suffering economy. Powell was honest in saying that the dollar is holding fine, particularly when compared to the failing currencies of other currencies. The Fed chair acknowledged the significance of the dollar to the financial systems of the United States.

Powell stated,“I think having a single government currency at the core of the financial system is something that has served us well. It is a highly basic thing, which has not been in question.”

The Fed chair is embracing digital currency efforts and told the House committee that “we are working hard on it.” The ultimate aim is to digitize the dollar in the future, which has been triggered since debates started over Facebook’s Libra plans. Such ambitious plans are in line with the Federal Reserve’s previous announcement that it is conducting experimentation and research related to potential use cases for digital currencies.

While addressing the Congress meeting, Powell acknowledged that there was a risk involved in central banks taking up the responsibility of blockchain and cryptocurrency. He revealed that the Fedcoin plan was first proposed to combat the idea of privately-owned cryptocurrencies. Powell admitted that banks around the globe are looking into central bank digital currencies.

Powell said: “Currently, every major central bank is taking an in-depth look at that. We feel that it is our obligation being that now technology has that possible. I think it is much necessary for us and other central banks to understand the benefits and costs associated with a possible digital currency.”

China’s digital yuan a wake-up call for the US

Foster asked Powell about the current Fed’s plan in responding to China’s efforts to launch a digital yuan. Powell responded that they have visibility regarding China’s efforts. He identified that China and the US are different when racing central digital currency. He said, “They are in an entirely different institutional context.”

The Fed chair stated that China is building digital currency in a completely different institutional context. He further mentioned that China’s position on cryptocurrencies is quite different from Bitcoin. China wants to develop a digital currency, which is run and centralized by the Chinese government, but Bitcoin functions on a free and decentralized model. In the US, where consumers are used to privacy and freedom, any financial ledger where the government has access to all the data would be greeted with intense scrutiny.

Powell emphasized that the Federal Reserve has not officially initiated the launch or creation of a digital dollar. He said, “We’ve not decided to conduct this. There are several questions, which should be answered around a digital currency for the US, including issues concerning privacy issues, cyber issues, and several operational alternatives as they present themselves. So, we are going to be working through all of that and do that work responsibly and thoroughly.”

However, Foster is concerned that if the federal government does not react and develop a plan for a digital currency quickly, then potential competitors like China could launch central bank digital currencies and consequently gain an upper hand. Foster pointed out that China’s intention to implement the digital yuan among nations involved in its Belt and Road initiative could put the dollar’s world reserve currency status at risk.

Image via Bloomberg

Impending Central Bank Digital Currency: Data Shows Not All Central Banks Support the Move

Reports of a unified digital currency to be issued by central banks of countries have been ongoing for some time, but a new surveyshows that not all central banks are open to the idea. The outcome of the survey was published by the Bank of International Settlements (BIS) which produced logistics and market sentiments in line with the Central Bank Digital Currency (CBDC) adoption.

Although banks in emerging market economies (EMEs) are switching direction towards the issuance of government-backedCBDCs, while those in developed countries seem to be employing a more logical approach on the move from fiat to digital currencies.

The paradox of the situation is that banks with the capacity to push the world into the digital currency era are actually not showing much interest towards adoption; with the reason for their reluctance remaining a question with no answer.

Figures from the survey show that 1.6 billion people could have access to CBDCs in less than three years which is the most baffling data from the survey titled “Impending Arrival—a sequel to the survey on central bank digital currency.” Participants of the survey included 66 banks representing 75% of the world’s population and 90% of its economic output. 10% of the banks stated they would launch the first general-purpose CBDCs in the space of three years, which represents 20% of the world population.

While reviewing the outcome of the survey with Cointelegraph, Himanshu Yadav, co-founder and managing partner of Woodstock Fund said, “As CBDCs are rolled out, some will ignore them, and some will explore them further, leading to a huge positive gain in the cryptocurrency ecosystem. Developers will build tools that will allow for seamless exchange between CBDCs and cryptocurrencies, and the race for digital currency supremacy will take center stage in this decade.”

This shows that central bank digital currencies despite being centralized in nature have the requirements to attain immediate mass adoption that has been taking the creators of cryptocurrencies which includes stablecoin more than a decade to achieve with the result still being in the mixed zone.

This is possibly due to the fact that central backs occupy a major position in the global economy and any adventure into the implementation of blockchain is a plus to the ecosystem.

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Ethereum’s Vitalik Buterin: Centralized Digital Currencies Without Privacy Are a Huge Step Back

Vitalik Buterin, the Ethereum co-founder, believes that mainstream adoption of digital currencies is inevitable, with or without blockchain, but will that currency be sovereign, corporate or decentralized?

Appearing on the Block TV podcast on March 4, Buterin said that central bank digital currencies (CBDC) and private stablecoins like Libra will exist in the near future but believes that non-inclusive “centralized chokepoints” of these institutional digital currencies will continue to steer adoption towards favouring decentralized cryptocurrency.

Challenges of Centralized Currency.

With each passing day, CBDC appears to be getting closer to realisation. Buterin believes these sovereign digital currencies will eventually see the light of day but highlighted the challenges these centralized projects will face. He explained the main problem is ”the concentration of power, the concentration or data collection — that you become dependent on potentially central intermediaries that can exercise a very fine-grained degree of control over who has the ability to participate in these systems and who can’t.”

Buterin alluded to the fact that these central controls or “chokepoints” allow the legacy institutions and sovereign infrastructures to exclude projects with little explanation. He said, “We’ve been seeing many situations where even things that are perfectly legal just end up getting restricted because whoever runs the centralized chokepoints just wants to exclude some category of users and I think those are reasons why people will continue to be interested in fully decentralized digital currency.” Facebook has recently taken a step back from Libra due to the regulatory backlash and pressure it has faced since the project was announced.

The Ethereum prodigy said that ultimately the market would lean towards decentralized currencies and that, “Centralized digital currencies without privacy are a huge step back” even more restrictive than our current systems of finance.

Enterprise Ethereum

During the earlier parts of the podcast, Buterin said that scaling on public blockchains is soon going to be able to properly serve the needs of global enterprises and adoption is already underway.

As reported by Blockchain.News yesterday, global accounting firm EY, have launched their open-source Baseline protocol which aims to address privacy issues to encourage enterprise adoption of public Ethereum.

According to the announcement on March 4, the Baseline Protocols aim is to empower enterprises to adopt the public Ethereum blockchain for complex and confidential processes, without storing sensitive data on-chain.

Baseline was created by EY in collaboration with technology giant Microsoft and ConsenSys and is specifically designed for enterprises to build on top of the Ethereum public blockchain. The protocol heavily leverages Zero-Knowledge Proofs (ZKP), a kind of encryption that is used to verify information without actually exposing the information.