Though the Chinese government is working on something called DC/EP (for “digital currency/electronic payment”), as we check out the financial inclusion in the fintech era.

In this article, let’s look at the possibilities of having a cryptocurrency as the alternative reserve currency to what we have now, and the reasons or news trending to this.

The possibilities are there.

The Industrial and Commercial Bank of China (ICBC), the world’s largest lender by assets, has conducted research and explored integrating blockchains with big data, artificial intelligence, the internet of things, and 5G technology since 2016.

ICBC has released a white paper on blockchain technology applications in finance, which is the first of its kind in the banking sector.

It needs to be both a medium of exchange and a store of value.

Jim Bianco, CEO and president of economics and finance analysis company Bianco Research

One of Possible Reasons Behind – Devaluation of Paper Money

Unless you have your head in the sand, you’ve probably realized that governments and central banks can print money out of thin air and in unlimited amounts.

Bitcoin.com

With over $6,000,000,000,000 printed in stimulus, that large of a number becomes hard to grasp. For some perspective, as at April 2020:

A million seconds ago was 11 days.
A billion seconds ago was 31 years.
A trillion seconds ago, there was no written history.

But people are start getting the idea how things may go dwindling down.

JUST IN: US Senate passes stimulus bill equivalent of 69,660,723 bitcoin

— Bitcoin (@Bitcoin) April 21, 2020

Related News (Development)

• Bianco Research CEO Says Next Reserve Currency Will Be a Cryptocurrency
• A Major Chinese Bank Unveils the Banking Sector’s First Blockchain White Paper

Related News (Possible Reasons)

• Printing Money from Thin Air – How the Fed Reduces Purchasing Power and Makes You Poorer
• Americans Are Using Their Stimulus Checks To Buy Bitcoin

The post A Cryptocurrency As The New Reserve Currency? appeared first on Blockchain Insider.

Looking at the headlines:

• World Bank Digs Deeper Into DLT and FinTech for Financial Inclusion
• The Suzhou trial – Digital Yuan Being Tested for a Workers’ Subsidies Scheme
• Aussie Crypto Unicorn Raises $160M With ‘Big Four’ Bank Backing
• The launch of 3iQ’s BTC Fund on TSX
• Berlin Real Estate Worth $12M Tokenized for Everyday Investors
• Akon City, a ‘sustainable eco-tourism smart city’ powered by Blockchain technology in Senegal.

Connecting the dots, the Blockchain’s shift from niche financial tool for techies to the mass adoption of digital currencies is happening into the conventional financial sphere. The interaction (blending or convergence?) of the two monetary worlds seems to be progressing positively.

The recent report by World Bank Group and Bank for International Settlements (BIS) further complement the previous report by BIS as CBDC (Central Bank-Issued Digital Currency) Is Well On Its Way.

Payment Aspects of Financial Inclusion Fintech Wheel by World Bank Group

Worth noting is the PAFI Fintech Wheel in the report.

Jolted below notes related to above mentioned headlines, the power to relate is important in getting the bigger picture.

Click on the respective headline to read the original report.

World Bank Digs Deeper Into DLT and FinTech for Financial Inclusion

The World Bank’s fintech-focused report on financial inclusion is not the organization’s first foray into blockchain and associated emerging technologies.

Among major PAFI tools, the World Bank listed distributed ledger technology (DLT), stablecoins, CBDCs and payment tokenization systems, placing them in line with other fintechs like big data analytics and cloud computing.

Combining several technologies, products and access models, the World Bank drew up the so-called “PAFI fintech wheel” to identify fintech developments that are potentially relevant to the payment aspects of financial inclusion.

In the 70-page report, the bank provided a detailed overview of selected advances in technology that are considered to be the most relevant to payments as well as described their applications and associated risks.

The Suzhou trial – Digital Yuan Being Tested for a Workers’ Subsidies Scheme

This month, agencies and enterprises in the Xiangcheng District of Suzhou will reportedly be paying 50% of local workers’ transport subsidies in the new digital currency (also referred to as DC/EP, for “digital currency/electronic payment”).

These patents indicate that the DC/EP adopts a two-layer architecture and two-tier delivery system, which enables licensed third-party payment institutions or banks to participate in secondary issuance of the digital currency.

… the report notes that the currency’s blockchain structure will ensure “traceability, encryption and supervisability.”

Aussie Crypto Unicorn Raises $160M With ‘Big Four’ Bank Backing

In March 2019, Airwallex received a $1 billion valuation — ranking it as Australia’s second unicorn alongside graphic design firm, Canva. Australia is currently home to three unicorns, with aerial imagery company, Nearmap, recently joining the list.

The launch of 3iQ’s BTC Fund on TSX

The launch of 3iQ’s BTC Fund on TSX was a historic event, to say the least.

The listing of a publicly-traded Bitcoin fund on a major stock exchange will serve as an important milestone for the industry as a whole — especially in regard to crypto being viewed as a legitimate asset class by the global investment community.

Currently trading under the name, “The Bitcoin Fund,” the offering has around 1.5 million Class A “QBTC.U” shares available on the Toronto Stock Exchange, or TSX.

At press time, each share is trading for around $12. The price indexes being used by the fund are from crypto data company CryptoCompare and VanEck Europe subsidiary MV Index Solutions.

3iQ is serving as the fund’s investment and portfolio manager.

The Bitcoin Fund is under the custody of the Winklevoss’ exchange Gemini, and thus Tyler and his brother Cameron are invested in the fund’s success.

TSX is Canada’s premier stock exchange, facilitating more than $97 billion worth of monthly trade.

• customer demand for regulated crypto products has been strong across the investing spectrum — be it the retail or institutional investor market.
• as time goes on, market demand for crypto offerings will increase.
• the demand for an easily accessible, securities-based product delivered through traditional channels.

Berlin Real Estate Worth $12M Tokenized for Everyday Investors

Germany’s Black Manta Capital Partners has launched a security token offering (STO) for Berlin real estate worth more than $12 million.

The project is a collaboration with the German real estate firm Tigris Immobilien and includes around 2000 square metres of real estate in total, mostly comprising individual apartments from 40 to 60 square meters in size. Construction is expected to be complete by 2022 and units will be sold to investors and owner-occupiers.

Token holders will share 20% of the sale profits through securitized participation rights. The company said the tokens will enable ordinary investors “to participate in a profitable real estate project normally reserved for professional investors.”

Minimum investment is just €500 (Fractionization / Fractional Ownership)

Blockchain technology is gaining steam in the real estate market with real estate security tokens now representing half of active security token markets and 15% of total volume.

• new “tokenization services” industry to emerge and the crypto custodian market to grow.
• institutional investors require regulated custodians

Akon City, a ‘sustainable eco-tourism smart city’ powered by Blockchain technology in Senegal

Blockchain’s shift from niche financial tool for techies to the mass adoption of digital currencies.

The celebrity singer famous for his “Lonely” song, is not only embark on lighting a million homes project, but also developing Akon City, a ‘sustainable eco-tourism smart city’ in Senegal.

While those listed above are quite a number of positive progress, some news shouldn’t be overlooked, especially when it concerns custodian services and legistration.

Where on the planet is KuCoin?

Unlike Binance, Coinbase and Ripple, KuCoin did not file with the Monetary Authority of Singapore to request a deferral of the requirement to operate without a payments license. Such deferrals allow those companies to operate as payments service providers without a license through July.

Without a license or a deferral, KuCoin cannot legally operate in Singapore. It remains unclear whether KuCoin is nonetheless operating in Singapore or if the exchange is in fact now operating elsewhere.

The post Financial Inclusion in The Fintech Era appeared first on Blockchain Insider.

China Issuing Bonds on Blockchain Is a Sign of What’s to Come, and this prove that Blockchaining Sukuk is something that is possible and could be done.

As reported by Cointelegraph:

“The Central Bank of China has recently issued 20 billion Chinese yuan ($2.8 billion) of special bonds, which it has sold in order to fund small and micro-enterprise businesses, according to the China Development Network.

China’s self-developed blockchain issuance system was put on display for the first time and it will handle the administration and tracking of these two-year bonds with a coupon rate of 3.25%.”

As the writer of the analysis – Nikolai Kuznetsov – pointed out, “China’s ban on blockchain systems now seems that it had little to do with ideology and was more about control. This is a safe guess considering that in terms of both blockchain and cryptocurrency, 2019 saw China launch both the blockchain bond issuance system and its seminal Central Bank-issued cryptocurrency (CBDC).”

Blockchaining Sukuk

This is the edited version of the presentation file during the briefing to World Bank Group Malaysia Global Knowledge and Research Hub. The content is about the potential and possibilities of Blockchaining Sukuk.

Image by sherisetj from Pixabay

Related news:

Forex Reforms Will ‘Deal With Cryptocurrency,’ Says Chinese Government

Central Bank of China Official Says Digital Yuan Will Be Different From Bitcoin

Chinese Internet Giant Tencent Plans to Create Digital Currency Research Group

The post Eyes On China appeared first on Blockchain Insider.

Central banks are progressively studying the introduction of CBDCs and their potential impact on the banking system.

The Bank of England Staff Working Paper No. 725 titled Central bank digital currencies — design principles and balance sheet implications by Michael Kumhof and Clare Noone dated 18th May 2018, laid out various scenarios of possible risks and financial stability issues of central bank digital currencies (CBDCs).

The Working Paper, No 1 | 2018 of Norway’s central bank, Norges Bank, stated that it is considering developing its own digital currency as a supplement to cash to “ensure confidence in money and the monetary system”.

Reuters reported on 17th May 2018 that Switzerland is seeking the study of state-backed “e-franc” cryptocurrency.

A Statement on Developmental and Regulatory Policies released on Thursday, 5th April 2018 shows that The Reserve Bank of India (RBI) is looking into issuing its own central bank digital currency (CBDC), after a meeting of the Monetary Policy Committee (MPC).

These come with no surprise because as early as 2016, the Bank of England and the People’s Bank of China had explored the idea of issuing their own digital currencies, with over 90 central banks worldwide that same year investigating DLT – Distributed Ledger Technology.

More good outlook as Anthony Lewis, research director at global banking consortium and enterprise software firm R3, predicted that a central bank issued digital currency (CBDC) will be implemented in 2018 in a panel discussion at Deconomy in South Korea on 4th April 2018.

CBDC at a glance

Russia – CryptoRuble
Japan – J-Coin
Venezuela – Petro, an oil-backed cryptocurrency
Singapore – project UBIN
Bank of Canada – Project Jasper
United States – toying with the idea of a FedCoin
Sweden’s Riksbank – contemplating the e-Krona

and the list is growing for sure.

CBDC related bank / central bank’s papers

Central bank digital currencies — design principles and balance sheet implications, Bank of England
18th May 2018

Central bank digital currencies, Norges Bank
NORGES BANK PAPERS NO 1 | 2018

Central Bank Digital Currencies, Bank for International Settlements
CPMI Papers | No 174 | 12 March 2018

Statement on Developmental and Regulatory Policies, Reserve Bank of India
April 05, 2018

CBDC (Central Bank-Issued Digital Currency) Explained

As defined by R3, an enterprise software firm working with a network of over 200 banks, financial institutions, regulators, trade associations, professional services firms and technology companies to develop on Corda, a blockchain platform designed specifically for businesses, a CBDC is a digital store of value (money) and method of exchange issued by a central bank. Theoretically, it introduces a new digital mechanism for real-time settlement between individuals.

So what’s the difference between cryptocurrency and CBDC?

Cryptocurrency is a blockchain asset and not the liability of anyone. Central bank issued digital currency is based on a fractional reserve banking system based on debt and the liability of increasingly highly indebted nation state central banks. ~ Rainer Michael Preiss, Coin Telegraph

The Money Flower image below illustrates the relationship well.

The Money Flower

Some people like flowers, and most people like money. How about a money flower?

Image Source: The BIS (Bank for International Settlements) report

More about Blockchain and Cryptocurrency in my speech transcript for MBLBC Oval Debate, Kuala Lumpur:

The post Central Bank-Issued Digital Currency (CBDC) Is Well On Its Way appeared first on Blockchain Insider.

A lot of progress happened in the Crypto world during the first quarter of 2018. As the authorities step in, two prominent figures from the financial world gave their views on the Crypto World in March 2018, coincidentally.

2 Mar, 2018 – “The Future of Money” by Mark Carney, Governor of the Bank of England

15 March 2018 – “Crypto Tokens: The Good, The Bad, and The Ugly” by Ravi Menon, Managing Director, Monetary Authority of Singapore

On the corporate and business side, Starbucks Corp. Chairman Howard Schultz believes that a trusted consumer brand with brick-and-mortar locations will help bring “legitimacy and trust” to cryptocurrencies. Which, is true, looking at how the market progress after his view was published in Bloomberg Technology in Jan 2018.

Earlier Mar 2018, the Messaging app company Telegram closed an initial $850 million in funding as part of an ICO that could bring in as much as $2 billion in total.

16 Mar 2018, Tony Fernandes, CEO of AirAsia (the $3 billion low-cost airline company in Southeast Asia) which is publicly listed in Malaysia, told TechCrunch that he is analyzing the potential to hold an ICO that would raise money by introducing its own cryptocurrency on the sidelines of Money2020 in Singapore.

What we see here is how the digital currency is evolving and how it might eventually be dominance by the authorities.

90% of today’s altcoins will vanish, replaced by trusted consumer brands’ token and eventually, sovereign cryptos backed by the governments or authorities. ~ How Tze, Blockchain Insider

Updated: 28th December, 2018

2 Articles in December 2018, one from Time magazine, one from WSJ

(1) Why Bitcoin Matters for Freedom

Innovation happens at the edge. For people living under authoritarian governments, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange.

http://time.com/5486673/bitcoin-venezuela-authoritarian/

(2) Once a Rebel, Bitcoin Is Conforming to Mainstream Markets

The influx of money from traditional investors has led the cryptocurrency to behave more like a traditional asset

https://www.wsj.com/articles/once-a-rebel-bitcoin-is-conforming-to-mainstream-markets-11546005600

We shall see how the distribution may look like in next article.

Excerpt from the book Blockchain Insider, Chapter 3: Smart Money

Related News:

Inside Telegram’s ambitious $1.2B ICO to create the next Ethereum

AirAsia, Southeast Asia’s low-cost airline, is considering an ICO

CBDC – Central Bank-Issued Digital Currency

As reported by Coin Telegraph in an article about Reserve Bank of India considering Central Bank-Issued Digital Currency

As early as 2016, the Bank of England and the People’s Bank of China explored the idea of issuing their own digital currencies, with over 90 central banks worldwide that same year investigating DLT tech.

In 2017, the Bank of Canada published extensive research into the benefits of CBDCs, and already in the first months of 2018, banks in Malaysia, Taiwan, Poland, Switzerland, among others, have all made news with inquiries into the use of Blockchain systems.

Earlier April 2018, an R3 researcher stirred a Deconomy panel in South Korea with his prediction that wholesale CBDCs would see real-world implementation in 2018.

The post The Three Phases of Cryptocurrencies appeared first on Blockchain Insider.