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Facebook’s Libra Concept Will Impact Cross-Border Payments: Ex-PBoC Chief

China should learn from Hong Kong and Facebook as it develops its own sovereign digital currency, a former central bank governor says.

A former governor of the People’s Bank of China (PBoC) has indicated that Beijing may delegate the issuance of digital currency to commercial entities, the Hong Kong-based South China Morning Post newspaper reported on July 11.

Zhou Xiaochuan, who stood down as head of the central bank in 2018 after 15 years, revealed the country may adopt a new approach for its sovereign digital currency scheme — taking inspiration from Hong Kong’s monetary system and Facebook’s Libra project.

In Hong Kong, three banks issue their own banknotes and collateralize them by holding US dollars in reserve, while the territory’s monetary authority ensures that one Hong Kong dollar is constantly worth about $7.80.

According to Zhou, following this method would enable Beijing to avoid the “huge fluctuations” that plagued cryptocurrencies during their early development.

Chinese tech giants such as Alibaba and Tencent have already launched digital payment platforms including Alipay and WeChat Pay, services that have amassed hundreds of millions of users.

During a speech in Beijing, he also urged policymakers to read Facebook’s Libra white paper in detail — and said the tech giant’s plans to peg the coin to a basket of fiat currencies, overseen by a non-profit consortium featuring two-dozen major companies, could be of interest as China develops a sovereign digital currency. He added:

“Libra has introduced a concept that will impact the traditional cross-border business and payment system.”

Despite China establishing an institute to explore the launch of its own sovereign digital currency, progress has reportedly been slow.

Beijing has taken a hard line against crypto trading in the past — banning Bitcoin (BTC) trading, initial coin offerings and crypto exchanges.

Nonetheless, a government-sponsored index ranks cryptocurrencies every two months. In the most recent ratings, EOS came top and BTC came 12th.

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‘Google Coin’ Within 2 Years as FANGs Will Go Crypto, Say Winklevoss

Companies such as Google and Amazon will launch a product in the crypto industry, say Gemini co-founders.

Digital currency will form part of all four FANG companies’ offerings by 2021, Tyler and Cameron Winklevoss told CNBC in a new interview on July 9.

Speaking about Facebook Libra, the twins, who co-founded cryptocurrency trading platform Gemini, said it was only a matter of time before other tech giants followed suit. 

FANG refers to the unofficial ‘Big Four’ of the internet: Facebook, Amazon, Netflix and Google.

“Our prediction is every FANG company will have some sort of cryptocurrency project within the next two years,” Tyler told the network. 

Libra as a payment protocol has not yet launched, but regulators have voiced alarm, particularly in the United States, where several sources have demanded developers halt the project. 

Concerns stem from Libra’s potential to bypass the banking system, something cryptocurrency proponents conversely argue makes the banking establishment overly nervous about losing revenue. 

On Thursday, Bitcoin (BTC) itself shed over 10% of its value after a senior U.S. lawmaker delivered fresh concerns about Libra.

For the Winklevosses, however, front-door approaches to regulators is key in getting any disruptive finance offering to market.

Though many say it is not a cryptocurrency at all, the twins even suggested they would facilitate trading of Libra on Gemini, should it be open and not subject to prohibitive restrictions.

“…We’ll evaluate Libra in earnest, and it might actually be an asset that is one day listed if it’s an open protocol; that’s possible,” Tyler continued. 

Earlier this week, Tom Lee, a serial Bitcoin advocate, delivered a similar forecast regarding tech giants’ future involvement in the digital currency industry.

“The fact that Facebook and likely other FANG companies are going to create their own digital currencies is validating the idea that digital money is here to stay,” he told CNBC.

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Bahamas National Cryptocurrency Developer Says Startups Essential for Adoption

The CEO of NZIA Ltd, the firm developing the Bahamas’ central bank digital currency, said that startups will be key to its adoption

The CEO of transactions firm NZIA Ltd, Jay Joe, says Bahamian tech startups will need to lead the development of Project Sand Dollar, according to a report by the Nassau Guardian on May 31.

Project Sand Dollar is an initiative to tokenize the Central Bank of the Bahamas’ (CBOB) fiat currency as a central bank digital currency (CBDC), which is supposed to launch in the Bahamian district Exuma this year.

Joe discussed how he thinks participation from local banks, small and medium-sized enterprises, and entrepreneurs in CBDC implementation will be crucial to the budding token’s adoption. He also commented on how solutions built by local tech startups will likewise be important in driving the digital token’s mainstream use:

“We are going to build the back end and we will open up the front end to allow local entrepreneurs, tech startups, whomever to be able to build new products and create new services around CBDC. We feel that this is going to be a key aspect of really making this thing become a real, living, breathing thing that people engage in.”

As previously reported by Cointelegraph, The Central Bank of the Bahamas signed an agreement with NZIA on May 30 to develop the token, after naming the firm as its “preferred technology solutions provider” at the beginning of March.

CBOB initially announced plans for its CBDC at the Bahamas Blockchain and Cryptocurrency Conference in June 2018. Deputy Prime Minister and Minister of Finance of the Bahamas, K Peter Turnquest, commented on the importance of digital currency for an island nation, saying:

“A digital Bahamian currency is especially important for the many family islands as they have seen many commercial banks downsize and pull out of their communities, leaving them without banking services. As an island nation, where transportation can be an inconvenience for many, especially the elderly, and costly, we must offer financial services digitally and securely.”

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Bahamas Central Bank Enters Agreement to Deliver First National Digital Currency by 2020

The Central Bank of the Bahamas is moving forward with its state-backed digital currency by entering a new agreement.

The Central Bank of the Bahamas (CBOB) will enter an official agreement for development of a digital fiat currency system on May 30, local news agency the Nassau Guardian reports on May 29.

Tomorrow, the CBOB will sign an official agreement with transaction provider NZIA.io in order to build and implement “Project Sand Dollar,” the first digital currency in the Bahamas, the report notes.

The Bahamian central bank first announced NZIA as its key collaborator for the project in early March 2019, along with Singapore-based software development firm Zynesis.

The “Project Sand Dollar” initiative will be an “integrated, affordable electronic payment system for all businesses and residents,” the central bank said. The project will comply with local financial regulations, and aims to provide equal access to digital payments for the residents of the island country, reducing cash transactions and service delivery costs, as previously reported.

While the CBOB has still not announced the first selected islands to pilot the project, bank governor John Rolle reportedly claimed that the institution expects to fully adopt the project for the Family Islands by 2020.

The CBOB first revealed plans to introduce its own government-backed digital currency back in June 2018.

Earlier today, the president of Germany’s central bank, Deutsche Bundesbank, warned central banks about the potential risks of introducing digital currencies. The official said that the adoption of digital money could potentially destabilize the financial system during periods of crisis, as well as could “fundamentally change the business model of banks” even in a good economic environment.

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Platform Allows Users to Send and Receive Cryptocurrency With Gadget of Their Choice

A private digital currency provider says peer-to-peer technology ensures every user’s account is kept “out of reach to any prying eyes.”

The team behind a private digital currency for secure payments says its goal is to make every consumer their own bank — enabling them to send and receive crypto with the gadget of their choice.

Xeonbit says its peer-to-peer technology ensures that every user’s accounts and transactions are “out of reach to any prying eyes.” A feature known as “ring signatures” means public keys are shuffled in order to ensure that particular users cannot be identified once a transaction has taken place. The startup says this is not at the expense of speed, scalability or security.

In a blog post setting out its vision, Xeonbit expressed hope of becoming a commercial foundation for the internet — adding: “Decentralized digital currency is slowly becoming a normal part of everyday life. Yet people’s main internet device continues to be their mobile, a device with a low-powered CPU and limited available storage.”

Although ring signatures use one-time addresses to ensure recipients are the only person who know where the funds have gone, Xeonbit says its technology offers optional transparency for addresses or certain transactions. Through view keys, an account holder can give read-only access to selected parties.

Xeonbit is available here

The company believes that there is a plethora of use cases for view keys. While charities could deliver transparency to their supporters, businesses will be able to achieve regulatory compliance by opening up their accounts for auditing. It is even suggested that children could have their own accounts for spending pocket money, with parents using view keys to monitor their transactions.

Branching out

The desktop wallet for its native currency, xeonbit (XNB), is available to download for Windows computers, macOS and Linux — and as the team furthers the development of its platform, it has applied to list a separate token known as XNS on the Binance decentralized exchange. The project says it has chosen to file this application because it is difficult for XNB, as a private cryptocurrency blockchain, to be accepted by major exchanges.

Looking ahead to its plans for the future, Xeonbit says it is determined to introduce more merchants to its ecosystem, helping to strengthen the use case for its cryptocurrency.

The company believes that XNS has the potential to make its transaction fee five times cheaper and up to 100 times faster for merchants to accept payments using its cryptocurrency.

In the coming months, the project hopes that its decentralized marketplace based on a third-party protocol will be ready to launch, while the xeonbit token will be able to be traded on Binance DEX and more decentralized exchanges by the end of the year.

This will be followed by ATMs for crypto as well as credit cards, depending on the approval of various licenses for its operation in Singapore. The team says it may give this a try if its first step of having XNS join Binance DEX is accomplished.

An initial exchange offering for XNS tokens will begin in May or June.

Learn more about Xeonbit

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Adviser to President of Russia Proposes Digital Currency in Crimea

An adviser to Russian President Vladimir Putin proposed to adopt a digital currency in Crimea to attract foreign investment.

An adviser to the President of Russia has proposed to adopt a digital currency in Crimea to attract investors and avoid sanctions, local news agency TASS reports April 19.

Sergey Glazyev, advisor to Russian President Vladimir Putin on regional economic integration, urged the government to adopt “digital money technologies” to reduce “cross-border barriers,” the official said at the Yalta International Economic Forum (YIEF).

According to Glazyev, adoption of digital currencies will “sharply reduce cross-border barriers” and will attract foreign investors who “are afraid of sanctions,” which are “generally carried out through the banks.”

The official reportedly elaborated that digital money such as stablecoins, which are pegged to gold or other physical assets, are able to “pass the border, and cannot be hampered by sanctions.”

Glazyev further suggested creating a “stable digital token” that would be pegged to cost per square meter in Crimea in order to raise funds for the large-scale construction of health resorts.

According to TASS, the Republic of Crimea has become the first region in Russia regarding the proportion of investments in gross regional product (GRP).

In his recent speech, Glazyev reiterated his positive stance on blockchain technology. In 2018, he noted the unrestricted nature of digital money, emphasizing that it is not subject to any unpredictable sanctions and can reduce political risk.

Recently, the central bank of Russia evaluated the potential benefits and drawbacks of central bank digital currencies (CBDC), outlining one major disadvantage for CBDC’s users, which is the lack of anonymity.

Meanwhile, Russia still has not enforced any regulations associated with crypto industry, with the State Duma, Russia’s parliament, having recently deferred consideration of the bill “On Digital Financial Assets.” Russian President Putin previously set a deadline for the government to adopt regulations for the industry by July 1, 2019.

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Central Bank of Russia Reviews Potential Benefits and Drawbacks of CBDCs

The Bank of Russia believes that CBDCs can reduce transaction costs in the economy and provide an asset that is less risky.

The central bank of Russia has reviewed the potential benefits and drawbacks of central bank digital currencies (CBDC) in a policy brief published on April 18.

In the document, entitled “Is there a future for central bank digital currencies,” the Central Bank of the Russian Federation outlined a number of potential benefits of CBDCs, such as their capability to reduce transaction costs in the economy, as well as provide an asset that is less risky and more liquid.

However, the Bank of Russia noted that CBDCs’ potential to minimize transaction costs can be only realized in case a technical solution for CBDCs will offer a better tool in terms of ease of use in payments and savings, as compared with fiat money and debit cards.

While acknowledging the sufficient advantages of CBDCs, the central bank pinpointed CBDCs’ lack of anonymity as the only one potential disadvantage. Specifically, the bank stressed CBDCs’ inability to provide the same level of anonymity as compared with cash.

The document notes:

“CBDC de facto cannot provide the same level of anonymity that is provided by cash. This is  certainly an advantage for regulators, but can be considered a disadvantage by users, not only those who are involved in suspicious activities, but those who are concerned about privacy.”

The Bank of Russia also stated that CBDCs are able to compete with commercial bank deposits in a context of low inflation and moderate interest rates. CBDCs can become a full equivalent of cash only in the case of providing liquidity and ease of use, the bank wrote.

A CBDC is a digital currency issued by a central bank that has the status of legal tender and other properties of centralized, fiat money.

Recently, the World Economic Forum released a report claiming that at least 40 global central banks were planning to experiment with CBDCs. Previously, the Bank for International Settlements published research that found that 70% of central banks worldwide were researching into issuance of CBDCs.

On April 1, the deputy governor of the State Bank of Pakistan, the nation’s central bank, announced that the institution aims to issue a digital currency by 2025.

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Algorand Expands Testnet Platform to Public Ahead of June Mainnet Release

The platform had previously undergone a private testnet release and will now gather feedback from users.

Digital currency and transaction platform Algorand has released its public testnet to gather feedback on its product, the company confirmed in a press release on April 16.

Algorand, the brainchild of Massachusetts Institute of Technology (MIT) professor Silvio Micali, seeks to build an app development platform for enterprises. The project previously obtained $66 million in funding, releasing the testnet to a limited group of participants prior to the public rollout.

Among them was Top Network, a decentralized cloud communication service which subsequently formed a partnership with Algorand to develop its own user offerings.

As Cointelegraph reported, Alogrand’s forthcoming ERC-20 token sale was the subject of controversy earlier this month when one cryptocurrency exchange, Bgogo, announced it would trade tokens before they exist.

Bgogo subsequently changed its approach after the company publicly distanced itself from the plan, instead opting to offer users futures trading.

Alogorand intends to launch its mainnet product in June, along with its token. In an interview this January, Micali spoke about his belief that blockchain technology has future potential for creating a borderless global economy.

A group of researchers at MIT recently claimed to have built a cryptocurrency that needs transaction-verifying nodes to store 99 percent less data when compared to bitcoin (BTC). The currency, known as Vault, will run on the Algorand blockchain.

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Pakistan’s Central Bank Aims to Issue Its Own Digital Currency by 2025

The State Bank of Pakistan, the nation’s central bank, aims to issue a digital currency by 2025.

Jameel Ahmad, the deputy governor of the State Bank of Pakistan (SBP), the nation’s central bank, declared that the institution aims to issue a digital currency by 2025, Pakistani YouTube news channel Public News reported on April 1.

English-language local media Dawn also reported today that Asad Umar, Pakistan’s finance minister, prompted the official’s statement during a ceremony celebrating the launch of Electronic Money Institutions (EMIs) on Monday, April 1.

According to Dawn, the minister asked the federal investigation agency and the central bank to ensure that the new system will feature cybersecurity. Umar purportedly claimed that a single high profile incident could irreparably damage trust in the banking system.

As part of his response, the central bank’s deputy governor, Ahmad, then declared that the institution is already working on releasing its central bank digital currency (CBDC) concept by 2025. According to the official, the aim is to promote financial inclusion and efficiency and combat corruption. The complete deployment of the CBDC, however, is set to happen by 2030.

As previously reported, Pakistan is implementing new cryptocurrency regulations in an effort to improve its track record fighting financial crime.

As Cointelegraph reported in February, Ukraine’s central bank has completed a pilot scheme for its own national digital currency, the e-hryvnia.

During the same month, the Oxford Business Law Blog published a research report conducted by a postdoctoral researcher from the University of Luxembourg noting that the idea of issuing a CBDC is too attractive to ignore.

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BC Group Unveils Insured Custody Offering for Asia-Based Crypto Investors

The service is the first of its kind locally, the company says, and utilizes U.K.-based insurance solutions.

Hong Kong trading and asset management firm Branding China Group (BC Group) is launching an insured custody service for cryptocurrencies, the company confirmed in a press release shared with Cointelegraph on April 1.

BC Group, which owns a portfolio of various blockchain companies, including cryptocurrency trading platform Anxone and digital asset brokerage OSL, said it decided to build the service to respond to the needs of institutional investors in Asia.

Its release, it says, constitutes the first such insured custody solution for crypto assets available locally, but will use United Kingdom-based insurers.

“BC Group’s custody service removes one of the key barriers that has to date prevented professional traders and institutions from adding digital assets to their portfolios,” the firm’s chief technology officer, Hugh Madden, commented in the press release. He added:

“These traders can only transact on exchanges that align with strict regulatory and fiduciary guidelines and meet high compliance and security standards. Insured custody is a vital component in meeting these standards.”

“BC Group route all incoming digital asset transfers directly to cold storage and advocate this as the industry standard,” Madden added, echoing practices from custody firms such as Switzerland’s Xapo.

BC will capitalize on the burgeoning institutional investor market which is set for greater expansion worldwide in 2019.

As Cointelegraph reported, this year should see the debut of products such as trading platform Bakkt, which will offer various crypto-related tools to investors, beginning with physically-delivered Bitcoin futures.

Last year, Cointelegraph further noted the increasing trend in insurance options for cryptocurrency industry businesses.