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Russian State Duma Defers Consideration of Bill On Digital Financial Assets

The State Duma of the Russian Federation has rescheduled consideration of the bill “On Digital Financial Assets” for April 2019.

The State Duma of the Russian Federation has deferred consideration of the bill “On Digital Financial Assets” to April 2019,  local media outlet TASS reported on March 20.

The second reading of the draft federal law “On Digital Financial Assets” has reportedly been rescheduled for April, following a decision made at the morning voting on the agenda of the plenary session. The initiative was taken by the Chairman of the State Duma Committee on Financial Market, Anatoly Aksakov, although he did not explain his motives.

The bill “On Digital Financial Assets” aims to formulate national cryptocurrency legislation, and was adopted by Russia’s parliament in the second reading earlier in March. Vyacheslav Volodin, the Chairman of the State Duma and coauthor of the draft bill, stressed then that the adopted amendments are aimed at fixing the difficulties related to the concept of digital rights.

The wording of the bill prepared for the second reading excludes the definition of a token, cryptocurrency, and smart contract. The document provides the definition of digital financial assets, saying that such assets are represented by digital rights, including liabilities and other rights, monetary claims, and the possibility of exercising rights in regards to equity securities and rights to require the transfer of equity securities.

As reported last December, Pavel Krasheninnikov, the head of the council and chairman of the State Duma committee on state building and also a coauthor of the bill, said that the bill had been pushed back to the first reading stage as it needed to be dramatically changed.

Recently, Russia’s parliament voted to enact new digital rights legislation in October of this year. The law reportedly establishes the concept of “digital rights” in Russian legislation with the addition of a new article, 141.1, of the Civil Code of the Russian Federation, and determines how digital rights can be exercised and transferred, as well establishes rules for digital transactions, including contracts.

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Central Banks Should Leave Crypto to Facebook and JPMorgan: PwC Partner

PwC France’s Pauline Adam Kalfon says central banks should stay away from crypto until it is “battle-tested” by corporations.

Central banks should leave issuance of digital currencies to corporations such as Facebook and JPMorgan, according to a blockchain and financial partner at PwC France, Forbes reports March 22.

According to PwC France’s Pauline Adam Kalfon, central banks should stay away from the issuance of central bank digital currencies (CBDCs) until large corporations test out the tokenization of fiat currencies themselves.

Only when cryptocurrencies are “battle-tested by corporations,” should central banks make a move towards the crypto space, Kalfon argued, adding that it will reduce the likelihood of potentially negative consequences on the economy arising from any central bank issuing a digital currency.

Kalfon elaborated that France’s central bank, Banque de France, may not be the best entity to launch a digital currency project, explaining that the bank will be operating under the European Central Bank (ECB). She said:

“It is clear that a European-level project would be very complex and challenging governance-wise, requiring alignment and the political consensus of all relevant stakeholders from each Member State.”

In mid-February, JPMorgan announced plans to launch its own crypto, JPM Coin, to increase settlement efficiency. Following the news, JPMorgan CEO Jamie Dimon stated that the company’s new cryptocurrency could have a consumer use one day.

Facebook was first rumored to develop its own crypto in December 2018, while The New York Times (NYT) released an article in late February alleging that the social media giant is developing a stablecoin that would incorporate Facebook’s three fully-owned apps — WhatsApp, Facebook Messenger, and Instagram.

In January, the Basel Committee on Banking Supervision (BCBS) reported that 70 percent of global central banks are exploring the benefits of CBDCs.

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Blockchain in Biometrics Could be Used in Travel Security, US Customs Rep Says

Using blockchain for biometric tracking would be the technology’s killer app in the travel security sector, a representative from the U.S. Customs and Border Protection has said.

Using blockchain for biometric tracking would be the technology’s killer app in the travel security sector, according to a representative from the United States Customs and Border Protection (CBP) agency. The news was reported by travel industry media outlet Skift on March 21.

Sikina Hasham, program manager at the CBP, made her remarks during a panel at the JetBlue Technology Ventures Blockchain in Travel Summit in New York City on Wednesday.

In response to a question from panel moderator David Post — managing director of IBM Blockchain Ventures — Hasham said that an area of significant promise for the government’s use of blockchain lies in its conjunction with biometrics:

“One area we’ve seen a significant amount of success in is facial comparison and biometric data. There is a service we’ve created to verify who an individual boarding an aircraft who is as they’re seeking admission into the United States. If we could have more data for the verification from another government party, that would be really great for us.”

Nonetheless, Hasham noted, a significant hurdle still needs to be overcome for the technology to gain traction and provide maximum use value: the development of standardized specifications for communication between multiple organizations’ blockchain systems.

If governments are to implement blockchain, rather than legacy databases, to share data within key security areas such as border control, robust standards for the industry would thus be a crucial enabling factor, Hasham implied. She also noted a further challenge the government is reportedly tackling, stating that:

“Our primary goal is security, but also facilitating trade and travel. Blockchain is relatively new for us […] in the travel space, we are still working on figuring out how industry stakeholders in the technology space will help us. […] Privacy and decentralized information are some of the challenges we as a government organization have a legal obligation to protect.”

As reported, the U.S. Department of Homeland Security (DHS) recently appealed to startups who develop blockchain solutions that can help prevent forgery of digital documents, in order to serve the mission needs of various programs under its aegis, among them CBP.

The CBP has already been trialing a blockchain shipment tracking system to gauge how much the technology is able to enhance the verification process for certificates of origin from various free trade agreement partners.

The coupling of blockchain with biometrics is meanwhile being developed across diverse applications, including municipal elections, secure ATMs, and Internet of Things biometric devices in the healthcare sector.

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Swiss Federal Assembly Approves Instructions on Cryptocurrency Regulation

Switzerland’s Federal Assembly has approved proposals to instruct lawmakers on cryptocurrency regulation.

The legislative body of the Swiss government, the Federal Assembly, has approved a motion to instruct the Federal Council to adapt existing legislation for cryptocurrency regulation. Coitelegraph auf Deutsch reported on the development on March 20.

The motion introduced by Liberal assemblyman Giovanni Merlini intends to instruct the Federal Council to adapt existing provisions on procedural instruments of judicial and administrative authorities, so that they can also be applied to cryptocurrencies. The Council approved the motion introduced with 99 to 83 votes in favor and 10 abstensions.

The move aims to close perceived gaps in protecting cryptocurrency users from illicit activities like extortion and money laundering. The legislation is set to determine how to stifle cryptocurrency-associated risks, as well as whether entities operating crypto trading platforms should be equated with financial intermediaries, and thus be subject to financial market supervision.

Following the approval, Swiss finance minister Ueli Maurer reportedly stated that the proposed developments exceeded the scope of the planned regulation.

Last December, Maurer indicated that instead of a specific blockchain or cryptocurrency legal framework, Switzerland should tweak existing laws to allow for the new technology and its financial application.

Earlier in March, the Basel Committee on Banking Supervision (BCBS), a Swiss-based international banking authority, warned that the robust growth of the crypto industry could potentially “raise financial stability concerns and increase risks faced by banks.” The BCBS also argued that crypto assets are “unsafe to rely on” as a medium of exchange or store of value — two of the main functions of money — implying that “cryptocurrency” is a misnomer.

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Seoul Medical Center to Launch Blockchain Tech Project With Korean Science, IT Ministry

A South Korean hospital plans to improve the accuracy of its healthcare data by using a blockchain-based platform.

A major hospital in South Korea’s capital city has announced plans to launch a blockchain-based platform aimed to improve its medical services. The news was reported by the Daily Medi, a healthcare sector-focused Korean news outlet, on March 17.

According to the publication, the “Smart Hospital” project was jointly developed by the Korean Ministry of Science and ICT and the Seoul Medical Center, and aims to improve data accuracy and reduce processing timing for the aforementioned hospital. The article also states:

“Seoul Medical Center will build an automated, personalized, integrated medical information platform by providing electronic prescription delivery, certificate issuance, and insurance claims through the blockchain-based system.”

The Smart Hospital project is one of the 2019 blockchain-based public project development plans issued by the Korea Internet and Security Agency, a sub-organization of the South Korean Ministry of Science and ICT, last December, with the aim of promoting the implementation of blockchain tech within the domestic industry.

According to the publication, the Smart Hospital project is scheduled to be launched this April.

As Cointelegraph reported on Feb. 19, in order to promote the country’s blockchain projects, the South Korean capital’s government announced the establishment of the “Seoul Innovation Growth Fund,” with the goal to invest more than $1 billion in blockchain and fintech startups by 2022.

Back in last November, Myongji Hospital, another major South Korean hospital located in the city of Goyang, signed a Memorandum of Understanding with a domestic IT firm to develop a medical services platform backed with blockchain tech, as Cointelegraph wrote on Nov. 13.

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Japan Introduces New Regulations for Cryptocurrency Margin Trading

The Cabinet of Japan has reportedly approved new regulations in regard to cryptocurrency margin trading.

Japanese financial regulators have reportedly introduced new regulations for cryptocurrency margin trading, local news agency Nikkei reported on March 18.

The Cabinet of Japan, the executive branch of the country’s government, has reportedly approved draft amendments to Japan’s financial instruments and payment services laws, limiting leverage in cryptocurrency margin trading at two to four times the initial deposit.

Margin trading is the use of borrowed funds from a broker to trade a financial asset, thus forming a collateral for the loan.

The new rules — which are reportedly et to come into force in April 2020 — will require cryptocurrency exchange operators to register within 18 months of that date, which will purportedly enable the Financial Services Agency (FSA) to introduce relevant measures in regard to unregistered cryptocurrency “quasi-operators.”

Following promulgation of the new regulations, entities dealing cryptocurrency will ostensibly be monitored similarly to securities traders in order to protect investors. Additionally, cryptocurrency operators will be divided into groups to identify those engaged in margin trading and those issuing tokens through initial coin offerings (ICOs).

With this move, regulators reportedly aim to secure investors from getting caught up in Ponzi Schemes, as well as encourage legitimate companies to practice offerings as fundraising tools.

In January, the FSA revealed that it was considering the regulation of unregistered firms that solicit investments in cryptocurrencies. The development is reportedly a bid to close a loophole in the country’s existing regulatory framework, in which unregistered firms that collect funds in crypto rather than fiat currencies remain in a legal gray zone.

Back in August 2018, the commissioner of the FSA said that the agency wants the cryptocurrency industry to “grow under appropriate regulation” in order to find the “balance” between consumer protection and technological innovation, noting:

“We have no intention to curb [the crypto industry] excessively. We would like to see it grow under appropriate regulation.”

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Report: Number of Blockchain and Cryptocurrency Lobbies Tripled in 2018

Lobbying on blockchain and crypto has reportedly grown on K Street, having tripled over the past year.

The number of lobbies working on blockchain technology issues in Washington D.C. tripled in 2018, politics-oriented news outlet Politico reported on March 18.

The number of entities lobbying on digital currencies and blockchain reportedly grew almost thrice in the course of the past year, reaching 33 projects in the fourth quarter of 2018 compared to 12 in the same period of 2017.

Jerry Brito — executive director at the non-profit organization Coin Center that works with Reps. Warren Davidson (R-Ohio) and Darren Soto (D-Fla.), both known for their cryptocurrency-friendly attitude — reportedly suggested that the growth is driven by securities regulation.

In January, Soto stated that most cryptocurrencies should not be regulated under the country’s securities regulator. According to Soto, crypto should be overseen by the Commodities and Futures Trading Commission and Federal Trade Commission — rather than classed as securities under the Securities and Exchange Commission’s charge.

Blockchain companies purportedly face more difficulties when it comes to the technology’s deployment outside digital currencies. According to lobbyist Dina Ellis Rochkind, blockchain firms are still in the early stages of winning allies in Congress. Izzy Klein from Ripple-backed Klein/Johnson Group, which lobbies for the Securing America’s Internet of Value Coalition, said:

“I think that when you have a new technology and new platforms in older and heavily regulated spaces, you need as many legitimate voices and boots on the ground that you can get.”

Last year, major industry leaders such crypto exchange Coinbase, technology startup Protocol Labs, as well as the Digital Currency Group and Polychain Capital, formed the “first” lobbying group representing the blockchain industry in Washington D.C. The Blockchain Association will purportedly represent entrepreneurs and investors who are engaged in blockchain-based projects.

Recently, Rep. Kevin McCarthy, the current Republican Minority Leader in the United States House of Representatives, said that blockchain can make the Congress a more efficient and transparent place. McCarthy stated:

“Blockchain is changing and revolutionizing the security of the financial industry. Why would we wait around and why wouldn’t we institute blockchain on our own, to be able to check the technology but also the transparency of our own legislative process?”

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Australia Announces National Blockchain Roadmap and Further Boost to Government Funding

Australia has unveiled a national blockchain strategy and roadmap, with a boost of AU$100,000 in further federal funding.

Australia has unveiled a national blockchain strategy and roadmap, with a boost of AU$100,000 (~$71,200) in further funding from the federal government. The news was announced in a joint media release from two Australian ministries on March 18.

Minister for Industry, Science and Technology Karen Andrews and Minister for Trade, Tourism and Investment Simon Birmingham have jointly stated that the new policy roadmap aims to make Australia’s nascent blockchain industry into a global leader.

The roadmap will encompass the development of blockchain “regulation, skills and capacity building, innovation, investment, and international competitiveness and collaboration.”

According to the media release, previous blockchain investments from Australia’s liberal national government — under Prime Minister Scott Morrison — have included AU$700,000 (~$500,000) to the country’s Digital Transformation Agency in 2018-19 explore the benefits of using blockchain for government payments, as well as AU$350,000 (~$250,000) to Standards Australia to promote the development of standardized international blockchain standards.

This fresh funding will specifically enable the Ministry for Industry, Science and Technology to sponsor Australian companies to join the Australian Trade and Investment Commission (Austrade)’s mission to the Consensus blockchain conference in New York City later this year.

Minister Andrews has outlined that they “will work closely with blockchain and technology experts from industry and academia […] as well as with CSIRO’s Data61 to incorporate findings from their forthcoming future scenarios report on blockchain.”

As Cointelegraph has previously reported, CSIRO (Commonwealth Scientific and Industrial Research Organisation) is an Australian government corporate entity that undertakes scientific research to advance local industries. Its digital innovation center, Data61, has spearheaded multiple major blockchain projects to date.

In the media release, Minister Birmingham emphasized that the government’s blockchain endorsement will help ensure that “Australia and [its] tech companies stay ahead of the game in one of the world’s fastest growing technology sectors.”

Over the course of the past year, major initiatives have been underway in Australia to integrate blockchain across both the government and the financial sector.

In July 2018, IBM signed a five-year AU$1 billion ($740 million) deal with the Australian government to use blockchain and other new technologies to improve data security and automation across federal departments.