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Germany Central Bank, Bundesbank Enlists Services Of Ocean Protocol To Develop Blockchain Project

By
Adam Barry
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The Germany Central Bank, Bundesbank, is working on a blockchain technology project for setting up a decentralized network approach.

Bundesbank developing a blockchain project for sharing of data

A publication in the Supplement to the Official Journal of the European Union indicated that a Singapore non-profit foundation, Ocean Protocol, has been tasked with the development of a decentralized network for Bundesbank. According to Bundesbank, Ocean Protocol was picked since it is the only possible contractor for the job as there are no other comparable competitors. Bundesbank said that the purpose of the project is setting up a decentralized network approach. This will allow participants to get permanent, symmetrical access to data for the realization of real-time statistics updates while at the same time preserving the sovereignty of data.

The central bank will work hand in hand with the non-profit foundation in building a secure platform for transferring, publishing, and consuming private and public data. Recently the Bundesbank indicated that it was considering alternatives to a central bank digital currency. Interestingly this release will be a preview of what the alternative could entail.

Bundesbank wary of a central bank-issued digital euro

According to Burkhard Balz, an executive board member of the bank, the launch of CBDC as a store of value could threaten the financial system. As a result, there is a need to develop tools that can limit the digital euro’s use upon its launch. Balz said that people should be using the central bank-backed digital euro as a payment mode rather than a value store.

The reason behind the argument is that people can withdraw their funds and convert them into digital euros during a crisis, thus making funds a liability to the central bank. As a result, this will lead to structural disintermediation of the finance system and possibly dampen credit provision. To address such a scenario, Balz suggested that there should be a limit on the number of digital euros one will hold at a particular time or introduce an incentive to control demand.

Reserve Bank of Australia Partners With Key Industry Players On CBDC Research

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Adam Barry
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The Reserve Bank of Australia, RBA, has announced a partnership with the National Australia Bank, Commonwealth Bank, ConsenSys, and Perpetual. The partnership seeks to explore the potential use and impact of a wholesale form of central bank digital currency (CBDC) in Australia using “Ethereum-based distributed ledger technology.”

Partnership to research wholesale use case of CBDC

According to the RBA, the project will involve researching developing a proof of concept (POC) for issuing a tokenized CBDC form. The bank mentioned the use of the CBDC by wholesale market participants for tokenized syndicated loans on a distributed ledger technology platform and explored the impact of delivery against payment security clearance with cross-chain atomic switches. Similarly, the central banks stated that the project will seek other potential automation and programmability features of financial assets and tokenized CBDC.

Michele Bullock, the Assistant Governor or RBA, said that with the project, the central bank seeks to explore CBDC implications for efficiency, innovation, and risk management in wholesale financial market transactions. He added that the CBDC use case for these markets is an open question. As a result, the RBA is delighted to partner with leading industry players in exploring the future role of wholesale CBDC in the country’s payments system.

RBA not ready to issue CBDC

This move is part of the on-going about-face for the central bank when it comes to policy around CBDC. The RBA payments policy head recently said that the central bank will continue researching CBDCs despite indicating in September that there was no string policy case to issue a CBDC.

RBA has pointed to the success of Australia’s efficient, real-time New Payments Platform as an alternative to issuing a central bank-backed digital currency. The bank added that it will continue offering fiat currency notes as long as people continue using them.

The research project the RBA is conducting with its partners will be finalized at the end of this year. The RBA said that a report in the same will be released during the first half of 2021.

Huobi Releases Two More Wrapped Assets Following Success Of HBTC, But They Perform Underwhelming

By
Adam Barry
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0

Huobi has launched two more wrapped cryptocurrency assets Bitcoin SV and Litecoin, following the successful release of HBTC, a wrapped Bitcoin tradable on Ethereum. HBTC was a significant success raising $70 million in BTC, and Huobi believed to have found a successful formula, but traders seem disinterested with the new wrapped assets.

Empowering DeFi ecosystem with wrapped assets

In September, the H-Token series touted the introduction of a variety of assets on Ethereum. Sharlyn Wu, the Head of Huobi DeFi Labs and Huobi CIO, stated in a press release that these offerings aim at empowering DeFi ecosystem with a variety of collateralized wrapped digital assets. She said that the mission of Huobi on DeFi is to offer the community enhanced assets, thus making DeFi more inclusive and better the global financial system. As a result, this will enable the realization of empowering millions across the globe to benefit from the development of DeFi.

After putting in a lot of hard work, the exchange managed to release HLTC and HBSV. Interestingly DeFi developers and traders seem not to care much about the recent additions to the Ethereum network.

Wrapped assets perform underwhelmingly

For instance, HBSV, which went live almost a week ago, has performed underwhelming with only around 12 wallets currently holding the token, and this includes the Huobi exchange wallet.in the last five days, the coin has not seen a single transaction, and so far has only been transacted 35 times in total.

On the other hand, HLTC is also witnessi9ng scanty traffic, and since its launch on Friday, it has seen 21 transactions, and it is held in 7 wallets only. However, interest in the wrapped assets could increase, but the response can’t even be tepid for now.  For some, this is the lack of incentive as traders are unwilling to hold wrapped assets whose market capitalization is smaller than the wrapper itself.  But in recent times, attention has shifted to Bitcoin, and this could have played a part.

China’s CBDC Seeks To Prevent Dominance Of US Dollar

By
Adam Barry
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0

The Chinese digital Yuan has been designed to boost retail payments in the country and prevent the US dollar’s dominance instead of addressing challenges presented by stablecoins and cryptocurrencies.

Concept of China’s digital currency different from that of G7 nations

According to the ex-governor of the People’s Bank of China, Zhou Xiaochuan, the digital currency approach is to prevent dollarization of the economy and enhance local retail payments. Zhou told delegates at the Eurasia Forum on October 27 that the PBOC’s focus is to create a digital currency that differed from that of the G7 countries. He said that the G7 nations’ concern was to address the challenges raised by the likes of Bitcoin, Libra, and cryptocurrencies.

The G7 said that these stablecoins should be supervised appropriately to avoid threats to the global financial system and ensure they are not used for tax avoidance or illicit activities. However, PBOC wants to create a digital currency for retail payments and reduce the dominance of the US dollar as a mode of exchange in the country. Zhao said that China has been pushing for its digital currency and electronic payment (DCEP) from a different design point to the G7.

PBOC already piloting its digital Yuan in Shenzhen

The PBOC is closer to launching the DCEP; they published a draft law that will give the DCEP system legal status. The law includes the digital Yuan as part of China’s sovereign fiat currency. Zhou has been among the proponents of a digital currency plan, and the project launched when he was at the helm of the PBOC in 2014. The PBOC has been piloting the digital Yuan and recently gave away $1.5 million to around 47,000 people in Shenzhen.

There have been concerns from some of the world’s largest economies about the launch of Facebook’s Libra, which they term a threat to the global financial system’s stability. Some countries like Canada are also working on their CBDC should regulators block Facebook’s Libra.

National Bank Of Cambodia Launches New Blockchain-Based Payments System For Banks Called Bakong

By
Adam Barry
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0

With central banks globally racing to establish their central bank’s digital currencies (CBDC), Cambodia has launched its own blockchain-based digital payment system called “Bakong.”

Bakong system to promote faster and cashless payments

Bakong is a platform through which microfinance institutions and banks can carry out transactions in a decentralized way. According to the National Bank of Cambodia, the system allows peer-to-peer transactions within the same institution or other institutions. Interestingly users can conduct transactions between Bakong accounts or by the use of traditional bank accounts.

The project was developed by the central bank in collaboration with other entities. It first secured involvement from financial giant PRASAC in October last year. At the beginning of this year, the National Bank of Cambodia described the system’s launch, which it revealed to be a closed-circuit enterprise.

PRASAC’s executive VP Sony Say said that Bakong is a new and innovative payment system that permits users to carry interbank transactions and make payments of bills easier. It is secure, and transactions are free with payment transactions made in real-time and settled within five seconds. This platform seeks to promote cashless transactions and financial inclusion in Cambodia while at the same time cutting costs and time taken to process transactions between banks.

Bakong system runs on secure Hyperledger Iroha blockchain

The system will utilize Hyperledger Iroha, a permission-based blockchain network to ensure the transactions’ transparency and security. Since the system is built I Hyperledger Iroha blockchain enhances transaction privacy and finality. There is the transparency of transactions to validating nodes run by the central bank without disclosing parties involved in the transaction.

Chea Serey, the General Director of the National Bank of Cambodia, said that they are optimistic that the Bakong System launch will promote social welfare. It also seeks to provide seamless peer-to-peer payments in the wake of the coronavirus. Serey said that users can make online payments through the system that offers alternatives for the transaction, such as sending and receiving money through e-wallets.

Japanese Companies Invest In Blockchain Trade Data Management System To Digitize Trade Transactions

By
Adam Barry
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0

Seven Japanese firms have formed a venture that will digitize trade transactions through blockchain as Japan moves to digitize its economy. The Nikkei reported that the firms are reportedly investing in a new trade data management system developed by NTT Data.

Japanese firms invest in blockchain trade management system

The data management system employs blockchain tech in preventing malicious third-parties from interfering with recorded trade data. This system has been designed for managing receipts for importing and exporting firms. It will also manage bank-issued letters of credit and help in processing documents handled by logistics and insurance companies.

The companies participating in the investment include Mitsubishi Corp, Japanese bank MUFG Bank, Sompo Japan Insurance, Toyota Tsusho, Kanematsu, Tokio Marine &Nichido Fire Insurance. NTT Data plans to commence an offering of the service by the end of this year. The venture is targeting around 400 companies as its customers in Japan and abroad. Already Mitsubishi has been piloting the service, which is said to have significantly reduced the time needed for processing data by almost 50%.

Japanese government focused on digitization of trade and the economy

Governments across South Asia promote the digitization of trade transactions, and the consortium plans to expand the platform to other countries. This will enable the exchange of digitized data with other countries across the region. The Japanese government under Prime Minister Yoshihide Suga has made digitization a top priority, and the group sees an opportunity in the digitization of government processes that have often relied on paper trail. For instance, one export transaction produces up to 20 different paper documents, but the NTT Data system called TradeWaltz will take everything online.

In 2018, NTT Data entered a partnership with the New Energy and Industrial Technology Development Organisation to work on a blockchain platform for the trade sector. The partnership aimed to create a system that can digitize and improve logistics data processing between trade entities. The blockchain system developed has been shown to reduce the time required in preparing trade documents by 50% compared to traditional filing methods of paper documents.

Exit Scams Disrupting Darknet Marketplaces As Jack Ma Praises Disruptive Nature of Cryptocurrencies

By
Adam Barry
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0

A recent report from blockchain forensic company CipherTrace has demonstrated the massive disruptions to the underground darknet marketplace after the recent wave of exit scams.

Exit scams hit darknet marketplaces

Although there is an opportunity for new marketplaces to garner users of the defunct platforms, there is still no platform controlling western volume. CipherTrace notes that the Russian-leaning Hydra Market is currently the largest globally. Between June 2019 and July 2020, Hydra generated around $1.2 billion in revenue even though the marketplace was only serving the Easter Europe region.

Despite darknet marketplaces historically being dominated by large players, there seem to be marketplaces commanding smaller user bases. The landscape is changing and Empire Market, a major darknet marketplace launched in 2018, abruptly ghosted. The platform had attracted over one million users as of January 2020, and in August, it went offline and disappeared with around $30 million of user’s funds.

Following Empire’s exit scam, most users moved to marketplaces like Icarus Markets. But this also vanished within weeks, and according to Icarus, its exit was unplanned as the platform had been pushing for updates before going offline. The disappearance might have been due to the influx of users from Empire, and the deposits made the marketplace ripe for a lucrative exit. CipherTrace indicated that the admins might have capitalized on the opportunity and excited ahead of their plan.

Jack Ma says cryptocurrencies are the future of global financial systems

Recently, Alibaba Group founder Jack Ma praised cryptocurrencies’ disruptive nature, stating that the current traditional international financial system does not suit young economies. Jack was speaking at the Bund Summit in Shanghai to bankers and regulators regarding the role cryptocurrencies are likely to play in the global financial system in the future.

He said that digital currencies will crease value, and the discussion should be on how to establish a new financial system based on crypto. Ma said that the Basel Accord’s current financial system is conservative and doesn’t fit growing economies.

PayPal’s Integration Of Cryptocurrency To Take Bitcoin Mainstream With Triple The Current Users

By
Adam Barry
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0

The shift of PayPal towards cryptocurrency has been praised as a huge win for the industry. The integration bodes well with Bitcoin’s price and could boost the user base of the most popular digital currency by three times.

BTC rallies on PayPal’s announcement of crypto integration

Following PayPal’s announcement, BTC price jumped to $13,000, which is a new 2020 high. Currently, Bitcoin is sitting around the $13,100 mark, with the coin rallying almost 10% after the news. The digital currency is almost surpassing PayPal as the 21st largest asset in terms of market capitalization.

The announcement from PayPal comes at the back of another payment provider’s move to foray into Bitcoin. Two weeks ago, Square announced an investment of around 1% of its assets into BTC. There has been growing interest in BTC from mainstream investors. 21Shares researcher Lanre Jonathan Ige says that the trend will continue, and more large-sized investments are expected to bring institutional interest in Bitcoin. He said that corporations are trend following, and more will join Square and Microstrategy with BTC investments.

Interestingly Paypal’s move to integrate BTC is likely to bring more users to BTC instead of BTC to institutions. PayPal will bring a mainstream audience to speed with crypto as an investment avenue for now and a payment method going forward. This has been the Bitcoin community’s main focus when it comes to the adoption of crypto.

PayPal bringing BTC mainstream

Data from glassnode indicated that currently, BTC has more than 187 million holders or users. Although this is impressive, Will Woo, a cryptocurrency analyst, stated that it pales compared to the 487 million PayPal users. The addition of BTC will bring crypto to a mainstream audience. Even though users will only be able to buy, sell and hold BTC via PayPal for now, the company has indicated that users will enjoy the option of paying for goods and transfers with crypto from next year. If this happens, it will cement the reputation of BTC as a remittance and payment mechanism.

Adoption Of P2P Crypto Trading Platforms in The Middle East Hampered By Lack Of Political Goodwill

By
Adam Barry
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0

According to Arcane Research, the major P2P cryptocurrency trading platform’s adoption is struggling to take off in the Middle East. This is because of the lack of infrastructure and regulations that have slowed adoption despite the demand for cryptos being high.

Poor infrastructure hampering the adoption of crypto in the Middle East

However, undocumented migrants use increased usage of the platforms in western countries to send money home. A recent report from Arcane Research showed that P2P cryptocurrency trading volume in the Middle East and North Africa was around 15% of 2017 volumes. This was as measured on major platforms such as Paxful and LocalBitcoins. Although centralized exchanges are providing cryptocurrency trading services in the Middle East, there is still a lack of infrastructure to boost adoption.

The report states that most Arab states do not have exchange infrastructure, and they lack political and financial stability. As a result, there hasn’t been any notable P2P adoption. Demand for P2P services in some of the Arab states facing inflation is high. This is because it allows residents to send money out of the country or by converting to cryptocurrency. For instance, the Lebanese pound has experienced significant inflation this year. In Iran, demand for crypto services is high because it is a hotspot for miners due to low energy cost. Just like Lebanon, Iran’s local currency has suffered from hyperinflation after the US imposed sanctions on the country in 2018.

New, less sophisticated P2P platforms emerging

Although demand for crypto is high in Lebanon and Iran, P2P exchanges are struggling to gain a foothold. This is because of negative sentiments from the regimes to crypto and poor infrastructure. Interestingly, Arcane established an emergence of less sophisticated P2P trading platforms in the region spurred by apps such as WhatsApp.

The report said that illegal immigrants in western countries have turned to cryptos to send money home. They are using gift cards and P2P platforms when regulations make sending of cryptocurrency difficult. Arcane has indicated that even with stringent laws, immigrants are finding a workaround to send money.

Siemens Partners With Utility Company Allgaeuer Ueberlandwerk To Launch Blockchain-Based Energy Trading Platform

By
Adam Barry
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0

Germany technology firm Siemens has launched a blockchain-based energy trading platform in partnership with Allgaeuer Ueberlandwerk. The energy trading platform allows the trading of energy by small rooftop producers to businesses and households.

Local solar energy producers to sell to businesses

The project dubbed “Pebbles,” a short form of Peer-to-peer energy trading based on blockchain, and announced a virtual demo of the blockchain-based platform for optimized power trading on October 22. The company launched the demo of the Pebbles power platform in Wildpoldsried in Bavarian. It aims at maintaining locally produced electricity within the community. This will help small rooftop solar panel owners to sell energy to other businesses such as bakeries.

The Federal Ministry for Economic Affairs and energy funded the Pebbles project. Grid operator AllgauNetz, regional utility Allgauer Uberlandwekr, and Siemens jointly developed the platform. The University of Applied Sciences at Kempten and Fraunhofer Institute for Applied IT also supported the project.

The platform employs blockchain tech in linking participants through an app that allows local energy producers to sell surplus power. Private energy producers will directly sell their excess power to other consumers without the need for a middleman or grid operator. This project will also provide flexible energy from electric vehicle battery storage. The use of blockchain tech aims at ensuring that information on all transactions is transparent and immutable. Siemens said that power distribution locally represents efficient utilization of the grid.

Germany targeting decarbonization of energy system

The energy industry in Germany is moving towards integration with more renewable plants for decarbonizing energy systems. Considering most generate power intermittently depending on weather conditions, this can put pressure on transport grids. Siemens project leader Michael Metzger said that it is necessary to onboard and integrate small to attain energy transition. Pebblesproject is expected to initially run-up to November 2021.

AUEW will operate the energy platform and is expected to develop a business model for the long term. Besides, Siemens created DLT energy; other players such as BloGPV, ETIBLOGG, and SMECs are also being implemented.

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