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Showing posts with label Govcoins. Show all posts
Showing posts with label Govcoins. Show all posts

Monday, July 26, 2021

Govcoins and crypto to coexist

 



GOVERNMENT-backed coins and private cryptocurrencies will coexist for a while, despite rising regulatory walls set by the government to counter virtual coins, experts at a global webinar session said Thursday.

Noting that cryptocurrencies and digital currencies by governments are “two different animals,” they will coexist for now partly because current cryptocurrencies are not actually solving payment problems.

“How many of them (cryptocurrencies) are solving actual payment problem? Most of them are speculative and used as a means of storage,” said Nelson Chow, chief fintech officer of the Fintech Facilitation Office at the Hong Kong Monetary Authority.

Chow said that some central bank digital currency, or CBDC, projects such as Multiple CBDC Bridge have the potential to solve decades-old problems for cross-border transactions. Multiple CBDC Bridge is a wholesale CBDC co-creation project between the Hong Kong Monetary Authority, Bank of Thailand, the People‘s Bank of China and the Central Bank of the United Arab Emirates.

Under the current regulatory environment, John Kiffmeiste, a former senior financial sector expert at the International Monetary Fund, said that it is unlikely that the emergence of CBDC projects, now numbering nearly 60 according to Kiffmeiste’s data, would make crypto assets obsolete.

“CBDC has to operate within confines of tax regulations, anti-money laundering, KYC (know-your-customer) and so many other regulations whereas cryptocurrencies don’t operate in that environment,” the economist added.

Speakers at the webinar co-hosted by The Investor, a tech media outlet run by The Korea Herald, Malaysia’s The Star and the Asia News Network.Speakers at the webinar co-hosted by The Investor, a tech media outlet run by The Korea Herald, Malaysia’s The Star and the Asia News Network.

But, Kiffmeiste pointed out that as the regulatory and legislative walls are closing in on crypto assets, they will come under the same rules that other types of conventional currencies operate under. “In that case, that levels the playing field. Perhaps in that new world, CBDCs and cryptocurrencies coexist, but crypto assets become redundant as at least payment medium.”

Andrew Sheng, one of Asia’s top economists, stressed that authorities should understand the complex contextual backgrounds that have brought about the rising interest in CBDCs and cryptocurrencies.

Noting that the value of the cryptocurrency market has reached US$1.2tril – half the value of the official gold reserves – Sheng said cryptocurrencies had grown outside of the purview of public control. “This was the big lesson of the Covid-19, private cyber currencies will be with us whether you like it or not,” Sheng said.

The tug-of-war between regulators and cryptocurrencies is most apparent in the US in the area of stablecoins like USD Coin, a digital equivalent of the US dollar.

The US-proposed Stable Act will bring USD stablecoin issuers into conventional regulatory perimeters.

Kevin Werbach, a professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania, said that the cryptocurrency industry does not have to be allergic to regulations.

“There is always a notion that we have to choose either innovation or regulation. And I think it’s a false dichotomy. For new technological markets to mature and develop, they need to be trusted. They need to get to the point where ordinary people around the world are willing to participate in these activities at scale, and regulations are an important part of that,” Werbach said.

As to the increasing public controls on crypto assets, speakers called for regulations compatible with the emerging cryptocurrency industry. They shared a similar view that cryptocurrency companies and regulators must work together on bringing the industry into the system.

“Since innovation is always ahead of regulation, it is inevitable for regulators to rely on us when drafting policies. It is crucial to reshape their ‘legacy mindset’ and make them understand the nature and dynamics of cryptocurrency,” said Marcus Lim, CEO and co-founder of Zipmex.

They were speaking at a webinar co-hosted by The Investor, a tech media outlet run by The Korea Herald, Malaysia’s The Star and the Asia News Network entitled “The rise of Govcoins & What’s next for crypto”. Speakers at the July 22 virtual seminar included a group of experts in the US, Europe and Asia who are navigating the current situation surrounding the development of central bank digital currencies and challenges posed by and to cryptocurrencies.

Experts said that central bank digital currencies have a huge potential to solve many issues, ranging from decades-old problems involving cross-border transactions to digital transformation.

Kiffmeiste noted that almost 60 jurisdictions are currently exploring retail CBDCs, with countries like the Bahamas and China at the forefront, but they are divided in their motivations for issuing the CBDCs. For instance, emerging economies consider CBDCs as a way to spur financial digitalisation, while advanced economics mull digital currency as part of financial stability and to improve monetary policies. — The Korea Herald/Asia News Network

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Tuesday, July 20, 2021

Webinar: The rise of ‘Govcoins’ and what’s next for crypto

The global financial landscape, especially i Asia, is being redrawn amid digitalisation of the financial sector, propelled by both the regulators and fintech innovators

ONCE viewed with suspicion, digital currencies have gained wider acceptance since the Covid-19 pandemic started.

` The recognition has sparked not only various investment opportunities but also technological innovations and developments, including by governments around the world eager to capitalise on the digital currency potential.

` One is China, where its central bank People’s Bank of China has just launched pilot projects on digital currency and is working with the Bank of Thailand and Hong Kong Monetary Authority on the initiative.

` The global hype in cryptocurrency investment, meanwhile, has come under restraint from the regulators but with the pandemic – a number of Asian companies have embraced the crypto innovation in hope of riding out of the economic slump. Investors especially the Gen Z have jumped on the bandwagon despite the risk and pushed the value of Bitcoin to a new high.

` To help people understand the government-backed digital currencies and the future of cryptocurrencies further, The Star will co-host a webinar entitled “The rise of Govcoins & What’s next for crypto” this Thursday, July 22, 2021, at 10am.

` The webinar is organised jointly with the Asia News Network (ANN), an alliance of 23 national media in 20 Asian countries, and The Investor, which is a tech media start-up of the The Korea Herald. Both The Korea Herald and The Star are members of ANN.

The webinar is organised jointly with the Asia News Network (ANN), an alliance of 23 national media in 20 Asian countries

` The speakers on the first session “The rise of Govcoins” include John Kiff, former senior financial sector expert at the International Monetary Fund; Nelson Chow, chief fintech officer at the Hong Kong Monetary Authority; and Andrew Sheng, one of Malaysia’s and Asia’s top economists, and The Star’s columnist.

` The second session “What’s next for crypto” will feature speakers Kevin Werbach, professor of Legal Studies & Business Ethics at the Wharton School, University of Pennsylvania; Stephane De Baets, president of Elevated Returns Ltd, an investment firm based in the US with Asian focus; Marcus Lim, group CEO, Zipmex Co, a regional cryptocurrency platform; and Pindar Wong, a blockchain specialist and chairman of VeriFi, a financial tech consultancy in Hong Kong. The speakers will discuss the decentralisation of finance, benefits and dangers of cryptocurrency, a shake-up which is taking place to weed out illegal financial transactions and the development of AI and programmable smart money.

Registration is available at https://us02web.zoom.us/webinar/register/4916263173191/WN_LaWquMD2ROaxPkccdsC4Qg

You can also listen live on Clubhouse at https://www.clubhouse.com/event/M8ZWK53b

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