Benoît Coeuré states Central Banks Should ‘Act Now’ on Crypto 0 23

While giving a speech on Friday, Benoît Coeuré said that decentralized finance and stablecoins will challenge the business models of banks and monetary authorities need to act quickly in order to develop their digital assets. Coeuré is a former member of the executive board of the European Central Bank and is currently a senior official serving at the Bank for International Settlements. The comments from the veteran policymaker highlight the increasing angst the financial authorities are dealing with due to the boom in the crypto space, along with other digital finance innovations. 

Coeuré said that both stablecoins, which are considered a store of value in the digital market, and financial firms are a threat to intermediaries and depository institutions, such as banks. Financial watchdogs and central banks are now facing urgent questions and are not sure of how to respond. He said that it was the responsibility of the central banks to deliver financial stability and price stability and they have to retain this ability. This means that they have to take action while the current system is in effect, which means they should act now. The policymaker is heading the research on behalf of BIS into central bank digital currencies.

He also urged the other policymakers to quicken their response in the face of cryptocurrencies and to work quickly on digital assets that are backed by national policymakers. Otherwise, he warned that they will lose the key role they have in the financial system. He added that the time for central banks to get going has long passed. It takes years for central bank digital currencies to be rolled out, whereas cryptocurrencies and stablecoins are already here. Therefore, it is even more urgent for central banks to get started. He also said that the banks, as well as regulators, have to consider the role they would play after this CBDCs are introduced and that of intermediaries in the digital financial system. 

Likewise, the implications of the design of these central bank digital currencies also has to be taken into account. According to Benoît Coeuré, central banks regard the traditional financial firms to be part of the new infrastructure of digital payments. However, he said that DeFi platforms, global stablecoins and big tech companies would challenge the models of the banks. A number of prominent central banks have been slow in responding to the challenge of Bitcoin and other digital currencies, as opposed to policymakers in developing economies that have already taken their CBDC projects to an advanced stage. 

China has already moved to the trial stage when it comes to their CBDC and it will be rolled out in the country at the Winter Olympics as part of their experiment. On the other hand, the ECB had launched their investigation phase in July this year for a digital euro. Likewise, the US Central Bank has also not taken a decision of whether to look into developing a digital version of the premier reserve asset in the world i.e. the US dollar. 

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Absconding Directors of South African Crypto Fraud “Africrypt” Agree To Attend Court Hearing Virtually 0 15

After proceeding of trial against infamous Africrypt, it would be for the first time that the main accused will attend court hearing, although virtually. The Court, upon the request of Cajee brothers’ counsels has agreed to offer virtual hearing option and fixed the date of 19th & 20th October, 2021 for recording of their testimonies.

The Courts in every country have been insisted upon by legal experts to utilize innovation and technology for justice system. Litigants everywhere criticize that justice is delayed. Primarily in the Asian and African regions, often Courts are criticized for not being able to decide cases even after 5 to 10 years. Recording of evidence kept linger on because the witness are not available in the country. In the modern countries, usually the Courts have provided for virtual hearings, however, such option was hardly utilized by Asian and African regions.

However, due to pandemic, the courts, which never used virtual hearing option, are now conducting hearings virtually as well. The practice has finally made its way into the justice system of both these regions as well. This very option has recently been utilized in a high profile crypto fraud case of South Africa namely “Africrypt”.

According to the complaints of Africrypt, the firm Africrypt looted their money while the perpetrators fled with millions of dollars. They claimed that a crypto scam of “exit” nature was committed on them.

Meanwhile, when the founders/operators of Africrypt namely Amer and Raees Cajee were there, they said they claimed a hack occurred. But nobody believed and said that they were concocting a false story to hide their crime while the money was taken by them. However, the local authorities soon came to know that both brothers went into hiding. No one knew where they were taking shelter or why they opted to hide if they did not do anything wrong. But their counsels were representing them before the Court and told the Court that Cajee brothers were receiving life threatening warnings. They were threatened by certain people of dire consequences which may involve harming their family members as well. So they went into hiding, claimed their attorneys.

Now an opportunity has been offered by the South African court to Cajee brothers to plead their case virtually. It has been noticed in the press as well that the Cajee brothers have accepted Court’s offer of attending Court’s hearing virtually.

The virtual hearing date was fixed to take place in September. But the date was requested by Cajee brothers’ counsels to be fixed in the month of October for various reasons. The Court has accepted the request of the counsels and has re-fixed the case for 19th October, 2021. On the said date of hearing, it is anticipated that both the main accused with record their testimonies virtually.

60 Crypto Exchanges in South Korea to Shut Down their Services 0 13

This is the week of the deadline for crypto exchanges as well as wallet operators in South Korea to comply with the new regulatory requirements introduced in order to stay open. Up until now, only one exchange has been granted the license for continuing their operations in the country. It is expected that around 60 crypto exchanges will either shut down fully, or cut down on their services. According to the new ‘Act on the Reporting and Use of Special Financial Transaction Information (Special Act)’, all crypto exchanges in South Korea have to register with the Financial Intelligence Unit (FIU) in the country and get certification for Information Security Management System (ISMS).

The last day to be able to do is September 24th. Crypto exchanges that are unable to do either of these things will have to cease their operations fully. Local media reported that around 34 exchanges have not been granted ISMS certification, which means they will entirely shut down by the given date. Around 29 crypto exchanges do have ISMS certification, but only one of them has managed to register with the FIU successfully. This is part of the country’s top financial regulator, the Financial Services Commission (FSC). On Friday, the Financial Intelligence Unit (FIU) had had their first crypto business review meeting.

Their goal had been to check the report that was submitted by Dunamu Inc. that operates the largest crypto exchange in South Korea named Upbit. The report was accepted by the review committee, which made Upbit the first licensed crypto exchange operator. It was further revealed by the FIU that other than Upbit, there were four other exchanges that had also submitted a report, which included Coinone, Korbit, Korea Digital Exchange (Flybit) and Bithumb. Furthermore, a report was also submitted by Korea Digital Asset (KODA), which is a wallet operator.

The FSC had said back then that since there was only a week left till the deadline, virtual asset providers should file a report right away, if they haven’t already done so. Furthermore, registered crypto exchanges that are interested in offering trading in the Korean won are also required to partner with banks for providing users with accounts verified with their real names. Up until now, banking partnerships have only been secured by the country’s largest exchanges, such as Upbit, Korbit, Coinone and Bithumb. Banks are not willing to partner with smaller exchanges because they are concerned about risks like money laundering.

This means that of the 29 exchanges that have been ISMS-certified, only 25 of them will be crypto-only exchanges in case they register with the FIU successfully. By September 24th, they will have to cease offering trading services in Korean won and should have already notified their clients, as per the rules of the financial regulators. Huobi Korea, Hanbitco, Gdac and Gopax are four companies that said they were still working on securing partnerships with banks by the given deadline. This indicates that out of 63 exchanges, only the leading four will continue to operate normally in the country. 

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