Singapore’s Central Bank Finalizes Regulatory Framework for Crypto Payment Services

One big obstacle that prevents cryptocurrencies from going mainstream has to do with how governments and traditional financial institutions accept them. This trend has been changing for a while now as many governments and central banks set to welcome cryptocurrencies. The new one in the room is the Monetary Authority of Singapore (MAS), the country’s central bank.

According to news from The Straits Times, Singapore’s central bank, the Monetary Authority of Singapore (MAS) has widened its regulatory authority in order to bring certain cryptocurrencies under its wings. The move will allow the bank to have regulatory control over certain cryptocurrencies operating in the country or accessed by its citizens. Coming in as the Payment Services Bill (PSB), the new bill was placed before parliament by Ong Ye Kung, MAS board member and minister of education. The new bill is coming to replace two existing ones, including the Money-Changing and Remittance Businesses Act (MCRBA) and the Payment Systems (Oversight) Act (PS(O)A).

Expected to be released in 2019 together with PS(O)A and MCRBA, the PSB’s journey to regulating the financial sector and digital currency industries started back in 2016. Since then, the bill has gone through two different public discussions in order to make it suitable as a tool for regulating the future of finance and money, including consumer funds, cybersecurity, and counter-terrorism financing. The bill is expected to affect many cryptocurrencies and crypto payment gateways, including Bitcoin, Ethereum, GrabPay, and others.

According to MAS, the PSB bill is made up of two main segments. The first one is geared towards what it calls a “designation regime,” and that gives the central bank the authority to include payment systems that are deemed “crucial to financial stability” under its regulatory wings. The second one has to do with payment services providers who are required to hold certain mandatory licenses in order to operate. This will, however, largely depend on the scope and nature of the activities a payment service provider runs. The first one will thus focus on money laundering related regulatory oversights that pose risks to the country. A more detailed license will also be provided for financial institutions that transact more than $3 million per month, provided they have in their custody over $5 million in digital cash floats. And a third license will be made for large financial service providers.

In October, Ravi Menon, Managing Director of MAS made it clear that there is the need to improve the support that banks give to cryptocurrency related entities. Though the director agreed that there are certain cryptocurrency businesses that pose major threats to the country’s financial system because of their supposedly clandestine activities, he entreated that traditional banks still need to open their doors to these cryptocurrencies, a sector he deemed emerging and disruptive.

For cryptocurrency businesses and other token payment platforms, the central bank has given them six months to acquire their licenses after the launch of the PSB in 2019, so as to comply with the new regulations. For traditional financial systems, they have up to twelve months to acquire their new licenses.

Blockchain Startup ConsenSys Acquires Space Company Planetary Resources

Blockchain started laying its name as a technology of choice when institutional money started coming. But beyond this, blockchain-based companies are now investing in and acquiring mainstream companies and giving these companies a touch of the decentralized world. The new one on the block to be acquired by a blockchain company is Planetary Resources, a space-based company.

In a press release on 30th October 2018, Planetary Resources announced that it has been acquired by Ethereum-based venture ConsenSys in an “asset-purchase transaction.” Founded in 2009 and formerly called Arkyd Astronautics, Planetary Resources centers on asteroid exploration, mining, and refinery, and is required to augment ConsenSys with “deep space capabilities.” According to ConsenSys founder and Ethereum co-developer Joseph Lubin.

“Bringing deep space capabilities into the ConsenSys ecosystem reflects our belief in the potential for Ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution.”

ConsenSys is a blockchain startup that aims to build decentralized applications using the Ethereum blockchain. Founded by Joseph Lubin in 2015, ConsenSys has grown into one of the most respected blockchain companies in the industry, covering six continents and employing more than 1000 people. The decentralized software platform has already developed blockchain-based solutions in many industries, including Balance, a financial management company, Civil, a journalism platform, and gaming firm Virtue Poker.

The exact nature of the partnership hasn’t been revealed yet. However, what is clear is that president and CEO of Planetary Resources Chris Lewicki, and Brian Israel, the asteroid mining company’s general counsel, will become part of ConsenSys. Also, the integration of the two companies, as revealed by Lubin, will be a gradual process in the months ahead.

On what Planetary Resources would be involved in at ConsenSys, Brian Israel, who once worked as a State Department lawyer on Space-related assignments proposed that ConsenSys could be used by the company to enhance space-based commerce. He made it clear that “Ethereum smart contract functionality is a natural solution for private-ordering and commerce in space — the only domain of human activity not ordered around territorial sovereignty — in which a diverse range of actors from a growing number of countries must coordinate and transact,”. He also added that “Over the course of nearly a decade, Planetary Resources has simultaneously pioneered technology, business, law, and policy, and brought the promise of space resources irreversibly closer to humankind’s grasp.”

For Lubin and ConsenSys, the blockchain is a fresh new technology that needs more research to realize its potential, and the company is doing its part to advance distributed ledger technologies. In a Memorandum of Understanding (MoU) signed in July this year by ConsenSys and the Xiongan New Area government, the blockchain company is tasked with advising and researching into how blockchain could advance the area’s smart city initiatives. Additionally, Lubin gained a minority stake in the blockchain-based firm DrumG Technologies by investing $6.5 million in October.

As a technology that is barely ten years old, blockchain has been able to cement its capabilities into the mainstream industry. It has become the go-to technology for building decentralized systems, and with the institutional money that is being poured into the industry, blockchain’s future as the new internet is not far.

ERC-20 Co-Author Out to Tackle Fraudulent Tokens with Secure ICO Model

Initial Coin Offerings (ICOs) started with a boom – helping finance many blockchain and cryptocurrency startups, bringing investors to decentralized applications, but also attracting many fraudulent actors. One of the first and most common standards for ICO tokens is the Ethereum based ERC-20 token format, and to clean scams and other fraudulent activities from the token scene, one of the standard’s co-author is proposing some changes.

The request, coming from Fabian Vogelsteller, is supposed to help protecting investors from scams. Vogelsteller made the proposal on Tuesday at the Devcon Conference, an annual gathering of Ethereum Developers and stakeholders, which was held in Prague. According to the author, the new standard would allow investors to refund their ICO investments at any level of progress the project makes. The proposal, casually dubbed “Reversible ICO” or (RICO), leverages a smart contract that would allow investors to exchange their already purchased tokens back to other cryptocurrencies at any time. This is supposed to work without any hassles, Vogelsteller explains, that “you are able to take your funds back at any point in time and do it simply by sending your tokens back.”

Though ICOs have been the backbone for many new blockchain projects, the industry is gradually falling as investor confidence reduces. According to Vogelsteller, this new proposal will restore investor confidence and encourage token issuers to fulfill their promises. This standard, if adopted, can bring more investment into the ICO area and revamp the crypto and blockchain project financing ecosystem, which seems to be losing. It will also reduce the user risks when investing in new ICOs.

With its promising features, the new standard is not without challenges. Startups that host ICOs using it might not be able to rely on the funds they raised to plan for the future of the project, since investors can withdraw their backing at any time. That means these startups would also have to look for other private or institutional funding means to keep them running in case of an abrupt withdrawal decision by a significant part of the investors.

Fraud in the ICO market needs to be checked. The unregulated nature of the market makes it prone to many scams. Whiles some ICO projects come out with excuses to disengage from investors, others literally disappear after their threshold has been met, and investors are left with nothing. As a technology that could possibly be its own regulator, this proposal could be the very definition of how the blockchain sector will regulate itself without government interference.

Fabian Vogelsteller is also the main developer of the decentralized application browser Mist. With his position in the Ethereum community, this proposal will surely receive a special treatment. That would not only change the blockchain ecosystem by bringing in institutional money but will also build trust in Ethereum as an ICO platform and spurring the adoption of blockchains.

 

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OECD Organizes International Conference on the impact of Blockchain Technology

The Organization for Economic Co-operation and Development will hold an international blockchain technology conference next month to discuss the potential impact of the distributed ledger technology. The conference, dubbed OECD Blockchain Policy Forum, will look at how the blockchain technology will impact the public and private sectors.

In attendance will be the State Secretary of Slovenia, prime ministers of Bermuda, Serbia, and the Rebulic of Mauritius, as well as Angel Gurria, Secretary-General of the OECD. The conference will be held between 4th and 5th September and will be live streamed from the OECD headquarters in Paris. There would be over 400 high-level decision-makers from both the private and public sectors to deliberate on the decentralized future of the region and the world.

Expected Topical Issues

Attendees will come together and discuss the possible influence of the blockchain on the region and on the global economy. Other topics that will receive prominent mention include cybersecurity, privacy, and how blockchain could be leveraged to create inclusive governance and private-based systems. On a broader note, there would also be discussions on sustainability in the region, green growth, as well as discussions on regulatory and governance practices.

According to the release, “blockchain has the potential to transform how a wide range of industries function. Fulfilling its potential, however, depends on the integrity of the processes and requires adequate policies and measures while addressing the risks of misuse. Governments and the international community will play a significant role in shaping policy and regulatory frameworks that are aligned with the emerging challenges and foster transparent, fair and stable markets as a basis for the use of blockchain.”

Planning started long ago

In order to prepare for the conference, the organization’s Directorate for Financial and Enterprise Competition Committee released a 10-page paper titled “Blockchain Technology and Competition Policy”.  The paper outlines the many applications of the distributed ledger technology that would be useful for private and public-based systems. Moreover, the paper dived into ins and outs of the blockchain technology and centered on other enterprise based blockchain development platforms, alluding to R3 as an example.

Among the blockchain use cases cited by the paper include distributed ledger systems that enforce tax payment and eliminate tax evasion tactics, the use of a sovereign-based cryptocurrency to aid fiscal and monetary policies, to build digital property registries, and to help citizens provide and prove authentic identification for online voting. Other use cases explored in the paper are public sector transparency and efficiency, pension processing and social security efficiency, and decentralized health databases for seamless sharing of patient data.

The future of blockchain for international organizations

Founded in 1961, the OECD is an intergovernmental economic organization created to stimulate economic progress, world trade, and social well-being of people around the globe. Featuring 36 member countries, the organization serves as a common forum for governments to deliberate on economic and social issues bothering the global economy.

The organization’s involvement with the blockchain spells a new era for distributed ledger technologies. Thus, blockchain has moved from discussion panels of computer nerds and tech enthusiasts into dialog tables of international organizations. The United Nations has also used the blockchain to help Syrian refugees and has recently raised $110 million bond through the global blockchain.

 

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World Economic Forum: Blockchains improve Global Economy

Beginning as a technology for financial ledgers only, blockchains have grown to become the corporate hype word around the globe. It’s touted as the invention that will change business processes, disrupt governance as we know it, change international businesses for the better, and create a world where the user is in control – call it decentralization. Thankfully, that future is not too far away. According to a recent publication by the World Economic Forum, the global economy would be driven by the adoption and subsequent impact of the blockchain technology in the next ten years.

Titled Trade Tech – A New Age for Trade and Supply Chain Finance, the report, produced by the WEF and Bains & Company, posits that adopting blockchain could boost worldwide trade to $1 trillion by 2028. The report looked at the larger impact that blockchain would have on global trade finance and the entire international business industry – both in payments, goods and services delivery, as well as digitization of global business processes.

Why blockchains could be the ideal solution

The trade finance gap is a growing concern to participants in global trade. There are still huge pen and paper means to conduct trade around the world. Additionally, the lack of finance to smoothen the international trade route intensifies the adverse effects this gap has on trade. Bains & Company hypothesizes that if the industry does not adapt to current technologies like distributed ledger systems, the trade finance gap could reach $2.4 trillion by 2025.

According to the report, these processes need to be digitized, and in order to do so, there is the need for a well-digitized system that removes the manual part of the entire process. The blockchain’s prowess in creating decentralized, highly secured, and global networks could solve these issues.

As it outlines: “A major impediment stands in the way of expanding trade and making it more efficient and safe: namely, paper-intensive, manual processes.” With a lot of micro-parts involved in trading across the globe, from finance and transaction processing to the movement of goods across borders and information dissemination, it is clear how blockchain could make this whole process seamless. In addition to decentralizing the whole global trade process, smart contract protocols such as Ethereum’s could help digitize every step and create a trustless system that enables parties to trade effortlessly.

Blockchain Adoption – the future ahead

Large, global institutions are very keen on adopting the blockchain technology for many solutions. For instance, the United Nations has leveraged blockchain and cryptocurrencies for refugee-based initiatives and for the issue of bonds. Other mainstream companies, including IBM and Microsoft, are already building decentralized ecosystems for the enterprise customer, and governments are weighing in on how to use the distributed ledger technology to better serve their citizenry.

In an interview with Cointelegraph, digital leader of the WEF in Europe Michele Orzan said that “cryptos are today to the blockchain what email was to the internet in the 90s.” Orzan also added that the speculative-driven new investors who enter the cryptocurrency industry for just the money end up increasing the skepticism that law enforcers have about these digital currencies. This has largely contributed to the delay in friendly regulating the ecosystem.

Michele also cited the Organization for Economic Co-operation and Development (OECD) as doing well in trying to help regulators understand the entire ecosystem. Recently, France also passed legislation on initial coin offerings in a bid to protect investors from fraudulent activities. As governments and global institutions join hands together to build a real, digital borderless global trading system through the distributed ledger technology, global trade is on its way to receiving a major boost.

 

Featured image via WEF.

EOS Maintains its Spot as the Best Blockchain Project in the New Rankings Released by Two Chinese Research Bodies

EOS maintains its spot as the number one blockchain project in the most recent ranking by two Chinese institutions. The second, third, and fourth places go to Ethereum, Komodo, and Nebulas, respectively. And Bitcoin has entered the top ten list for the first time since the rankings began in may this year, rising from 16th place in July, and spurring a major improvement over a period of just one month.

These rankings are created by the China Electronic Information Industry Development Research Institute and the China Software Testing Center. Funded by the Chinese government, these institutions take a deep dive into blockchain projects and produce rankings based on three parameters: Technology, Innovation, and Application. Contributions are also taken from the Nation’s prestigious educational institutions such as Beijing and Tsinghua University, as well as from researchers and professors. The quest to find the best blockchain projects by the two Chinese institutions began in May 2018 with 28 projects. August’s rankings featured 33 crypto and blockchain projects, indicating an addition of 5 projects between the first ranking and the recent one. In addition to the ranking parameters.

A Hattrick for EOS; Second Place Again for Ether; Bitcoin Rises

This is the third time in a row that EOS has been ranked the best blockchain project (June – August). In the latest category, EOS attained 104.3 points to win the technology category. Though EOSIO V 1.2.0 was recently released by EOS’ team, the project has suffered a lot of backlashes since the beginning of 2018. Issues of centralization, bugs, and constitutional disagreements have been the core issues facing EOS. Nevertheless, the delegated proof of stake consensus of EOS, which has the ability to process huge amounts of transactions faster and better than siblings like Bitcoin and Ethereum, is the force driving its success.

For Ethereum, this is the second time the project has maintained the second position. Though Ethereum won in the Applicability parameter, it only surpassed EOS by a 0.1 difference. In another category, Bitcoin leads the Innovations parameter with 40.3 points.

Final Morsels

The rankings indicate that when it comes to the best blockchain, the projects with high impact above price would always win because the two most important parameters according to the institutions are application – which talks about how a project is applicable in real-world use cases and in other projects, and technology – which has to do with the capacity and scalability of a blockchain project.

Though Bitcoin led the innovation category in this month’s rankings, there hasn’t been many changes and innovative solutions in the past one month, and as such, might have climbed on that category because of its sturdy performance over the last month as a store of value.

Nonetheless, the rankings are more focused on the ability of a project to serve as a platform for building blockchain-based systems. therefore, platforms that allow for building decentralized applications (dApps) and smart contract protocols will always receive special treatment in the rankings. Hence, it is not surprising to see EOS, Ethereum, Steller, Komodo, Nebulas, NEO, Lisk, Steem, and many other blockchain-as-a-service platforms rank higher than Bitcoin.

The new entrants into the August’s rankings are NULS and Tezos, which were ranked 21st and 28th respectively. As other projects prove their worth in the three most important categories used by the institutions undertaking the rankings, they will make their way into the table in the coming months.

 

Featured image via BigStock.