Russia and China May Digitize Their Currencies With Ethereum

An increasing number of central banks and governments are working on digitizing their national currencies. China and Russia are investigating the potential of Ethereum as the base protocol for a digital Yuan and Ruble respectively.

Currently, the Royal Chinese Mint, the subordinate unit of China Banknote Printing and Minting, is testing Ethereum and its ERC 20 token standard to digitize the renminbi (RMB) or the Chinese yuan. As ConsenSys’ head of global business development Andrew Keys revealed in his blog post, the Royal Chinese Mint is at the forefront of research and exploration into digital money.

By utilizing the ERC 20 token standard, the Royal Chinese Mint is essentially considering the possibility of releasing unique tokens that are compatible with the Ethereum network; an Ethereum-compatible token would grant higher liquidity and interoperability.

The Royal Chinese Mint is currently “concentrating on the research and exploration of the forefront of digital money, taking part widely in innovation and practice in the fields such as digital currency, mobile finance, smart-city construction and Internet-based finance; it also actively promotes the application of blockchain technology in finance and related fields,” wrote Keys.

Apart from the Chinese government, Russia is also looking into Ethereum and its potential in the finance sector. Although technical specifications and details of the Russian central bank’s national digital currency project remains undisclosed, in 2016, the Bank of Russia announced the development of an Ethereum-based interbank blockchain prototype called Masterchain. Some of the largest commercial banks in Russia participated in the pilot test, and the Bank of Russia’s Deputy Governor recently expressed her optimism toward cryptocurrency.

“Regulators of all countries agree that it’s time to develop national cryptocurrencies, this is the future. Every country will decide on specific time frames. After our pilot projects, we will understand what system we could use

Deutsche Bundesbank: No Cause to Prohibit Bitcoin

The Deutsche Bundesbank, the Central Bank of Germany, warns customers of bitcoin. The price of bitcoin might have been rising fast over the course of May 2017, but according to Bundesbank Chair Carl Ludwig, there is an imminent danger of a downward correction. Since no Central Bank backs bitcoin, it cannot be secure money. For a prohibition however he sees currently no cause.

In a recent interview with German Weekend Newspaper “Welt am Sonntag” Bundesbank Chair Carl-Ludwig Thiele talked about bitcoin again.

The Central Bank of Germany warned the Germans; whoever invests money in virtual coins, might suffer from losses. Bitcoin, Thiele urged, is just an object of speculation. Sometimes – like in the last weeks – the price thrives heavily, but this can easily look otherwise. Just a glance at the volatile price charts demonstrates that bitcoin is “not an appropriate medium to store value”, Thiele noted.

This is not the first time, Thiele publicly spoke out against bitcoin. In early 2014, following the large late-2013 bubble, the Bundesbank Chair explained that due to its architecture that cryptocurrency and its high grade of volatility, the cryptocurrency is poised to be a highly speculative investment asset. In this early note, he coined the term of bitcoin as “a niche phenomenon” in terms of transactional volume.

In the interview with “Welt am Sonntag,” Thiele repeated this assessment. He stated that he sees no cause for the prohibition of Bitcoin. Users, however, need to comply with Anti-Money Laundering laws, while he sees no risk for the financial system as a whole, at least as long as bitcoin remains a niche phenomenon. While every day just around 350,000 bitcoin transactions are processed, in Germany alone 77 million transactions, charges and credit card payments are made, Thiele told the newspaper.

Further, the Bundesbank Chair

Soramitsu and the Central Bank of Cambodia to Develop New Payment Infrastructure Using Hyperledger Iroha

Japanese blockchain startup Soramitsu Co. and the National Bank of Cambodia have announced that they will collaborate to co-develop the open source distributed ledger project Hyperledger Iroha with the aim to build a new payment infrastructure based on blockchain technology.

Hyperledger Iroha is an open-source software framework and part of the Linux Foundation’s Hyperledger Project. Hyperledger Iroha is a distributed ledger software that specializes in developing applications, such as mobile and web applications, for end users to interact with and allows for data to be processed quickly and securely. This makes Hyperledger Iroha a useful framework for digital payments, identity management, and supply chain management, among a range of other possible applications.

Using the Hyperledger Iroha software, currencies can be digitized and can become programmable through the use of smart contracts. That means that the conditions of a transaction can be programmed and automatically executed by a computer program. This technology can be used to create “smart money”, which can be utilized to build more efficient and secure payment systems as it allows for fully automated self-executing payments in what-if scenarios. This, in turn, would increase the speed and efficiency of payment systems as well as reduce the costs of processing payments digitally.

Tokyo-based fintech company Soramitsu is a member of the Hyperledger Project and created and co-maintains the open source distributed ledger platform Hyperledger Iroha. Soramitsu was founded in early 2016 with the aim is to contribute to society by helping governments and financial institutions manage digital identities, assets, and contracts through the use of blockchain technology.

Soramitsu’s collaboration with the National Bank of Cambodia will see blockchain technology be applied to develop a new payment system framework that could potentially be implemented on a global scale to improve the current status quo of payment systems.

Soramitsu’s CEO Kazumasa