This week was quite unprecedented in the digital currency space. This week saw some significant developments leading to the mainstream adoption of cryptocurrencies.
Several countries invest in digital currencies
Several countries took sturdy steps towards implementing a digital version of their country’s currency. France’s central bank, Banque de France, selected eight potential candidates, which includes firms such as Accenture and Societe Generale, to test the possibility of using the digital Euro for interbank settlements.
Similarly, the Bank of Jamaica has invited technology firms to work with them in developing and testing potential CBDC solutions. These companies are asked to submit their proposal by Aug 7, 2020. The developed solutions will be tested within the bank’s regulatory sandbox to ensure sufficient consumer protection and data privacy.
Meanwhile, the Bank of Japan announced that it had formed a new team to expedite the research into the efficacy of central bank digital currencies. This group will continue the research undertaken with other central banks, although the Bank of Japan has no plans to issue CBDCs anytime soon.
The biggest news this week, however, was the Office of Comptroller of Currency, the U.S. Banking regulator released a letter confirming that the U.S. national banks are allowed to offer crypto custody services to their customers. According to the OCC, banks have long been providing custody services for physical assets and hence can extend these services to the digital ones. OCC also finds banks very capable of delivering highly secure custody options to both individual customers and to the investment advisors who manage cryptocurrencies on behalf of their customers.
Countries and their approach towards cryptocurrencies
After initiating the crypto bill in 2018, Russia has finally passed the legislation, which will provide legal status to cryptocurrencies. This bill legitimizes cryptocurrency trading in Russia, however, prohibiting its use as a payment method.
Meanwhile, the central bank of Lithuania has issued a blockchain-based collector token, LBCOIN symbolizing the country’s Act of Independence of 1918. This token, however, is meant to be exchanged with other collectors or transferred to the public blockchain network as is not a digital currency.
On the other hand, South Korea announced a 20 percent taxation on income from cryptocurrency trading. The Ministry of Economy and Finance introduced the revised tax code, which will classify the gains from virtual asset transactions as taxable income. According to the ministry, even the non-residents and foreign corporations that trade in South Korean exchanges will be taxed.
More mainstream adoption of Blockchain and Cryptocurrency
Mastercard is approaching several cryptocurrency firms and encouraging them to partner on its cryptocurrency card program. The new partners are now onboarded to the Mastercard’s Accelerate program in a matter of weeks.
Paypal, on the other hand, has allegedly partnered with Paxos Crypto Brokerage, a newly launched brokerage firm, to launch its crypto service. Paxos offers fintech firms connectors to provide crypto trading within their applications. Paxos handles all regulatory, technological, and liquidity aspects, while fintech firms take care of front-end experiences.
Meanwhile, Eftpos Australia, the country’s leading point-of-sale technology provider, is launching a proof-of-concept exploring DLT-based micropayments using stablecoin pegged on Australian Dollar. They are partnering with Hedera Hashgraph and will be using Hedera’s Consensus Service. The goal of this pilot is to demonstrate the use of micropayments for innovative solutions such as pay-per-page or streaming services on a pay-per-second basis.
Twitch, one of the world’s prominent live-streaming platforms, is now offering its users a discount of 10 percent on subscription fees when they pay using cryptocurrency on BitPay.
At the same time, Alibaba’s payment arm Ant Group has launched a new blockchain solution called AntChain aimed to increase trust and transparency in industrial processes. As per a report, AntChain is built on Ant Group’s blockchain technology and combines artificial intelligence and IoT, among others.
This week, the Phillippine Bureau of the Treasury launched a blockchain-powered mobile application to issue government-backed treasury bonds. They are partnering with Union Bank and Phillippine Digital Asset Exchange. The objective of this initiative is to reach the countless unbanked people who are left out of the system due to a lack of bank accounts. The application will allow the citizens to invest in retail treasury bonds, and they will be able to make instant payments using various internet payment options.
Next, the Bank of Korea is launching an innovation department intending to introduce different technologies such as Blockchain and Artificial Intelligence. The department will work on implementing new digital policies and expanding the digital infrastructure.
Further, Italy’s primary agriculture association has partnered with one of Europe’s largest tomato processing plants to trace homegrown tomatoes from farm to fork. VeChain’s ToolChain Blockchain will be used in this pilot and will see organizations tracing tomatoes from farms to the processing factories and then to the final customers while adding transparency and trust in the quality of these farm produce.
Chronicled, the firm behind the blockchain-based pharmaceuticals traceability platform, Mediledger, is collaborating with Deloitte to address one of the perennial problems of the pharma industry – counterfeit drugs. According to Chronicled, the MediLedger solution targets the problem by storing the information about the drugs on Blockchain, and using a barcode for anyone to verify the veracity of the drugs.
And finally, Garry Kasparov, the Russian Chessmaster, in an interview for Forbes, said that Bitcoin, cryptocurrencies, and Blockchain technologies, give individuals more control over their money, and are the privacy solution for the financial markets.