The crypto custody and trading platform has received approval for a $150 million shelf offering shortly after announcing its ability to sustain operations as a “going concern.” This means that the platform has been given the green light to offer $150 million worth of securities to potential investors. The approval comes just a week after the platform’s declaration, which stated that it has the necessary resources and strategies in place to continue its operations without any significant concerns. This development showcases the platform’s resilience and ability to attract potential investors despite the challenges faced by the crypto industry.
Insights from US Treasury on Crypto’s Involvement in Hamas Terror Financing
According to Brian Nelson, a U.S. Treasury official, Palestinian militant groups such as Hamas continue to show a preference for “traditional products and services.” This statement suggests that despite advancements in technology and digital platforms, these groups still rely on conventional methods for their operations. It implies that they may not be actively engaging in utilizing modern technologies or digital platforms for their activities. The preference for traditional products and services could indicate a lack of interest or access to more advanced tools and technologies commonly used in the digital age.
UK Regulator Cracks Down on 450 Illegal Cryptocurrency Ads in 2023
In 2023, the Financial Conduct Authority (FCA) in the United Kingdom took action by ordering the withdrawal or amendment of more than 10,000 finance-related promotions. This regulatory move by the FCA aimed to ensure compliance and protect consumers from misleading or inappropriate financial advertisements. The FCA’s intervention highlights its commitment to maintaining transparency and safeguarding the interests of individuals engaging with financial products and services. By scrutinizing and addressing these promotions, the FCA aims to uphold the integrity of the financial sector and promote responsible advertising practices.
Debt Box challenges SEC’s attempt to dismiss case, alleging strategic tactics
Debt Box claims that the recent decision by the SEC to dismiss its case is an effort to gain preferential treatment in federal courts, particularly in relation to the entities that the SEC oversees. Debt Box believes that this move by the SEC is an attempt to secure a more advantageous position for itself, potentially at the expense of fair and equal treatment for all parties involved. By dismissing the case, the SEC may be seeking to assert its authority and influence in the legal system, potentially raising concerns about impartiality and fairness in regulatory proceedings.
Attorney John Deaton’s Potential Challenge to Elizabeth Warren in the 2024 Elections
Deaton, a prominent figure, has expressed keen interest in the upcoming election in Massachusetts. This indicates that he is giving serious consideration to the political landscape and developments in the state. Deaton’s involvement in the election suggests that he is actively engaged in analyzing the candidates, policies, and potential outcomes. This demonstrates his commitment to staying informed and engaged in the democratic process. By closely monitoring the election in Massachusetts, Deaton is likely to contribute to the discourse surrounding the campaign and potentially influence the final results.
Tennessee House Approves ELVIS Act to Protect Musicians from AI Copyright Violations
The Tennessee House Banking and Consumer Affairs Subcommittee has recently approved a bill that seeks to protect musicians from potential infringement by artificial intelligence (AI) technology. The bill received unanimous support from the subcommittee members. This legislation aims to establish measures to safeguard musicians’ intellectual property rights and ensure that AI technology does not infringe upon their creative works. By passing this bill, the subcommittee is taking a proactive step in addressing the potential challenges posed by AI in the music industry and providing necessary protection for musicians in Tennessee.
US Lawmaker Criticizes Elizabeth Warren’s Bill for Failing to Stop Crypto-Linked Terrorist Funding
Representative French Hill has voiced concerns regarding certain provisions in a bill that seeks to amend the Bank Secrecy Act. He argues that these requirements would be impractical to enforce on cryptocurrency miners and validators. Hill suggests that the unique nature of crypto mining and validation processes makes it difficult to apply traditional regulations to these activities. His challenge highlights the need for careful consideration and tailored regulations when it comes to the cryptocurrency industry.
Exploring the Impact of Central Bank Digital Currency on Banking Preferences
Date: February 2024
A groundbreaking study has investigated the potential Impact of Central Bank Digital Currency on Banking deposits, shedding light on the dynamics between these two financial instruments. The research, which developed and estimated a structural model, examined the decision-making process of households in selecting a financial institution to deposit their digital money. The study found that households consider multiple factors when choosing where to deposit their funds, including the interest paid on digital money, the availability of complementary financial products, and access to in-branch services. The researchers discovered that a non-interest-bearing CBDC lacking complementary financial products can significantly displace bank deposits, but only if it offers an extensive service network.
However, the study also revealed that imposing a substantial limit on CBDC holdings can effectively mitigate the displacement of bank deposits. This finding suggests that prudent regulatory measures can be implemented to strike a balance between the introduction of CBDCs and the stability of traditional banking systems.
Impact of Central Bank Digital Currency on Banking Preferences
The research provides valuable insights for policymakers and financial institutions as they navigate the potential introduction of CBDCs. Understanding the nuanced relationship between CBDCs and bank deposits is crucial for ensuring the smooth integration of these digital currencies into the financial landscape while safeguarding the stability of existing banking systems.
As discussions around CBDCs continue to evolve, this study offers a comprehensive analysis of the competition between CBDCs and bank deposits, informing decision-makers and stakeholders about the potential implications and necessary regulatory measures. The study, which utilized a unique Canadian dataset, examined the interplay between banks and CBDCs by accounting for the provision of complementary financial products and the value consumers place on physical service locations.
By developing a comprehensive structural model that incorporates these essential factors, the researchers were able to address various questions surrounding CBDCs. Firstly, they discovered that the competitive advantage enjoyed by banks, resulting from the provision of financial products that complement deposits, significantly mitigates the impact of a CBDC. This finding underscores the importance of recognizing the added value banks offer beyond simple deposit services.
Secondly, the study highlighted the critical role of service location networks in determining the success of a CBDC. A CBDC lacking physical service locations showed minimal traction, while leveraging existing infrastructure such as Canada Post offices as service locations yielded a take-up rate comparable to that of cash. Importantly, this approach was found to benefit rural households, underscoring the potential for CBDCs to enhance financial inclusion.
Additionally, the research revealed that banks with larger market shares are more responsive to the introduction of a CBDC, enabling them to retain a greater portion of deposits. This finding emphasizes the need for banks to adapt and innovate in the face of evolving digital currency landscapes.
The study examined the potential effects of implementing a limit on CBDC holdings, a measure frequently discussed by policymakers. While such a limit was found to significantly reduce CBDC adoption, its impact on consumer surplus—the overall benefit experienced by consumers—was comparatively modest. These findings provide valuable insights for policymakers, regulators, and financial institutions as they navigate the complex terrain of CBDC implementation. By considering the interplay between banks, complementary financial products, service locations, and market dynamics, decision-makers can make informed choices that promote financial stability, inclusivity, and consumer welfare. As discussions surrounding CBDCs continue to reshape the financial landscape, this study offers a comprehensive analysis of their impact on banks, shedding light on Impact of Central Bank Digital Currency on Banking Preferences.
References:
https://www.bankofcanada.ca/2024/02/staff-working-paper-2024-4/
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Lugano Set to Settle Second Digital Bond Using CBDC Technology
Date: 08 February, 2024
The City of Lugano recently released its second CHF 100 million ($114 million) native digital bond, settling transactions using the Swiss franc wholesale Central Bank Digital Currency (CBDC) within the Project Helvetia III initiative. This time-limited project permits CBDC usage until June 2024. The issuance, coming a year after Lugano’s initial CHF 100 million digital bond release, allows bond holding in both the SDX digital central securities depository (CSD) and the conventional SIS depository. The ten-year 1.415% bond is listed on both the SIX Digital Exchange (SDX) and the primary SIX exchange.
Lugano Set to Settle Second Digital Bond
Building on the success of Lugano, late last year, the wholesale CBDC facilitated the settlement of two other SDX digital bond issuances by the Canton of Zurich (CHF 100 million) and the City of Basel (CHF 105 million).
Leading the Lugano issuance were Zürcher Kantonalbank (ZKB), Basler Kantonalbank, and J. Safra Sarasin. Wholesale CBDCs, typically with limited access to banks, were utilized in this pilot, accessible only to participating banks. ZKB and potentially Basler Kantonalbank will settle using the wholesale CBDC, while the City will receive funds conventionally as it is not a CBDC participant.
The digital bond market demonstrated strong demand, with ZKB closing its order book in just 17 minutes. The bank received nine orders, with the largest allocation of CHF 8 million, despite a higher order amount. Asset managers secured nearly half of the allocation, followed by banks (22.8%), insurers (18.6%), and pension funds and treasuries.
Mayor Michele Foletti of Lugano emphasized that this initiative aligns with the city’s commitment to being a “model of innovation” and supporting digital transformation, technological innovation, development, and research to position itself as a cutting-edge city.
The trend of digital bond issuance is expected to accelerate, as seen with Hong Kong issuing digital green bonds valued at $756 million earlier this week.
References:
https://www.ledgerinsights.com/lugano-digital-bond-cbdc/
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India Unveils Plans to Introduce Programmable Features to its Digital Currency
Date: 09 February, 2024
In a recent announcement, the Reserve Bank of India (RBI) disclosed its plans for Programmable Features to its Digital Currency by introducing programmability and offline capability. The country’s ongoing Central Bank Digital Currency (CBDC) retail pilot, initiated in late 2022, has demonstrated successful person-to-person and person-to-merchant transactions. Encouraged by this progress, the RBI aims to expand the functionality of its digital currency.
The latest monthly governor’s statement from the RBI outlined the proposed additions. The introduction of programmability will enable specific or targeted transactions, allowing government agencies to ensure payments serve defined benefits. Businesses, according to Governor Shaktikanta Das, could use programmable features to allocate funds for specific purposes like employee business travel. Moreover, the offline capability is envisioned to facilitate transactions in areas with poor or limited internet connectivity, addressing challenges in remote and mountainous regions.
To implement these advancements, the RBI plans to introduce the new features gradually through additional pilot programs. The move is seen as a strategic effort to boost economic development, with the RBI framing these initiatives as accelerators for India’s potential growth. The programmable digital rupee is expected to offer innovative solutions, tying digital cash to geographical areas and enhancing the efficiency of targeted transactions.
Beyond the digital currency enhancements, the RBI is also planning to establish a principle-based framework for authenticating digital payment transactions. While additional factor authentication methods, including SMS-based OTP, have been tested, the RBI seeks to explore more options to ensure the security and reliability of digital payments. These initiatives align with India’s broader goals of improving physical infrastructure, developing advanced digital and payments technology, fostering ease of doing business, increasing labor force participation, and enhancing the quality of fiscal spending.
References:
https://www.theregister.com/2024/02/09/india_programmable_money/
https://www.ledgerinsights.com/india-cbdc-programmable-offline/
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