China’s central bank, the People’s Bank of China (PBoC), reports that it is “progressing smoothly” with its development of a government-backed digital currency. The bank issued its statement during a working conference held in Beijing from Jan. 2–3, according to an official news release published yesterday, Jan. 5. Five years in the making As reported, China has devoted five years of research and system development work to its forthcoming central bank digital currency (CBDC), and proceeded to conduct its first real-world pilot of the currency in Dec. 2019. As a form of digital legal tender — and unlike a private, …

The Hong Kong Institute of Bankers (HKIB) has onboarded six virtual banks as corporate members, according to a Jan. 2 press release. The HKIB is a non-profit institution that provides training and certification to the banking organizations in Hong Kong. The last banks joining the HKIB are Airstar Bank Limited, Fusion Bank Limited, Livi VB Limited, Ping An OneConnect Bank (Hong Kong) Limited, SC Digital Solutions Limited and WeLab Bank Limited. New era in Hong Kong’s banking sector Commenting on the news, Carrie Leung, CEO of the HKIB, said that the launching of virtual banks marked a new era in …

Wells Fargo analyst Mike Mayo announced during a Dec. 30 CNBC news segment that “this is the golden decade of banks and technology.” Mayo explained that while the 1990’s had record bank consolidation (banking businesses merge with each other), systems were never integrated. He then explains that in the “aughts” decade – the 2000s – banks saw excessive growth, which unfortunately ended in “tears” due to the financial crisis of 2007-2009. Mayo pointed out that the financial crisis was cleaned up this decade, twenty-five years after national banking first permitted banks to leverage their scale and growth. He noted that …

Turkey's Istanbul Clearing, Settlement and Custody Bank (Takasbank) announced that its blockchain-based, physical gold-backed transfer system is now live. Turkish Takasbank launched BiGA Digital Gold to provide banks with a blockchain-based system for the issuance, repayment and transfer of digitized gold, according to an announcement on Dec. 30. The BiGA system — first announced in September 2019 — enables participating banks to use blockchain tech to transfer digital assets representing a quantity of physical gold. Each asset represents a gram of gold that is physically stored in vaults of the Borsa Istanbul (BIST) Turkish stock exchange. The BiGA project aims …

South Korea's central bank, the Bank of Korea (BOK), plans to organize a task force dedicated to central bank digital currency (CBDC) research in the new year. In its “Monetary Policy for 2020” brief, published on Dec. 27, BOK said it would continue to build on its existing research into distributed ledger technology, crypto assets, and CBDCs and to play an active role in overseeing and enhancing the security of payment and settlement systems. Recruiting digital currency experts As part of its CBDC research agenda, BOK ostensibly plans to recruit additional experts in the field. On Dec. 10, the institution …

The Bank of Russia, the country’s central bank, has reportedly started testing stablecoins pegged to real assets in a regulatory sandbox. Elvira Nabiullina, Russia’s central bank head, said that the bank doesn’t assume that those stablecoins will function as a means of payment or become a substitute for money, Russian news service Interfax reported on Dec. 25. Nabiullina noted that the Bank of Russia is exploring the potential uses of stablecoins — cryptocurrencies that are pegged to another asset to prevent the volatility associated with crypto markets. She said: “We are testing stablecoins in our regulatory ‘sandbox’. We see companies …

The Central Bank of China has recently issued 20 billion Chinese yuan ($2.8 billion) of special bonds, which it has sold in order to fund small and micro-enterprise businesses, according to the China Development Network. This recent issuance of $2.8 billion in bonds is nothing to look twice at and was largely expected, given the bank's inclusive small and micro-enterprise loan balance at 404 billion yuan so far this year — representing an increase of 35.36% since the end of the previous year and catering to nearly 410,000 small and micro-enterprise owners. However, these bonds weren’t issued the standard way, …

Ongoing technological advancement in digital currencies is a phenomenon that can help developing countries both politically and economically. Cryptocurrencies can solve problems that are unique to these countries by providing access to a bank account, easy transfer of money across borders, and fractionalized payments. Improving the accessibility of financial services can help improve developing economies by providing greater transparency in transactions and reducing corruption at all levels, and including previously unbanked persons into the financial system stimulates economic growth and enables more accurate forecasting, risk management, and analysis. Cryptocurrency allows money to be sent from someone on any corner of …

Recent research by the European Central Bank (ECB) claims that it is possible to develop a central bank digital currency (CBDC) payment system that protects user privacy. Per the report dubbed “Exploring anonymity in central bank digital currencies,” the European System of Central Banks (ESCB) established a proof-of-concept (PoC) for anonymity in CBDCs, which came as part of its ongoing research of CBDCs and their potential benefits to the public. The dedicated PoC was developed in collaboration with tech companies R3 and Accenture. Corda-based PoC The ESCB used R3’s open-source blockchain platform Corda to develop a PoC featuring four parties …

Global banking regulator Basel Committee on Banking Supervision (BCBS) calls for a conservative prudential treatment framework for crypto assets. The Basel Committee — which includes banking regulators from the United States, Europe and Japan — published its report on the prudential treatment of crypto assets. The study was first announced in November, as Cointelegraph reported at the time. In the document, the regulator claims that the growth of cryptocurrencies and related services can negatively affect financial stability and increase the risks faced by banks. The report reads: “Crypto-assets are an immature asset class given the lack of standardisation and constant …

New Zealand’s ASB Bank, owned by Commonwealth Bank of Australia, has participated in a new $1.7 million funding round by blockchain startup TradeWindow. The startup provides a software-as-a-service supply chain solution to create a “single trading window” accessible by all parties involved in the transaction from the importer to the exporter. ASB Bank is now the second-biggest shareholder after TradeWindow CEO, owns 21% Following the seed round, ASB Bank now owns a 21% stake in the company and is the second-largest shareholder after TradeWindow’s founder and CEO AJ Smith, The New Zealand Herald reports Dec. 16. According to an announcement …

The Marco Polo Network, a trade finance network co-developed by major enterprise blockchain firm R3, has completed its largest finance trial. Built on R3’s open-source blockchain platform Corda, Marco Polo has hosted the largest global trade finance trial that involved over 70 organizations from 25 countries including financial giants like Japanese SBI Holdings, according to an official announcement on Dec. 12. 100% of respondents in the trial believe that blockchain has the potential to improve their industries As the trial has involved more than 340 participants from multiple industries ranging from financial services to automotive, the joint initiative purportedly intends …