Global Compatibility Is A Key Factor In The CBDC Race, Says Expert

Global Compatibility Is A Key Factor In The CBDC Race, Says Expert

CBDCs will have to be internationally interoperable to become globally adopted, says a Hong Kong University expert.

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International interoperability will become the cornerstone of the CBDC race as it goes forward, according to Douglas Arner, director at Asian Institute of International Financial Law at the University of Hong Kong. 

Speaking at the Unitize blockchain conference earlier today, Arner argued that the interconnections between different global economic systems will become “one of the biggest challenges — and one of the biggest opportunities” as more countries are becoming involved in CBDC projects across the globe.

In Arner’s view, the Chinese financial system already has some predispositions for the cross-border adoption of the upcoming digital yuan project, like the renminbi swap lines which China has established with dozens of countries worldwide over the past few years:

“If we think of the Chinese [CBDC] proposal at the moment, it is largely limited to operating within the context of the physical and electronic borders. But one can imagine how in the context of those electronic borders if one integrates the system with, say, the RMB swap lines that are engaged in a range of different countries, that sort of RMB electronic area can be expanded outside.”

US, EU and China are poised to have the biggest impact 

Additionally, Arner outlined three financial institutions who seem to have most leverage in the intensifying CBDC race, which he referred to as “major currency-issuing central banks”: the Fed Reserve, People’s Bank of China and the European Central Bank. He elaborated:

“Those are different animals than everything else. What Canada or Sweden or the UK or Singapore, Australia or Saudi Arabia may do is all really interesting and nice, but the rest of the world is not potentially going to be adopting that in the context of large-scale economic or financial transactions.” 

Arnern concluded that “there is definitely an element of potential geopolitical — not necessarily competition, but potentially alternatives or even fragmentation going forward.”


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CBDCs will have to be internationally interoperable to become globally adopted, says a Hong Kong University expert.

Binance Research: Bakkt Is ‘Contributing Factor’ to Bitcoin’s Fall

Binance Research: Bakkt Is ‘Contributing Factor’ to Bitcoin’s Fall

Binance’s latest research supports the theory that Bakkt’s launch partly caused Bitcoin’s fall

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Major cryptocurrency exchange Binance’s newest research supports the theory that the launch of institutional trading platform Bakkt partly caused Bitcoin to drop 20%.

In the latest edition of its markets overview, Binance Research, the exchange’s analytics arm, singled out Bakkt as the principal event which occurred just before Bitcoin’s price slip last week.

Binance: Bakkt is a “contributing factor” in Bitcoin’s fall

As Cointelegraph reported, Bakkt debuted its Bitcoin futures to much fanfare on Sept. 23. Three days later, BTC/USD plummeted from near $10,000 to under $8,000.

Commentators were underwhelmed by the offering that saw negligible trading activity despite executives promising to open up Bitcoin markets. Binance Research summarized:

“Bakkt was touted by many ‘crypto-observers’ as an additional primary channel to bring large institutional flows into cryptocurrency and digital asset markets. It may certainly still do so in the future, as illustrated by the CME futures sluggish start and subsequent pick-up in volumes. Short-term wise though, Bakkt’s disappointing start seems to have been a contributing factor to the recent price decline.”

JPMorgan highlights risk

The verdict builds on similar findings from sources outside the crypto industry. Last week, it was JPMorgan that was unimpressed, but volumes may not be to blame. A report from Sept. 27 quoted by Bloomberg stated:

“It may be that the listing of physically settled futures contracts (that enables some holders of physical Bitcoin e.g. miners to hedge exposures) has contributed to recent price declines, rather than the low initial volumes.” 

In an ironic twist, Bakkt in some ways agreed with appraisals of its market impact. On social media, the company described the Bitcoin price decline as “price discovery unfolding before our eyes.”

Prior to that, COO Adam White told mainstream media that Bakkt hoped its futures would aid price discovery long-term.


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Binance’s latest research supports the theory that Bakkt’s launch partly caused Bitcoin’s fall

UK Financial Watchdog Grants License to London-Based Crypto Asset Firm

UK Financial Watchdog Grants License to London-Based Crypto Asset Firm

London-based Prime Factor Capital has received FCA approval to operate as a cryptocurrency investment management firm

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London-based crypto asset management firm Prime Factor Capital has obtained a license from the Financial Conduct Authority (FCA) to operate as a full-scope Alternative Investment Fund Manager (AIFM). The development was announced in a press release on July 1

Being FCA-authorized gives Prime Factor Capital the right to operate as a full-scope AIFM under the European Union’s AIFM Directive (AIFMD). The Directive is a regulation applied to private equity funds, hedge funds, and real estate funds, which sets standards for marketing in regards to raising private capital, risk monitoring and reporting, among other issues.

As required by AIFMD, Prime Factor Capital has ostensibly appointed a depository that provide additional layer of protection to investors. Adam Grimsley, COO of Prime Factor, said that “full-scope AIFMs are subject to heightened transparency, disclosure and reporting requirements, in addition to a number of other obligations.”

Nic Niedermowwe, CEO of Prime Factor, stated, “This Being FCA-regulated brings us under the purview of one of the most recognised financial markets regulators globally. This is particularly relevant in the cryptocurrency space, which has repeatedly captured headlines for poor operating standards and even fraudulent activity.”

The press release claims that Prime Factor is the first dedicated cryptocurrency asset management firm authorized by the FCA. As reported last August, the FCA granted its third e-money license to Wirex, whose main product is a prepaid debit card that converts crypto into fiat currency for everyday use.

The FCA also launched a United Kingdom fintech sandbox in March 2016 aiming to facilitate innovative fintech development within a protected testing environment that streamlines strict regulatory requirements. In late April, the sandbox onboarded three more blockchain businesses from a total of 99 applications.


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London-based Prime Factor Capital has received FCA approval to operate as a cryptocurrency investment management firm