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BANK OF ENGLAND WANTS TO ENSURE TOKENIZED WHOLESALE TRANSACTIONS USE CENTRAL BANK MONEY
During a speech on October 3rd, the Bank of England’s Sasha Mills outlined the need for tokenized wholesale transactions to be settled in central bank money. Ms Mills is the Executive Director of Financial Market Infrastructure.
“If central bank money is unable to interact with new technologies, there could be a risk of high value wholesale settlement activity moving away from central bank money to private settlement assets, weakening financial stability,” she said.
Ms Mills outlined some of the options to ensure transactions continue to be settled in central bank money. That’s especially relevant since applications opened for the Digital Securities Sandbox, a joint initiative between the Bank and the Financial Conduct Authority.
The first option is to use the omnibus account facility. This allows banks to transfer money to a shared central bank account, where the cash is tokenized as a joint token. That’s the model of Fnality which went live (with limits) last year.
The Bank also has a long term plan to extend the hours of its renewed RTGS system and is planning a synchronisation interface. This will be an extension of work done as part of Project Meridian which completed last year. Plus, the bank is considering a wholesale CBDC.
In late July the Bank published a discussion paper on innovation in money and payments, inviting input on the synchronisation work and a potential wholesale CBDC. The deadline for feedback is at the end of October. The Bank is also taking part in Project Agorá, which explores the upgrade of correspondent banking using multiple wholesale CBDCs.
“There’s a huge amount of work taking place in industry around the adoption of digital assets; unless we’re alive to this work, the speed at which certain markets and activities become systemic may outpace the ability of policymakers to build infrastructures and frameworks to respond,” said Ms Mills.
The desire for central bank money
It’s worth circling back to why central banks are so keen on using central bank money. The settlement of tokenized assets can use delivery versus payment. Hence, there’s no risk that one party hands over the funds but doesn’t receive the asset. However, that only addresses counterparty risk.
There’s still credit risk. In other words, if the buyer has money at a bank to pay for the assets, it’s possible the commercial bank could go bust before the settlement.
@ Newshounds News™
Source: Ledger Insights
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RIPPLE VS SEC NEWS: IS GARY GENSLER ON THE VERGE OF GETTING FIRED?
The SEC recently filed an appeal in the ongoing SEC vs. Ripple case, challenging Judge Torres’ ruling. Many analysts have already discussed reasons why this appeal likely won’t succeed, given the low odds of overturning the original decision.
Ripple’s Chief Legal Officer, Stuart Alderoty, had previously pointed out that the success rate for appeals in similar cases is around 10%, making the SEC’s current appeal an uphill battle.
The ongoing appeal in the XRP lawsuit has had an impact on the market, with XRP’s price dropping significantly following the SEC’s announcement to appeal. Critics, including Ripple CEO Brad Garlinghouse, argue that the SEC’s regulatory approach is harming the industry rather than protecting investors.
Recent meetings within the SEC have revealed increasing dissatisfaction among former and current commissioners regarding the agency’s direction, with calls for a reevaluation of its regulatory strategy. Many are expressing concerns over the SEC’s overreach and the unintended consequences of its enforcement actions, particularly in the case of XRP.
Robert B. Stebbins, General Counsel of the Securities and Exchange Commission, said in a meeting, “I don’t think that the current structure is working very well. I don’t like the idea that, from a big picture, the SEC has someone in corporate finance determining whether something is an important social good—and you’re not, and you’re paying for it.
I think that’s a very ugly argument to make in the fifth circuit when you just look at the last 25 years. Right now, we’re going to have a whole new structure. So, I think the SEC has to be very careful about where they’re going.”
Recent turmoil within the SEC, including the resignation of two lawyers due to misconduct, has intensified scrutiny on Gensler’s leadership. With calls for greater awareness around his actions, some analysts suggest that raising public consciousness about the SEC’s overreach could lead to accountability.
@ Newshounds News™
Source: Coinpedia
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URUGUAY ENACTS BILL 20.345: URUGUAY’S LEGISLATIVE ADVANCES IN CRYPTOCURRENCY OVERSIGHT
▪️Uruguay passes Bill 20.345, positioning itself as a global and regional leader in cryptocurrency regulation.
▪️The new law categorizes cryptocurrencies, establishing a framework that recognizes digital assets distinct from fiat currency.
Uruguay has recently made significant strides in regulating the cryptocurrency sector with the enactment of Bill 20.345, focusing on Bitcoin (BTC) and other digital currencies.
This legislation positions Uruguay as a pioneer not only in Latin America but also globally, where few jurisdictions have established specific legal frameworks for cryptocurrencies.
As reported by Crypto News Flash, Uruguay now joins nations like El Salvador, Brazil, Argentina, and Venezuela, which possess some of the most developed cryptocurrency regulations in Latin America. This development has sparked both national and international discussions about the implications of such regulation.
The Uruguayan Fintech Chamber (CUF) was among the first to comment on the law, praising the government’s initiative as a significant first step in addressing cryptocurrency operations and recognizing them more formally within the national economy.
According to the CUF, the law establishes a basic framework that acknowledges cryptocurrencies, treating them as assets rather than fiat currency. This is seen as a crucial move towards legitimizing crypto currencies in Uruguay, providing clear guidelines for exchanges and other businesses in the sector to operate legally and transparently.
In the long term, this law has the potential to transform the financial landscape in Uruguay, attracting new investors and companies in the fintech sector.
In addition, it provides a solid foundation for the development of new technologies and financial services based on virtual assets, which could position Uruguay as a benchmark in the region. – Uruguayan Fintech Chamber.
Furthermore, the legislation categorizes digital currencies into four types as defined by the Central Bank of Uruguay: “value currencies,” “utility tokens,” “stablecoins,” and “others.” This classification aims to create a more transparent regulatory environment and is a key aspect of the law highlighted by Uruguayan lawyer Juan Echeverría.
He noted that this categorization is vital for clarifying the legal status of different types of digital currencies and enhancing measures against money laundering and terrorism financing.
However, the law also introduces challenges, particularly concerning its implementation. The Central Bank of Uruguay is expected to issue detailed regulations in the coming months, which will include the steps for registering cryptocurrency platforms and the operational and legal requirements these entities must fulfill.
For the Fintech Chamber, understanding how these regulations will be executed and the timelines involved is critical. The ability of businesses to quickly adapt to these new legal and operational demands will be essential for the sustainable growth of the sector.
@ Newshounds News™
Source: Crypto News Flash
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El Salvador doubles down on Bitcoin, defies IMF concerns | Youtube
@ Newshounds News™
Source: Seeds of Wisdom Team RV Currency Facts
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Seeds of Wisdom Team RV Currency Facts Youtube and Rumble
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