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MAS Exec Excludes Crypto from Digital Money Race

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MAS’ senior executive has asserted that stablecoins and central bank digital currencies [CBDCs] are positioned as potential forms of digital currency, distinct from cryptocurrencies. Ravi Menon, the managing director, conveyed this perspective during the Singapore Fintech Festival, emphasizing the role of privately issued cryptocurrencies, CBDCs, well-regulated stablecoins, and tokenized bank liabilities in the future financial landscape.

Menon’s rationale for excluding traditional cryptocurrencies from this category lies in their perceived failure to meet the requisite criteria for digital money. He highlighted their shortcomings, citing poor performance as a medium of exchange or store of value, susceptibility to speculative price swings, and significant losses suffered by many cryptocurrency investors.

MAS
Pic Source: @MAS_sg

There are four contenders for digital money. Cryptocurrencies have failed the test of digital money because they have performed poorly as a medium of exchange or store of value, their prices are subject to sharp speculative swings, and many investors in cryptocurrencies have suffered significant losses.

These remarks have attracted attention, particularly considering Singapore’s status as a prominent crypto hub in Asia. Menon illustrated his point in a keynote speech by referencing Paxos, a blockchain infrastructure platform that recently launched a stablecoin pegged to the USD in Singapore after securing approval from the Monetary Authority of Singapore [MAS].

As reported by TronWeekly, the new stablecoin aligns with MAS’ regulatory framework for stablecoins, unveiled on August 15, which outlines criteria such as value stability, capital, and redemption at par for issuers. MAS sees well-regulated stablecoins as a promising digital currency that complements CBDCs and tokenized bank liabilities.

MAS Managing Director Champions Project Guardian

Menon also highlighted Project Guardian, a collaborative effort between MAS and industry partners to tokenize foreign exchange, bonds, and funds. This initiative aims to enhance global liquidity, streamline cross-border transactions, and improve operational efficiency in financial markets, with trials involving major global banks.

Menon envisions a broader network of interoperable systems that facilitate instantaneous and seamless payment, clearing, and settlement. He emphasized the transformative potential of digital assets, identifying two critical features that could fundamentally change financial transactions. However, Menon expressed reservations about existing digital asset networks, including public permissionless blockchains and private permissioned blockchains, citing challenges such as accountability, legal uncertainty, and interoperability issues that limit their suitability as a global digital asset infrastructure.

Ripple Gains Momentum Towards IPO Amid Legal Victories

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In a highly anticipated Ripple event, known as Swell, scheduled for the upcoming weeks, the XRP community is abuzz with speculation about potential game-changing announcements. At the forefront of these swirling speculations, Ripple is unveiling its intention to undertake an Initial Public Offering (IPO), marking a potentially game-changing event for the XRP community.

A prominent XRP enthusiast known as WrathofKahneman (WoK) is  Leading the charge in discussing Ripple’s IPO announcement at Swell. Recognizing the immense importance of the upcoming conference, WoK has ventured to explore what the future might hold for the XRP community. WoK has meticulously outlined four key potential developments that could emerge from the Swell conference, with the IPO announcement taking center stage.

The enthusiasm surrounding discussions about IPO has been steadily building in recent weeks, particularly in light of consecutive legal victories. Adding fuel to the fire, Ripple recently dropped a hint about its IPO plans by posting a job opening for a “Senior Shareholder Communications Manager.”

Ripple’s Innovations In CBDCs And Stablecoins

The XRP community’s unwavering belief in Ripple’s imminent IPO has them eagerly anticipating any official statements during Swell. In addition to the IPO buzz, WoK and other community members eagerly await a possible announcement regarding acquiring a Virtual Assets Regulatory Authority (VARA) license during the conference.

Additionally, the crypto community is on the lookout for updates on Ripple’s Central Bank Digital Currency (CBDC) initiatives, advancements in stablecoins, tokenization, and the expansion of XRP’s user base through the introduction of new services. These developments are poised to reshape the landscape of digital finance.

Ripple’s official announcement outlines Swell as an immersive two-day event scheduled to take place in Dubai on November 8 and 9, 2023. The gathering is set to bring together luminaries from blockchain, cryptocurrency, financial services, and economic policy.

The agenda includes discussions on the Future of Crypto, CBDCs, Payments, Compliance, Regulation, and Payments. Participants could delve into digital cash and payments, gaining crucial insights into combining crypto tech with conventional finance. It emphasizes a deep dive into how regulatory measures impact digital currencies.

With Ripple’s Swell event on the horizon, the XRP community remains on the edge of their seats, eagerly awaiting any potential groundbreaking announcements, especially regarding IPO plans.

Mastercard To Wraps Australian CBDC For NFT Adventure On Ethereum

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Mastercard has joined the Central Bank Digital Currency (CBDC) pilot project in Australia, where they showcased the capabilities of CBDCs by purchasing a non-fungible token (NFT) listed on the Ethereum blockchain. 

The innovative process effectively “wrapped” the CBDC on the Reserve Bank of Australia’s (RBA) pilot CBDC platform and created wrapped pilot CBDC tokens on the Ethereum blockchain.

Mastercard announced this significant milestone in a press statement on 12th October, emphasizing the successful development of a new solution. This solution enables CBDCs to be tokenized or “wrapped” on various blockchains, opening up new opportunities for consumers to participate in commerce across multiple blockchains while enhancing security and user-friendliness.

The collaboration that led to this achievement involved Mastercard, Cuscal, and Mintable as part of a research project with RBA and DFCRC. They aimed to explore potential use cases for a CBDC in Australia. 

They emphasized stringent controls to ensure pilot CBDCs can only be held, used, and redeemed by authorized parties who have undergone Know Your Customer (KYC) verification and risk assessment by licensed service providers.

Richard Wormald, Division President, Australasia at Mastercard, explained the rationale behind this development:

This technology not only has the potential to drive more consumer choice, but it also unlocks new opportunities for collaboration between the public and private networks to drive genuine impact in the digital currency space.

Mastercard’s Broader Blockchain Strategy

The live demonstration showcased how the solution allowed the holder of a pilot CBDC to purchase an NFT on the Ethereum public blockchain with robust controls in place. This success also highlights the Multi Token Network introduced by Mastercard, designed to make payments and commerce applications more efficient using blockchain technology.

This initiative aligns with Mastercard’s broader strategy to expand blockchain technology usage in various payment scenarios, with the network currently in beta testing and being piloted by select financial institutions worldwide.

However, this achievement by Mastercard, in collaboration with RBA, Cuscal, and Mintable, represents a significant step in the evolution of CBDCs and blockchain technology. 

It showcases the potential for greater blockchain interoperability and offers consumers new opportunities to securely and transparently engage with digital currencies.

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French Central Bank Backs CBDC As Key To New Global Monetary System

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In a significant move that underscores the evolving landscape of digital currencies, representatives of Banque de France, the country’s central bank, have thrown their weight behind the central bank digital currency (CBDC) discourse. In a recent announcement, Denis Beau, the first deputy governor of Banque de France, hailed CBDC as the linchpin for ushering in a novel international monetary system.

According to a recent report, Beau’s endorsement came during a pivotal moment on October 3 when he asserted that CBDCs could be the catalyst for revolutionizing cross-border payments and reshaping the global financial order. Unlike many who view CBDCs as an afterthought in the cross-border arena, Beau emphasizes their strategic importance from the outset.

Pioneering CBDC Development Paths Unveiled

The deputy governor laid out two paths for Central Bank digital currency development. The first path entails establishing common standards and fostering interoperability between wholesale CBDCs and traditional financial systems. The second path, actively advocated by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS), revolves around creating regional or global central bank digital currency platforms. These platforms would enable the direct exchange of standardized wholesale CBDCs while facilitating payment versus payment and delivery versus payment transactions.

One noteworthy highlight in Beau’s address was his reference to Project Mariana. This collaborative initiative, involving Banque de France, the Monetary Authority of Singapore, and the Swiss National Bank, delved into the potential of an automated market maker (AMM). The project, which concluded successfully in late September, could hold key insights for the future of central bank digital currency

In a broader context, Beau extended his thoughts beyond central bank digital currency, touching on the tokenization of finance. He ardently believes that the public sector must actively support the private sector to unlock blockchain’s full potential while managing associated risks. He believes tokenized “central bank money availability” and tokenized assets should be seen as allies rather than rivals in the evolving financial landscape.

Banque de France’s enthusiastic embrace of central bank digital currency as a cornerstone of a fresh global monetary system signals a significant shift in the central bank’s approach. As discussions around CBDCs continue gaining momentum worldwide, the world eagerly watches how other central banks respond to this emerging financial paradigm.

Related Reading: |CBDC Battle Royale: Congress Divided Over Digital Currency

CBDC Battle Royale: Congress Divided Over Digital Currency

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CBDC: In a significant development in the world of digital currencies, the House Financial Services Committee has greenlit a bill designed to prevent the Federal Reserve from pursuing the creation of a US central bank digital currency. Introduced by US Congressman Tom Emmer, the bill aims to ban the Fed from initiating any CBDC pilot programs and seeks to forestall the introduction of a retail digital currency that could potentially infringe on citizen privacy and freedom.

Emmer passionately argues that the CBDC issue revolves around critical factors like privacy, individual sovereignty, and the preservation of free-market competitiveness. With the bill’s approval by the House Financial Services Committee, it is now poised to advance to the House of Representatives for further deliberation.

One key provision of this potential legislation is that any progress toward a government-backed digital token must be explicitly authorized by Congress. However, its prospects for approval in the House remain uncertain, and its fate in the Senate, where Democrats hold the majority, is even less clear. This political divide presents a challenge, as the bill was introduced by a Republican, and Democrats in the Senate may not be inclined to support it.

Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, expressed her concerns about the bill and its potential impact on the US’s position in the global financial landscape. She contends that such a bill would hinder the US in its race with other countries, particularly China, to establish a global standard for central bank digital currencies.

Waters argues that it could impede research and development, potentially causing the US dollar to lose its status as the world’s reserve currency and depriving US citizens of the benefits of faster, cheaper, and simpler payment systems.

US CBDC Bill Stirs Controversy Amid Global Trend

The bill’s significance lies in the broader context of global CBDC initiatives. Many countries around the world have either embarked on or explored the creation of their own CBDCs, recognizing the potential benefits they offer in terms of financial inclusion, efficiency, and innovation. However, the United States has remained divided on the issue, with contrasting opinions within the crypto industry and among policymakers.

As the bill advances to the House of Representatives, it remains to be seen whether it will gain sufficient support to become law. The outcome will undoubtedly have a substantial impact on the future of CBDCs in the United States, shaping the nation’s stance on digital currency, privacy, and its competitiveness in the evolving global financial landscape. Ultimately, the decision will determine whether the US joins the ranks of nations embracing CBDCs or takes a different path in the digital currency revolution.

XRP’s Surging Utility: 4.8B Transactions & 2.03B Circulation Spark Frenzy

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Santiment’s recent tweet has ignited discussions about the remarkable surge in utility for XRP at the onset of the month. The cryptocurrency has achieved milestone highs in both on-chain transaction volume, totaling 4.8 billion XRP, and circulation, reaching 2.03 billion XRP. 

Simultaneously, the development activity surrounding XRP, the fifth-largest cryptocurrency by market capitalization, has witnessed substantial growth. 

XRP & XLM: Navigating The Future

In the midst of this cryptocurrency excitement, analyst EGRAG CRYPTO took to Twitter to discuss the future of finance with a focus on XRP and XLM. The central theme revolves around global finance transformation, driven by CBDCs ascent and the pursuit of decentralization in currency control.

The emerging vision entails a world where every major nation introduces its own digital currency, effectively supplanting conventional fiat currencies. These CBDCs, issued and overseen by central banks, are poised to become the cornerstone of our financial systems.

Moreover, financial institutions actively embrace the digital revolution by tokenizing their reserves and potentially introducing native tokens. This trend signifies the broader adoption of digital assets as integral components of financial operations.

The overarching shift towards digital assets extends to diverse value categories, including real estate, stocks, and commodities. The lines differentiating asset classes are fading as everything migrates to blockchain and distributed ledger technology.

One of the most significant aspects of this financial transformation is the move away from a single dominant reserve currency, like the US Dollar, which has historically led to financial imbalances. Decentralization on a global scale is deemed necessary.

CBDCs, while resolving the issue of a single reserve currency, introduce the challenge of requiring a decentralized bridge currency. This bridge currency would facilitate seamless cross-border transactions and serve as a connection between various CBDCs.

Cryptocurrencies, such as XRP and XLM, are emerging as potential candidates for this pivotal role, according to discussions within the crypto community. However, the landscape remains dynamic, and new contenders may emerge. Nevertheless, it’s undeniable that distributed ledger networks (DLNs) will be at the forefront of this transformative process.

However, the future of finance is destined to be digital, decentralized, and underpinned by CBDCs and DLTs. The era of a single reserve currency is waning, and cryptocurrencies like XRP and XLM may pave the way to this new financial paradigm. 

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CBDCs on the Horizon: 130 Nations, 98% GDP Combine Forces to Explore e-Currencies

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Numerous nations worldwide have intensified their exploration of Central Bank Digital Currencies (CBDCs) in recent times. Back in May 2020, the consideration of CBDCs was limited to 35 countries. However, this number had risen to 105 by mid-2022. The most recent data from the Atlantic Council indicates that an even larger group of 130 countries is currently engaged in the investigation of digital iterations of their respective currencies. In aggregate, these nations make up a substantial 98% of the global GDP.

Furthermore, out of the G20 countries, 19 have progressed to an advanced stage in the development of Central bank digital currency’s. Notably, nine of these nations have already entered the pilot phase. Impressively, nearly every G20 member has made noteworthy advancements and allocated fresh resources to these initiatives within the past six months.

The key findings of the Atlantic Council’s report also underscore that “over 20 other countries are poised to commence pilot programs for their Central bank digital currency’s in 2023.” Notably, Australia, Thailand, and Russia plan to continue their pilot testing, while India and Brazil are targeting CBDC launches in 2024.

The central bank of Brazil recently designated 14 institutions to engage in the trial phase of its Central Bank Digital Currency (CBDC) program. Well-known companies such as Visa and Microsoft were chosen to partake in this initiative. The list also encompassed entities like B3, which is Brazil’s largest stock exchange, in addition to local private banks including Nubank, Bradesco, and Itaú Unibanco.

Furthermore, Banco do Brasil, the largest public bank in Brazil, was also included in the selected institutions. In India, two CBDC pilot projects were introduced in 2022. The initial project, focusing on a wholesale Central bank digital currency (CBDC-W), commenced on November 1 with the participation of nine banks. The second project, involving a retail CBDC (CBDC-R) pilot, was initiated on December 1 across four cities.

Monitoring Global CBDC Advancements

Currently, 78 nations are in the stages of conducting research and development for their Central Bank Digital Currencies (CBDCs), while 21 countries are actively engaged in pilot testing. Furthermore, approximately 11 nations have successfully introduced electronic versions of their currencies. In contrast, 16 countries have not made any progress, and two have reversed their efforts in the Central bank digital currency domain.

The Atlantic Council has highlighted that the United States has experienced a standstill in advancing retail Central bank digital currency development. In this region, a number of politicians express opposition to CBDCs. In the context of the 2024 election, Vivek Ramaswamy, a presidential candidate, recently declared himself an “opponent” of CBDCs. He contends that Central bank digital currency’s pose a significant “threat” to the freedom of the United States.

CBDC

On the other hand, other countries remain committed to advancing in this area. Notably, Visa is currently sharing its Central bank digital currency expertise with the Central Bank of Azerbaijan. The collaborative efforts between the company and the central bank involve a transparent and constructive discourse to establish suitable channels of interaction and collaboration.

Ripple & Other Blockchain Leaders Join Mastercard’s CBDC Innovation Journey

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In a move that underscores the rapid evolution of the financial landscape, global payment giant Mastercard has extended invitations to prominent blockchain companies to join its Central Bank Digital Currency (CBDC) Partner Program. Among the pioneering partners are Ripple, Consensys, Fluency, Idemia, Consult Hyperion, Giesecke+Devrient, and Fireblocks.

Raj Dhamodharan, head of digital assets and blockchain at Mastercard, said:

By assembling the strengths, deep expertise and different capabilities of these partners, we can drive innovation in the central banking community and along the CBDC value chain as the space continues to evolve.

Central banks worldwide have been exploring avenues to introduce their own digital currencies, a concept often termed Central Bank Digital Currencies (CBDCs). While these digital counterparts to traditional fiat currency have been less captivating than cryptocurrencies like Bitcoin, they are gaining traction as practical alternatives. CBDCs, being government-backed and less speculative, have the potential to revolutionize everyday transactions.

The Bank for International Settlements (BIS) reveals that an impressive 93% of central banks are actively engaged in CBDC-related efforts, with four retail CBDCs already in full circulation. However, numerous aspects require careful consideration. According to Jesse McWaters, Mastercard’s leader in global regulatory advocacy, pertinent questions revolve around private sector participation, security, privacy, and interoperability.

Ripple’s Role: Revolutionizing Payments with Amazon

To shed light on the benefits and challenges of CBDCs and to foster innovation and collaboration, Mastercard has established the CBDC Partner Program. Key players in the blockchain and payment service domains will come together to navigate the complexities of CBDC implementation, striving for seamless and secure digital transactions.

Notable partners in this initiative include Ripple, which has also recently joined forces with Amazon to revolutionize payment transactions. Other participants like Consensys, Fluency, Idemia, Consult Hyperion, Giesecke+Devrient, and Fireblocks will contribute their expertise in various aspects of CBDC development.

Mastercard envisions a future where CBDCs coexist harmoniously with traditional forms of money, ensuring the ease of use, privacy, and security that users expect. Despite challenges such as user adoption and privacy concerns, this collaboration seeks to bring forth a comprehensive roadmap for CBDC integration. 

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CBDCs and Individual Liberty: An In-Depth Analysis by Vivek Ramaswamy

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Numerous individuals running for the presidency have expressed firm opposition to Central Bank Digital Currencies (CBDCs). Vivek Ramaswamy, in a recent statement, presented his perspective against Central Bank Digital Currencies. In a video segment shared on X (formerly known as Twitter) earlier today, Ramaswamy conveyed, “I hold a negative stance towards Central Bank Digital Currencies, as I believe they pose a significant risk to the freedom and liberties within our nation.”

CBDCs: China’s Choice, America’s Dilemma – Vivek Ramaswamy’s Opinion

Numerous countries around the globe have been making significant advancements in this realm, and the United States has also joined this trend. Ramaswamy highlighted that China’s adoption of CBDCs is aimed at restricting individual freedoms. Consequently, he argues against the U.S. following the same path. Specifically, he remarked,

“The exact reasons the Chinese Communist Party (CCP) aims to implement CBDCs are precisely why the United States should refrain.”

Other prominent figures in the U.S. share Ramaswamy’s viewpoint. Congressman Warren Davidson recently advocated for a prohibition on Central Bank Digital Currencies, likening the Federal Reserve’s actions to constructing a financial equivalent of the “Death Star.” Davidson believes that CBDCs transform money into a tool for manipulation and authority. He called for swift legislative action to outlaw CBDCs and criminalize any efforts to develop or establish a digital dollar. In the video, Ramaswamy also criticized the Federal Reserve, describing it as a “negative actor” over the past 25 years.

However, Federal Reserve Governor Michelle Bowman has expressed reservations about CBDCs in the past. A couple of months ago, she raised concerns that Central Bank Digital Currencies could encroach on users’ privacy and disrupt the stability of the banking system. She further stated,

“The potential risk of a CBDC goes beyond just observation and could potentially hinder the freedom that Americans currently have in determining the allocation and utilization of money and resources.”

(Note: “CCP” has been used to abbreviate “Chinese Communist Party” for conciseness.)

India’s RBI Directs Lenders Towards Digital Rupee

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CBDC: In a bid to increase transactions, the Reserve Bank of India (RBI) has extended invitations to a broader set of lenders to engage in pilot programs centered around the central bank digital currency, as reported by three bankers who spoke to local media.

A recent survey conducted by the Bank for International Settlements (BIS) and published on Monday revealed that nearly twenty central banks in emerging and advanced economies are anticipated to have digital currencies in circulation by the end of the decade.

Last year, the RBI commenced trials using Central Bank Digital Currency known as e-rupees in both the wholesale and retail markets.

Currently, prominent state-owned and private lenders such as State Bank of India (SBI.NS), Bank of Baroda (BOB.NS), ICICI Bank (ICBK.NS), HDFC Bank (HDBK.NS), Kotak Mahindra Bank (KTKM.NS), and Yes Bank (YESB.NS) are participating in the pilot project.

RBI Targets: One Million CBDC Transactions

The technology head of a state-owned bank, who attended a meeting with RBI officials on Tuesday, disclosed that the RBI has instructed smaller banks to either collaborate with fintech companies or enhance their systems to initiate CBDC pilots this year.

Due to their lack of authorization to speak to the media, the bankers opted to remain anonymous. RBI Deputy Governor T Rabi Sankar stated on Tuesday that the RBI aims to achieve a target of one million CBDC transactions per day by the end of this year.

As of June 2023, there were 1.3 million customers and 0.3 million merchants utilizing CBDC, according to Sankar. Another banker from a state-owned bank remarked,

“By involving more banks in the pilots, the RBI intends to identify any implementation issues and conduct trials on a substantial user base. We are in the advanced stage of submitting a CBDC pilot request to the RBI. We anticipate receiving approval within the next one to two months.”

In recent weeks, Shaktikanta Das, the governor of the RBI, highlighted that there was no urgency to implement the CBDC on a larger scale. He acknowledged the existence of technological and procedural obstacles and expressed the RBI’s intention to address these challenges before introducing the CBDC in a manner that ensures a smooth and non-disruptive transition.