Here's the most recent fintech, crypto and blockchain news from all around the globe:

Cryptocurrency Hub online community appreciates and cherishes the time and effort its members invest communicating, interacting and contributing on its platform and as a token of appreciation and giving back to the community we came up with a a prize points system based on members activities in the community! Yaaaaayyyyyy 😎

So that's how it will work:

Registered members earn points based on certain activities. Each activity has a number of points for each action taken. These points will be added for each member automatically.

Points will be calculated according to the below formula (subject to change upon the discretion of the admins):

Don't forget that you can invite new members to our community and help it grow while collecting points for each invited member! 🤪

The regular crypto giveaway will be in the form of weekly Cardano (ADA) and monthly Ripple (XRP) prizes! 🎁😁

Weekly Cardano (ADA) prizes (2 winners):

Every end of the week a First Prize will be given to 1 winner (1st highest number of activity points collected for the corresponding week): 30 ADA

Every end of the week a Second Prize will be given to 1 winner (2nd highest number of activity points collected for the corresponding week): 20 ADA

Monthly Ripple (XRP) prizes (1 winner):

Every end of month one Prize will be given to 1 winner (with the highest number of activity points collected for the corresponding month): 50 XRP

Members usernames will be of course announced in due dates and contacted to have their crypto prizes transferred to their wallets addresses.

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Blockchain technology is a prominent example of how many sectors are being revolutionized by this innovative force in today's quickly changing digital landscape. Leadingblockchain development company In Mohali Wisewaytec is driving this change by providing creative approaches that enable companies to thrive in the decentralized era.

Initial Thoughts

Running a cryptocurrency exchange for your business gives you a competitive advantage. It helps attract more customers and allows for smooth business growth. As the demand for custom cryptocurrency exchanges continues to rise, ensuring the security of your platform is crucial. As digital transformation progresses and customer transaction patterns shift, cyberattack risk is also at an all-time high.

Since there is no government identification verification process, recovering stolen cryptocurrency becomes nearly hard when compared to fiat currencies that are governed by the government. Whether you're planning to launch a cryptocurrency exchange or are already in the business, understanding the essential security features is vital. Let's explore the top must-have security features to keep your business ecosystem safe and operational.

Decentralized Storage for Wallets

Most cyber attacks target wallets due to insufficient security measures. Businesses should strengthen their wallet systems with a comprehensive security solution to ward off potential threats. It provides multiple security features, such as multi-signature authentication, automatic logout after a session, and password-protected access, ensuring the safety of your customers and platform.

Even in a worst-case scenario where hackers have full control over the exchange, the wallets remain protected, safeguarding customers from losing any of their assets.

Registry Lock for Cryptocurrencies

To secure the information of your crypto exchange, a registry lock plays a crucial role. This feature helps the owner to boost overall security by locking down domain-related information during various operations.

This important security step stops hackers from faking domain information or changing DNS server details to get unauthorized access.

Protocol for Anti-DDoS Security

Hackers often use Distributed Denial of Service (DDoS), a common cyberattack, to block legitimate users from accessing the platform. After such an attack, registered users find it impossible to use services or reach their stored assets. This module blocks anyone trying to enter the system with fake traffic, ensuring the safety of both users and the platform.

Domain Name System Security Extension

It is a security extension for your cryptocurrency exchange that protects the data associated with your domain from hackers. With this extra layer of security, business owners must use digital signatures to verify the DNS data and keep the platform running smoothly. It's an advanced security feature that crypto platform owners should have to provide a trouble-free trading experience.

In Conclusion, operating a cryptocurrency exchange is pivotal for business growth, attracting customers with rising demand. The heightened risk of cyber threats necessitates robust security measures. Essential features such as decentralized wallet storage, registry lock, and anti-DDoS protocols shield against attacks, ensuring asset protection. The Domain Name System Security Extension adds an advanced layer of defense. For effective cryptocurrency exchange software development, these security measures are indispensable, providing both resilience and a secure trading experience.

Introduction

In the world of finance, cryptocurrency has become a buzzword, and demand for exchange platforms for cryptocurrencies is rising. Many companies are making efforts to get into the crypto exchange market because of the growing demand. However, starting from scratch to create a crypto exchange might be a difficult undertaking. White-label cryptocurrency exchange development services are useful in this situation. In this article post, we will describe the guidelines and necessary things you should be aware of before creating a crypto exchange.

Most Important Things You Should Know Before Starting Crypto Exchange

Learn the types of exchanges

The first and most crucial step in creating a cryptocurrency exchange is deciding on the kind of exchange to create. This phase will determine the subsequent actions you take, such as licensing, selecting software, employing experts, and communicating with for-profit businesses. There are three different types of crypto exchanges.

1. Centralized (CEX)
2. Decentralized Exchange (DEX)
3. Hybrid Exchange

Regulatory Compliance

Exchanges for cryptocurrencies are governed by several laws, and it is essential to ensure that the exchange complies with all the relevant regulations. Respecting the law can promote user confidence and guarantee the exchange's long-term viability. The exchange ought to have a group of legal professionals on staff who can make sure the exchange conforms with all applicable laws, such as those relevant to know-your-customer (KYC) and anti-money laundering (AML).

Security Measures

Ensuring that an exchange has strong security measures in place to guard against hackers and cyberattacks is crucial, as security is a crucial component of cryptocurrency exchanges. Multiple security measures, like SSL encryption, cold storage wallets, and two-factor authentication, should be implemented on the exchange. Additionally, to find potential weaknesses and offer mitigation strategies, the exchange should regularly carry out security audits.

Innovation and Upgrades

You must continuously innovate and provide new updates if you want to stay ahead of the competition. As a result, they provide cutting-edge concepts and ideas for innovation that are essential to the expansion, effectiveness, and competitiveness of cryptocurrency companies and technology.

Customization

By working with a cryptocurrency exchange software development company, you may tailor your exchange platform to your desired business requirements. To draw consumers to your platform, you might add features and change the way it looks.

Conclusion

Numerous investors have already shown interest in the cryptocurrency industry, which includes Bitcoin and other cryptocurrencies. In the upcoming years, exchanges for cryptos will only get more valuable and popular. Along with the development and addition of new currencies, the market for cryptocurrencies appears to be expanding. We expect that there will be many more cryptocurrencies listed on exchanges by 2024. The cryptocurrency market, involving Bitcoin and other cryptocurrencies, has already attracted a large number of investors. Create your crypto exchange website right now.

A Cyptocurrency wallet development company specializes in creating secure and user-friendly software applications to store, manage, and transact with digital currencies like Bitcoin and Ethereum. These firms employ blockchain technology experts to design and develop custom wallet solutions tailored to the unique needs of clients, ensuring the protection of digital assets and enabling seamless cryptocurrency management.

Developers can encourage liquidity provision through incentives, such as yield farming or liquidity mining programs. Additionally, partnerships with other projects can attract more users and liquidity to the exchange.

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A reliable crypto exchange development platform incorporates compliance features such as KYC (Know Your Customer) and AML (Anti-Money Laundering) checks to adhere to regulatory requirements in different jurisdictions.

The time required to launch a white label crypto exchange platform depends on various factors, such as the provider's setup process, the level of customization needed, and compliance with regulatory requirements (if applicable). With a reliable provider like Mention Blockchain App Factory, entrepreneurs can typically launch their exchange within a few weeks to a few months.

Some white label crypto exchange software does support leverage trading and margin facilities. However, these advanced trading features come with added risk, and it's crucial to implement them carefully and comply with applicable regulations.

Decentralized exchange development services are important because they allow businesses to create DEX applications without the hassles associated with platform creation and deployment. Such a provider usually also offers post-launch support for DEX ventures.

Yes, it is possible to build your own decentralized exchange. However, developing a decentralized exchange from scratch can be complex and time-consuming, requiring expertise in blockchain technology, smart contract development, and security protocols. Alternatively, you can explore white label decentralized exchange solutions provided by development companies. These solutions offer pre-built exchange platforms that can be customized and branded according to your requirements, saving time and resources.

Dubai's forward-thinking regulatory authority, known for its progressive stance on financial innovation, has issued a warning highlighting the inherent risks arising from regulatory gaps within the global cryptocurrency industry.

With cryptocurrencies gaining widespread attention and adoption, there is a pressing concern for consistent oversight and the establishment of a strong legal framework across various jurisdictions.

A reliable ICO marketing agency that comes highly recommended is Blockchain App Factory. They have a  proven track record in the industry, working with numerous successful ICO projects and offering     comprehensive marketing solutions to drive engagement and investor interest.

In recent years, the crypto industry has faced skepticism and regulatory challenges worldwide. While some countries have banned or heavily regulated cryptocurrencies, a fascinating trend is emerging in Asia. Unlike its neighbors, such as Malaysia and the Philippines, Hong Kong is actively positioning itself as a crypto hub.

Hong Kong: Asia's Crypto Pioneer

Hong Kong is set to introduce a fresh set of regulations that will enable retail investors to participate in cryptocurrency trading, despite ongoing clashes between digital-asset firms and regulators in other Asian regions.

The Securities and Futures Commission of Hong Kong is expected to announce the results of a consultation on retail involvement in the crypto sector. It is anticipated that the agency will proceed with its proposal to allow individual investors to trade major tokens like Bitcoin and Ether, starting as early as next month. Stringent safeguards will be implemented to ensure investor protection.

Read more on what Hong Kong initiatives are taking to begin issuing licences on June 1.

The U.S. Securities and Exchange Commission (SEC) proposed a rule in 2022 about “best execution” in the crypto asset securities market. However, Paul Grewal, the Chief Legal Officer of Coinbase, has come forward to voice his concerns about the proposed rule.

The SEC’s Proposed Rule and Its Legal Obligations

The proposed rule, Regulation Best Execution (Reg Best Ex), aims to provide a regulatory framework for brokers to ensure they offer the best possible prices to their customers. This proposed rule has caused quite a stir in the digital currency market, as it’s the first time the SEC has applied such a rule to crypto asset securities read more

Authentication certificates can be created using NFTs, which are mostly utilized in the antiquities market. This is because they are indestructible and the user has a means of verifying that the item he purchased was authentic. Given that India is the home to many antiquities, it should come as no surprise that the popular types of NFTs that are listed on several NFT marketplaces in India.

There is no crypto license in the Czech Republic at this time. A corporation must comply with normal authorization procedures and obtain a Trade Licensing Register license to conduct crypto-related activity.

According to the Czech Republic's laws on cryptocurrency, crypto assets are considered "goods" and not payment methods. Although their circulation is not controlled by anyone, it is not restricted. Crypto-assets that resemble financial products like shares or bonds may be subject to financial regulations. All transactions using virtual currency are subject to anti-money laundering regulations.

Czech National Bank (CNB), is the main regulator of the Czech financial markets. It regulates local banks and permits them to provide cryptocurrency-related services as long as AML/KYC requirements are followed.

Different types of Crypto Licenses:

Businesses must obtain a license before they can start operations in the Czech Republic. It is not yet clear what regulatory framework will be used to regulate digital assets. The government has made significant progress in this area, creating a transparent system to obtain permits.

Based on what type of activity you wish to perform, there are four types of licenses available:

1. Classic
2. Fiat
3. Traditional
4. Specialized

A Crypto license is vital for any crypto business. If they don't know it, this is something all companies in the industry should be familiar with. It should not be difficult to obtain a crypto license if you are a trustworthy business owner and follow good standards. It is important to know that getting a crypto license can be difficult for budding entrepreneurs who want to start a new cryptocurrency firm. The process can take several months and requires a lot of documentation and paperwork. Entrepreneurs will often have difficulty obtaining a crypto license. In this case, they can approach the white label currency exchange development company and get their license quickly.

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Blockchain, an intriguing technology, long connected primarily with the virtual currency ‘Bitcoin’ has evolved as one of the most crucial technologies accessible today. Legacy technologies are being challenged in various sectors including financial, healthcare, and energy by advanced blockchain-based solutions. In terms of geographic influence, blockchain has also surged. Entrepreneurs, engineers, venture capitalists, and bankers are pouring their time, energy, and money into bitcoins and other cryptocurrency-related businesses, but the true appeal is the underlying "blockchain" technology.

Over the last two years, an obscure technology long linked primarily with the virtual currency Bitcoin has become one of the most crucial technologies accessible today. Legacy technology is being challenged by suggested blockchain-based solutions in financial services, healthcare, energy, capital markets, and many other areas. In terms of geographical influence, blockchain has also surged. Entrepreneurs, engineers, venture capitalists, and bankers are pouring their time, energy, and money into bitcoin and other cryptocurrency-related firms, despite the fact that the underlying "blockchain" technology is the actual draw.

While it is frequently stated that cryptocurrencies and blockchain technology are unregulated, this is hardly the truth. Let's take a deeper dive to learn why.

Impact Of Regulations On Cryptocurrency & Blockchain

Many view the rise of crypto assets, such as cryptocurrencies, as part of a wider trend toward more flexible financial market infrastructures that boost options while also providing innovative solutions to fulfill both current and future payment demands. In the future, the extent and quality of regulation in a given jurisdiction will directly influence the adoption of cryptocurrencies and stablecoins. Many jurisdictions, including the United States, regulate cryptocurrency activities uniquely. Some crypto exchanges that do not clearly fit under the present legal framework have built strong techniques to authenticate their users’ identities and the source of money.

Crystal-clear Anti-Money Laundering (AML) and Know-Your-Customer (KYC) practices can help tremendously in eradicating illegal activities happening through exchanges and other cryptocurrency-powered platforms. A pro-innovation regulatory approach is required to enable the crypto and blockchain industry's growth while simultaneously safeguarding customers and avoiding illicit activities.

Northern Europe Is a Digital Safe Haven for Cryptocurrency Projects

Despite the instability that erupted in the crypto market this summer, there is a significant long-term indicator that should be factored into any sophisticated analysis: the combo of adoption and regulation. Large economic jurisdictions such as the EU and the US have already taken initial measures toward crypto and blockchain regulations. The Council presidency and the European Parliament struck a preliminary agreement on the markets in crypto assets (MiCA) proposal at the end of June 2022, which includes issuers of unbacked crypto assets and stablecoins, as well as trading platforms and wallets where crypto assets are stored. MiCA's goal is to give further clarity across the European Union, as several member states currently have varied national regulations concerning crypto assets.

In order to provide you with the most significant details on the current state of cryptocurrency and blockchain in Northern Europe, we have put up a brief summary. Let's take a peek.

1. Sweden

Regulations & Legislation: There is still no clear crypto or blockchain legislation in the country. As a result, "blockchain is often forced to conform within the current legal framework." The Swedish Data Protection Agency and the Swedish Financial Supervisory Authority are the main regulatory bodies in the country.

Major Initiatives: Lantmäteriet, Sweden's land-ownership authority, began exploring blockchain technology in 2016, resulting in a pilot project to design future real estate transactions via smart contracts. In June 2018, developers executed the platform's first successful transaction. Together with Nasdaq, one of Sweden's leading banks, SEB, launched the Nordic Fund Ledger, a partnership aimed at improving mutual fund trading through the use of blockchain.

Statistics: 15 blockchain firms were launched, and $39.9 million (or 40 million euros) was generated through initial coin offers (ICOs).

Taxes: Local tax advisers clarify that capital gains from selling cryptocurrencies are subject to a 30% tax.

Key Players Within Sweden:

• 3Box- a decentralized consumer data storage system
• AIAR- an Ethereum-based education platform
• Bitrefill- a digital gift card and mobile airtime supplier

1. Denmark

Regulations & Legislation: Denmark has no cryptocurrency-specific legislation. Danske Bank, Denmark's largest bank, declared in 2021 that it will not offer cryptocurrency services to consumers but will not interfere with transactions originating through crypto platforms.

Major Initiatives: Maersk and IBM announced the debut of TradeLens in 2018, a blockchain-powered shipping solution designed to foster more secure and efficient global trade.

Statistics: 24 blockchain firms launched & a total of $32.4 million (32.5 million euros) was raised by blockchain initiatives.

Taxes: Cryptocurrency earnings are subject to income tax, which is estimated to be approximately 37%. If you're a lavish earner, your crypto gains — as part of your entire income — might go up to 52% tax.

Key Players Within Denmark:

• Chainalysis
• Blockshipping
• MakerDAO

1. Finland

Regulations & Legislation: The Finnish Financial Supervisory Authority is the primary regulatory body for all crypto matters in the country. The Act on Virtual Currency Providers took effect in 2019. Any organization that offers or markets its crypto-related services to Finnish clients is required to register. Myriad types of digital currencies are not differentiated in any way by the Virtual Currency Act.

Major Initiatives: An alliance between the Finnish government and Essentia to develop blockchain-based solutions for smart logistics was first announced in 2018.

Statistics: 18 blockchain startups launched

Taxes: Cryptocurrency exchange or sale profits are subject to capital gains tax, which is calculated at a rate of 34% on excess income over $29,922 ($30,000) and 30% on income up to that amount.

Key Players Within Finland:

• SOMA (SOcial MArketplace)- a decentralized P2P platform
• LocalBitcoins- a P2P platform for digital currencies
• Haja Networks- developer of distributed & decentralized database solutions based on blockchain solutions

1. Norway

Regulations & Legislation: The Norwegian Data Protection Authority, the Financial Supervisory Authority (FSA), Norges Bank, and the Norwegian Tax Authority are the advisory and regulating bodies for blockchain and cryptocurrencies. The FSA has already stated that a legal framework and guidelines for investor protection are required in case cryptocurrencies turn out to be a good investment for consumers. The Regulation on Markets for Crypto-Assets (MiCA), the EU's flagship cryptocurrency law, has not yet been adopted, thus it is doubtful that Norway would pass new cryptocurrency legislation as of now.

Major Initiatives: A regulatory sandbox was formed by The FSA in 2021 to boost fintech innovation. A central bank digital currency (CBDC) is being intensively researched by the Central Bank of Norway and is now undergoing a two-year phase of technical testing.

Statistics: Total equity funding of $26.9 million (27 million euros), 22 blockchain solution companies.

Taxes: Cryptocurrency holdings in Norway are susceptible to the standard capital gains tax, much like in other Scandinavian nations. The yearly tax rate for private individuals is 22%; due to a uniform corporate income tax rate, the same proportion also applies to legal companies. A person would pay extra, though, if his annual income exceeded specific thresholds.

Key Players Within Norway:

• Choose- a cryptocurrency platform backed by CO2 emission permits
• ViPi Cash- a digital platform that uses blockchain technology to enable international money transfers
• Diwala- a decentralized platform that uses decentralized ledger technology to verify people's skills

1. Latvia

Regulations & Legislation: The country's regulations on cryptocurrency are still mostly lax. In the country, cryptocurrency is still mainly unregulated. The Financial and Capital Market Commission, the country's major financial regulator, warned investors in 2020 to "be extra attentive since cryptocurrencies operate in an infrastructure that is now defined by very few regulations than in the financial and capital markets."

Major Initiatives: The Latvian Economic Ministry launched two blockchain-based experimental projects in 2019. The first would increase the State Revenue Service's supervisory capabilities and minimize the shadow economy by using a blockchain-based cash register. The second would make obtaining limited liability company status easier by utilizing blockchain technology in the Enterprise Registry.  In 2021, the national airline carrier- airBaltic started accepting Dogecoin and Ether as payment options. It began accepting Bitcoin as early as 2014.

Statistics: 15 blockchain startups launched

Taxes: The Latvian PIT Act classifies cryptocurrency as a capital asset liable to the general capital gains tax of 20%.

Key Players Within Latvia:

• Blockvis- a blockchain development and consulting group
• Velvet- a blockchain-powered solution for online identification
• Soft-FX- a software developer, that has collaborated with major crypto platforms such as Binance, and Bifinex, among others

1. Lithuania

Regulations & Legislation: Lithuania is among Europe's top pro-blockchain countries. It was one of the first countries to establish ICO rules in 2018. From 2019, all providers of digital assets had to be registered with the country's Centre for Registers.

Major Initiatives: In 2018, the Bank of Lithuania unveiled LB Chain, a digital currency sandbox intended to serve as a model for central bank-issued blockchain-based coins.

Statistics: 31 blockchain firms have been launched, and local startups have raised $1.09 billion (1.1 billion euros).

Taxes: The corporate tax rate for cryptocurrency enterprises is 15%, and the individual income tax rate is also the same.

Key Players Within Lithuania:

• DappRadar- a market intelligence vendor for DApps
• Bankera- a blockchain-based digital bank
• BirDegree- a blockchain-backed & gamified online education platform

1. Estonia

Regulations & Legislation: Estonia became the first country in Europe to establish clear legislation and guidelines for digital currencies. According to local legislation, digital currencies are "value defined in digital form that is digitally transferable or tradable and that people have accepted as a payment instrument." Digital currencies, on the other hand, are not regarded as legal currency and do not have the legal status of money.

Major Initiatives: The blockchain-backed e-Residency program allows anybody to form and administer an EU-based company entirely online and "has proven to be a substantial facilitator of blockchain business activity in the country." It should be mentioned, however, that when the country refined the definition of virtual asset service providers (VASPs), more than 1,000 licenses from crypto businesses were revoked. The government employs a blockchain-based keyless signature infrastructure that is extremely scalable and privacy-focused, and it is utilized in healthcare, property, business, and inheritance registries, as well as in the country's digital court system.

Statistics: 200+ blockchain solution providers, $284 million (285 million euros) funds raised

Taxes: Digital currencies are considered property, and their trade is subject to a 20% capital gains tax.

Key Players Within Estonia:

• Idealogic- a software development firm with expertise in product design & custom software development in Fintech
• Cryptodevelopers.net- a cryptocurrency wallets developer
• Solve.care- a healthcare blockchain technology company

Closing Thoughts

Marianna Charalambous, research project manager at the University of Nicosia and a member of the EU Blockchain Observatory, stated that Estonia is still a pioneer in public blockchain deployment. "Most banks have prohibited their customers from dealing in cryptocurrency, and the founders of cryptocurrency startups have had their bank accounts forcefully closed." "Because most individuals in the Nordics are still reliant on the fiat banking system, this is a big impediment to creating breakthroughs," said Kristina Lillieneke, CEO of BlackBird Law and a member of the EU Blockchain Observatory.

All of these statements from Blockchain and cryptocurrency specialists demonstrate that the EU is on its way to becoming a pro-blockchain jurisdiction. The need for crypto regulations is getting more pressing by the day. Many nations have already begun to implement regulations to make crypto trading safer for their residents. But how long will it take for global crypto and blockchain regulations to be put in place? Only time will tell.

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Did you feel frustrated when you couldn’t find any solutions regarding the crypto trading licenses?

As cryptocurrency is becoming more popular, governments around the world have been putting together various licensing standards and laws. It can be difficult to stay current with global license requirements and the changing cryptocurrency landscape.

What are the steps necessary to obtain a Crypto Trading License? What are the requirements? Who can help in obtaining these crypto trading permits? Allow us to address all these questions and more. Let's get going. We are ready to assist you to get it.

Why Do You Need A License For Crypto Trading?

If you operate a cryptocurrency business in a nation where a license is required and you don't have one, you might be liable for fines and other penalties. You can encounter some limitations even if your company is established in a country where a cryptocurrency license is not necessary.

Requirements to get a crypto trading license in Europe (Estonia):

Requirements

1. Estonians must have at least one director.

2. The minimum capital requirement for the company is 12,000 USD

3. AML officers must be present in the company.

4. Estonia is the legal address for the company.

Documents

1) A detailed plan for your business

2) Extract from the Registry and Company By-laws

3) A clean criminal history

4) Information regarding corporate bank accounts

Approval of Licenses - Within 2 Months

Prices (in USD). - Starting at 20,000

Conclusion

A crypto license is necessary whether you're just another crypto enthusiast or a real business person eager to enter the cryptocurrency market with a cutting-edge trading platform.

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The Bank for International Settlements established criteria that countries should consider when adopting a CBDC.

Five Things CBDCs need to address (Photo by Mika Baumeister on Unsplash)

In Short

• BIS developed the report in conjunction with the World Bank and IMF.

• The BIS believes that CBDCs contribute to the banking inclusion of individuals.

One of the advantages of central bank digital currencies (CBDCs) is the ability to facilitate cross-border payments, something that the Bank for International Settlements (BIS) has been promoting for a couple of years.

Along with the World Bank and the International Monetary Fund (IMF), the financial entity has once again deployed a series of recommendations on CBDCs because they consider that "international cooperation and coordination is needed in the early stages of the design" of a currency of this type, as they point out in the document. In the report, the international bank unveils five criteria that, in its opinion, central banks should take when adopting a digital currency.

The five criteria proposed by the BIS

The first criteria highlighted by the BIS is "not to harm" here. They refer to the design of CBDC ecosystems that support public policy objectives and do not impede the ability of central banks to fulfill their mandates.

Secondly, they talk about "improving efficiency." Here they believe that monetary authorities can achieve this by adopting state-of-the-art technology compared to legacy systems. They say it is also possible to achieve that goal by fostering a level playing field and competition.

"Increase resilience" is the third criterion. The BIS believes that CBDC ecosystems, with their payment instruments and infrastructures, could "provide an independent alternative to existing payment instruments and systems." CBDCs would assist "to the overall resilience of the overall payments landscape in the domestic and cross-border context."

Another criterion relates to interoperability between CBDCs and other types of money, such as cash. They suggest that the two alternatives should "complement each other and coexist." The idea is to deliver more payment choices that support public policy objectives and include and support private money.

Finally, the BIS defines another criterion as "financial inclusion," whereby CBDCs "should not impede and, where possible, should improve access to payment services for those currently excluded."

CBDCs must accommodate the demands of each country

Cecilia Skingsley of the Committee on Payments and Market Infrastructures believes governments must work out cross-border payments with CBDCs early. The BIS suggests that any system must be built with the "flexibility to adapt to a changing world" and the different CBDC designs. As such, each central bank designs according to its needs.

Cecilia Skingsley (Source: riksbank.se)

These differences in each nation's digital currencies, especially in cross-border payments, need to be worked out among central banks early, suggests Cecilia Skingsley of the Committee on Payments and Market Infrastructures.

"Only then can CBDCs significantly impact the costs, speed, access, and transparency of cross-border payments," Skingsley added. This information went in line with another BIS report a few days ago. They also highlight the role of CBDCs because they offer a "more stable solution for a future monetary system" over cryptocurrencies.  

They say this in contrast with Bitcoin, an issued and self-regulated currency without the need for a third party to intervene, preventing a central financial body from imposing regulations on any country's monetary system, which would leave central banks out of the international economic game.

As of now, El Salvador has adopted Bitcoin as a legal currency. Other countries, including US, UK, Europe, Canada, Australia, Denmark, France, Germany, Iceland, Japan, Mexico, and Spain, also accept crypto transactions. It may not take long before other countries follow them, as there is a vast opportunity that lies ahead.

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#governments #cryptocurrency #governmentsregulatescrypto

The issuance of a digital euro may become the most important economic event of the last hundred years, depending on its design.

The header statement may seem exaggerated, but the point is that for the first time in history, we have the option of creating digital money that is entirely public and risk-free. We haven't seen such a significant change since countries prohibited commercial banks from issuing physical money. That happened in the 19th century. The prohibition of the States had to do with the economic collapses produced by the defaults in the payment promises of the credit institutions. This time, the debate is different, as most of the money is already digital and represented in book entries.

Digital Euro, the economic event

However, the essence is the same: return the ability to create money to the central bank and remove this power from the commercial banks. It is worth remembering that commercial banks are currently responsible for producing 90% of the money supply that surrounds us. Why a digital euro? The most important reason is the democratic aspiration for risk-free money, which would avoid economic crises.

A new type of digital money would be created, backed by a central bank independent of private economic interests, and can represent all citizens. In this context, the digital euro would be sovereign and risk-free. They would reach people through a wide range of financial intermediaries authorized by the European Central Bank (ECB) to hold and store digital euros.

This money should not have a negative interest rate, as it would lose value over time, harming citizens' ability to save. With a fully public digital euro, the ECB would be able to control its monetary policy much more effectively by depriving banks of the ability to create private digital money.

Protections for private money

In the case of an ECB-issued digital euro, there would be no need to increase or maintain current protections for private digital money. The money would be safe and backed by the ECB. An issue that could benefit the EU's weakest countries by making it possible to offset country risk. Also, with the digital euro, there would be a clear differentiation between the money issued by the ECB, the payment services sector, and the companies financing companies and households.

The money would be a public good, allowing savings, and there would be a liberalization of the payment services market, allowing the entry of new players. With homogeneous regulation on money laundering and terrorist financing, for example, rewarding technological and financial innovation.

In this scenario, stablecoins could occupy a prominent place, provided they are well regulated and backed 100% by public money. Stablecoins could deliver significant benefits to innovation, competition, and financial inclusion. Especially where traditional banking is not present.

Competing with new players

Miguel Angel Fernández Ordoñez, former governor of the Bank of Spain (BdE), explains this rationale in his book "Adiós a Los Bancos" (Farewell to the banks). Ordoñez recalls in his book that commercial entities must adapt to the arrival of the digital euro. The former central banker recommends that banks gradually change their business model to compete with new players in issuing credit and payment services.

This adoption has to be gradual, and banks cannot implement these changes too fast, as it could risk damaging the current financial system. A system where banks are the primary guardians of people's savings. Similarly, it is essential to emphasize that central banks' digital currencies should have interoperability. The reason is none other than that one of the objectives of Central Bank Digital Currencies (CBDCs) is to make international transactions between countries cheaper and more efficient.

User privacy

It is also relevant to stress the need for the digital euro to respect the privacy of its users, an issue of particular concern to Europeans. However, the digital euro can effectively resolve this issue, as the ECB has no commercial interests (unless we talk about a taxing policy for all the EU members). Finally, it is essential to note that the technology supporting the digital euro must be energy sustainable and secure and can be centralized or use Distributed Ledger Technology (DLT).

Although we still do not know if there will be a digital euro because the ECB has not yet decided on the matter, if it were to become a reality, it would mean a significant change for our economy and society. In the words of Fernández Ordoñez, the digital euro "is of great interest to us." The issue is not a minor one. It is about the money of tomorrow. The question is straightforward: What do we want our digital money to be? Private or public? Was it created by commercial banks or by central banks? The debate is open.

Seems like crypto regulatory clarity has kicked off in full steam!