Apex Crypto News – China’s Digital Yuan Will Target the Dollar, Not Bitcoin

Apex Crypto News - China's Digital Yuan Will Target the Dollar, Not Bitcoin

Having learned what it needs from the cryptocurrency space and blockchain, China will aim to rival the U.S. dollar, not Bitcoin (BTC), with its highly-anticipated digital yuan.

Matthew Graham, a veteran investment banker in China and the CEO of Beijing-based Sino Global Capital — analyzed what is known so far about the forthcoming digital currency and argued that the Chinese government sees new technologies as a “leapfrog opportunity” to chip away at the dollar’s hegemony.

Speaking with Boxmining founder Michael Gu at the Unitize conference on July 6, Graham said that even though it’s extremely difficult for China to internationalize the renminbi:

“Swift, CHIPS, Fedwire […] they’re antiquated, they’re expensive, they’re slow. It’s 2020 and we have transactions that take three days to clear and that are far more expensive than they should be. All of these technologies that underpin much of the USD-centric global economy are really showing their age. So that’s a big opportunity [for China].”

Beijing uses the acronym DCEP to refer to its forthcoming digital currency electronic payment system and, as Matthew Gu noted, has “borrowed a lot of its technological details from blockchain,” including concepts such as UTXO. 

Yet DCEP is a far cry from public blockchains such as Bitcoin. It will reportedly be issued by the People’s Bank of China and remain under the central bank’s full control and authority, as with other existing national fiat currencies.  

Graham emphasized that “if you’re approaching this [DCEP] from a crypto or blockchain framework, I think you’re going to really have a hard time understanding what it is and what and why it’s so important.” 

The new technologies integrated into the digital yuan, including those aspects learned from blockchain, are being used to a different end. Gu cited comments from the chairman of the China International Economic Exchange Center, who has previously said:

“DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”

Graham added that for monetary policy, DCEP “could be very useful for implementing negative interest rates.” Moreover, “it opens up a lot of capabilities in terms of AI and machine learning for fraud detection […] and there’s potential programmability aspects as well.”

Contrast this with systems such as  Fedwire, CHIPS, SWIFT — the “plumbing” that underpins much of the global dollar economy. These, as Graham noted, are “thirty, forty, fifty year old technologies, with all the frictions and costs.”

“There is a leapfrog opportunity” here, he said. “DCEP’s not about Bitcoin. It’s about potentially internationalizing renminbi, at least to some extent.”

Source: apexcryptonews.com


Apex Crypto News - The Role of ISINs in Relation to Digital Assets

Apex Crypto News – The Role of ISINs in Relation to Digital Assets

Institutional interest in digital assets has been growing. The Chicago Mercantile Exchange’s volume of Bitcoin (BTC) options hit a high of $40 million on May 13, 2020. The world’s largest digital currency asset manager, Grayscale, posted record-breaking capital inflow to its GBTC fund in Q1 2020, and Fidelity’s cryptocurrency services division confirmed increased interest from pension funds and family offices.

Due to growing interest from financial institutions examining how to leverage blockchain technology for security issuance, industry and regulators alike have turned their attention to assigning International Securities Identification Numbers for digital assets. This standardization is necessary in order for firms to ensure consistency, gain efficiencies, increase transparency and lower costs.

An industry body, responsible for the adoption and implementation of international standards for identifying financial and referential instruments, is in the process of examining a number of various scenarios, in which digital assets could require the assignment of ISINs. Typically, the umbrella term of “digital assets” is broken down into three different use cases — incorporating security tokens, payment tokens and utility tokens. The focus of these particular discussions has been around security tokens because the scope of financial and referential instruments overlaps most with the current remit of the ISIN standard.

Specifically, those participating are in the process of evaluating the following key points:

Whether there is a need for an ISIN with regards to different but complementary standards, such as the Digital Token Identifier currently being developed by the International Organisation of Standardisation Working Group 3 (ISO/TC 68/SC 8/WG 3).

What the different scenarios are, in which an ISIN in relation to a digital asset could be issued, including: (1) straightforward security (e.g., a plain vanilla bond) issued via distributed ledger technology; (2) security with an underlying referential instrument, which is a digital asset (e.g., an ETF that tracks Bitcoin); and (3) a digital asset that is used as an underlying referential instrument (e.g., Bitcoin) — thus raising the question of whether an ISIN should be applicable to a referential instrument.

How different regulatory regimes treat each of the different scenarios listed above in terms of both existing and forthcoming regulations.

Those involved in the discussions represent a cross-section of the financial industry and have come together under the auspices of the Association of National Numbering Agencies, whose overarching goal is to support a transparent, compliant and efficient financial markets structure. The outcome of these examinations will be used to build the rationale for recommendations on the assignment of ISINs within each scenario, using a technology-agnostic approach.

While digital assets are currently only a fraction of the traditional space within the financial services industry, this work is considered significant, given that new asset classes have a tendency to evolve quite quickly. Stakeholders in traditional financial markets benefit from the provision of international standards to identify, classify and describe financial and referential instruments that help in the process of providing accurate and reliable data for suitable investment and trading decisions. Similarly, participants in the digital token ecosystem will need accurate, reliable and quality data attributes to make appropriate investment and trading decisions.

Now is the time, therefore, to prepare the groundwork in order to ensure consistency and uniformity of the data around these digital assets. The outcome of these industry discussions will be an important part of the journey to provide tools that will be most useful to the industry as a whole.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Stephan Dreyer has been managing director of the Association of National Numbering Agencies since Jan. 2, 2020. Prior to this, Stephan spent over 25 years working for Bloomberg LP in the U.S., London and Frankfurt as a senior product manager for fixed-income debt capital markets and securitized derivatives within the data management division, where he spearheaded the development of data products for market transparency and regulatory purposes.

Source: apexcryptonews.com


China’s Digital Yuan Will Target the Dollar, Not Bitcoin

China’s Digital Yuan Will Target the Dollar, Not Bitcoin

Having learned what it needs from the cryptocurrency space and blockchain, China will aim to rival the U.S. dollar, not Bitcoin (BTC), with its highly-anticipated digital yuan.

Matthew Graham, a veteran investment banker in China and the CEO of Beijing-based Sino Global Capital — analyzed what is known so far about the forthcoming digital currency and argued that the Chinese government sees new technologies as a “leapfrog opportunity” to chip away at the dollar’s hegemony.

Speaking with Boxmining founder Michael Gu at the Unitize conference on July 6, Graham said that even though it’s extremely difficult for China to internationalize the renminbi:

“Swift, CHIPS, Fedwire […] they’re antiquated, they’re expensive, they’re slow. It’s 2020 and we have transactions that take three days to clear and that are far more expensive than they should be. All of these technologies that underpin much of the USD-centric global economy are really showing their age. So that’s a big opportunity [for China].”

Beijing uses the acronym DCEP to refer to its forthcoming digital currency electronic payment system and, as Matthew Gu noted, has “borrowed a lot of its techno logic al details from blockchain,” including concepts such as UTXO. 

Yet DCEP is a far cry from public blockchains such as Bitcoin. It will reportedly be issued by the People’s Bank of China and remain under the central bank’s full control and authority, as with other existing national fiat currencies.  

Graham emphasized that “if you’re approaching this [DCEP] from a crypto or blockchain framework, I think you’re going to really have a hard time understanding what it is and what and why it’s so important.” 

What future awaits cryptocurrencies?
GOODBAD

The new technologies integrated into the digital yuan, including those aspects learned from blockchain, are being used to a different end. Gu cited comments from the chairman of the China International Economic Exchange Center, who has previously said:

“DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”

Graham added that for monetary policy, DCEP “could be very useful for implementing negative interest rates.” Moreover, “it opens up a lot of capabilities in terms of AI and machine learning for fraud detection […] and there’s potential programmability aspects as well.”

Contrast this with systems such as  Fedwire, CHIPS, SWIFT — the “plumbing” that underpins much of the global dollar economy. These, as Graham noted, are “thirty, forty, fifty year old technologies, with all the frictions and costs.”

“There is a leapfrog opportunity” here, he said. “DCEP’s not about Bitcoin. It’s about potentially internationalizing renminbi, at least to some extent.”

Source: bitcoin.marketing


Apex Crypto News - China's Digital Yuan Will Target the Dollar, Not Bitcoin


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