Tag: blockchain

Experts, BFSI News, ET BFSI

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Ahead of the government’s bill on cryptocurrency, there is no clarity on whether the government plans to ban cryptocurrencies or regulate them.

The bill intends to ban all private cryptocurrencies, with certain exceptions, to promote the use of the underlying technology of cryptocurrency. The much-awaited bill also aims to provide a framework for the creation of an official digital currency to be issued by the Reserve Bank of India. The government has already made it clear it has no plan to make cryptocurrency a legal tender.

What if govt bans cryptos

In the event government plans to ban cryptocurrencies, experts said any crypto ban could cause investors to move underground and obtain cryptos and trade in them illegally. Moreover, the P2P transactions do not fall under any legal ambit and hence, decentralised exchanges would continue to thrive regardless of the ban. Banning cryptos would not only prove a technological challenge for the government but also mean huge capital funds moving out of the country.

The Blockchain and Crypto Assets Council, the association of crypto exchanges in the country, released a statement reiterating the futility of the ban. A blanket ban on cryptocurrencies will encourage non-state players, thereby leading to more unlawful usage of such currencies, it said.

“The Council has always argued in favour of prohibiting the usage of private cryptocurrencies as a currency in India by law since usage as currency is likely to interfere with monetary policy and fiscal controls. On the other hand, the council has advocated their use only as an asset. The council believes that a smartly regulated crypto assets business will protect investors, help monitor Indian buyers and sellers, lead to better taxation of the industry, and limit illegal usage of cryptos,” BACC said in a statement.

Grey areas

Also, the government needs to define the scope and meaning of the term ‘private cryptocurrencies.’ Almost all the cryptocurrencies would be private except significant cryptocurrencies like Bitcoin and Ethereum that the miners collectively own, if the definition concerns ownership rights or anonymity of transactions.

However, except like Bitcoin, not all cryptocurrencies are store of value with there being utility tokens like Ethereum, Cardano.

Experts said the exchanges could be asked to follow stringent KYC/AML procedures to dissuade money laundering and terror financing activities.



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Regulating cryptocurrency will make it another PayTM, BFSI News, ET BFSI

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There is much debate and speculation around the upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 that is one of the 26 new bills on the agenda of the Union government for the upcoming winter session of the Parliament that begins from November 29. Media reports say that the legislation will try to define cryptocurrency and any information like number, code, token that promises a price will be considered cryptocurrency. As per the reports, the Central government is also considering a ban on all private cryptocurrencies in the proposed bill. ETCISO spoke to a range of stakeholders, including the security agencies and cybersecurity leaders about the Crypto Regulatory Framework, the pros, cons, opportunities and risks.

“I feel a regulatory framework is a must, including the KYC of each investor, properly licensed exchanges that follow transparency, and a database of all credit and debit activities of crypto, otherwise this entire crypto currency world will be hacked and it will evaporate. This is a big grey area operation that provides anonymity and which is leading to the misuse of this beautiful product and technology. For the police, it is a big headache. Whom do we go to in case some heist occurs? There are currently fake exchanges, fake mining , fake wallets, etc. How to we authenticate and enforce?” says Professor Triveni Singh, SP, Cybercrime, Uttar Pradesh Police.

“The biggest issue with crypto is its misuse by criminals, nation-states and speculators. Any digital currency must be designed to be traceable, and remove risks from paper currency while replacing it. One physical rupee should be the same as one crypto rupee. If crypto currency is controlled, a major portion of the incentive to hack companies would go. Today, my guess is that criminals invest a lot of money in vulnerability and exploit research and may be more adept than even security firms,” says Lucius Lobo, Chief Information Security Officer at Tech Mahindra.

“Addition of a regulatory framework and tying it back to the financial transactions lifecycle to check for terror financing or illegal transactions should also be one of the vectors to bring in governance for crypto. And a common framework on minimum security controls and assurance framework for organizations in setting up such environment, complimented with required education and awareness for end users of the system on how to secure their crypto assets and credentials would be helpful,” adds Dilip Panjwani, Senior Director – Chief Information Security Officer (CISO) & IT Controller at Larsen & Toubro Infotech Ltd.

Money laundering using fiat money far exceeds misuse via crypto

There is a counterview to the opinion that cryptocurrencies have aided money laundering.

“I will disagree with this. Money Laundering using fiat money far far far exceeds misuse via crypto. But agree that KYC will help. But database of all transactions is already online and public on the blockchain,” counters a senior infosec leader.

Moreover, there are voices against such regulation as well.

“If we break its anonymity and control international transfers, as recommended by the RBI governor, It’ll just become another Paytm wallet. Here’s the problem. There’s no point of a distributed/ decentralised cryptosystem being controlled by one entity, for example, the RBI.

The entire reason for its immense popularity is “no control by any central authority” via it’s technical construct,” says another top cybersecurity expert on condition of anonymity.



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Crypto currencies recover, back in the green on Indian exchanges

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More than 24-hours after a blood bath and almost a fourth of its value wiped out on the exchanges, cryptocurrencies are back in the game. Top tokens have recovered nearly 10 per cent or more from yesterday’s plunge of 15-20 per cent.

As of 1:30 pm, bitcoin was trading in green, up by 5.03 per cent. USDT or Tether’s price jumped by 3.68 per cent, Shiba Inu by 4.83 per cent and Ethereum by 3.32 per cent. Sandbox topped this list on WazirX which was up by 23.76 per cent.

Also read: Only a handful of cryptocurrencies that exist today likely to survive: Raghuram Rajan

The massive cryptocurrency crash on Indian exchanges on Wednesday was a result of a Lok Sabha notice released on Tuesday evening summarising bills to be discussed in the upcoming winter parliamentary session.

The description next to The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 read that the government was seeking to prohibit private cryptocurrencies while allowing certain exceptions to promote the underlying technology. This created confusion and unexpected panic sale among investors leading to temporary crashing of several exchange platforms.

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Only a handful of cryptocurrencies that exist today likely to survive: Raghuram Rajan

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Out of the 6,000-odd cryptocurrencies currently in existence, only a few are likely to survive, according to the former RBI Governor Raghuram Rajan.

Rajan, in a recent interview with CNBC TV-18 said that only one or two, or at most, only a handful of the cryptocurrencies that exist today would survive in the future.

“If things have value only because they will be pricier down the line, that’s a bubble,” Rajan said.

The former RBI governor compared the current mania in cryptocurrencies to the tulip mania in the Netherlands in the 17th century.

Also Read: Explainer: Digital currency vs cryptos – how are they different?

He added that the issue was that most cryptocurrencies did not have permanent value. Additionally, some of them would survive to facilitate payments, especially cross border payments.

“In the US, crypto is a $2.5 trillion problem that nobody really wants to regulate,” he said.

According to Rajan, part of the problem was the lack of understanding of the space and how to regulate it, among regulators.

He added that the government can examine these crypto entities more closely when they get too big to make sure that there isn’t fraud.

Rajan’s remark come as the bill to ban all private cryptocurrencies and facilitate introduction of the Central Bank Digital Currency (CBDC) topped the government’s busy agenda for the Winter Session of Parliament.

Also read: Exchanges on tenterhooks as they await details of proposed cryptocurrencies Bill

Top cryptocurrencies including Bitcoin, Ethereum, USDT, Shiba Inu, Dogecoin, Sandbox among others crashed overnight on Indian crypto exchanges on Wednesday as investors panicked following the government’s plans on the bill seeking to prohibit private cryptocurrencies while allowing certain exceptions to promote the underlying technology.

Additionally, the former RBI Governor said that the government must focus on the underlying blockchain technology, letting it flourish adding that blockchain ways of transacting were much cheaper, especially across borders.

There has been a fair share of regulatory concerns when it comes to cryptocurrencies.

However, despite regulatory uncertainty and the Reserve Bank of India’s (RBI) concerns, India now has close to 400 cryptocurrency-based start-ups offering various services to the crypto ecosystem.

According to data sourced by BusinessLine from Tracxn, there are 380 crypto start-ups and 12 Non-fungible Tokens-based (NFT) start-ups currently operating in the country, as per previous reports.

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Time to clear the air on cryptos

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While the government has had mixed and probably even alternating stance on cryptocurrencies, the currency regulator RBI had been silent for a long time and, of late, has shared its concerns on cryptos with the government.

The securities regulator SEBI could be the ideal regulatory candidate if cryptos were to be treated as an asset class.

The Indian investor community has been euphoric about the instrument, despite noise that crypto investing could become illegal or taxed harshly. All this, when the issue of crypto was purportedly settled last year with the Supreme Court of India lifting the RBI’s crypto ban of 2018.

A to G of crypto

Arbitrary actions and reactions will continue as the financial industry has showcased so far. A few months ago, some banks stalled operations or pass-through of the crypto exchanges; purportedly, as the market guesses, to avoid irritating their regulator. The day there is clarity on how crypto would be seen under Indian law, and if it is for holding crypto as an asset, every BFSI and fintech would jump onto the bandwagon.

The banking sector’s lack of understanding of cryptos continues. It is more about understanding the liquidity of various cryptos available. As long as the rules bring clarity on what other information other than KYC would be needed, the sector can chug ahead.

Crypto consumers will stay invested probably until they get hurt by crypto falsehood or misleading investments. It is rightfully the RBI’s endeavour to have consumer protection in mind. But as we regulate the sector, we also have to move to a market-led economy, where, as long as the consumers get into an investment position without being mis-sold or forced to invest, the industry should not be ostracised.

It is also worthwhile to mention that the RBI is planning to launch its own CBDC (central bank digital currency). Debt leverage worry of the lending community will continue until they are allowed by the regulator. End-usage fears that cryptos could potentially be used for terror financing, etc., seem far-fetched, considering the granularity of its traceability. Interestingly, usage of gold or realty seems far in the wrong end of illegal funding.

Functionality of its core, which is blockchain, cannot be brushed away. It has tremendous usage and potential across public finance, banking and financial services; this could help build a secure financing backbone for the entire country as we seek to expand the inclusive-nature of our financial offerings.

The government’s stand cannot vacillate on policy matters without taking wide range of inputs, not just from a commercial angle but also from a deeper technological understanding if it can bring potential good. Let’s remember that our grandparents could not have imagined mobile-payments or transactions without seeing/touching the monies or writing a cheque. So let us not discount the emerging digital monies, for the short term notion of “not wanting it happen in my watch.”

Any asset class’ trade-worthiness and consequent liquidity is determined by a crucial factor: “trust”. Regulations can offer confidence around legality of the asset class and its usage, but cannot determine public acceptance or asset pricing. Regulations can surely offer consumer confidence and consumer protection if they are light-touch and use latest digital supervisory capabilities.

It is essential that the government does not give into knee-jerk reactions of the stakeholders, and takes a pragmatic call. It has displayed tremendous initiative by adopting digital across various facets including financial markets, e-governance, public outreach, etc. It should engage in depth with various stakeholders to understand how digital finance can be used for larger public good, and not give in to short-term worries and lack of capacity.

It’s a good sign that the Parliamentary Standing Committee on Finance has invited crypto industry players to hear their views on the opportunities and challenges. If our regulators take a leaf from this and invite multi-stakeholder discussions and seek inputs about the draft Bill, it would be a comforting exercise.

In the spirit of democratic transparency, it would be welcome if the ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ is put in public domain, and comments sought.

The writer is corporate advisor and markets commentator

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UST named ‘leader’ in blockchain services for banking

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Digital transformation solutions company UST announced that the NelsonHall NEAT report for blockchain services has named it a leader in the banking capability market segment.

Leaders are vendors that exhibit a high capability, relative to peers, to deliver immediate benefit and meet future client requirements, a spokesman for UST said here.

How blockchain can aid healthcare delivery

Building reusable components

UST has a centre of excellence in blockchain in Madrid and an R&D lab in Thiruvananthapuram. More than 100 global organisations across banking, insurance, energy and utilities, healthcare, technology-media-telecom, retail and consumer packaged goods, and transportation use its solutions, the spokesman added.

Don’t ban cryptos: Experts, stakeholders to House panel

The NEAT report cited UST’s focus on building reusable components versus customisable accelerated solutions. Working with practitioners, domain experts, and a network of innovation partners, it offers blockchain services in four categories:

Strategy and consulting services: this includes a framework that enables enterprises to seamlessly adopt blockchain-based solutions and services.

Solution design and development: UST’s lab in Madrid is dedicated to research in rapid prototyping, co-creation of use cases, and concept development on DLT (distributed ledger technology).

Architecture and integration: UST provides blockchain-based solutions that integrate with existing technology to enhance existing solutions.

Products and tools: this includes libraries and accelerators to jumpstart prototypes and manage blockchain infrastructure.

Niranjan Ramsunder, Chief Technology Officer, said the recognition proves UST’s ability to deliver innovative solutions for any bottlenecks including legacy integration challenges.

Cost and time savings

“As a global leader in leveraging blockchains, UST helps reduce cost and time-to-market for clients’ most important blockchain initiatives. We are blockchain platform-agnostic and build on a solid international ecosystem, working with the best vertical solutions on all the principal blockchain platforms,” said Ramsunder.

The NelsonHall report estimates the global market for blockchain services at $496 million in 2020, with a CAGR of 53.3 per cent through 2025. While North America and Europe have the largest blockchain markets, the Asia-Pacific region is projected to grow fastest in the next five years.

‘Exciting time for blockchain’

UST’s client-specific blockchain solutions facilitate innovative business models built on data reliability and operational agility.

Daniel Field, Head of Blockchain, UST, said the recognition acknowledges UST’s work in helping clients transform their business processes through blockchain technology.

“It is an exciting time for the field of blockchain. Long-envisaged solutions for programmable money and cheaper, faster settlement and reconciliation are rapidly becoming a commercial reality and the exploration of central bank digital currencies (CBDCs) is accelerating significantly.”

‘Top Case Study’

UST’s blockchain services were recognised by ISG with a ‘Top Case Study Award for Digital Excellence’, highlighting the company’s engagement with a leading Spanish multinational commercial bank to transform its international payments experience through blockchain-based solutions.

The bank launched its mobile-based application, which enables end-customers to complete international transactions in hours, even minutes, instead of the usual 2-3 days.

In four to five clicks, the customer can enter the amount to be transferred, select a recipient and exchange rate, and confirm the transaction. UST played a significant role in delivering this solution and integrating the platform, the spokesman said.

 

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Australia’s banking regulator looks into CBA’s jump into crypto, BFSI News, ET BFSI

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By Paulina Duran

SYDNEY, – Australia‘s banking watchdog said it was examining the regulatory implications of Commonwealth Bank‘s’s planned introduction of bitcoin trading to unsophisticated retail investors – the first bank in Australia to do so.

CBA says it would welcome a clear regulatory framework for crytpocurrencies, which are not formally regulated in Australia.

On Wednesday CBA broke banking industry ranks to match offerings from fintech firms by announcing it will become the first main-street bank in the developed world to offer a platform for retail customers to trade cryptocurrencies.

The move is forcing financial watchdogs in Australia to immediately focus on the volatile $2 trillion crypto trading industry that many argue has no intrinsic value and relies on users’ complete trust in different types of software.

A spokesman for the Australian Prudential Regulation Authority (APRA) told Reuters the country’s largest lender had made the regulator aware of its plans and the authority was “examining regulatory issues that this raises”.

After a staged pilot for 2,000 people, CBA will give easy access to crypto trading in 10 assets to about a third of Australian adults already using its industry-leading mobile banking app, which also offers energy retailers discounts and carbon emission trackers.

CBA’s crypto trading service will be provided in partnership with Gemini Trust Company, one of the world’s largest crypto exchanges that was created in 2014 by the Winklevoss brothers, famous for accusing Facebook’s founder of stealing their idea.

The anti-money laundering watchdog the Australian Transaction Reports and Analysis Centre said that it was “engaging … in relation to this new product offering” with both CBA and Gemini.

CBA says it would welcome regulatory clarity in the space, and that its product was designed with risk-mitigation and regulatory concerns front of mind for both the bank and to ensure people feel safe when using the product.

“We would really welcome regulatory clarity for crypto assets. We think it would improve the market, enhance trust and it would raise the bar in terms of customer protection,” said Sophie Gilder, Commonwealth Bank’s head of Blockchain and the bank’s project leader.

CBA’s offering will be a “a closed loop” connected to a CBA bank account, that would be monitored with cryptocurrency anti-money laundering services from Chainalysis for any potential suspicious activity.

“We’ve got complete transparency as to customer activity and can report on that to regulators when necessary,” Gilder said, which includes customary reporting to the taxation authority.

“We will not, as soon as the pilot ends, open it to everyone. It will be a more gradual process than that, which I think is appropriate considering the volatility of crypto.”

(Reporting by Paulina Duran in Sydney; Editing by Michael Perry)



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Blockchain-based platform SportZchain raises $4,00,000

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Blockchain-based fan engagement platform SportZchain has raised $4,00,000 in a pre-seed funding round led by Darq Capital. Jagadeesh Atukuri, Director of Comply Dot, and SHISAN Investments (co-founded by EX-COO of Goldman Sachs) among others also participated in the round.

The funds will be utilised to build the platform’s alpha version of an interactive blockchain-based web app and implementing branding & marketing initiatives to drive awareness around its unique offerings.

Also read: Bollywood stars, Indian celebrities launch NFTs amid global craze

Ideated in March 2021, the Singapore-based SportZchain was founded by Siddharth Jaiswal with the belief that sports fans deserve a basic right to be heard by their favourite sports teams, help them make the right decisions by voting on official binding polls, and reap financial gains by owning branded sports token.

The company is backed by Ajeet Khurana (Ex-CEO of Zebpay and Head of Blockchain & Crypto Committee, India), Suhail Chandok (Star Sports TV Presenter, Analyst & Commentator – IPL, ICC Cricket, World Cups, Pro Kabaddi, Wimbledon, etc.), Oksana Belousova (CEO of Fenix Technology), to name a few.

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Bollywood stars, Indian celebrities launch NFTs amid global craze, BFSI News, ET BFSI

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By Nupur Anand and Shilpa Jamkhandikar

Indian celebrities from the world of Bollywood and cricket are increasingly launching digital memorabilia through non-fungible tokens (NFT), hoping to rake in thousands of dollars by cashing in on growing interest in such assets.

NFTs are a type of digital asset which use blockchain to record the ownership of items such as images, videos and other collectibles. Their roaring popularity has baffled many but the explosive growth shows no sign of abating.

Bollywood superstars such as Amitabh Bachchan and Salman Khan are planning to launch NFTs soon. While Bachchan’s NFTs will include autographed posters of his movies, Khan has been building excitement on his Twitter account by telling his 43 million followers about the planned NFT launch.

“NFTs are right now alien to Bollywood but I am sure they (film stars) will see this as another platform where they can use their existing content and generate revenue,” said Ayaan Agnihotri of Bollycoin, an NFT marketplace for Bollywood assets.

Agnihotri said that within days of launch this month, his platform sold 8 million of the 20 million available so-called “BollyCoins”, crypto tokens that can be used to buy NFTs when they are launched. One BollyCoin is worth 10 U.S. cents.

But its still early days for celebrity NFTs in India.

Indian cricketer Dinesh Karthik is auctioning a digital art reel https://bit.ly/3m28fNc from a cricket match where he hit a match-winning six on the last ball for around 5 ethereums, a digital currency, worth around $20,000. But he has yet to receive any bids.

“NFT has picked up a lot in the West in the last one year with now iconic moments from basketball being bought by fans digitally, which gave us the idea,” Karthik told Reuters.

Others have had success. One of India’s top fashion designers, Manish Malhotra, recently sold NFTs of digital sketches of some of his most famous creations for $4,000 a piece. Malhotra’s website shows one can purchase some of his bridal wear outfits at a lower price range of $2,500-$3,500.

The rise of NFTs has baffled many who say it makes little sense to spend large sums of money on items that don’t physically exist and can simply be viewed online.

Still, global sales volumes of NFTs have galloped to $10.7 billion in the third quarter of 2021, making an eightfold increase from the previous quarter, data from market tracker DappRadar showed..

Vishakha Singh, vice president for NFTs at Indian crypto exchange WazirX, said celebrity participation in the segment is set to create excitement in the space.

This, she said, “is great for the ecosystem. This will help us in garnering more awareness towards this new game changing world of digital assets,” Singh said.

(Reporting by Nupur Anand and Shilpa Jamkhandikar; Editing by Aditya Kalra and Kim Coghill)



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Belfrics to relaunch its cryptocurrency exchange in India, BFSI News, ET BFSI

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Belfrics, a Malaysia based blockchain technology firm, is restarting its cryptocurrency exchange in India from October 2021 in a new avatar. The company is going to focus on phygital model and opening 200 centres across India. All these centres will be based on a franchise basis. The company is planning to invest $10 million for cryptocurrency exchange and $5 million for its blockchain (a total of around Rs100 crore) in the Indian market.

“With regards to the spending in India, as of now we have allocated $3 million for the exchange and once the regulatory scenario clears up, we will be increasing this to $10 million,” Praveen Kumar, CEO & Founder, Belfrics Group, said.

Belfrics also runs a cryptocurrency exchange on its proprietary platform.

India operations

Belfrics had started its operations in India in 2015 when the cryptocurrency segment was very new. Later when RBI issued a notification instructing banks not to favour cryptocurrency transactions, Belfrics put a pause button on its crypto business in 2018.

“Though we halted our cryptocurrency business, our blockchain is doing well in India. Our blockchain business is very active,” Kumar said.

Belfrics was recently acquired by Life Clips, a global software solution company, which has operations in Malaysia, Singapore, India, Kenya, Tanzania and other countries.

In its Indian version, Belfrics is also planning to add many other products.

“On the cryptocurrency exchange along with basic services we will also add five other products which are globally very popluar. Such as staking reward, derivative products, lending and borrowing, custody solutions and crypto payments card and loyalty programmes,” Kumar said.

Focus on India’s crypto market

Since the Supreme Court has set aside the RBI’s ruling on cryptocurrency, there is an exponential rise in the segments. More blockchain startups are entering the space.

“We hope sooner or later regulators will look at this segment, with this hope we are reactivating our plans,” Kumar added.

Currently, India has crypto exchanges but most of them are in the online zone. Belfrics is planning to open 22 centres all over the country.

More than one crore people have invested in cryptocurrency in India and the response towards crypto is.

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