Tag: cryptocurrency

Bitcoin slips after China central bank vows to crack down on crypto trading, BFSI News, ET BFSI

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Bitcoin fell nearly 5 per cent on Friday after China’s central bank said it would crack down on cryptocurrency trading, banning overseas exchanges from providing services to mainland investors.

The largest cryptocurrency was last down 4.6 per cent at $42,874, with smaller coins that typically trade in tandem with bitcoin also tumbling. Ether fell over 8 per cent while XRP slipped 7 per cent.

The People’s Bank of China also said it will bar financial institutions, payment companies and internet firms from facilitating cryptocurrency trading, and will strengthen monitoring of risks from such activities.

“Crypto markets are in an extremely frail state overall, and these sorts of downswings speak to that; there’s a degree of panic in the air,” said Joseph Edwards, head of research at cryptocurrency broker Enigma Securities.

“Crypto continues to exist in a grey area of legality across the board in China.”

Shares in cryptocurrency and blockchain-related firms also came under pressure with U.S. listed miners Riot Blockchain , Marathon Digital and Bit Digital slipping between 4.1 per cent and 5.1 per cent in premarket trading. China-focused SOS slipped 1.2 per cent while crypto exchange Coinbase Global fell 2.7 per cent.

Earlier this year, Chinese authorities said they would crack down on cryptocurrency mining, sparking a massive sell-off of bitcoin and other coins.

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Crypto adoption goes up in tier-2 and tier-3 cities in India, BFSI News, ET BFSI

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NEW DELHI: According to the data from crypto exchanges including CoinDCX and Wazir X, tier-2 and tier-3 cities are adopting and acclimatizing to cryptocurrency trading faster than others, Economic Times reports.

The rise in cryptocurrency adoption is partly attributed to the work-from-home culture brought about by the pandemic as also to the positive response from the government, the report says The diverse profile of the Indian cryptocurrency users has caught as much attention.

Data from the crypto exchanges reveals the following findings:

* Majority of the new signups were reported from tier-2 and tier-3 cities. Wazir X had 55 percent users in 2021 from these small cities.

* Among small cities, Bhopal reported the highest growth at 100 percent, according to BuyUcoin exchange.

* Other leading exchanges also witnessed similar sign-up growth patterns from Ahmedabad, Lucknow, Patna, Vadodara, Kolkata and Bhopal.

* WazirX reported a 2,375 percent increase in sign-ups in 2021, from tier-2 and tier-3 cities.

* The following information came up about the profile of crypto users :

– The new crypto users are mostly under 35 years and possess some kind of degree.

– 90 per cent of these investors are IT professionals, MBA graduates, engineers and start-up owners.

– The local exchanges unanimously reported a remarkable rise in women investors at 30-40 per cent from last year’s 15 per cent.

– The young Indian investors are not only banking on Bitcoin, but are also interested in other forms of cryptocurrency assets like DeFi assets and NFTs.

The new cohort of young cryptocurrency investors who are keen towards all forms of virtual assets. This has led to diversification of the investment patterns in the Indian crypto markets.



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Bitcoin fever reaches Honduras with first cryptocurrency ATM, BFSI News, ET BFSI

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The first cryptocurrency ATM in Honduras opened this week as bitcoin backers sought to spur demand for virtual assets after neighboring El Salvador became the first country to establish bitcoin as legal tender.

The machine, locally dubbed “la bitcoinera,” allows users to acquire bitcoin and ethereum using the local lempira currency and was installed in an office tower in the capital of Tegucigalpa by Honduran firm TGU Consulting Group.

Juan Mayen, 28, chief executive of TGU, led the effort to bring the ATM to Honduras in hopes of educating people about virtual assets through first-hand experience.

Until now, there was no automated way to buy crypto-currencies, he said.

“You had to do it peer-to-peer, look for someone who … was willing to do it, meet in person and carry X amount of cash, which is very inconvenient and dangerous given the environment in Honduras,” he said.

On Friday, one ethereum was trading at $3,237, and bitcoin; $48,140. If the service is popular, Mayen said he hoped to install more units.

To make a purchase, users have to scan official identification and input personal data such as a phone number.

Many software developers in Honduras are already paid in cryptocurrencies, Mayen said, adding that it will also be a cheaper option to send remittances.

In 2020, Hondurans living abroad – mainly the United States – sent $5.7 billion, about 20% of the country’s gross domestic product (GDP), in remittances.

The Congress of El Salvador approved in June a proposal by President Nayib Bukele to make the country the first in the world to adopt Bitcoin as legal tender.

Elsewhere in the region, lawmakers presented draft bills in Panama that regulate the use of bitcoin and its status as a legal tender.

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US treasury department sanctions crypto exchange Suex over ransomware attacks, BFSI News, ET BFSI

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NEW DELHI: The US treasury department launched sanctions against Suex, a crypto exchange, for money laundering related to ransomware payments.

The exchange is alleged to have facilitated transactions from illegitimate proceeds of 8 ransomware variants accounting to 40 percent of the company’s transaction.

Ransomware is a type of malware that uses encryption to disable access to key applications and databases.

Then the fraudsters ask the victims for ransom in lieu of not leaking the stolen data. This is the first time that the US government has resorted to such an action against a cryptocurrency or any virtual asset for that matter.

Going ahead, the treasury department will designate the exchange that will make it tough for it to do business with other companies, cnbc.com reports.

According to a Bloomberg report, the Biden administration is cracking down on cryptocurrency fraudsters by imposing sanctions on dubious companies and has asked crypto companies and victims to report cybercrimes to authorities.

The treasury department added that cryptocurrency transactions being decentralized cannot be traced easily as compared to those involving traditional financing.



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Rapid digitisation of banks invites cyber risks as well. What are the risks, and what should banks do?, BFSI News, ET BFSI

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-By Ishwari Chavan

The banking sector has always been victim of cyberattacks, and with COVID-19, it has become more vulnerable. Cyberattacks against banks and financial institutions across the globe increased to 238% between February 2020 and April 2020, according to VMware Carbon Black.

According to the Indian Computer Emergency Response Team (CERT-In), over 2.9 lakh cyberattacks related to digital banking were reported in 2020. A total number of 1,59,761; 2,46,514 and 2,90,445 cyber security incidents related to digital banking were reported during 2018, 2019 and 2020 respectively. These incidents included phishing attacks, network scanning and probing, viruses and website hacking.

Year Number of cyber security incidents
2018 1,59,761
2019 2,46,514
2020 2,90,445

Source: Indian Computer Emergency Response Team

“The kind of security threats that we see whether it is a remote mirroring of applications, localization of your data stores in your mobile, hijacking of your sessions, social engineering attacks, all of those are very easy things to do. You don’t need real hackers to do that, smart people can do this too. That’s what has happened in the banking sector where we’ve seen a lot of increase in fraud, whether it’s on the UPI side or the traditional payment side,” said Ramesh Lakshminarayan, chief information officer at HDFC Bank.

According to Heeral Sharma, senior cyber security advisor at McAfee, three challenges must be tackled to ensure cyber safety. First is the challenge of internal IT security, second is digitization of applications and of critical data such as payments and personally identifiable information (PII), and third are cloud native threats.

What are the risks?

More and more individuals are now accessing their bank accounts through banks’ mobile apps. Many of these apps, and even customers, tend to have minimal or no security, such as users keeping easy passwords or banks keeping minimum password checks for transactions.

“The cloud threats in the BFSI segment increased by 571%, which is huge. The reason is simple, the network boundaries are no longer defined. It’s all borderless. So the attackers have found out new ways to get in and penetrate at times even by using legitimate credentials.” said Sharma.

Cyber security infrastructure as a whole needs an upgrade. Banks need to rightfully utilise their cyber security budget to help advance their technology and detect all kinds of risks.

As banks have upgraded their cyber security, attackers have turned to shared banking systems and third-party networks to gain access. In case, these are not as protected, there is more risk for cyberattacks.

Even for cryptocurrency, hacks have become more advanced as the segment is still unsure on how to implement cyber security.

What should banks do?

Banks should prioritise investing in cybersecurity and build a resilient infrastructure, to address current cyber security threats and prepare for challenges in the future.

“When we talk about digital we talk about investments. Our investments will also go into the cybersecurity segment as we move towards digitization. There should not be any compromise as far as the data securities and the Data Protection Service securities are concerned,” said Upma Goel, chief financial officer at Ujjivan Small Finance Bank.

Sharma stressed on how data protection requires a completely different approach so that banks are aware on what’s happening in the cloud. “Data protection, threat protection and network security model all built in together will provide a better approach and also take care of the complexity in the multi state and collaborative environment,” she said.

“If you look at the entire security landscape, right from an employee experience to the customer experience to our own, huge disruptions are happening in the area,” Lakshminarayan said. Banks are required to reimagine some of their own technology and adapt to a three-year or four-year journey, he added.

The article is based on the panel discussion on: Fireside Chat on Bankers Chariot, Riding on Tech that took place at ETBFSI CXO conclave



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Will banks clamp down on cryptocurrency transactions again?, BFSI News, ET BFSI

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Banks which had started processing cryptocurrency transactions after RBI clarification may be again shying away from virtual currencies.

The country’s largest lender, State Bank of India, has blocked the receipt of funds by crypto bourses on its UPI platform. The bank has told payment processors to disable SBI UPI for crypto merchants, according to a report.

With this, traders cannot buy Bitcoin or any cryptocurrency by transferring funds via UPI, as none of the processors which handle funds for

exchanges will be unable to receive money sent for crypto purchases on their SBI accounts.

The largest domestic crypto bourse, WazirX, has already been impacted by the decision, with the processing agency following the directive of SBI. Industry circles said payment processors may stop accepting payment for other exchanges as well, unless SBI does a rethink.

With UPI blocked, many traders on WazirX are using one of the e-wallet services to transact.

But due to wallet charges and limits on fund transfer, traders prefer UPI in the absence of other payment modes like credit and debit cards, NEFT (national electronic fund transfers) and net banking.

After SBI’s decision, many banks may be reluctant to onboard crypto merchants on their respective UPI platforms.

The RBI decision

After the Reserve Bank of India told banks that they no longer can use the regulator’s 2018 circular prohibiting dealings in virtual currencies, as the direction has been struck down by the Supreme Court, banks were allowing crypto transactions.

Lenders including HDFC Bank, ICICI Bank and Axis Bank are allowing transactions in virtual currencies through the UPI platform.

According to crypto exchanges, more banks are now warming up to them and several channels are available for customers to buy crypto assets.

Till June this year banks were sending official notices to many customers warning them of curbs, including permanent closure of accounts.

Lenders were asking customers to clarify the nature of transactions and warning credit card users that transactions of virtual currency will lead to suspension/cancellation of card.

While trading in cryptocurrency is not illegal as per existing Indian laws, individual institutions can enforce their terms based on their risk assessment.

A grey area

Despite the boom, cryptocurrencies are in a grey area in India, with the Reserve Bank hostile towards it and the government unsure about its prospects.

There is no legislation or regulatory code yet to govern the crypto ecosystem, leading to confusion among customers, businesses and financial institutions providing banking services.

In 2018, the Reserve Bank of India barred financial institutions from supporting crypto transactions, which the Supreme Court overturned in 2020. The government has circulated a draft bill outlawing all cryptocurrency activities, which has been under discussion since 2019.

The RBI asked banks not to cite its 2018 circular and clarified that banks can do their own KYC for crypto clients. With this, banks are now reassessing the situation, but several banks currently lack the technical expertise to make a supervisory assessment on these transactions.



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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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People are adopting cryptocurrency in Vietnam, India the most, BFSI News, ET BFSI

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By Manpreet Kaur

The rate of cryptocurrency adoption has jumped by 880 percent in the last year, with bitcoin being the most popular coin followed by Ripple and Ethereum.

The popularity of cryptocurrency is gaining pace, with people using it as a prefered investment option. Five countries – Vietnam, India, Pakistan, Ukraine and Kenya – have ranked the highest in cryptocurrency adoption, according to Chainalysis‘ 2021 Global Crypto Adoption Index.

The report, titled “Geography of Cryptocurrency”, compared the countries’ cryptocurrency adoption based on three main parameters – on-chain retail value transferred, cryptocurrency value received, and peer-to-peer exchange trade volume between June 2020 and June 2021.

The index ranked 154 countries to measure the level of cryptocurrency adoption and usage between July 2020 and June 2021, with every country being ranked between 0 and 1. The closer the score is to 1, the higher the rank.

Country Rank
Vietnam 1
India 0.37
Pakistan 0.36
Ukraine 0.29
Kenya 0.28

China and the US both dropped in the rankings, because peer-to-peer trading volume declined. Last year, China ranked fourth and the US sixth. This year, the US is eighth and China 13th.

“In emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions,” Chainalysis said.

Although cryptocurrencies are not authorised in Vietnam, the country ranked first with 20% claiming to have purchased Bitcoin, according to a survey by US-based firm Finder.

“Remittance payments may have played a significant role in these numbers, with cryptocurrency an option for migrants who want to send money home and avoid exchange fees,” Chainalysis said.

India ranked second in cryptocurrency adoption, with a user base of 7.3 million and more than $21.8 billion in trading volumes this year.

India’s “huge expatriate population” makes it the world’s number one remittance recipient in the crypto space, Finder said. India had 18 million people from the country living outside their homeland last year, the largest expatriate population in the world, according to a report by the United Nations released in January.

Smaller towns are leading in adopting cryptocurrency. Last week, WazirX, the largest crypto exchange in the country by trading volume, said that it had seen more than 2.5% growth in user sign-ups from tier II and tier III cities in India.

The interest is mostly driven by referrals, said Naimish Sanghvi, who has been running crypto information platform Coin Crunch since 2018.

Pakistan, which came in third, has seen a recent boom in trading and mining cryptocurrency, with interest picking up on social media and transactions on online exchanges.

While cryptocurrency is not illegal in Pakistan, the global money laundering watchdog Financial Action Task Force (FATF) has asked the government to regulate the industry. FATF monitors terror financing and money laundering, and Pakistan is on its grey list.

“Half the members have no clue what it was and didn’t even want to understand it,” Ali Farid Khwaja, chairman of KASB Securities, a stock brokerage in Karachi told reporters. “But the good thing is someone set up this committee. The relevant bodies in the government who need to get things done are supporting it, and the promising thing is nobody wants to stand in the way of technical innovation,” he added.

Ukraine, ranked fourth, is the latest country to legalise cryptocurrency. The daily turnover of virtual assets in the country stands at $37,000, according to the government.

By 2022, the country plans to open a cryptocurrency market to businesses and investors, according to the Kyiv Post. Top state officials have also been touting their crypto street cred to investors and venture capital funds in Silicon Valley.

Kenya, ranked fifth, is well ahead of the other 154 countries surveyed in terms of peer to peer to exchange trade. Kenyans are directly trading cryptocurrencies with each other more than elsewhere in the world.

The index has also made adjustments for purchasing power parity per capita and the internet-using population.

Residents of other African countries are also jumping into the opportunity to cushion remittances and cross-border businesses from costly transfer fees and the risks of weakening currencies.



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RBI Guv, BFSI News, ET BFSI

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MUMBAI: The Reserve Bank of India’s Governor Shaktikanta Das today said that the central bank would like to see credible answers on what would be the contribution of private cryptocurrencies to the Indian economy.

Das, who was speaking at the Indian Express-Financial Times event, reiterated that the central bank has “serious” and “major” concerns about cryptocurrencies and their impact on the financial stability in the country.

The Indian government is currently in the process of formulating a cryptocurrency bill that may seek to outlaw all private cryptocurrency, while laying down the path for the introduction of central bank digital currency in India.

India has emerged as one of the biggest hubs for cryptocurrency adoption in the world with some pegging the total value of cryptocurrency owned by Indians at over $6.5 billion as of May 2021. The ownership of crypto assets in India has ballooned 400 per cent over the past 17 months.

According to a survey by Finder, almost 30 per cent of the respondents in India said that they owned private cryptocurrencies in their investment portfolio making it the third-highest among Asian countries.

The surge in demand for cryptocurrencies has led to an explosion in cryptocurrency exchanges in the country backed by investments from marquee global private equity and crypto investors such as Tiger Global, Binance and others.

Recent media reports have suggested that the government may look at designating cryptocurrency as a commodity, which will allow them to function as an asset class like equity, bonds and gold. However, the government has yet to finalise the bill, which is awaiting the approval of the Cabinet and the Parliament.

In the past, Finance Minister Nirmala Sitharaman has suggested that the government is open to taking a calibrated approach towards cryptocurrencies after facing backlash from the crypto industry, which has since gone on a massive public relations drive to spread awareness on the asset.



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Delay in legislation on crypto boosts lobbying, BFSI News, ET BFSI

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NEW DELHI: The delay in the government finalising the legislation on cryptocurrency has prompted intense lobbying, with agencies worried over the risks emanating from an unregulated segment with extreme price volatility, posing a threat to investors, many of whom do not understand the instrument.

Besides, there are concerns over the instrument being used for money laundering and terror funding, an issue that has been flagged by other agencies across the globe, sources told TOI.

While the Supreme Court had lifted the ban imposed by the RBI, the government had listed a bill on cryptocurrency to be introduced during the Budget session of Parliament but with the session cut short, the legislation could not make it.

During the monsoon session, the government remained silent on the future of the proposed bill with finance minister Nirmala Sitharaman recently saying that it has been sent for clearance by the Union Cabinet before it can be introduced in Parliament. The next session is at least two months away.

But crypto exchanges have used the interim period to launch a massive lobbying initiative with several governments and regulatory agencies, raising concerns. The exchanges have argued that a ban on digital currency transactions will result in job losses.

While there are fears that a ban will lead to investors getting locked into the instrument, sources indicated that a three-six month window will be provided for investors to exit.

Several officials have junked the argument that crypto currencies are an asset class. Besides, there are worries over the legal basis for the presence of some of the exchanges, which remain outside the jurisdiction of either Sebi or the RBI. “There has to be global coordination to combat the challenge posed by cryptocurrencies. They are not a currency as only the sovereign can issue currency. There is a grave danger in allowing these instruments,” said a source.



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