Category: Bank

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The World Bank has launched a decentralised bond

Categories Blockchain, Cryptocurrency, Bank, Technology, Bonds

The World Bank has launched a decentralised bond

Despite the news that the SEC refused nine different Bitcoin ETF applications in one go, there has been a bit of a boost for the blockchain industry.

The World Bank announced the launch of a blockchain-bond that uses the technology from start to finish. The bond-I, which stands for “blockchain operated new debt instrument” is a two-year bond that was created in collaboration between the Commonwealth Bank of Australia and the World Bank.

Investors in the project include several leading Australian banks and state treasuries as well as entities such as King & Wood Mallesons, Mark-it, Microsoft, and Toronto Dominion Securities. The World Bank has said that the bond is the first of its type and will create, allocate, transfer, and manage all aspects of its life-cycle using blockchain technology.

Whilst it claims to be a world first, there are actually some examples of smaller companies issuing bonds using cryptocurrency and the Ethereum blockchain. One such experiment was conducted in the UK and the Russian telecoms firm MTS has placed private bonds on the blockchain in collaboration with Sberbank back in May.

A spokesman for The World Bank said in a statement that the i-bond is the first bond of its type that is offered to a public and global range of investors. They added that the bond is unique in that the entire bond process, from creation to allocation, is carried out on and over the blockchain. It is also worth considering that the scale of the i-bond is considerably larger than any private blockchain bond offerings that have come before it.

The World Bank has often led the way when it comes to pioneering bonds as they launched the first globally traded and settled bond back in 1989, followed by the first electronic bond in 2000.

“We welcome the huge interest that this transaction has generated from various stakeholders and will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient,” the World Bank’s Oteh said.

“But don’t expect the World Bank to jump on the cryptocurrency bandwagon just yet.” Its president, Jim Yong Kim, said earlier this year that while it is investigating using cryptocurrencies, “I’m told the vast majority of cryptocurrencies are basically Ponzi schemes.”

 

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The World Bank announces a decentralised bond

Categories Blockchain, Cryptocurrency, ICOs, Bank, Technology, Bitcoin, Tokens

The World Bank announces a decentralised bond

The World Bank has announced the launch of the world’s very first blockchain bond. The honour has been given to The Common Wealth of Australia who is expected to facilitate it in the coming months.

Dubbed as the bond-I or Blockchain Offered New Debt Instrument, the bond will be the first of its type to be created and managed on and over a blockchain platform. Blockchain is the tech that underpins Bitcoin and other cryptocurrencies and it also functions as a distributed ledger that is able to securely record all transactions that are made on or over it.

It has long been thought that blockchain technology has the potential to streamline a whole range of processes in the debt capital market, including but not limited to intermediaries and agents. This, in turn, will help simplify the process of raising capital, trading securities, as well as enhancing regulatory compliance and operational efficiencies.

When the bond is officially launched, it will be issued and distributed over a blockchain platform that will be jointly operated by the Commonwealth Bank of Australia and The World Bank.

So far, it seems that investor interest in the bond has been very strong and the bond is set for an official release after a wider consultation process with investors. Those that are advocating for the use of blockchain maintain that it has the power to make processes much faster and more secure, but there are still some that are dubious and believe it is nothing more than a bubble.

This latest news from the world’s leading financial authority will only boost the popularity of blockchain as well as giving it a much-needed vote of confidence. It seems that each day that passes, more and more leading names are turning to blockchain to solve solutions that they have long struggled with.

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Bank of England revamps RTGS system with the help of Decentralised Technology

Categories Blockchain, Cryptocurrency, ICOs, Bank, Technology, Exchanges, DLT

Bank of England revamps RTGS system with the help of Decentralised Technology

The Bank of England is in the midst of executing a total overhaul of its interbank payment system through the introduction of a new blockchain-based platform. They have also confirmed that the network will soon be available for fintech firms and businesses that are involved in processing transactions on a blockchain network.

In August, the central bank of the UK published a report that detailed its recent work establishing a PoC with a number of firms that are operating within the blockchain or DLT space. The idea behind the trial was to explore the feasibility of connecting blockchain businesses with a version of the banks RTGS service.

The Real-Time Gross Settlement service handles approximately GBP 500 billion through the facilitation of settlements between various financial institutions. Mark Carney, the Governor of the BoA announced that one of the core features of the new RTGS would be opening it to private payment systems including DLT companies.

Mr Carney who has been vocal in his criticism of cryptocurrency in the past stated that the bank “No longer access to central bank money be the exclusive preserve of banks.”

The PoC which was finalised in March of this year included collaborative efforts from Baton Systems, R2, Token, and Clearmatics Technologies. The report on the findings of the trial includes the expressed confidence from participants that they would connect to the RTGS in order to settle transactions that are denominated in central bank currency.

“All participants confirmed that the functionality offered by the renewed RTGS service would enable their systems to connect and to achieve a settlement in central bank money,” the BoE said in its statement, adding that officials will also investigate “whether the renewed RTGS service could provide and consume acceptable forms of cryptographic proofs.”

The impending departure of the UK from the European Union has resulted in many British companies and institutions making significant efforts to attract fintech and digital businesses to the country.

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One of the world’s largest banks will test decentralised-based loans

Categories Blockchain, Cryptocurrency, Bank, Technology

One of the world’s largest banks will test decentralised-based loans

The Agricultural Bank of China (ABC) has announced the issuance of its first loan on the blockchain.

ABC is owned by the Chinese Government and it is one of the country’s, four big lenders. In a statement issued this week, they announced the issuance of a $300,000 loan that is backed by a piece of agricultural land in the Guizhou province.

The bank intends to ‘build blocks with local people, pilot land and resource bureaus, as well as agriculture and animal husbandry bureaus’ through the blockchain system.

The new project also involves third party participants such as the provincial branch of the People’s Bank of China who is keeping tabs on the project and the validity of the loan data.

Going forward, the bank intends to issue other types of loans over the blockchain with DLT technology helping to avoid situations where a client can use the same piece of land as collateral at different banks.

This latest news is a further indication of the speed in which the country is adopting blockchain technology with the government intending to implement industry-wide blockchain standards by 2019.

Back in May, Li Ming, Director of the Chinese Blockchain Research Office said that a dedicated working group has begun work on a project to identify and implement standards across various industries. The group will be known as the Blockchain and Distributed Accounting Technology Standardisation Committee and their aim is to guide the industry and to help the advance of its development.

Yu Kequn, Director of the National Centre for Information Technology Security Research said that: “The development of blockchain technology may become an important step for China to grasp global technological competition.”

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Germany offers special accounts to crypto firms

Categories Blockchain, Cryptocurrency, Regulatory, Bank, Technology, Tokens

Germany offers special accounts to crypto firms

Solarisbank, the Berlin-based BaaP institution has just announced the intention to launch a new banking service that will serve clients from the crypto and blockchain industry.

The soon-to-be-launched resource known as ‘Blockchain Factor’ will provide tailored financial management services to businesses that are directly, or indirectly dealing with cryptocurrency and blockchain related services.

The struggle to build banking relationships

Over the last couple of years, cryptocurrencies and related services have increased significantly in popularity yet many still struggle to build relationships with their banking providers. In some cases, many banks and other financial institutions have closed business accounts of companies such as exchanges and brokerages leaving these businesses stranded. But now, the German fintech company Solarisbank is planning to offer a solid banking solution complete with an account manager who fully understands the technology.

“The Blockchain Factory will be used by Solarisbank to offer banking services to companies whose business is directly or indirectly based on cryptocurrencies and blockchain technology — One example of these services is the ‘Blockchain Company Account’ for the banking business of blockchain companies,” Solarisbank explains.

“Furthermore, services for global cryptocurrency marketplaces will be made available to make it easier to buy and sell fiat currencies; such as the Solarisbank ‘Automated Trust Account’, an automated escrow account for cryptocurrency market places.” 

Since the bank’s inception back in 2016, they have done well to carve out a solid reputation in the fintech marketplace. After entering into a strategic partnership with MasterCard, they raised over $70 million in a Series B fundraising round with contributions from firms such as SBI Group, Visa, BBVA, Lakestar, and ABN Amro.

“There is high demand from the blockchain world for a licensed partner that forms the technological and regulatory bridge to traditional banking — as a technology company with a banking license, we are the natural partner,” Roland Folz, the CEO of Solarisbank said.

Establishing partnerships

The fintech bank has plans to establish partnerships with crypto companies that have banking and debit card requirements.

CTO of Sloraisbank, Peter Grosskopf explains: “The fiat world is not about to dissolve. We are moving towards a hybrid future, in which the blockchain world still has to prove itself.”

In June 2018, Binance announced that they had been able to successfully open a bank account in Malta, although the name of the bank has been kept strictly under wraps. Whether the Germans will lead by example and pave the way for not just crypto-friendly banking but fully fledged crypto departments within financial institutions remains to be seen.

 

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Binance is backing the world’s first decentralised bank

Categories Blockchain, Cryptocurrency, Malta, Bank, The Blockchain Island, Technology, Cryptocurrency Exchange, Regulation, Tokens, Binance

Binance is backing the world’s first decentralised bank

On July 4th, the Maltese government unanimously passed the 3rd reading of three blockchain regulations. Many blockchain companies saw an opportunity to relocate on the Blockchain island including, Binance.

In a report issued by Bloomberg, stated that Binance is backing a project, to build the first-ever decentralised bank in Malta. They stated that a 5% stake has been invested by both Binance and the Maltese government to make this decentralised, community-owned bank happen.

How will it work?

The name given to this decentralised bank is, Founders Bank. There will be no ownership of the bank, this includes any corporations, persons or entities. The only owners of the bank will be those who purchase a portion of its token-based equity.

The blockchain equity platform, Neufund will take care to fundraise this project.

In a recent speech, Joseph Muscat, Malta’s Prime Minister said that he is very optimistic about the viability of this project. He stated that “The concept sounds confusing right now, I have no doubt that it will form the base of a new economy in the future. Just as we attribute value to pieces of paper, so too will future generations attribute value to electronic storage systems.”

 

E&S Group is a leading law firm offering various services with regards to ICOs. Feel free to contact us directly on +356 20103020 or by email at [email protected] to find out how E&S can help you in ‘making things happen’.

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Microsoft teams up with two leading Asian firms

Categories Blockchain, Cryptocurrency, Bank, Technology

Microsoft teams up with two leading Asian firms

The Taiwanese subsidiary of Microsoft has announced its collaboration with a large tech investment company called China Binary Sale Technology and another called High Cloud to create a platform which will encourage further enterprise blockchain development. The news was broken at the end of last week via a press release from Microsoft.

The Microsoft Azure cloud platform will be offered as a base for the China Binary blockchain platform. The three-way collaboration is intending to transform a range of industries such as e-commerce, finance, and entertainment with a geographical focus on the Asia-Pacific region.

Exciting times ahead

The General Manager of Microsoft Taiwan, Sun Jikang expressed his excitement and confidence regarding the ability of Microsoft to both improve the operational speed and overall security of the China Binary blockchain. He also added that Taiwan has a solid technological potential as well as large manufacturing sectors, a Research and Development Foundation and an “excellent geographical location”.

Blockchains important role

Sun Jingtao, the founder of China Binary noted the important role that blockchain technology has in the spheres of fintech, business, science, and many other industries. He also emphasises the importance of creating synergy between blockchain applications and other technologies such as the Internet of Things, Artificial Intelligence, and biometrics.

At the end of May, the Taiwanese government launched a parliamentary blockchain group that would further promote the development and growth of the technology. On May 14th, the Tapei Fubon Commercial Bank made an announcement that it had deployed a blockchain-based payment system that saw them become the first bank in Taiwan to do this.

 

E&S Group is a leading law firm offering various services with regards to ICOs. Feel free to contact us directly on +356 20103020 or by email at [email protected] to find out how E&S can help you in ‘making things happen’.

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European Parliament says that crypto is not likely to challenge central banks

Categories Blockchain, Cryptocurrency, European Commission, Bank, European Parliament, Technology

European Parliament says that crypto is not likely to challenge central banks

In a report released by the European Parliament, they have stated that they do not believe that cryptocurrency has the power to challenge the dominance of central banks.

The most recent Monetary Dialogue report was issued on June 26th and the European Parliaments Committee on Economic and Monetary Affairs said that whilst cryptocurrencies have significantly improved the safety, speed, and transparency of financial transactions, it is unlikely that they pose a threat to fiat currencies.

Positive attributes

This analysis was carried out by the Centre for Social and Economic Research, a not-for-profit research institution that is based in Poland. Early on, they noted the positive changes that cryptocurrencies could bring to transactions and also stated that they are used globally with no limitations on borders or geographical constraints.

Real market demand

The report states that cryptocurrencies respond to “real market demand” and that there is every chance they have the potential to become a fully-fledged private money as well as an integral part of the global economy. The report then goes on to state that whilst this is all positive, it remains unlikely that cryptocurrencies will pose a threat to central banks and traditional fiat currencies, especially in countries where sovereign currencies are very popular.

Despite the widespread popularity of fiat currencies, there are a few exceptions. Countries such as Venezuela is a small jurisdiction but the sovereign currency is incredibly volatile. In a case such as this, cryptocurrencies could offer a valid alternative to unstable fiat currencies.

 

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European banks complete the very first live, blockchain financial trades

Categories Blockchain, Cryptocurrency, European Commission, Bank, Trading, Regulation

European banks complete the very first live, blockchain financial trades

A group of European banks have announced that they have completed the very first, live blockchain-based trans-border transactions. The trades in question were made via a jointly developed we.trade blockchain platform.

These real-life trades were executed over the previous five days amongst 10 companies and were facilitated by four leading banks that utilised the blockchain-based platform. HSBC, one of the institutions that are using the platform, has claimed that three of its clients have been able to complete an open account transaction via we.trade, in Europe.

We.trade is build on the IBM Blockchain Platform using its Hyperledger Fabric technology. It was created and developed by Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Societe Generale, and UniCredit, with the purpose of boosting the efficiency of cross-border transactions in the financial sphere.

As reported back in April, we.trade was supposed to start testing the platform in May with an expected commercial implementation due in the summer. Back then, Societe Generale told the press that the reason for the quick development of the platform was due to the fact that it was designed to be used by SME’s trading within Europe.

IBM’s blockchain lead in Europe, Parm Sangha stated:

“As we.trade has moved from pilot applications to conducting live transactions across borders, it has demonstrated the power of blockchain technology in an enterprise setting.”

The platforms Chief Operating Officer has announced that the next step will be to encourage buy-in from other EU banks and clients further afield.

 

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Malta Bankers Association Chairman gives crypto a big vote of confidence

Categories Blockchain, Cryptocurrency, Malta, Bank, The Blockchain Island, Technology, Cryptocurrency Exchange, Regulation, Tokens, Malta Bankers Association

Malta Bankers Association Chairman gives crypto a big vote of confidence

Marcel Cassar, the new Chairman of the Malta Bankers Association stated this week, that blockchain technology is a “bankers dream”. He also added that he believes cryptocurrencies are here to stay.

It seems that Cassar believes that the banking industry has a duty to keep up to date with the fast-past nature of the digital word, and it should move to embrace new technologies instead of shunning them. He compared the present ecosystem to “rush hour gridlock trapping an F1 car”.

Cassar added; “Going by our experience of technological innovation, a blockchain revolution of business and government could still be years away because many barriers would need to fall in the meantime.”

He also stated that he believes blockchain is a foundational technology that has the power to create new platforms for both economic and social infrastructures.  He also distinguishes between cryptocurrencies and payment technologies; “the currency is the ‘what’ while the payment technology is the ‘how’.”

He then brought up the still unanswered question of how we should be defining cryptocurrencies and seeking to regulate them, adding that he sees them as no short or medium term threat.

“But what it means for banks is that their traditional role as main payment intermediary for funds and currency transmission will become challenged, if not obsolete.”

Whilst Cassar notes that cryptocurrencies can be risky due to their connection to money laundering and of course, their volatility, he still thinks that they are “here to stay”.

Malta has been renamed “The Blockchain Island” due to their welcoming government, their crypto friendly laws, and the set up of several large cryptocurrencies in the country. Exchanges such as Binance, BitBay and OKEx have all announced their intention to relocate to Malta and the government have just enforced three new bills designed to fully regulate the sector.

Just last week, Binance announced that they had managed to open a bank account on the island meaning they would be able to offer crypto to Euro exchange. Cassar commented that whilst it is an area of unknown and unprecedented risk for the banks, this doesn’t mean it isn’t possible.

“We need to be sure of what enhanced risk management and compliance capabilities the banks are putting in place because there are also other important linkages that need to be protected, among others our correspondent banking networks which still see these technologies as new and susceptible to risk of criminal abuse.”

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