Turkish Settlement Bank Launches Blockchain-Based System for Gold

Turkey’s Istanbul Clearing, Settlement and Custody Bank (Takasbank) announced that its blockchain-based, physical gold-backed system is now live.

Takasbank developed BiGA Digital Gold to provide an option for a blockchain-based system for gold. Mainly targeted towards banks and institutional investors, with BiGA, gold can now be traded in a digitized form according to the official announcement.

The BiGA system was first announced in September 2019. It allows participating banks to use blockchain for quick and easy settlement of digital assets that represent a unit of physical gold. According to specifications, each unit asset represents one gram of gold that is stored in vaults of the Borsa Istanbul (BIST) Turkish stock exchange.

The project aims to put into application blockchain technology to benefit from quick and easy settlements, while preserving full regulatory compliance. Thus, BiGA enables access to the gold markets via digital assets that are fully-backed by the commodity. Speaking to Turkish news agency AA, Takasbank officials said:

“This platform distinguishes itself from many similar projects in the world by allowing the use of blockchain technology to transfer digital assets based on physical commodities, not having any value of its own, and ensuring full compliance with existing regulations.”

According to Takasbank the BiGA Digital Gold platform has seen a list of banks joining in their efforts. Financial institutions, including state lenders Ziraat and Vakif, private lender Garanti BBVA, and private and state banks Albaraka Turk, Kuveyt Turk, and Ziraat Participation, have joined the ranks of the project.

Takasbank as a clearing and settlement house in Turkey, provides counterparty clearing services for particular markets and is under the supervision of financial regulatory agency, the Capital Markets Board of Turkey.

This is not the first attempt at digitizing the gold commodity, with most notable efforts coming from Paxos, with its PAX Gold token that is also fully backed by the commodity stored in London vaults.

The trend for applying blockchain technology has been well-received in Turkey, and the country’s efforts put it ahead of a row of competing economies. In September 2018, BIST developed a blockchain-based system to improve financial data transfers in collaboration with Takasbank and the Central Securities Depository of Turkey.

Besides the steady growth of blockchain infrastructure, Turkish officials have hinted that a blockchain-based digital Turkish Lira may be ready for testing in the upcoming year.

Coinbase Forced to Remove Dapp Browser Integration from Apple’s Store

United States-based cryptocurrency exchange Coinbase has recently announced that might remove the decentralized application (Dapp) browser feature from its crypto wallet application in order to comply with Apple’s store policy.

According to a Reddit post published on December 28th, Coinbase may have to remove the dapp browser functionality from Coinbase Wallet to comply with App Store policy.

Coinbase CEO Brian Armstrong seemingly confirmed the browser’s impending removal, who expressed concern over Apple’s recent move in a response to the Reddit post.

“This is really unfortunate to see. Apple seems to be eliminating usage of Dapps from the App Store,” said Armstrong.

 “If Apple customers want to be able to use Dapps, we may need to make this request know to Apple in some way. This is an important area of innovation in finance, and many developers and early adopters of this technology have millions of dollars worth of crypto tied up in these financial applications, which they will no longer be able to use on Apple mobile devices if this app store policy continues.”

According to Armstrong, this is beyond the company’s control and this could presumably extend to other wallets as well such as Trust, Argent, Metamask. He further said he believed this to be a big threat to the ecosystem.

Notably, Coinbase has already erased all of the language about the dapp browser from the App Store — a stark difference from the Google Play store, where the dapp browser is actually in the app’s name. In the meantime, users can still access DApps through Coinbase Wallet on their desktop devices by simply scanning a QR code via its WalletLink feature.

At the moment, neither Coinbase nor Apple has released an official statement regarding the recent policy enforcement. It remains to be seen whether Google will follow suit with Coinbase Wallet, although the recent removal of Metamask from the Play Store doesn’t bode well.

As mentioned above, the news comes shortly after Google banned Ethereum wallet and DApp browser MetaMask from its Android application distribution platform Google Play.

Meanwhile, cryptocurrency Influencer Omar Bham suggested that these actions were taken to protect the firms’ businesses against potential decentralized competitors, according to a tweet published on December 28th:

“Web3 is in direct competition with Google & Apple. We should expect continued censorship on MetaMask, Coinbase, & other dapp browsers.”

On December 23rd, cryptocurrency influencers started claiming that Google’s user video streaming platform YouTube started censoring their content. After many of content creators started speaking up, the platform reinstated some of the content, but many of the affected YouTubers noted that their videos were not restored.

Two days later, YouTube restored more of the content and the firm’s team stated in a tweet that the initial issue had happened due to an error in the review process. After the incident, some of the content creators turned to decentralized content sharing platforms.

Bank of Korea Intensifies Efforts for Central Bank Digital Currency Development

The Bank of Korea (BOK) – South Korea’s central bank – has revealed that it will be taking another important step towards adopting the trend for central bank digital currencies (CBDCs) in the next year. The central bank intends to establish a task force that will focus on the existing CBDC research as well as further improve it.

According to a press release on December 27th, the move is aimed at strengthening the country’s payment and settlement system as stipulated in its “Monetary Policy for 2020” document. The research will continue to focus on innovations in areas such as distributed ledger technology, digital assets and CBDCs. As it is known, a CBDC is a digital currency issued by a central bank, which has the status of legal tender and other properties of centralized, fiat money.

Moreover, the central bank will organize a special task force with the sole purpose of providing a better understanding of how digital assets operate. Given the rising trend of global central banks adopting the CBDC idea, BOK will also hire additional experts in the field.

According to local reports, the bank had posted on December 10th a job listing for digital currency experts. There were several rumors of the bank preparing to issue a CBDC, however, an anonymous official from the bank, reportedly said at the time: “This hiring does not presuppose the possibility of issuing a CBDC.”

Earlier this year, after examining the possible legal and social effectiveness of a CBDC project, the institution concluded that there was no reason for the bank to issue a CBDC, explaining that issuing a CBDC issuance could impact liquidity at commercial banks, amongst other risks.

In addition to establishing its task force, the institution stated that it would actively engage in discussions with the Bank of International Settlements (BIS) and other relevant international institutions in order to continue observing the CBDC development at other central banks.

“We will actively engage in discussions with the Bank for International Settlements (BIS) and other international organizations, keeping an eye on CBDC development at other central banks.”

Moreover, the bank intends to use BIS’ Principles for Financial Market Infrastructures (PFMI) to establish assessment principles for improving its oversight of domestic financial systems.

The PFMI is essentially a framework created by the BIS used to manage market risks such as credit, liquidity, custody, settlement, operational and investment risks across payments systems, securities settlement systems, trade repositories as well as other infrastructures.

Most recently, BIS’ general manager spoke about the emerging trend of digital assets, stating that although he still was against digital currencies, he said that central banks have to embrace the digital money revolution. He further noted that the responsibility falls on them to stay at the center of the global payments system, or risk being overtaken by other establishments.

Meanwhile, at least 18 countries are currently developing CBDCs, including China, Singapore and Thailand. The list does not include central banks that have announced they are considering issuing digital currencies or at least researching them.

Huobi Closes Investment for Japanese Branch

Japanese financial services firm Tokai Tokyo Financial Holdings has announced that it will invest about 500 million yen (nearly $4.6 million) in the Japanese branch of cryptocurrency exchange Huobi.  

According to a press release on December 26th, the investment in the subsidiary of Huobi is part of a broader collaboration with the goal to adopt new and emerging technologies such as blockchain technology as part of its business development plan.

Upon the announcement, the brokerage firm issued a statement, saying:

“The financial business using blockchain technology has advanced rapidly in recent years with the application area of crypto assets and Security Token Offering (STO) expanding globally. Here in Japan, the relevant ministerial ordinances are expected in force next spring.”

The firm further explained that the capital and business alliance with Huobi Japan will help promote new businesses in the digital assets sector such as crypto asset exchange, initial exchange offerings, local currency issuance, as well as crypto management and storage services. As part of the investment, the brokerage firm will acquire shares in the exchange.

Notably, the firm considers expanding this business to partner regional banks and other regional banks in the future. Further details about the share acquisition by Tokai Tokyo Financial Holdings have not beendisclosed yet, however it is estimated that the acquisition will be finalized in January 2020.

Founded in 1908, Tokai Tokyo is a Japanese financial services holding company and one of the country’s oldest securities trading platforms. It is mainly involved in providing brokerage services through its subsidiary Tokai Tokio Securities. The company has opened up 159 offices nationwide and has reportedly secured net assets worth $1.4 billion. In addition to that, it handles around $39 billion worth of client assets.

According to financial news website Financial Times, Tokai Tokyo Financial Holdings reported a revenue of 57.57 billion Japanese yen ($252.5 million) over the past 12 months. 

Last month, Tokai Tokyo invested $5 million in tokenized security startup iSTOX.  At that time, President and CEO of Tokai – Tateaki Ishida – said that the financial services sector is approaching an important period of change with the emergence of transformative technologies like blockchain.

We believe that forward-looking providers of financial services must embrace this change if they wish to truly serve their clients in the new century,” he further added.

Meanwhile, Huobi Japan CEO Haiteng Chen stated that Tokai Tokyo’s decision to invest represented “greater mainstream recognition.” He further added:

“Tokai Tokyo is a comprehensive securities firm, which will find many areas to benefit in from partnering with Huobi Japan.”

In September 2018, Huobi’s Japanese subsidiaryHuobi Japan Holdingsacquired a majority stake in local cryptocurrency exchange BitTrade and subsequently changed BitTrade’s name to Huobi Japan in February 2019. The subsidiary continues to facilitate cryptocurrency trading.

It seems that Huobi Japan is focusing on expanding its reach in eastern countries as it has recently ceased its operations in the United States. The exchange cited regulatory reasons for suspending its services for US customers.

Uzbekistan Government Bans Cryptocurrency Purchases

The government of Uzbekistan has recently decided to ban its citizens from purchasing digital currencies. The decision comes as a surprise as the government had been relatively lenient towards digital assets until now.

According to several local media outlets on December 25th, the National Project Management Agency has banned the citizens from purchasing digital assets, even from licensed exchanges.

Curiously enough, the government has made it illegal to purchase digital assets, however investors owning digital assets can still sell cryptocurrencies. However, in order do to so, the citizens would need to prove that they have previously acquired the assets legally. If they fail to do so, any transfers or sells will be illegal, due to the new amendment.

Most recently, Uzbekistan’s National Agency for Project Management introduced new regulatory amendments, which were made public on December 6th.

Whilst the new regulations has barred citizens from purchasing digital coins, the agency has decided to let investors sell off their digital assets obtained before the new ban comes into effect. Crypto holders are still allowed to sell their coins on two registered platforms within the country — Forklog and Sputnik.

In the meantime, some have already pointed out the ineffectiveness of the law as it can easily bypassed and access foreign cryptocurrency trading platforms by using virtual private networks (VPNs). And due to the decentralized design of such assets, it is very hard to track down their owners.

Certainly, this decision is a major step back from the previous year, when the government signed a memorandum of understanding to regulate and establish licensing for crypto exchanges

In September 2018, Uzbek President Shavkat Mirziyoyev had also ordered the establishment of a state blockchaindevelopment fund called the “Digital Trust.” In addition to that, he also signed a decree on the development and integration of blockchain technology into the country’s public administration. 

In addition to that, the Uzbek government had also signed a pact with the Korean Blockchain Business Association. The partnership was highly anticipated, as it was supposed to provide help to Uzbekistan in the execution of the Uzbekistan Revolution 4.0.There were even plans of establishing a trading platform, a blockchain academy, and even initial coin offerings (ICOs) were supposed to be legalized.

The government even provided tax benefits to crypto holders as any income generated from the trading digital currencies would not be taxed. Moreover, the licensed exchanges operating within the country would not be subject to existing foreign currency regulations.

As such, the government’s actions from last year pointed at a major step towards expanding crypto operations in the country, for that reason the ban seems abrupt and has caught many by surprise.

Meanwhile, countries around the world have taken a strict stanceon various aspects of the digital assets sector. For instance, some officials in India have sought an outright ban on all digital assets. It is rumored that Russian financial regulators are likewise preparing a ban on the use of cryptocurrencies for goods and services.