🟩 Switzerland stands for cash
DeSantis & Kennedy agree on Bitcoin, and the hardest role to fill in crypto
The New Money Brief covers the global rise of digital currencies and how they are disrupting the world of payments, and much else.
Delivered several times a week. Created and edited by Marc Andrew.
The Swiss government wants to enshrine the availability of cash in the constitution and will let citizens decide in a national vote.
After campaigners collected enough signatures to trigger a plebiscite that would preemptively counter the spread of digital money, the government in Bern on Wednesday announced in a statement that it will draw up its own plan.
“The Federal Council recognizes the importance of cash for the economy and society,” it said. While the supply of physical money and the franc as the Swiss currency are already anchored in law, the government “is prepared to raise these concerns from the legal to the constitutional level in order to underline their importance.”
Source: Bloomberg
A crypto startup said it has received the first special purpose broker-dealer license under US Securities and Exchange Commission guidelines that would allow it to custody digital assets securities. But there’s a catch: it can’t support Bitcoin.
Prometheum Ember Capital, a New York-based firm founded in 2021, said the approval allows it to safekeep digital asset securities on behalf of individual and institutional clients as a qualified custodian. An SEC spokesperson declined to comment. The firm views it as a major step toward building out the corporate structure and licenses to ultimately enable its parent, Prometheum Inc., to provide crypto trading for customers.
The license approval could be viewed as a sign that registration as a crypto business with US regulators is possible. SEC Chair Gary Gensler has long said most digital assets are securities and that firms offering them to US customers need to come in and register. Many crypto firms, however, have pushed back on that narrative, saying the existing rules aren’t workable and that Congress should act to pass new legislation.
Source: Bloomberg
Crypto companies fleeing U.S. regulatory uncertainty have been offered a welcome in France, by officials boasting a regulatory framework that offers relative predictability.
The European Union member already boasts around 74 registered crypto companies – a number that could surge to 100 as a last round of firms seek to anticipate the EU’s Markets in Crypto Assets rules that were formally signed off by ministers earlier Tuesday.
“In France, we are proud to be pioneers” with the crypto service asset provider regime, known as PSAN, that was legislated in 2019, Benoît de Juvigny, Secretary General of the Autorité des marchés financiers (AMF), told reporters Tuesday.
Source: CoinDesk
Many large countries around the world, including Pakistan and Nigeria, suffer currency turmoil. And, despite official efforts to curb crypto activity, there are signs their citizens are turning to crypto assets as a hedge, says Noelle Acheson.
With the U.S. mired in political stasis while other regions build crypto frameworks, it’s worth looking at the evolution of, and outlook for, on-the-ground demand for crypto assets. This is getting more and more relevant as many large countries struggle with skyrocketing inflation, shaky currencies and autocratic control over financial access, and as populations become increasingly crypto-aware and a lack of trust in centralized institutions grows.
Last week, the government of Pakistan (the fifth largest country in the world in terms of population, with over 239 million inhabitants) was reported to have said that cryptocurrencies “will never be legalized” in Pakistan, in order to avoid FATF penalties.
Source: CoinDesk
An International Monetary Fund working paper concludes Nigeria’s central bank digital currency (CBDC) has had “disappointingly low” acceptance among the public.
The Central Bank of Nigeria launched the e-naira, Africa’s first central bank digital currency, on October 25, 2021. The CBN initially minted 500 million naira ($1.2 million) of the new currency. The e-naira uses distributed ledger technology (DLT).
Source: Central Banking
The International Organization of Securities Commissions (IOSCO) has released a report outlining policy recommendations for global crypto recommendation as part of the public consultation process.
Members of the public can view the full report here and have until July 31 to send in comments and feedback by email.
The IOSCO specifically advised regulators to prohibit crypto companies "from combining certain functions in a single legal entity or group of affiliated entities,” such as prohibiting crypto companies from also running exchanges, trading firms, and custody businesses under the same legal entity.
Source: Decrypt
Argentina’s government will tighten access to the foreign exchange market for oil companies that need to import amid a severe shortage of dollars, according to people with direct knowledge.
Central Bank President Miguel Pesce, Energy Secretary Flavia Royon and other officials informed oil company executives Wednesday morning that they will be required to finance import payments for 90 days, one person said. The policy makers met with executives of Raizen, Axion, YPF and Trafigura at the monetary authority to discuss the changes.
Oil companies must now obtain financing from international banks or their parent companies to pay for their imports. At the same time, the central bank may allow companies to deposit pesos in accounts or assets that adjust with Argentina’s official exchange rate, one person said.
Source: Bloomberg
Hong Kong, which is preparing to introduce a new regime for trading digital assets, is responding to concerns raised by industry players about the shortage of a crucial type of worker: the Chief Crypto Officer.
In conclusions from a weeks-long consultation published Tuesday, the Securities and Futures Commission included a provision that may allow licensed crypto platforms to employ fewer so-called responsible officers than previously thought.
The difficulty finding responsible officers, or ROs, had emerged as a hurdle for crypto companies seeking permits under Hong Kong’s new regulatory regime, which takes effect June 1. That’s threatening to set back Hong Kong’s push to establish itself as a crypto hub, a key part of the city’s effort to recover from the twin blows of political unrest and unpopular Covid restrictions.
Source: Bloomberg
Hong Kong has launched the trial run for a digital version of the local currency, called the e-HKD, paving the way for a virtual coin the public will be able to use to shop, dine out and make money transfers.
Some 16 banks and payment companies will select small groups of their clients to test six potential uses for the e-HKD – online payments, payments in shops and restaurants, collecting government payouts, tokenised deposits, tokenised asset settlement and Web3 trading and clearing, according to a statement by the Hong Kong Monetary Authority (HKMA).
Eddie Yue Wai-man, the CEO of the HKMA, hosted a ceremony on Thursday evening to mark the start of the e-HKD pilot programme at the de facto central bank’s office in Central.
Source: South China Morning Post
As central banks seek tangible uses for central bank digital currencies, Visa and a group of partners have developed a mechanism that uses a CBDC to connect cash-strapped small businesses with a wider range of funding options.
Visa worked with Microsoft, the farming crypto technology firm Agrotoken and software developer Sinqia to develop a financing prototype that uses the Real Digital, Brazil's CBDC, for blockchain-powered financial services. Dozens of countries are developing CBDCs or considering whether to digitize their currency, and card companies like Visa and Mastercard seek ways to work with governments to play a role in CBDC development. Brazil's central bank chose Visa and its partners as part of a government initiative to locate new blockchain use cases.
An initial test involves Brazil's farmers, which are often remote and struggle to obtain low-cost capital. Visa contends CBDCs and related technology can democratize financing for these farms, and demonstrate how digital assets such as CBDCs can improve access to financial services for small businesses and other underserved users globally.