Our weekly list of announcements about how capital markets and regulators are engaging with digital assets.
NY authority licenses Seed CX for institutional crypto services
The New York State Department of Financial Services (DFS) has approved the applications of two Seed CX subsidiaries, Seed Digital Commodities Market (SCXM) and Zero Hash, for virtual currency licenses. In total, 20 virtual currency businesses have been approved.
DFS superintendent Linda Lacewell said in a statement: “The Department’s approval of these new licenses will provide institutional customers with more choice while also protecting consumers and the public through strong anti-money laundering, cybersecurity and other compliance standards in a continuously evolving global financial services marketplace.”
DFS has authorized SCXM to serve as a matching engine for buyers and sellers of cryptocurrencies (such as bitcoin) and as a platform for cryptocurrency block trades, for large financial institutions and trading firms. Zero Hash will function as the money transmitter for the trading activity resulting from its affiliated exchange, SCXM.
Bank of Japan mulls issuing digital currency
Digital currencies issued by central banks are called “central bank digital currencies” (CBDCs). The Bank for International Settlements (BIS) conducted an interesting survey on central bank initiatives for CBDC. Among the 63 respondent central banks, about 70% are engaged in CBDC work, most of which is in the form of research/study or experiments/proof-of-concept.
Central banks that have actually been developing CBDCs and are seriously considering its issuance are in the minority; they are limited only to those of countries, such as Sweden where the circulation of banknotes is rapidly decreasing and emerging and developing countries where the infrastructure supporting banknotes has not yet fully developed.
Except for these cases, many central banks see themselves as unlikely to issue CBDCs in the short or medium term. Many central banks therefore take the position that they have no plan to issue CBDCs in the near future but will continue research into CBDCs, which is the position the Bank of Japan also takes. But why do central banks take this seemingly contradictory position? The main aim of this speech is to explain the background to this.
Read the full speech by Bank of Japan deputy governor, Masayoshi Amamiya
SALT partners with DASH masternode for collateralization of crypto assets
SALT, a provider of large crypto-backed loans for cryptocurrency holders, announced its partnership with NODE40, the blockchain masternode hosting and monitoring provider. The partnership will provide expanded loan options for DASH masternode owners in tandem with the Dash community’s first masternode hosting service.
SALT said in a statement that Dash is an appealing collateral form for its platform because it has long-term viability, numerous use cases, level of adoption. Also, Dash has two-tier network that uses masternodes to maintain the viability of its blockchain. A Dash masternode serves to expedite transactions and scale the network by relaying them over a second-tier network. While Bitcoin’s second layer is an off-chain solution to scale, Dash runs an on-chain second layer using masternode operators who are incentivized by the network like miners in Bitcoin.
“Our development team has made a technological breakthrough and has advanced our mission by unlocking value and liquidity in cryptocurrency assets through collateralizing the Dash connected to masternodes,” said Rob Odell, VP of Product and Marketing at SALT, in a statement. “Dash has quickly become our second most popular collateral option behind bitcoin and the community has reacted positively with a high volume of loan applications.”
Overstock details next steps for blockchain sub tZERO
In an update, CEO of Overstock.com’s blockchain subsidiary tZERO, Saum Noursalehi, said that its joint venture with the Boston Security Token Exchange (BSTX) is working with US regulator, the Securities and Exchange Commission, to launch the first regulated national security token exchange. BSTX will launch shortly after regulatory approval is granted.
The joint venture with the BSTX is expected to provide key infrastructure to scale the issuance, listing, and secondary trading of security tokens in the US, and will be underpinned by tZERO technology.
World’s first digital currency created at Royal Mint in UK
Cryptocurrency temtum (TEM) has been produced at the Royal Mint, which will store the cryptocurrency’s private crypto keys in its vault. The news comes ahead of an upcoming trading launch. With the Royal Mint having minted the UKs supply of coins for over 1,100 years, alongside over 60 nations worldwide where British currencies are exported, the financial institution will be the home of the temtum genesis private keys and currency reserve.