Taiwan’s central bank has announced no set timeline for launching a digital currency, emphasising that the process will be extensive and complex. Despite this slackening, the bank plans to hold public hearings next year to educate the public about digital currency. The central bank has been developing a pilot program for a government-run digital currency to enable people to use digital wallets for payments without needing debit or credit cards.
In a report to parliament, the bank noted that while there is no timetable for issuing the digital currency, ongoing research and experimentation are already enhancing the payment system’s efficiency and innovation. The bank stressed the importance of widespread communication about the currency’s introduction, highlighting the need for public hearings and forums.
Why does it matter?
Globally, 134 countries, representing 98% of the world’s economy, are exploring digital versions of their currencies, with many in advanced development stages. Proponents argue that digital currencies offer new functionalities and alternatives to physical cash, though concerns about government surveillance have sparked protests in some countries.
The first half of 2024 saw a significant surge in cryptocurrency thefts, with over $1.38 billion stolen by 24 June, compared to $657 million during the same period in 2023, according to blockchain researchers TRM Labs. The increase in stolen crypto, driven by a few large-scale attacks and rising crypto prices, highlights the growing motivation among cybercriminals. Ari Redbord, global head of policy at TRM Labs, noted that while the security of the crypto ecosystem hasn’t fundamentally changed, the higher value of various tokens has made crypto services more attractive targets.
One of the year’s largest thefts involved $308 million worth of bitcoin stolen from Japanese exchange DMM Bitcoin. Large-scale losses remain relatively rare, although cryptocurrency companies face hacks and cyberattacks frequently. The theft increase comes as crypto prices rebound from the lows following the 2022 collapse of FTX, with bitcoin reaching an all-time high of $73,803.25 in March.
Bitcoin experienced a significant drop to a two-month low recently, driven by uncertainty surrounding the US presidential elections and the impact of supply from a defunct Tokyo-based crypto exchange. The cryptocurrency fell over 2% to $57,843, its lowest since 2 May, marking a loss of more than 6% this week.
The market has been under pressure, particularly after the first debate between US presidential candidates Joe Biden and Donald Trump, which raised concerns about potential candidacy changes that could affect crypto policies. Market analyst Josh Gilbert from eToro highlighted the speculation that a new candidate might not be as crypto-friendly as Biden.
Bitcoin had surged earlier in the year, reaching a record $73,803.25 in mid-March following the US exchange-traded funds launch. However, the cryptocurrency has since lost over 21% of its value. Political uncertainties in France and Britain and the changing dynamics of the US election have contributed to this decline.
In addition, reports that Mt. Gox, a former leading crypto exchange, is repaying its creditors have created anticipation that these creditors might sell their bitcoins, further impacting the market. Despite the current downturn, some analysts, like Tony Sycamore from IG, believe that bitcoin could still retest its March highs and reach up to $80,000. Meanwhile, Ether also declined, trading over 1% lower at $3,213 and down more than 22% from its mid-March highs.
Russia’s central bank has advised businesses to adopt ‘multiple choice solutions,’ including cryptocurrencies and other digital assets, to manage payments with foreign partners amidst Western sanctions related to Ukraine conflict. The sanctions have severely impacted Russia’s trade with non-sanctioning countries like China, India, the UAE, and Turkey. Key financial institutions, such as the Moscow Stock Exchange and Russia’s SWIFT alternative, have been targeted, exacerbating the challenges for the Russian economy.
Elvira Nabiullina, the central bank governor, highlighted at a financial conference in St Petersburg that the main economic hurdle is the disruption in payment systems. She noted that new financial technologies offer unprecedented opportunities, prompting the central bank to relax its stance on cryptocurrencies for international payments. Businesses have become innovative and discreet in finding solutions, often not disclosing their methods even to the authorities.
Nabiullina also discussed ongoing efforts to establish a new global payment system independent of Western institutions, noting that countries like Russia and its BRICS partners are feeling increasingly vulnerable relying on a single international payment framework. The proposed BRICS Bridge payments system aims to integrate the financial systems of member nations, though progress has been slow and complex.
Adding to the discussion, Andrei Kostin, head of Russia’s second-largest lender VTB, emphasised the sensitivity of international payment mechanisms. He suggested that such information should be classified as a state secret to prevent quick countermeasures from Western entities, implying that Western diplomats closely monitor Russian financial strategies.
Despite a significant upswing in Ethereum’s price today, an ICO whale has moved a large amount of its holdings to a centralised exchange. Specifically, 7,000 ETH, valued at $24.28 million, were transferred to the Kraken exchange after 209 days of dormancy. The move has raised concerns among Ethereum investors, especially as it comes amid substantial weekly outflows.
Ethereum has seen the largest outflows since August 2022, with $60.7 million in weekly outflows reported by CoinShares. Over the past two weeks, the total outflows amass $119 million, making Ethereum the worst-performing asset in year-to-date net flows. The year-to-date outflows amount to $25 million, further exacerbating investor worries about the asset’s future performance.
Additionally, the US SEC’s recent postponement of the spot ETH ETF launch process has added to Ethereum’s uncertainty. The SEC’s decision to return the S-1 amendment forms for refiling has fuelled speculation about Ethereum’s future in the market.
Despite these concerns, Ethereum’s price has surged today, reflecting a broader positive movement in the crypto market. However, the ongoing outflows and regulatory delays continue to cast a shadow over the asset’s prospects.
The Bahamas, the first country to issue a central bank digital currency (CBDC) with its ‘Sand Dollar’ in 2020, is now preparing regulations to mandate commercial banks to provide access to the digital currency to boost its adoption. Central Bank Governor John Rolle emphasised the need for commercial banks to distribute the Sand Dollar, as current uptake remains limited. He indicated that regulations should be in place within two years to ensure all commercial banks offer their clients access to the CBDC.
Despite being a pioneer, the Sand Dollar accounts for less than 1% of the Bahamas’ currency in circulation, with a significant drop in wallet top-ups from $49.8 million to $12 million in a year. The low adoption mirrors the experiences of countries like Nigeria and Jamaica, which have also seen minimal usage of their CBDCs. Critics argue that CBDCs still need to offer clear advantages over existing payment methods and raise concerns about potential government surveillance.
Rolle believes that mandating banks to integrate the Sand Dollar into their systems will enhance its usage but recognises that the real challenge is encouraging more businesses to accept it as a payment method. Unlike India, which offers financial incentives for using its e-rupee, or Israel, which is considering interest rates on CBDC wallets, the Bahamas does not plan to offer such incentives for the Sand Dollar.
Sony Group has ventured into the cryptocurrency trading platform sector by acquiring Amber Japan. That move signifies a strategic expansion for Sony, a conglomerate with a market value surpassing $100 billion and a diverse portfolio that includes gaming, music, and cameras.
Amber Japan was established earlier this year when Singapore-based market maker Amber Group acquired the regulated Japanese cryptocurrency trading platform DeCurret. The rebranding to Amber Japan followed this acquisition, marking Amber Group’s significant footprint in the Japanese market.
In February 2022, Amber Group secured $200 million in a financing round, reaching a valuation of $3 billion. That funding round saw investments from prominent firms such as Temasek, Sequoia China, Pantera Capital, and Tiger Global Management, highlighting strong investor confidence in the company’s growth and potential.
In a decision issued on 28 June 2024, a US federal judge authorised most of the US Securities and Exchange Commission (SEC) lawsuit against leading cryptocurrency exchange Binance. The origin of the lawsuit can be traced back to June 2023, when the SEC alleged that Binance and its CEO, Zhao, had manipulated the market, misused customer funds, non-complied with US customer restrictions, and misrepresented investors on their market surveillance controls.
Binance was also accused of enabling trades of crypto tokens, which were classified as unregistered securities by the SEC. For Binance, this ruling compounds its challenges following its recent $4.2 billion settlement with the Department of Justice and the Commodity Futures Trading Commission over financial misconduct.
However, the verdict partially favours the cryptocurrency industry as the judge invoked a previous ruling, stating that the SEC failed to prove that secondary sales of Binance’s tokens (those sold by sellers other than Binance on exchanges) should be classified as securities.
Why does this matter?
The following case reflects a broader regulatory trend directed to major crypto firms, such as Coinbase, Kraken, and Consensys, in an attempt to increase oversight of the cryptocurrency sector.
Channel Seven is currently investigating a significant breach on its YouTube channel, where unauthorised content featuring an AI-generated deepfake version of Elon Musk was streamed repeatedly. The incident on Thursday involved the channel being altered to mimic Tesla’s official presence. Viewers were exposed to a fabricated live stream where the AI-generated Musk promoted cryptocurrency investments via a QR code, claiming a potential doubling of assets.
During the stream, the fake Musk engaged with an audience, urging them to take advantage of the purported investment opportunity. The footage also featured a chat box from the fake Tesla page, displaying comments and links that further promoted the fraudulent scheme. The incident affected several other channels under Channel Seven’s umbrella, including 7 News and Spotlight, with all content subsequently deleted from these platforms.
A spokesperson from Channel Seven acknowledged the issue, confirming they are investigating alongside YouTube to resolve the situation swiftly. The network’s main YouTube page appeared inaccessible following the breach, prompting the investigation into how the security lapse occurred. The incident comes amidst broader challenges for Seven West Media, which recently announced significant job cuts as part of a cost-saving initiative led by its new CEO.
Why does it matter?
The breach underscores growing concerns over cybersecurity on social media platforms, particularly as unauthorised access to high-profile channels can disseminate misleading or harmful information. Channel Seven’s efforts to address the issue highlight the importance of robust digital security measures in safeguarding against such incidents in the future.
According to insider sources, India’s digital currency, the e-rupee, has seen a sharp decline in usage, dropping to just one-tenth of its peak usage in December. The Reserve Bank of India (RBI) launched the e-rupee in a pilot program in December 2022, aiming to provide a digital alternative to physical cash. By December 2023, the pilot had successfully reached a target of 1 million daily retail transactions, largely driven by user incentives and partial salary disbursements to bank employees via the e-rupee. However, daily transactions have plummeted to about 100,000 since the incentives waned.
The transaction drop highlights a need for more organic demand for the e-rupee. Sources involved in the project indicated that the remaining transactions are primarily due to banks continuing to disburse employee benefits through digital currency. At the end of each month, this practice temporarily boosts transaction numbers to between 250,000 and 300,000 per day. Despite the earlier push to test the system’s resilience at scale, the RBI is now focused on refining the technology and developing practical use cases for the e-rupee rather than expanding the pilot rapidly.
The challenge faced by the e-rupee is common. A survey by the Bank of International Settlements found that among 86 central banks, a third are piloting a central bank digital currency (CBDC). Even countries that have launched CBDCs, such as the Bahamas and Jamaica, have yet to experience much success. The Federal Reserve Bank of Kansas City noted that consumer adoption of CBDCs requires more than just the technology itself; it needs to offer additional value compared to traditional cash. As the RBI continues developing the e-rupee, the focus will be on creating compelling use cases that encourage widespread adoption.
