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E-Money and virtual currencies

2019

Australia’s security regulation authorities Australian Securities and Investments Commission (ASIC) issued the guidelines for the ICO and crypto-assets. By their words regulation is following the incentive from the Australian Consumer Law and it is talking the emergence of crypto-asset category. Decided by the new regulation cryptocurrency exchanges will have to obtain the Australian market license, while payment and service providers will need to comply with the set of rules needed for the ‘non-cash payment facility’.

Regulation further defines the role of specific actors in crypto-asset industry, namely: Crypto-asset issuers (ICO's), Crypto-asset intermediaries, Crypto-asset payment and merchant service providers, Wallet providers and custody service providers and consumers. You can access the document here.

According to the reports, Brazil’s President of the Chamber of Deputies, issued a call for forming the commission which will work on the new set of rules around the cryptocurrency. This commision is to be consist from 34 members and will propose the future regulation. The regulation is aiming to implement the rules of the Financial Action Task Force (FATF) on Cryptocurrency.

The Financial Action Task Force's rules will be officially presented at the G20 ministerial meeting this June in Tokyo.

The World Economic Forum announced the formation of six Global Fourth Industrial Revolution councils to work on new technology policy guidance. The councils will aim to help policy makers to regulate artificial intelligence, autonomous mobility, blockchain, drones, Internet of Things, and precision medicine. The participants of the boards will be leaders from the public and private sectors, civil society and academia and will gather regularly to address the relevant regulatory issues, to define a mutual understanding of best policy practices and provide strategic guidance. According to the announcement, the councils’ members  already met for the first time at the Forum’s Centre for the Fourth Industrial Revolution Network in San Francisco and are planning a global summit on technology governance next year in April 2020..

Facebook is planning to launch a cryptocurrency for digital payments by 2020. Dubbed “GlobalCoin”, the system is envisaged to provide a secure and affordable payment system even to the unbanked.

According to a report by the BBC, GlobalCoin will be ready for testing in a dozen countries by the end of this year. In the runup, Facebook founder and CEO Mark Zuckerberg met with Bank of England governor Mark Carney last month, to discuss the project.  Facebook has also broached the idea with US treasury officials.

The social media giant has 2.4 billion users worldwide. It also owns the private messaging application Whatsapp, which is popular in low and middle income countries. Last year, it was reported that Facebook was developing a payment technology known as StableCoin that would allow Whatsapp users to send and receive money on their phones. Mexico’s Santader Bank is already piloting national Whatsapp payments.

GlobalCoin will allow Facebook users to change US dollars and other international currencies into digital coins. The coins will then be used to purchase goods and services online. The ecosystem will include merchants and e-commerce platforms who will accept GlobalCoins as payment, as well as banks and brokers who will facilitate currency exchange to digital coins.

Facebook is mulling over how to make the system affordable for it large user base. It is likely to face opposition from privacy groups as well as banks. If successful, GlobalCoin could revolutionise digital payments by expanding online financial services across many nations and unbanked populations.

Microsoft and the The World Wide Web Consortium (W3C) group on decentralized identifiers (DIDs) announced their project on the solutions for digital identities based on bitcoin’s blockchain. Microsoft presented its Ion open-source project which tackles the question of digital identity in a decentralised way. Microsoft had earlier presented the idea of decentralised identity, a concept that will help users gain sovereignty over their digital data by controlling who can access it. Decentralised identities are the focus of the Microsoft’s Decentralized Identity Foundation (DIF).

The blockchain technology used in bitcoin (the first cryptocurrency) and its network is tested and known to be secure. Nevertheless, its network is not capable of performing high numbers of transactions, so Microsoft is proposing the solution in a so-called ‘layer two’ technology. This way, data will be anchored in the bitcoin’s blockchain but the system would still be able to perform a high number of cryptographically approved transactions. The project is in its starting phase and testing will continue throughout 2019.

The head of the finance committee of the French Parliament suggested a change in regulation that would introduce a ban on privacy oriented cryptocurrencies. Only a few cryptocurrencies are oriented solely towards the privacy and anonymity of its users. The most prominent ones like Monero, ZCash, and PIVX are promise full online anonymity for their users.

A similar ban was suggested in Japan earlier this year. Anonymous cryptocurrencies are used for payments throughout Dark Web shops.

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