President Erdogan: Turkey to Finish Testing Digital Lira in 2020

Turkey’s President Recep Tayyip Erdogan directed that the government should finish testing the national central bank digital currency (CBDC) in 2020. The country’s national blockchain-based digital lira is planned to be issued by the Central Bank in accordance with the 2020 Annual Presidential Program, Cointelegraph Turkey reported on Nov. 5.
Digital lira ‘instant payment’ pilots should be finalized by the end of 2020
Published on Nov. 3, the Presidential Program specifies that the first trials of the digital lira should be conducted and finalized by the end of 2020, according to a document published by Turkey’s official national publication Resmi Gazete on Nov. 4.
Within the pilots, the government reportedly plans to develop a software platform for instant payments based on the digital lira. Alongside the central bank, the project will also involve the national tech innovation agency — the Scientific and Technological Research Council of Turkey, also known as TUBITAK.
As reported by Cointelegraph Turkey, the launch of the digital lira is part of the country’s objective to strengthen the local economy. The document reads:

“The main objective is to establish a financial sector with a strong institutional structure that can respond to the financing needs of the real sector at a low cost, offer different financial instruments to a wide investor base through reliable institutions and support Istanbul’s goal of becoming an attractive global financial center.”

Industry adoption rises in Turkey
The inclusion of the digital lira in the 2020 Annual Presidential Program of Turkey follows previous plans outlined by the state in the country’s 2019-2023 economic roadmap issued in July 2019. In addition to a CBDC, the government is interested in implementing blockchain technology for transportation and customs as well as public services and administration.
In September, the government of Turkey announced plans to set up a national blockchain infrastructure to deploy distributed ledger technology in public administration.
As reported Nov. 1, Changpeng Zhao, CEO of major cryptocurrency exchange Binance, will be a speaker at the Turkish Capital Markets Summit 2019 in Istanbul from Nov. 19–20, 2019.

How Blockchain Disrupts Global Business | Sibos 2019

Blockchain technology is reshaping the face of our global financial system, and it goes far beyond cryptocurrencies alone.
Since Bitcoin’s arrival, the conventional finance world has been intrigued by blockchain, Bitcoin’s underlying disruptive technology. Now we are seeing that intrigue being transformed into a full-fledged and active public interest, and the potential onset of popular mass adoption.
But why is the white-collar financial world interested in adopting the very technology that holds profound implications for permanently altering “business as usual?” We headed to London in attendance of a conference called Sibos 2019 to find out.
Sibos is the premiere financial services event of the world. It is hosted by SWIFT, the payments service powerhouse that underpins major portions of the global financial ecosystem. This year the event attracted more than 11,000 delegates, 600 speakers, and 300 exhibitors from all corners of the globe. Representatives for everyone from Deutsche Bank to Google were there — it turns out plenty of mainstream business players are toying with blockchain, and with good reason.
This technology’s potential is disruptive at worst and revolutionary at best. It redefines the way we can store, share, and verify data, opening opportunities for entirely new businesses and ecosystems. One of the world’s largest corporations, IBM, is operated by over 350,000 employees across 177 different countries, and it has become a leading blockchain innovator in a variety of economic systems, including in trade and finance, provenance, and the supply chain.
Even major banks are getting involved. Research from renowned consultancy McKinsey & Company shows that over 90% of the world’s top 50 banks are tinkering with blockchain technology. Why? Well, according to research from Accenture, a Fortune 500 company, blockchain methodologies could generate a whopping 30% cost savings across all industries. (Accenture also happens to be developing a blockchain-based identity system for travelers, with the end goal of making it easier to confirm identities as people engage in international travel.)
We had a camera in hand to bring you along to London with us. Please check out our video report on how blockchain is changing the way we conduct global business, and subscribe to our YouTube channel!

Joe Lubin: China Will Avoid Blockchain’s ‘Decentralizing Aspects’

China’s forthcoming digital renminbi is unlikely to use blockchain, considers Ethereum (ETH) co-founder and ConsenSys CEO Joe Lubin.
In an interview for CNBC’s Squawk Box Asia on Nov. 6, Lubin argued that the People’s Bank of China (PBoC) has little to gain — for its purposes — from the decentralized aspects of the technology.
“There’s no real reason” for China to make use of decentralization
As reported, China’s digital legal tender — or central bank digital currency (CBDC) — will be controlled by the PBoC and officials have said they expect the asset to “have lots of positive impacts, including tracking the money flow in economic activities and supporting making monetary policy.”
Lubin told CNBC that while the principle of decentralization in blockchain is used to establish trust:

“China is probably not interested in that aspect of blockchain. They will, I believe, bring a digital RMB to China that makes use of some of the cryptographic primitives of blockchain technology but there’s no real reason for China to make use of its decentralizing aspects.”

Lubin noted that should the system be designed to be operated by multiple actors, not just the central bank, it’s possible there would be advantages for its creators to implement the “ fuller aspects of blockchain.” However, “it’s probably just about the digital, not the decentralized aspect,” he said.
CBDC will be used to maintain existing control
As to whether the forthcoming CBDC will bolster the authorities’ capacity for policing and centralized oversight of capital flows, Lubin downplayed the idea, arguing that:

“I think the central bank and the government have very significant control already. My guess is that it will be used to maintain the control that they have but also to potentially enable interoperation between more public and global systems.”

This summer, Yang Dong — director of the Research Center of Finance Technology and Cyber Security at Renmin University of China — told reporters at the CPC-owned English-language news portal China Daily that the CBDC was being tested for non-governmental and cross-border applications.
PBoC Deputy Director Mu Changchun revealed in August that the CBDC will be structured as a centralized, two-tier system, with the PBoC at the top tier and the second tier controlled by domestic commercial banks.
Late last month, the vice-chairman of Chinese economics think tank, the China Center for International Economic Exchanges, said he was confident the PBoC would win the global race to become the first central bank to launch a CBDC.
The Standing Committee of the 13th National People’s Congress in China passed a new law regulating cryptography on Oct. 26 due to take effect on Jan. 1, 2020. The new regulation has been rumored to be part of preparations for the forthcoming currency.

Expert: US Should Cut Crypto Firms Some Slack to Compete With China

Fintech and regulation experts have said the United States needs to wake up to China’s proactive pursuit of a central bank digital currency.
A Fortune report published on Nov. 1 pointed to the fact that digital currency looks poised to play an increasingly important role in the standoff between the two superpowers. 
China making “very large macros plays”
As Mike Wasyl — managing partner at DeerCreek, a fintech-focused corporate strategy firm that works across Asia-Pacific and the U.S. — told Fortune:

“China is making these very large macro plays. They want to maintain control and be seen as leaders and so adopting blockchain and being public about it, as we saw recently, is going to stir a lot of interest.”

Duncan Wong, chief executive of Hong Kong-based startup CryptoBLK, ventured that the recent endorsement of blockchain innovation by Chinese President Xi is likely to accelerate the rollout of the People’s Bank of China (PBoC)’s plan to launch a central bank digital currency (CBDC). 
As Wasyl noted, China’s race to launch its CBDC first is likely to send a signal to global competitors that this is “the new paradigm.”
The country already has a vast digital payment ecosystem, with Tencent’s WeChat Pay counting over a billion users and Alibaba’s Alipay 1.2 billion.
U.S. trying to regulate its way to innovation
Li Chen, a researcher at the Chinese University of Hong Kong whose work focuses on China’s financial development and government regulation, told Fortune underscored that the country’s approach to digital currency and blockchain bifurcates between encouragement and caution.
The country is notoriously opposed to decentralized cryptocurrencies such as Bitcoin and pursued a historic blanket criminalization of initial coin offerings (ICOs) alongside a crypto exchange crackdown back in 2017. 
Yet when it comes to blockchain innovation in the industrial — and particularly financial — sectors, Li argued that advancements in CBDC development have taken place within the “relatively permissive attitude of China’s financial regulators and central bank”: 

“I think it’s fair to say China’s fintech revolution […] would not achieve what it is now without the overall more permissive attitude of Chinese government regulations.”

Insofar as [developers] “remain in these parameters set by the state in terms of the direction of innovation,” he said he expected to see accelerated blockchain implementation in China. 
Wasyl: U.S. needs to cut blockchain firms “a little more slack
But contrast, Wasyl argued that the U.S. is stuck trying to “regulate [its] way to innovation.”
 A U.S. CBDC is “an inevitability,” he said, and the government should be capitalizing on the interest sparked by Facebook’s Libra to open up a larger conversation about the country’s currency future. 
Once digital currency gains traction, he stressed, “it’ll be gradually, and then all at once.”
The experts remained unanimous in considering that for the time being, China’s CBDC is not likely to pose a threat to U.S. dollar hegemony, but warned that the U.S. needs to cut blockchain firms “a little more slack to allow some exploration” if it is to stay ahead in the game. 
This summer, the former PBoC governor characterized Libra as being “inseparable from the global dollarization trend,” stressing the imperative for China to maintain a strong monetary status.

Swiss Crypto Bank Gets Approved for Singapore Banking License

Swiss-based cryptocurrency bank Sygnum has received the go-ahead to offer banking services in Singapore.
Sygnum: license is “important milestone”
In a blog post on Oct. 31, Sygnum, which gained a Swiss banking license in August this year, can now proceed with its first product for the Singapore market.
Sygnum was the first Swiss company to win the title of cryptocurrency bank and will target accredited investors and institutions with a multi-manager fund, which will also debut in its home jurisdiction.
Long on the cards, the Singapore documentation comes in the form of a capital markets services (CMS) license from the Monetary Authority of Singapore (MAS), the Asian city state’s de facto central bank. 
Sygnum’s head of asset management, Stefan Mueller, commented in the press release:

“The CMS license is an important milestone to establishing our asset management arm, leveraging the vibrant financial environment in Singapore. This is complementary to our banking services in Switzerland and will also benefit our Swiss institutional and private qualified investor clients.” 

Execs reveal major Swiss crypto interest
As Cointelegraph reported, Singapore continues to position itself as a friendly environment for cryptocurrency and blockchain businesses. 
MAS is part of the government structure looking to integrate the emerging technologies with state activities and beyond, as its Project Ubin finance scheme is set to commence operations next year. 
Sygnum meanwhile is also eyeing expansion into markets such as Hong Kong, as well as in Europe. In September, Peter Wuffli, the ex-UBS head who is now the company’s CEO, underscored his desire to tap the full potential of the cryptocurrency market.
“Thousands of clients have contacted us for a one-stop-shop for asset custody, loans and trading cryptocurrencies seamlessly with fiat currencies,” he revealed.

Financial System Blind to Crypto’s Deflationary Impact, Says Analyst

Investment strategist William Peets has pointed to a widespread underestimation of the deflationary impact of cryptocurrencies such as Bitcoin and blockchain for global finance.
Peets is currently CIO and portfolio manager for digital asset strategies at Passport Capital. 
In an Oct. 30 interview with Real Vision Finance, he said that blockchain represents a generational change in technology with profound implications for the existing financial system — something that most have been too slow to recognize.
Redressing macro imbalances
Finance is ripe for disruption by crypto and blockchain, Peets said, noting that application of the technology will eat into the monopoly power of traditional financial services incumbents:

“Security issuance, tokenization of real assets, trading of those assets, custody-all those things can potentially be done in a more efficient manner with distributed ledger technology. And that shrinks the margins of the likes of a State Street or Northern Trust, or these traditional banks and incumbents, again, which is all deflationary.”

He again underscored that a “large portion of the market” remains blind to the potential impact of such far-reaching change, as well as how fast this change could happen.
Post-2008, he argued that the potentially deflationary impact of blockchain could be crucial to mitigate some of the worst dysfunctions of a debt-riven system, stating that:

“What’s going on in the macro environment as it relates to indebtedness and the amount of debt that’s trading out and negative interest rates, it really starts to make you think about the current monetary system, and if that’s sustainable.” 

Wake up call
As previously reported, analysts consider that even ahead of gaining widespread global traction, the very existence of private decentralized cryptocurrencies such as Bitcoin (BTC) is already having a healthy impact on the global financial sector. 
Private digital currencies, a summer 2019 report argued, serve as competition for local investment and thus restrain monetary policy, thereby generating lower inflation.
In a speech at the International Monetary Fund’s general meeting earlier this month, former Bank of England governor Mervyn King told attendees the world was “sleepwalking” into a financial crisis even worse than that of 2008.

Association of Private German Banks Argues for Digital Euro

German banks have presented a position paper in which they make several arguments for the digital euro.
On Oct. 30, in a paper released by the Association of German Banks (Bankenverband), which represents more than 200 private commercial banks and eleven member associations, banks stated that the “economy needs a programmable digital euro.”
Monetary policy is the state’s responsibility, says Bankenverband
The paper states that the responsibility for the monetary system lies with sovereign nation-states and that any currency provided by banks or private companies must fit into a state-determined system. “Anything else would ultimately lead to chaos and instability,” the paper reads.
The banks make the case for a cryptography-based digital euro which, they state, should be created on the condition that a concurrent, common, pan-European payments platform is also established, further adding:

“The user of a digital euro – whether man or machine – must be clearly identifiable. This requires a European or, better still, a global identity standard. With every form of digital money, customers should be identified using a standard that is just as strict as that which banks and other obligated entities are required to apply under current legal framework pursuing the combat against money laundering and terrorist financing.”

However, according to Bankenverband, a competitive payment system can only be based on a common standard and a common currency. It stated, “In order to maintain Europe’s competitiveness, satisfy customers’ needs and reduce transaction costs, the introduction of euro-based, programmable digital money should be considered.”
Although the private German banks are convinced that, in a digitized economy, this form of digital money will rapidly gain in importance, they state that the existing monetary system must not “be endangered by the provision of crypto-based digital money.”
A private global digital currency, such as Facebook’s Libra, competing with the official key currencies in the world economy would most likely be a source of considerable economic and political conflict, the paper adds.
The banks further call on national and international policymakers to act responsibly and assure that competition with private currencies should not be allowed.
While a digital euro seems appealing, German officials criticize crypto
The German finance minister Olaf Scholz echoed similar sentiments when he recently advocated for the idea of launching a digital euro coin, stating that such a digital payment system would be beneficial for Europe and that they “should not leave the field to China, Russia, the U.S. or any private providers.
Mario Draghi, president of the European Central Bank, recently said that private stablecoins and cryptocurrency in general are of little value, adding:

“Thus far, stablecoins and crypto-assets have had limited implications in these areas and are not designed in ways that make them suitable substitutes for money.”

The president of the European Central Bank is joined in his sentiments by the German federal parliament, which recently released a statement in which they said that cryptocurrencies such as Bitcoin (BTC) are not real money.
Moreover, the statement points out that stablecoins are no alternative to fiat money and explains that the government intends to limit their adoption:

“It will be ensured that stablecoins do not establish themselves as an alternative to state currencies and thus call into question the existing monetary system.”

China’s Central Bank Introduces Certification System for Fintech Products

China’s central bank, the People’s Bank of China (PBoC), will use a new system to certify 11 types of fintech hardware and software products relating to digital payments. 
On Oct. 29, the PBoC alongside China’s market regulator, the State Ad­min­is­tra­tion for Mar­ket Reg­u­la­tion (SAMR), jointly released a set of documents for the new nationwide Certification of Fintech Products (CFP) system. The documents include definitions of fintech products that require certification as well as rules for its proceedings.
The listed products include em­bed­ded ap­pli­ca­tion soft­ware, cloud computing platforms, user front-end software, security carriers and chips, as well as point of sale terminals and ATMs.
In the document titled “Fintech Product Certification Rules,” the PBoC and SAMR stated that, in order to obtain a CFP certificate from the central bank, applicants will have to pass a prototype examination as well as on-site inspections.
The certificate is valid for 3 years and requires a renewal after the expiration date, the authorities noted. During the validity period, CFP bearers will have to pass random inspections at any stage of the production process, the document says.
Additionally, CFP carriers will be prohibited from using certification for advertising purposes, while incorporation of the certificate to their logo is authorized.
PBoC denies digital renminbi launch readiness 
The new announcement of China’s central bank comes just a month after the bank publicly denied reports that its central bank digital currency (CBDC), a digital renminbi, was about to launch. On Sept. 24, the PBoC claimed that the financial institution needs time for research, revealing that there is no specific timetable for the CBDC launch.
On Oct. 28, China recorded a sharp growth of interest in blockchain technology after President Xi Jinping called for faster adoption of blockchain tech. Earlier today, Cointelegraph reported that the Guangzhou government formed a new $140 million subsidy fund in order to encourage the development of blockchain initiatives.

Tokenized Carbon Credits Exchange for Airlines Launches in Singapore

Carbon exchange AirCarbon launched a global tokenized carbon credits trading platform in Singapore.
Business news outlet Business Times reported on Oct. 30 that the platform will allow firms such as airlines to buy and sell tokens representing carbon offset credits or Eligible Emission Units (EEUs), approved by the International Civil Aviation Organization (ICAO).
The first token representing an EEU has been created today by Senior Minister of State at the Ministry of Trade and Industry Koh Poh Koon upon the platform’s launch at the Asia Clean Energy Summit 2019. The front end of the platform has been designed by United Kingdom-based financial firm First Derivatives.
Exchange to fully launch in 2020
AirCarbon has not yet received the recognized market operator license that it applied for with the Monetary Authority of Singapore. The firm aims to fully launch the exchange next year. The website of the firm describes its service in the following way:

“A Singapore regulated digital exchange focused on servicing transportation industry stakeholders’ carbon liability under ICAO’s CORSIA regime.”

The credits are represented by fungible security tokens on a blockchain and each is equivalent to one tonne of CORSIA-compliant carbon credits. The firm also aims to fund the registration, consulting, issuance and audit fees of some EEUs for free with its AirCarbon Registration Facility initiative.
A joint initiative
In exchange for the grants, the developers of the financed carbon offset projects must commit to list and transact their credits on the upcoming tokenized credits trading platform. 
The exchange is reportedly the result of a collaboration with the Sustainable Energy Association of Singapore (SEAS) that sees support by local statutory board Enterprise Singapore. SEAS chairman, as well as AirCarbon’s chairman and co-founder, Edwin Khew commented:

“We aim to make the AirCarbon token the easiest and most streamlined instrument for the trading of CORSIA EEUs globally.”

Khew also claimed that the platform will be the first global blockchain-based, multi-stakeholder carbon credits trading exchange that will represent carbon trades with a value of over $100 billion. 
The assistant chief executive officer of the statutory board under the Ministry of Trade and Industry Enterprise Singapore Satvinder Singh noted that he expects the demand for EEUs to grow, given the increasing focus on sustainability. He also said:

“Enterprise Singapore stands ready to support solutions providers like AirCarbon to grow in Singapore and address the needs of corporates to offset their carbon emissions, starting from the aviation industry.”

As Cointelegraph reported at the beginning of September, Germany’s Free Democratic Party wants to pay cryptocurrency to anyone who removes carbon dioxide and other greenhouse gases from the atmosphere.

Julius Baer Top Exec: Crypto Still in ‘Darwinian’ Process of Selection

A top executive at private Swiss private banking Julius Baer says cryptocurrencies are still at the stage of a “Darwinian” process of selection.
In an interview with Arabian Business on Oct. 29, Christian Gattiker-Ericsson — Julius Baer’s chief strategist and head of research and investment solutions — argued that:

“We are still in this Darwinian selection process where different business models get tried and tested, but we haven’t seen something that was a clear winner.”

Crypto still “more like gold than a currency”
Gattiker-Ericsson had a further claim about the state of the new asset class, suggesting that many cryptocurrencies “still struggle with the fact that they have limited or plateauing supply patterns, which actually make them more like gold than a currency”.
In an apparent divergence from the decentralized ethos that spurred cryptocurrencies’ invention, he told reporters that innovators would need to be able to “transfer the trust” that is “inherent in a currency, central banks and governments” — and transpose this into “the virtual, decentralized world.”
The executive also characterized blockchain technology as a new frontier, saying that Julius Baer was exploring its possibilities and acknowledged that it will “possibly change the rules of the game.”
Change of tack
As Arabian Business notes, Julius Baer’s ex-CEO Bernhard Hodler had likened cryptocurrencies to gambling back during an interview back in 2018. 
Yet despite Hodler’s emphasis at the time that the bank was not advising its clients to speculate in the field, Julius Baer has since made a 180 degree-turn. 
This February, Julius Baer announced plans to offer clients access to digital asset services via a partnership with now-licensed Swiss crypto bank Seba Crypto. It also indicated that Julius Baer had been a minority stakeholder in Seba as of 2018.