Regulation
Bank of Israel launches “Digital Shekel Challenge” to innovate CBDC payment systems
- Bank of Israel has launched “Digital Shekel Challenge” to develop CBDC payment solutions.
- Participants of the challenge will access a prototype system to create innovative digital shekel uses.
- Bank of Israel is scheduled to hold a webinar on June 9 for details.
In a significant move towards digital currency adoption, the Bank of Israel (BoI) has announced the launch of the “Digital Shekel Challenge.”
The initiative aims to develop innovative payment solutions using the digital shekel, Israel’s proposed central bank digital currency (CBDC), first reported in 2021.
Inspired by the “Rosalind Project” from the BIS Innovation Center, the challenge marks a major step in the BoI’s action plan for potentially issuing the digital shekel.
What is the Digital Shekel Challenge?
The Digital Shekel Challenge is designed to invite participation from a wide array of entities, including private companies, public institutions, and academic researchers.
Participants will have access to a technological prototype that simulates the core functions of the digital shekel system, complete with an API layer. This environment will allow them to create and test real-time payment applications tailored for public use.
The challenge is structured into three phases. Initially, interested parties must respond to the call for participation by registering through a specified form.
Selected participants will then gain access to the experimental environment where they can begin developing their projects.
The final phase will involve presenting these projects to a panel of experts, who will evaluate them based on originality, innovation, and relevance to the Israeli economy.
Bank of Israel actively exploring a CBDC possibility
The BoI has been exploring the potential of a CBDC since 2017, accelerating its efforts in 2021.
Public consultations conducted by the bank have shown substantial support for the digital currency, though privacy concerns were also noted.
The digital shekel is envisioned to offer privacy protections at least on par with existing digital payment methods, potentially setting higher standards.
Internationally, the BoI has engaged in collaborative projects such as Project Sela with Hong Kong’s central bank and the BIS, successfully testing retail CBDC systems. These efforts aim to balance user accessibility, competition, cybersecurity, and the benefits of traditional cash.
To provide more information and answer queries, the BoI will hold a webinar on June 9, 2024. Participants and interested parties can register for this event to gain further insights into the challenge.
The Digital Shekel Challenge represents a bold move towards modernizing Israel’s payment infrastructure, aiming to harness cutting-edge technology to enhance efficiency and foster innovation in the financial sector.
Andrew Abir, Deputy Governor of the Bank of Israel, emphasized the importance of collaboration in the success of the digital shekel.
Abir stated: “The digital shekel challenge is another step towards the means of payment of the future, aiming to create an innovative and competitive ecosystem.”
The deputy governor highlighted that the Digital Shekel initiative would foster cooperation between the central bank, the financial industry, and other stakeholders, both domestic and international.
Thailand is witnessing a significant breakthrough in its ambitious vision to establish a digital asset hub. A recent report on Wednesday revealed Thailand’s plans to adopt Bitcoin ETFs, permitting local exchanges to list the exchange-traded funds.
Thailand Prepares for Bitcoin ETF Debut
The Thai Securities and Exchange Commission (SEC) plans to approve its first Bitcoin ETF, aligning with the country’s crypto hub vision, Bloomberg reported on January 15.
SEC Secretary-General Pornanong Budsaratragoon posited that the move would allow individual and institutional investors to invest in the Bitcoin vehicles directly.
Promoting the use of cryptocurrencies, Thailand is paving the way for the worldwide adoption of digital assets. During an interview on Tuesday, Pornanong stated,
Like it or not, we have to move along with more adoption of cryptocurrencies worldwide. We have to adapt and ensure that our investors have more options in crypto assets with proper protection.
Although, One Asset Management in Thailand has introduced a fund-of-fund tracking international Bitcoin ETFs, a direct investment tool remains pending approval. The ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI) and was approved by the Thai SEC last year.
Thailand’s Thaksin To Legalize Crypto
The latest development came on the heels of Pheu Thai Party leader Thaksin Shinawatra’s efforts to legalize crypto. Citing the incoming US President Donald Trump’s crypto-friendly approach, Thaksin suggested Thailand embrace a more progressive stance on virtual assets. He also proposed the increased issuance and use of stablecoins.
Digital-asset trading activity in Thailand is picking up amid a wider rally that pushed Bitcoin to a record high of $108,315. Crypto hedge funds had a great last year but failed to give more returns than Bitcoin (BTC), as per Bloomberg
Thailand’s Broader Crypto Vision and Regulations
Thailand has long been striving to solidify its position at the forefront of the global crypto market. In a recent development, the country announced its crypto payment pilot project, with the trial set in Phuket.
While the initiative is expected to be executed within Thailand’s existing legal framework, it bolsters the nation’s crypto vision. The country is broadly looking to boost crypto adoption and Bitcoin ETFs will be welcome move for the local crypto industry.
Nynu V Jamal
Nynu V Jamal is a passionate crypto journalist with three years of experience in blockchain, web3, and fintech spheres. She has established herself as a knowledgeable and engaging voice in the cryptocurrency and blockchain space. Her experience as an Assistant Professor in English Language and Literature has further added to her quest for crafting informative, well-researched, and accessible content.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Upbit, South Korea’s largest crypto exchange, is facing increased scrutiny over alleged Know-Your-Customer (KYC) violations. The Financial Intelligence Unit (FIU) of South Korea has scheduled a disciplinary hearing on January 21 to evaluate the exchange’s regulatory compliance. As as result, the crypto market could see significant low activity amid the review
FIU Meeting To Assess Upbit’s KYC Violations
Notably, the FIU revealed that the sanctions review meeting would assess the 500k+ suspected KYC breaches discovered during an on-site inspection for the renewal of the virtual asset service provider (VASP).
Reportedly, this sanctions-level meeting for Upbit marks the first hearing of its kind, addressing issues identified during a VASP renewal inspection. This meeting will determine the extent of sanctions Upbit could face, considering factors like lapses in KYC compliance. Analyzing the crypro exchange’s explanation for its alleged violations, the regulator would determine the severity of fines and disciplinary actions against the platform.
Upbit Faces Scrutiny Under South Korea’s FIU
Since August last year, Upbit facing investigations led by the financial watchdog. During the license renewal process, the FIU uncovered 500,000-600,000 cases of unauthorized customer verification procedures. This includes instances of accounts being approved despite the blurred customer name or registration number, making identification impossible.
Though these cases highlight the exchange’s reluctance to follow regulatory standards, it is still uncertain whether they actually mark KYC breaches. However, following the disciplinary meeting, FIU is likely to draw conclusions, particularly based on Upbit’s explanations.
South Korea’s Crypto Regulatory Norms
South Korea has embarked on its journey to establish a crypto-focused regulatory framework. In a recent development, the Financial Services Commission has kicked off discussions on the second phase of crypto regulations, especially targeting stablecoins and customer protection.
South Korea’s recent collaboration with the US and Japan to tackle the growing crypto threats also underscores the nation’s commitment to user security. Last day, the three countries jointly released a paper, warning against the North Korean hackers’ eye on crypto.
The FIU’s meeting on Upbit’s KYC violation marks a significant turning point in South Korea’s regulatory landscape. While the meeting decides its fate in South Korea, it could have a broader impact on global crypto regulations and laws.
Nynu V Jamal
Nynu V Jamal is a passionate crypto journalist with three years of experience in blockchain, web3, and fintech spheres. She has established herself as a knowledgeable and engaging voice in the cryptocurrency and blockchain space. Her experience as an Assistant Professor in English Language and Literature has further added to her quest for crafting informative, well-researched, and accessible content.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The incoming administration under President-elect Donald Trump is preparing to introduce changes to cryptocurrency regulations in the United States. Sources indicate that the Securities and Exchange Commission (SEC), under new leadership, will initiate a review of its current policies and enforcement actions related to crypto.
Donald Trump SEC Leadership To Reassess Crypto Enforcement Actions
A recent Reuters report suggests that top officials at the SEC, including Hester Peirce and Mark Uyeda, are planning to reassess existing crypto enforcement cases. The focus will be on cases where fraud is not alleged, with the possibility of freezing or withdrawing some lawsuits.
Under the outgoing leadership of Gary Gensler, the SEC pursued at least 83 enforcement actions involving crypto-related companies. These actions targeted firms like Coinbase and Kraken, often on the basis that their tokens were considered securities. Industry participants have long sought clarity on when and how the SEC applies its rules to digital assets.
Sources state that Peirce and Uyeda are expected to call for feedback on potential new crypto regulations. This process will address industry concerns while aligning the SEC’s rules with evolving market conditions.
Meanwhile, Bitcoin advocate Anthony Pompliano has outlined three key actions for Donald Trump to boost U.S. Bitcoin adoption. Anthony proposed repealing SAB 121 for banks to hold Bitcoin, establishing a national Bitcoin reserve, and reforming tax codes to eliminate capital gains tax on BTC payments. Pompliano believes these measures will solidify the U.S. as a crypto leader.
Proposed Regulatory Changes
The SEC is likely to revise its guidance on accounting practices for companies holding crypto assets. The current guidance has reportedly made it costly for listed firms to manage digital tokens for third parties. Changes in this area will lower barriers to institutional participation in the crypto market.
Paul Atkins, Donald Trump pick for Securities and Exchange Commission Chair, has a reputation for supporting crypto-friendly policies. However, his confirmation by the Senate may take some time. Until then, Peirce and Uyeda will lead interim efforts to reshape regulatory priorities.
Trump Administration’s Executive Orders to Accelerate Crypto Overhaul
President-elect Donald Trump is expected to issue executive orders aimed at expediting crypto regulatory reforms. These orders may direct federal agencies, including the SEC, to review their policies and promote innovation in the digital asset sector.
The administration’s pro-crypto stance has already generated excitement within the market. Bitcoin reached $100,000 for the first time in December, reflecting optimism about the regulatory environment under Trump’s leadership.
Despite the optimism, revising regulations and enforcement actions could face challenges. Legal experts note that dismissing pending cases or reopening settlements may lead to objections from courts. Resolving these issues will require careful coordination between the SEC and industry stakeholders.
The new leadership may also need months to finalize and implement any proposed rule changes. Industry representatives have previously criticized the Securities and Exchange Commission for being unwilling to engage in discussions under its former leadership.
In addition, Bitwise CIO highlighted trends driving corporate Bitcoin adoption, including MicroStrategy’s $42B acquisition plans, new FASB rules allowing firms to record BTC gains and pro-crypto policies. These factors, he notes, are encouraging more companies to integrate Bitcoin into their treasuries.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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