The European Union’s finance commissioner Valdis Dombrovskis has pledged to propose new rules to regulate cryptocurrencies such as Facebook’s Libra.
As Reuters reports, speaking before EU lawmakers on Oct. 8, Dombrovskis stated:
“Europe needs a common approach on crypto-assets such as Libra. I intend to propose new legislation on this.”
Having served as Latvia’s prime minister and finance minister and as a member of the European Parliament in 2004–2009, Dombrovskis now seeks reappointment as the executive vice president of the European Commission.
If reappointed, he would be tasked with a brief labelled “An Economy that Works for People” and continue to be responsible for the Commission’s financial services portfolio and its work to “deepen Europe’s economic and monetary union,” as president-elect Ursula von der Leyen outlined.
In addition to underscoring the need for new cryptocurrency-specific legislation in Europe, Dombrovskis spoke of the EU’s need to tackle “unfair competition, cybersecurity, and threats to financial stability.”
EU finance ministers are hostile to Libra
On Oct. 7, Cointelegraph reported that Germany’s finance minister Olaf Scholz has stated that he is “very, very skeptical” of Facebook’s Libra project.
The social media titan’s proposed stablecoin has also received a frosty response from French finance minister Bruno Le Maire, who has gone so far as to say that Libra should not be authorized on European soil as it would imperil the monetary sovereignty of states.
JAPAN’S FINANCIAL REGULATORS TO DISCUSS CRYPTO ASSET CREATION
- Japan Joins List of Countries Exploring Central Bank Crypto Assets
- Central Banks Explore Digital Currencies as Response to Facebook’s Libra, Bitcoin
Japan’s Central Bank and Finance Ministry have set out to discuss the issues pertaining to creation of a state-backed crypto asset.
JAPAN JOINS LIST OF COUNTRIES EXPLORING CENTRAL BANK CRYPTO ASSETS
Japan is preparing to join the growing list of countries to explore the benefits of a state-backed digital asset. Also called Central Bank Digital Assets (CBDCs), those tools are still a hypothesis. China is considered the closest to a decision to launch a digital yuan, which would be the first CBDC.
But more central banks are opening explorations of offering a new type of digital coin and a blockchain solution directly related to a central bank. For now, this move is hypothetical, but if applied in practice, it would change both the banking and the crypto industry.
Japan, which is one of the most favorable markets for public digital assets, may also get a boost from a favorable stance to issuing a blockchain-based crypto yen. In the past month, the Ministry of Finance, the Bank of Japan, and the Financial Services Agency (FSA) met to discuss the potential for a Japanese CBDC, reported the Japan Times.
The meeting brought together Yoshiki Takeuchi, vice-minister of finance for international affairs, Ryozo Himino, FSA vice-minister for international affairs, and Shinichi Uchida, BOJ executive director for international affairs. The Japan Times reported their discussion involved topics such as the effect of CBDCs on the currently highly dollarized global economy.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
Bank of Japan Governor Haruhiko Kuroda previously said, “We are advancing research and study from the technical and legal perspectives so that we will be able to move in an appropriate way when there is a growing need.”
CENTRAL BANKS EXPLORE DIGITAL CURRENCIES AS RESPONSE TO FACEBOOK’S LIBRA, BITCOIN
With the latest discussions, the Bank of Japan joins other monetary policy authorities that have shown interest in central bank crypto assets, including the European Central Bank, the Swedish Central Bank, Bank of England and Bank of Canada.
Japan, however, has lagged behind as a hub for crypto-related activity. The FSA initially started with relatively lenient requirements but went on to require more stringent registration rules for exchanges. The added regulatory pressure caused Binance to leave its Tokyo offices and seek alternative headquarters and registration.
Central banks accelerated their exploration of CBDCs after Facebook started on its Libra project. The fear of undue influence from Facebook urged central banks to react and explore the potential of offering an alternative to Libra, with more regulatory oversight. The crypto community is split on its opinions of CBDCs. Those assets may validate a blockchain use case, but at the same time, undermine the central feature of cryptocurrencies – that they would be permissionless, public, and censorship-free.
MAKERDAO CRYPTO COMMUNITY GOES DEFENSIVE FOLLOWING DEFI EXPLOITS
- Crypto FUD Surfaces Again
- MakerDAO Goes Defensive
The crypto ecosystem was rattled this week with the first two exploits of decentralized finance platforms. The world’s most popular one, MakerDAO, has gone into defensive mode as a result.
CRYPTO FUD SURFACES AGAIN
As usual the media has run with the FUD spouting headlines of crypto hacking and DeFi fear to boost their page views.
Nothing was hacked and there is no reason for fear and doubt . A wily trader simply exploited a vulnerability in the system to execute a flash loan and arbitrage attack to profit from low liquidity markets.
Some industry experts have suggested that this could actually be a good thing for Ethereum as it highlights what is possible in this new founded financial landscape.
The world’s largest DeFi project, MakerDAO, has now become a target itself as the community is put on high alert.
MAKERDAO GOES DEFENSIVE
The decentralized lending platform currently dominates DeFi markets with 57.5% market share according to defipulse.com.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
Concern has been growing over the possibility of a bad actor controlling a large amount of the MKR token being able to manipulate the collateral of pull off a similar flash loan exploit.
At the moment the big MKR crypto pots are controlled by public facing venture capital firms that have a vested interest in the success of the project, not its demise.
The head of community development at MakerDAO [@richatmakerdao] has been posting updates from a recent Governance and Risk meeting involving the platform’s Governance Security Module (GSM).
The GSM is a mechanism in which MKR token holders are given a chance to review any changes that will go into the system and act accordingly if those changes are deemed to be malicious.
Currently the module is set at zero hours which would enable a bad actor to infiltrate the system in real time or governance to be abused if compromised.
Today’s meeting will put forward a proposal to raise the GSM to a 24 hour delay giving MKR holders a full day to respond to any spurious governance results.
Previous attempts to push this through failed due to insufficient knowledge and lack of awareness as highlighted on the MakerDAO Forum.
The Foundation development team has also proposed a Dark Fix mechanism, which provides a way to pre-authorize a specific bug fix without exposing its bytecode on-chain.
DeFi is an embryonic crypto ecosystem, barely a couple of years old, so things will break and fixes will be required as it evolves. Bitcoin maximalists rushing to condemn it is completely counterproductive to the ethos of crypto and why we’re all here in the first place.
RUSSIA DECIDES TO OUTLAW CRYPTO AS A MEANS OF PAYMENT
- Russia’s Two Giant Departments Come to Compromise
- FSB Wants to Identify All Crypto Owners
Russia’s Federal Security Service (FSB), the successor of KGB, agreed with the Central Bank of Russia that cryptocurrencies should not be allowed as means of payments on the territory of Russia, a local portal reported.
RUSSIA’S TWO GIANT DEPARTMENTS COME TO COMPROMISE
Prior to this consensus, the FSB was confused about whether it was even possible to ban cryptocurrencies like Bitcoin as payment options. The two departments have argued about how to regulate digital currencies. While the Bank of Russia has been firm on its position that everything related to cryptos should be banned, the FSB was open to legalization and endorsed a regulatory framework that would favor miners.
However, according to letter from the Deputy Prime Minister Dmitry Chernyshenko seen by Russian portal Baza, which was sent to President Vladimir Putin, the two agencies have finally come to a compromise.
A decision was made following a meeting in the government to establish a ban on the issuance and use of cryptocurrencies as a means of payment
In the same letter, Chernyshenko said that the FSB insisted that some of its crypto-related proposals to be included in Russia’s bill on digital financial assets, which is likely to pass through the parliament this spring.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
Some of the FSB proposals suggest that the exchange of cryptocurrencies for rubles and other fiat currencies should be carried out only through specialized operators. Thus, Russians wouldn’t be able to buy anything with their crypto funds, but they would be able to exchange them for fiat.
FSB WANTS TO IDENTIFY ALL CRYPTO OWNERS
Even if a Russian citizen holds Bitcoin and doesn’t use it in any way, they will have to pass through an identification procedure carried out by the specialized operators. For failure to comply with the upcoming law, the FSB wants to impose administrative and even criminal liability.
While the FSB and the Bank of Russia reached an agreement on how to regulate crypto, the two departments would not concede on their intentions to independently influence the regulatory process. So far, it seems that the central bank hasn’t responded to the FSB’s proposals.
Interestingly, a BBC investigation suggested that the FSB could be behind the disappearance of $450 million worth of crypto from an exchange platform.