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Blockchain Firm Pitches CBDC Operating System to Bank of England

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United Kingdom-based blockchain firm L3COS has submitted a proposal to the Bank of England, or BoE, for a blockchain-based operating system to power a central bank-issued digital currency, or CBDC.

L3COS described the proposal as a response to the consultation document on CBDC published by BoE in March — which identified several benefits and challenges associated with central bank virtual currencies and invited feedback from technology providers, financial institutions, and academics.

Blockchain firm pitches CBDC system to BoE

In an article published by U.K.-based outlet Verdict on June 12, L3COS founder and chief executive Zurab Ashvil proclaimed that the firm’s platform can facilitate the creation of a CBDC for household and business payments.

Asheville argued for the benefits that an immutable and transparent digital ledger offers to the government, asserting that a CBDC would render “fraud, money laundering or other black-market financing impossible.”

Ashvil added:

“Commercial banks and other financial institutions will benefit from the Real-Time Gross Settlement System, or RTGS, that is built into the L3COS ecosystem,”

Coronavirus may hasten CBDC discussions

Despite L3COS’ enthusiasm for a BoE-issued CBDC, the central bank emphasized that it had “not yet made a decision on whether to introduce CBDC” in its March report.

However, the depths of the coronavirus-induced global crisis have renewed CBDC discussions among many policymakers, with BoE digital currencies team manager, Ben Dyson, asserting that it is “the right time for us to be thinking about the future of money” during a webinar in April.

That same month, ING economists Carlo Cocuzzo and Teunis Brosens also concluded that “CBDC will be a more likely option post-COVID-19,” stating:

“The bigger role of governments and the close cooperation between them and the financial sector in combating the economic fallout will guide discussions about CBDC in the context of the role the financial sector has in serving society.”

US position on CBDC unclear

Recent discussions surrounding a digital dollar in the United States have re-stoked CBDC discourse worldwide. 

The recent appointment of Coinbase’s former legal head and architect of the USD Coin stablecoin, Brian Brooks, to the top position of the Office of the Comptroller of the Currency had sparked speculation that the U.S. may be quickly exploring the digitization of the dollar.

However, the position of the United States is still unclear, with persistent warnings concerning the impact CBDC may have on commercial banks being voiced by high-ranking officials. 

China emerges as global leader in CBDC

U.S. research into CBDC may also be taking place from a defensive perspective regarding China — who have made rapid progress toward issuing a digital yuan in recent years.

Speaking to Cointelegraph, Ledger Vault’s head of APAC region, Glenn Woo, emphasized the speed with which a local CBDC could be rolled out on top of existing infrastructure in China, stating: “Domestically, it could be deployed really quickly and widely used, and people won’t necessarily know what has changed.”

Looking beyond China’s borders, Woo predicts that China’s regional trading partners will be encouraged and offered incentives in exchange for using its CBDC for trade financing and settlement.

Elsewhere, many governments are making moves to trial CBDC, with the Bank of Ghana’s first deputy governor recently reaffirming the institution’s commitment to piloting a state-issued digital currency.

Source: https://cointelegraph.com/news/blockchain-firm-pitches-cbdc-operating-system-to-bank-of-england

Blockchain

Eyeing EU Banks, Hex Trust Teams With SIA on Crypto Custody

A multinational payments firm is partnering with cryptocurrency custodian Hex Trust to help its European banking clients hold digital assets.

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Multinational payments firm Sia is partnering with cryptocurrency custodian Hex Trust to help its European banking clients hold digital assets.

“When you have one bitcoin, it’s not a big problem, but when you start adding 10, 20 or 100, you have a treasury and you have to decide where to store this,” said Daniele Savarè, SIA’s innovation and business solutions director. “We are discussing digital custody needs with banks in Europe.” 

The firm is also helping banks manage and safekeep security tokens and central bank digital currencies, he added.

Through SIA, Hex Trust plans to offer European banks the software to custody digital assets on behalf of their customers. Hex Trust will also act as a sub-custodian for banks that don’t want to directly offer the service, said Hex Trust CEO Alessio Quaglini. 

Currently, Hex Trust works with three banks – Mason Privatbank Liechtenstein AG and two unnamed Asian banks. Quaglini said Hex Trust has 10 other banks that are exploring the custodian’s products.

Going forward, SIA will be the primary distribution partner for Hex Trust to offer digital-asset services to banks in Europe, Quaglini said. 

Source: https://www.coindesk.com/hex-trust-sia-crypto-custody-eu-banks

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Collider Labs Raises $1M to Invest in Blockchain Startups

The venture builder is seeking to invest in early-stage startups with a focus on transparency, privacy and “fairness.”

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Collider Labs has raised $1 million to be invested in early-stage blockchain and cryptocurrency startups.

In an announcement Thursday, the venture builder said the raise had brought on board several notable limited partners including Efficient Frontier CTO Alon Elmaliah and Follow [the] Seed Founding Partner Andrey Shirben.

Collider provides funding and liquidity and actively participates in building up startups alongside their communities and founders, according to the firm’s founding partner, Avishay Ovadia.

The company is actively seeking to invest in early-stage blockchain and crypto startups globally, with a focus transparency, privacy and “fairness.”

Collider “is a venture builder that somewhat resembles an accelerator” Ovadia said. With some “key characteristics” that differentiate it from a typical accelerator.

Venture builders, also known as startup studios, pair with early-stage startups and utilize their own ideas and resources to, if all goes according to plan, construct viable enterprises.

According to Ovadia, Collider forms partnerships with founders, invests in teams and works alongside them as what he calls “Investors in Residence.”

Source: https://www.coindesk.com/collider-labs-raises-1m-to-invest-in-blockchain-startups

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Voyager Agrees to Buy LGO Markets and Merge 2 Firms’ Tokens

Two cryptocurrency trading firms are merging, and in a rare twist, so are their tokens.

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Two cryptocurrency trading firms are merging, and in a rare twist, so are their tokens.

Voyager Digital, a publicly traded digital asset brokerage with offices in New York, has agreed to buy LGO, a French crypto exchange primarily serving institutional investors, as the company expands to Europe.

The transaction requires regulatory approval, which the parties said they expect to receive by the end of this year, along with the token swap. The value of the deal will depend on the value of Voyager’s shares, and the firms’ tokens, at closing; at current prices, it would be in the low seven figures.

As such, this deal is dwarfed by this year’s blockbuster crypto M&A deals such as Binance’s acquisition of CoinMarketCap, estimated to be worth $400 million, and FTX’s $150 million deal to acquire Blockfolio.

Read More: ‘They Have the Users’: Binance CEO Explains Why He Bought CoinMarketCap

What makes this deal unusual is that the two companies’ utility tokens, VGX and LGO, will be swapped into newly minted tokens featuring decentralized finance (DeFi) functions such as community governance and staking at an initial interest rate of 7%.

“We think this is really taking the old-school mergers and acquisitions to the token world, which hasn’t been done before,” Steve Enrlich, Voyager’s co-founder and chief executive officer, told CoinDesk.

Upon completion, Voyager, which is publicly listed on the Canadian Securities Exchange, will issue one million shares for the acquisition and operate in the European retail market with LGO’s Virtual Asset Service Provider registration with the French Financial Markets regulator (AMF). All activities will be conducted under the Voyager brand and LGO will discontinue its institutional services on Oct. 31. Shares of Voyager closed at C$0.67 ($0.51) on Wednesday. 

Read More: Voyager to Pay Interest on DeFi Tokens to Gain Brokerage Clients

Hugo Renaudin, co-founder and chief executive officer of LGO, told CoinDesk that the French company made the deal after it decided to shift its focus from institutional clients to increasing value for its token holders.

“The key decision-maker is what will bring the most value to our tokens,” Renaudin said. “So we have this token. We have token holders and they’re mostly retail [clients].”

LGO launched an initial coin offering (ICO) in February 2018, according to its website, which raised 3,600 bitcoin (worth about $36 million at the time). The company’s white paper shows that 60% of the tokens were distributed through a pre-sale process, while 20% of the supply went to LGO’s founders and advisors.

At its peak in April 2018, the LGO token’s market cap was nearly $40 million, according to data from CoinMarketCap. On Wednesday, that value was calculated to be $1.5 million. 

Renaudin told CoinDesk that the company’s other option would have been focusing on better serving its institutional clients, which means its spot exchange would have to provide new and exotic derivatives products. After consideration, he said that the team had decided to change its focus to retail customers instead.

The merger comes during a time of regulatory crackdown on crypto derivatives trading around the globe. Popular crypto derivatives exchange BitMEX was charged by the U.S. Commodity Futures Trading Commission (CFTC) with facilitating unregistered trading activities, while in the UK, the Financial Conduct Authority (FCA) has banned crypto derivatives for retail consumers.

This is not the first acquisition by Voyager, which went public in early 2019 in a reverse merger with the shell of a Canadian mineral exploration company. Previously, it acquired wallet startup Ethos.io for about $4 million.

Read More: Voyager CEO Says Revenue Growth Accelerates 8-Fold as DeFi Trading Surges

Voyage’s revenue in the most-recent fiscal quarter, which ended Sept. 30, surged to about $2 million, compared with $1.1 million during the fiscal year ending in June.

“We are becoming the financial service firm of the future, which means I will look at acquisitions that can add products, customer assets to the platform, or tokens and other communities that can be accretive to what we are trying to do,” Enrlich said. “And adding these pieces together we are going to either do it organically or through more acquisitions.”

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Source: https://www.coindesk.com/voyager-acquires-lgo-token-merger

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