BIS to Issue Report on Cryptos and Blockchain

In new report Bank of International Settlements questions crypto's ability to deliver promises
18 June 2018   848

The Bank for International Settlements, whose main functions are facilitating cooperation between central banks and facilitating international financial settlements, published material that questioned the ability of the cryptocurrency to justify the expectations placed on them. This is reported by CoinDesk.

In the document under the heading "Cryptocurrencies: looking beyond the hype", the history of technology and analysis of its potential as a trustworthy form of money are given. The publication of this document precedes the release of the full annual economic report of the BIS.

The decentralized technology of cryptocurrencies, however sophisticated, is a poor substitute for the solid institutional backing of money.To process the number of digital retail transactions currently handled by selected national retail payment systems, even under optimistic assumptions, the size of the ledger would swell well beyond the storage capacity of a typical smartphone in a matter of days, beyond that of a typical personal computer in a matter of weeks and beyond that of servers in a matter of months.
 

Cryptocurrencies: looking beyond the hype

As reported, beyond storage capacity, the report claims that "only supercomputers" have the proper processing power needed to conduct every retail transaction on a blockchain, and even if there were sufficient supercomputers to create a decentralized network, "millions of users [would] exchange files on the order of a magnitude of a terabyte." Bank claims that using a blockchain to process the volume of retail payments made daily "could bring the internet to a halt." 

The document also mentions the miners with which, according to its authors, a number of assumptions are connected: it is assumed that honest miners control most of the computing power of the network, and the issue of coins occurs in accordance with the pre-established rules of the protocol.

Although the BIS is negative about the cryptocurrency, the blockchain technology finds a positive response in its report, as it looks "promising in other areas." A distributed ledger can be used for cross-border payments, "where the benefits of decentralized access exceed the higher operating cost of maintaining multiple copies of the ledger."

Binance Singapore Unit to Apply For License

Under the new law, aimed at regulating crypto paymetns and trading, firms must register with the Monetary Authority to receive a license
17 February 2020   295

Binance, a Singapore-based cryptocurrency exchange unit, has applied for a license under the new Payment Services Act, which entered into force on January 28.

We have already applied. We submitted the application pretty fast. Binance’s Singapore entity has been in close touch with the local regulators, and they have always been open-minded.

 

Changpeng Zhao

Founder and CEO, Binance

Under the new law, crypto companies in Singapore must register with the Monetary Authority and receive one of three licenses: an exchange of money, a standard or large payment institution. The measure is aimed at regulating payments and crypto trading using requirements for participants in the traditional finance industry. Zhao did not specify which of the licenses Binance Singapore chose.

Binance has been offering crypto-fiat trading services in Singapore since April 2019 and works with eight coins, including Bitcoin, Ethereum and XRP. The trading platform is supported by Vertex Venture Holdings, a venture division of Singapore's Temasek Holdings.