Hong Kong Won't Issue Own Crypto

Senior official said that HKMA had studied the topic and concluded that such a currency would prove less useful to Hong Kong than to some other jurisdictions
31 May 2018   1268

The Hong Kong Monetary Authority (HKMA) does not plan to issue a state digital currency, a senior official from the department said.

During a meeting with legislators, Joseph Chan, acting secretary for financial services and treasury, said that HKMA had studied the topic and concluded that such a currency would prove less useful to Hong Kong than to some other jurisdictions in the world.

The HKMA has carried out research on CBDC (central bank digital currency). At the same time, the HKMA notes that the benefits of CBDC and its efficiency gains will depend on the actual circumstances of a jurisdiction. In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.

Joseph Chan

Acting Secretary,  Financial Services and the Treasury

Last April, HKMA reported for the first time that it was "studying and creating evidence of the concept of a digital currency issued by the central bank." At the same time, the agency announced that it would complete the first stage of the project before the end of 2017 and, based on its result, decide on further actions.

The last statement of Chan was a response to the request of legislator Dennis Kwok, sent on May 18. According to the published document, Kwok wanted to know whether the government was going to issue its own digital currency in order to keep Hong Kong's competitiveness in the field of financial innovation.

Potentional Vulnerabilities Found in ETH 2.0

Least Authority have found potentional security issues in the network P2P interaction and block proposal system
26 March 2020   202

Technology security firm Least Authority, at the request of the Ethereum Foundation, conducted an audit of the Ethereum 2.0 specifications and identified several potential vulnerabilities at once.

Least Authority said that developers need to solve problems with vulnerabilities in the network layer of peer-to-peer (P2P) interaction, as well as in the block proposal system. At the same time, the auditor noted that the specifications are "very well thought out and competent."

However, at the moment there is no large ecosystem based on PoS and using sharding in the world, so it is impossible to accurately assess the prospects for system stability.
Also, information security experts emphasized that the specifications did not pay enough attention to the description of the P2P network level and the system of records about Ethereum nodes. Vulnerability risks are also observed in the block proposal system and the messaging system between nodes.

Experts said that in the blockchains running on PoS, the choice of a new block is simple and no one can predict who will get the new block. In PoS systems, it is the block proposal system that decides whose block will fall into the blockchain, and this leads to the risk of data leakage. To solve the problem, auditors suggested using the mechanism of "Single Secret Leader Election" (SSLE).

As for the peer-to-peer exchange system, there is a danger of spam. There is no centralized node in the system that would evaluate the actions of other nodes, so a “malicious" node can spam the entire network with various messages without any special punishment. The solution to this problem may be to use special protocols for exchanging messages between nodes.