The South Korea Central Bank seems to be a lot in the crypto news lately and today’s again for issuing a warning over central bank digital currencies according to a report from local news outlet Yonhap News Agency.
CBDCs are basically state-backed digital currencies that involve a blockchain-based version of a certain country’s fiat currency by circulating in tandem or totally replacing the paper notes and coins.
South Korea decided against the use of CBDCs while other countries are looking into the possibility of using them. The decision comes after a six-month consultation with the Bank of Korea. The central bank claims that CBDCs can lead to mass withdrawals of funds that will lead to squeezing the liquidity and will push up the interest rates:
“The CBDC is a kind of a BOK-issued bank account. People trust it more than one in a commercial bank. Demand deposits are one of the biggest sources of loans by banks. When people pull out their money, banks raise rates, or lower the reserve ratio, to secure more funds.”
The Bank of Korea has previously stated:
“We have no plans to issue any type of CBDC that is available for all people in the near future. We have to work further on the benefits and costs of CBDC implementation first.”
Seoul decided not to make any major changes to its stance on cryptocurrency in general. However, in other countries such as Switzerland, the Bank of International Settlements provided support where it shows that 70 percent of the central banks worldwide are conducting a CBDC research in some form for 2019.
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“Telegram was the first big project that legally prohibited investors from selling their allocation. Investors usually just share their allocations with friends, without signing documents.’’The purchase agreement which was written for Telegram by the US legal powerhouse Skadden, Slate, Meagher, and Glom LLP according to one investor stipulates that the buyers of grams may not offer pledge, swap, sell and encumber or dispose of their tokens directly and indirectly. The investors may sell any securities convertible into or exercisable or exchangeable for the investment contract between an investor and the company. The issuance of the tokens is conditional upon the investors’ compliance with the rule. One investor stated for the latest cryptocurrency news:
The future issuance of tokens is conditional upon the investor’s compliance with this rule. If Telegram learns the investor broke the agreement, it can cancel the allocation.
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‘’Experts point out that domestic blockchain projects are flocking to foreign exchanges largely due to tougher domestic cryptocurrency exchange market conditions. Investors cannot make or withdraw deposits in the Korean currency at Korean exchanges’’If we don’t include the nation’s four largest exchanges, some of the 200 smaller exchanges cannot even open real-name virtual accounts and this is one of the reasons why crypto investors cannot benefit from the protection systems. The international players such as China’s BW.com, Bitholic and Binance Labs sense the demand from South Korea hence they are either opening Korean won markets or in this case, Binance Labs is only sponsoring the blockchain efforts. Only this week, Japan as one of the governments that openly claim to foster crypto exchange innovation while still has a strict licensing scheme added another platform to its domestic economy in the form of Rakuten Wallet. These moves are also impacting other exchanges and market players' share of the market. As a result the South Korean exchanges are less appealing in 2019 because of the low volume and out of the top one hundred in the world, there are only a few exchanges that are located under the jurisdiction in Seoul. Other issues faced by the local include added responsibility for loss or theft of the customers’ funds. Earlier this month, the commentators warned that the existing restrictions on cryptocurrency by the regulators will throttle attempts to foster blockchain innovation as read in the latest cryptocurrency news:
“It is no exaggeration to say that 97 percent of domestic exchanges are in danger of going bankrupt due to their low volume of transactions’’
Coinbase Confessed To Have Put Traders’ Funds At Risk
‘’Under [a very specific] and rare error condition, the registration form on our signup page wouldn’t load correctly, which meant that any attempt to create a new Coinbase account under those conditions would fail. Unfortunately, it also meant that the individual’s name, email address, and proposed password (and state of residence, if in the US) would be sent to our internal logs.’’The exchange noted that the users who resubmitted the form had their usernames and passwords and other details kept securely. Unfortunately, more than 3,000 customers as mentioned logged their private data onto the servers. Coinbase pretended to be the good Samaritan and fixed the issue on top priority. The company traced the entire line of storage to confirm that they are not holding any more information from the customers’ personal information. According to the blog post:
‘’We have an internal logging system hosted in AWS, as well as a small number of log analysis service providers. Access to all of these systems is tightly restricted and audited. A thorough review of access to these logging systems did not reveal any unauthorized access to this data.’’The company also started a password reset for affected customers and asserted that a password alone could not have a hacker potentially stealing their bitcoins because they protect each account with mandatory email and 1FA authentications. Coinbase confessed:
‘’We maintain incredibly high standards for securing the Coinbase platform, and any time we fall even slightly short of those standards, we mobilize a team to figure out what went wrong, and how we prevent it from happening again. We also believe in being transparent with our customers, which is why we’re sharing the results of our investigation today.’’As we can read in the coming altcoin news today, the alert came in a time when the institutional investors are taking huge steps into introducing bitcoin in their portfolio because security is still the top of their concerns.
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