CORE BANKING
Article | June 22, 2022
Contents
1. Say Hi to the Future
2. Digital Currencies: Types and Companies Involved
3. Why Are CBDC(S) Becoming The Talk of The Town?
4. Are Asian Nations Well On The CBDC Track?
Say Hi to the Future!
CBDCs, or Central Bank Digital Currencies, are the future of transaction modes and an excellent alternative to cash and private digital money. As the name suggests, CBDCs are digital tokens similar to cryptocurrencies, as both use blockchain technology. However, the significant difference lies in their modes of regulation. While cryptocurrencies are decentralized and highly volatile, CBDCs are regulated directly by a country’s central bank and, thus, are pretty transparent and stable for a financial system.
Digital Currencies: Types and Companies Involved
Cryptocurrency, Stablecoins, and Central Bank Digital Currencies (CBDC) are the three main digital currencies.
Cryptocurrency grew in popularity because it was inexpensive and available in various currencies. Furthermore, its decentralized nature eliminated the role of banks in traditional money transfers, as they acted as intermediaries and thus charged for this. However, with the introduction of cryptocurrencies, the network members acted as intermediaries in the blockchain, and as such, the compensation got minimal.
Here’s a list of the top cryptocurrency companies that offer enhanced data security:
Advanced Micro Devices: It is an American multinational semiconductor company based in Santa Clara (California). It offers the best combination of CRU and GPU technologies to make faster and more secure blockchain transactions.
Alpha Point Corporation: AlphaPoint is a white-label software company powering crypto exchanges worldwide. Its award-winning blockchain technology has helped over 150 clients in 35 countries discover and execute their blockchain strategies since 2013.
Intel: By pushing forward in fields like AI, analytics, and cloud-to-edge technology, Intel’s work is at the heart of countless innovations.
However, over time, stablecoins gained attention due to their stable nature. These are also cryptocurrencies backed by other cryptocurrencies, fiat currencies, commodities, etc. As suggested by its name, this backing system for stablecoins has been implemented to keep their prices steady and avoid fluctuations altogether.
Some of the famous companies dealing in stablecoins include:
Gemini: Gemini Trust Company, LLC is a next-generation cryptocurrency exchange and custodian that allows customers to buy, sell, stake, and store digital assets such as Bitcoin and Ether.
OKCoin: It is one of the world’s largest and fastest-growing cryptocurrency exchanges. The company helps millions of people buy and sell Bitcoin, Ethereum, Miamicoin and many other crypto assets daily.
ConsenSys: It is a leading Ethereum software company that enables developers, enterprises, and people worldwide to build next-generation applications, launch modern financial infrastructure, and access the decentralized web.
Why Are CBDCs Becoming the Talk of the Town?
Central Bank Digital Currencies are likely to gain much traction as they enable faster and smoother transactions, which are also very safe and secure.
Since CBDCs do not involve holding a bank account, this concept will probably be more popular among non-banking individuals.
With the recent collapsing examples of commercial banks, CBDCs have a higher chance of survival since the latter involve linking customers’ funds directly to the central bank.
CBDCs also promise transparency, as all their transactions are recorded on a digital ledger, enabling authorities to detect fraud and other illicit activities.
Are Asian Nations Well on the CBDC Track?
Some CBDCs are in the pipeline, while the rest are at different stages of progress in many Asian nations, but none have launched yet! However, CBDCs are picking up steam in Asia. This region is home to many emerging markets that are quick to adapt to new technologies and keen to extract more benefits from innovations.
CBDCs are mainly of two types, namely, Retail and Wholesale. While the former (CBDC-R) involves transactions by individuals and businesses, the latter (wCBDC) is more into institutional financial activities or transactions from one bank to another.
Coming back to Asian countries and how they are doing with digital currency, one can design for both cases or just one, depending on the country's needs. For example, China and Thailand kicked off both models, while South Korea and Russia followed the CBDC-R model.
As per a report from the Atlanta Council, Asian nations such as India, Japan, Indonesia, and Bhutan are at the development stage in both models. Similarly, Thailand and China are in the pilot phase of implementing both models. Meanwhile, nations in the development phase of implementing only the Retail CBDC include Iran, Israel, Lebanon, Turkey, and Cambodia. Besides, Saudi Arabia, UAE, Malaysia, and Singapore are in the pilot phase of the Wholesale CBDC. Meanwhile, nations in the research phase include Georgia, Kuwait, Palestine, Pakistan, and the Philippines. Nevertheless, North Korea is still in inactive mode.
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PAYMENTS
Article | July 21, 2022
Say Hi to the Future!
CBDCs, or Central Bank Digital Currencies, are the future of transaction modes and an excellent alternative to cash and private digital money. As the name suggests, CBDCs are digital tokens similar to cryptocurrencies, as both use blockchain technology. However, the significant difference lies in their modes of regulation. While cryptocurrencies are decentralized and highly volatile, CBDCs are regulated directly by a country’s central bank and, thus, are pretty transparent and stable for a financial system.
Why Are CBDCs Becoming the Talk of the Town?
Central Bank Digital Currencies are likely to gain much traction as they enable faster and smoother transactions, which are also very safe and secure.
Since CBDCs do not involve holding a bank account, this concept will probably be more popular among non-banking individuals.
With the recent collapsing examples of commercial banks, CBDCs have a higher chance of survival since the latter involve linking customers’ funds directly to the central bank.
CBDCs also promise transparency, as all their transactions are recorded on a digital ledger, enabling authorities to detect fraud and other illicit activities.
Are Asian Nations Well on the CBDC Track?
Some CBDCs are in the pipeline, while the rest are at different stages of progress in many Asian nations, but none have launched yet! However, CBDCs are picking up steam in Asia. This region is home to many emerging markets that are quick to adapt to new technologies and keen to extract more benefits from innovations.
CBDCs are mainly of two types, namely, Retail and Wholesale. While the former (CBDC-R) involves transactions by individuals and businesses, the latter (wCBDC) is more into institutional financial activities or transactions from one bank to another.
Coming back to Asian countries and how they are doing with digital currency, one can design for both cases or just one, depending on the country's needs. For example, China and Thailand kicked off both models, while South Korea and Russia followed the CBDC-R model.
As per a report from the Atlanta Council, Asian nations such as India, Japan, Indonesia, and Bhutan are at the development stage in both models. Similarly, Thailand and China are in the pilot phase of implementing both models. Meanwhile, nations in the development phase of implementing only the Retail CBDC include Iran, Israel, Lebanon, Turkey, and Cambodia. Besides, Saudi Arabia, UAE, Malaysia, and Singapore are in the pilot phase of the Wholesale CBDC. Meanwhile, nations in the research phase include Georgia, Kuwait, Palestine, Pakistan, and the Philippines. Nevertheless, North Korea is still in inactive mode.
Read More
CORE BANKING
Article | July 20, 2022
The pace of change within the global payment’s technology space is still at full speed with no sign of slowing down. While traditional incumbents have until recently taken comfort in their size and decades of dominance, new digital-only challenger banks are ramping up and making a huge impact on the global financial landscape.
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Article | February 10, 2020
The following article looks at Big Tech and its impact on the financial services sector. Whilst competition from small fintech startups will certainly take away some market share from traditional banks, the impact of “GAFA” could be huge. The fintech movement did more than unbundle banking and its core services — it spurred financial inclusion across Asia, increased overall economic growth, and made significant inroads into the finance value chain. The born-digital companies brought technology to the forefront, attacking the traditional risk-averse sector from various points — digital payments, insurance, P2P lending, and investment management, among other avenues.
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