JAPANESE FINANCIAL GIANT SBI LAUNCHES BITCOIN LENDING SERVICE

Japanese financial giant SBI Group has concluded plans to roll out a crypto lending service that seeks to borrow cryptocurrencies from holders. According to the report, SBI has put aside a yearly interest of 1% on Bitcoin, and it intends to include XRP and Ethereum in the service in the future.

SBI says it will be introducing the crypto lending service via its crypto-based subsidiary, SBI VC Trade. According to the official announcement today, the service will be open to users who want to lend their crypto to SBI and earn interest on top of their funds.

The crypto renting service will borrow at the current price of $1,880 per 0.1 Bitcoin to a maximum of $94,000 (5 Bitcoin) from users. Interest will be paid at the end of the one-year borrowing term. The service is similar to what is obtainable in traditional bank settings, as customers receive interest for keeping their money with the bank for a certain period.

When the customer lends its fiat money to the bank, they earn a small fraction of the amount as interest yearly. The bank makes use of the funds to give out loans and other banking services.

Service will be limited to Bitcoin for now

The VC Trade lending service will first offer support only for Bitcoin (BTC). But, as explained by SBI, other cryptocurrencies will be added in the future, with XRP and ETH coming next. According to SBI, the lending service will not have annual membership fees or account management fees. Additionally, fees will not be charged for deposits made in crypto or Japanese yen. However, there will be a fee for the yen withdrawal.

As a major financial player in Japan’s crypto industry, SBI has kept setting the pace in the industry, providing important crypto services for users. Earlier last month, SBI Liquidity Market, the foreign exchange and derivatives branch of the financial giant, bought Taotao, a crypto exchange.

Yahoo Japan YJFX has a 40% stake in the company before it was bought by SBI.

SBI, a major player in the crypto market

SBI and Ripple have also formed a serious partnership, as the latter builds its financial products on XRP. There are other major partnerships SBI has had with other crypto-based firms, which shows SBI’s serious participation in the crypto market.

SBI said the existing crypto lending programs are open to higher risks such as counterparty facing bankruptcy or faulty smart contract. But the traditional bank approach of the new SBI lending service will offer a less risky option for users, the financial giant pointed out....

FUND MANAGERS IN CHINA FIND OFFSHORE SAFE HAVENS FOR BTC TRANSACTIONS

Crypto-asset executives in China consider expansion beyond their zone, like Hongkong and Singapore, to bypass the crackdown that has escalated at home.

Currently, the value of bitcoin has been on the surge to over $18000. The price has doubled, displaying almost $10,000 in growth in the past two months. The rise in value in a miniboom of 2017, the rise has subsequently led to massive gains in cryptocurrency-focused hedge funds. 

The value of bitcoin price has risen by about 15% over a week alone, making headlines in the world of finance. The massive acceptance of cryptos over traditional financial providers has contributed significantly to the sore in prices. Despite this, Beijing has been reinforcing already harsh measures over cryptocurrencies while the People’s Bank of China warms up to launch its digital currency.

Chinese Government Restrictions to Suppress Crypto Business

In 2017 China had a couple of regulatory standards to suppress crypto-related activities. Likewise, the government does not acknowledge cryptocurrency as lawful tender; it says the purpose of putting those measures is for financial risk prevention and investor protection. 

The standards put in place include; limiting the primary business of cryptocurrency platforms, defining the initial coin’s aims as illegal, and discouraging bitcoin mining. Moreover, the ban stopped the swift growth of the crypto industry in the country. Europe’s largest digital asset manager, Coinshare, reported that China’s portion of global bitcoin trading had declined to less than 4% from around 17% in 2017.

Babel Finance. Hongkong based crypto platform requested an asset management license in town. The license in the Asian financial hub will enable the crypto-financial provider to get more crypto investors. Flex Yang, Babel Finance founder, aims to get $1billion dominating similar crypto financial service providers after receiving the license.

Gordon Chen, Co-founder of cryptocurrency asset, chose Singapore last year due to its regulatory structure. There was a high demand for the crypto market, and they stepped in to bridge the gap. At the moment, Chen is running over $20 million in bitcoin assets.

Onchain Custodian in Singapore intends to expand in China by first giving consultancy services in blockchain technology. Furthermore, the company takes account of Chinese conglomerate Fosun as an investor. Even so, most undertakings are still under restriction.

China is Off Track

Recently, the PBOC outlawed private issuance of digital currencies, and OKEx, a Malta-based crypto exchange, was demanded to defer their crypto withdrawals for a while since an executive was helping Chinese authorities with their investigation.

Gordon Chen feels sad that China is off the right track of international pricing power and the lead hub for bitcoin trading and mining. He added that China’s premium advantage had faded away....

SOUTH AFRICA’S FSCA ISSUES DRAFT DECLARATION ON CRYPTOASSETS

With the idea of crypto-assets gaining steam across the world, the question really is which country will be left behind. South Africa seems to be the latest country to make an effort to regulate cryptocurrencies after the FSCA, the country’s premier financial regulator, issued a declaration that stated that the country intends to treat cryptocurrencies as a financial product.

Observing that there is rapid, growing interest among retail investors towards purchasing crypto-assets, the FSCA said,

“South Africa has also experienced an exponential increase in the provision and use of crypto assets.”
The aforementioned draft declaration is expected to result in improved disclosures to customers that more effectively highlight the high risks involved in investing in crypto-assets, while also ensuring a more robust advice process. Further, such a declaration will also ensure that proper risk assessments are done when intermediaries decide to advise customers to purchase crypto-assets.

That’s not all, however, as the same also says,

“The draft Declaration in no way impacts the status of crypto assets in the context of other laws such as exchange control regulations, requirements under the Pension Funds Act and Collective Investment Schemes Act and so forth, nor does it attempt to regulate, legitimise or give credence to crypto-assets.”

The wording here is interesting, especially since it is unusual that a country would issue a declaration assigning a status to cryptocurrencies, while also claiming that the same in no way attempts to legitimize or give credence to crypto-assets. In the regulatory agency’s defense, the FSCA has referred to this as an “interim step” between the developments taking place through the country’s Crypto-Assets Regulatory Working Group.

Interestingly, South Africa’s draft declaration is somewhat similar to Kyrgyzstan’s recently-issued draft law. Like Kyrgyzstan, South Africa’s draft declaration has also invited interested parties from the general public to comment on the draft on or before 28 January 2021....

US OCC SEEKS TO BAN DISCRIMINATORY PRACTICES AGAINST CRYPTO BUSINESSES

The US Office of the Comptroller of the Currency issued a regulatory proposal that seeks to ensure that crypto businesses enjoy the same facilities when it comes to having a bank account as any other legitimate endeavors. The OCC wants to end the silent discrimination against crypto businesses.

According to the US regulator, instead of using general considerations towards all crypto businesses, banks should now evaluate each company individually. Crypto businesses, not just in the USA but in many other countries, also face discriminatory practices.

The regulatory proposal seeks to provide a better way to evaluate the risk involved. 

 
The “Fair Access to Financial Services” proposal by the OCC seeks to provide a better way to evaluate the risk of certain businesses like fintech, exchanges, payment protocols, lending and custody services, etc. In order to ensure that banks provide customers with fair access to financial services, and consistent with longstanding OCC policy, a bank’s decision not to serve a particular customer must be based on an individual risk management decision about that individual customer, not on the fact that the customer operates in an industry subject to a broad categorical exclusion created by the bank, according to the OCC. 

Crypto regulations in most countries remain in a grey area. 

Cryptocurrency-related regulations in most countries are still in a grey area as lawmakers continue to issue guidelines and propose regulations. Crypto regulations remain a hot topic in the crypto community as lawmakers around the world try to tackle the newly emerging space. Currently, crypto regulations in most countries are in a grey area. However, lawmakers and financial regulators are working to ensure decisions are made for the public interest. Since Facebook announced its stablecoin project Libra last year, lawmakers worldwide have started to take the crypto industry more seriously. ...

BITSTAMP SEEKS TO SUBPOENA TWO US BANKS IN THE PAYMENT LAWSUIT

The crypto exchange giant Bitstamp is seeking to subpoena two U.S. banks as part of its legal battle against one of its payment processors. The crypto exchange filed an application with a New York court seeking to subpoena Citibank and Bank of America to produce documents for use in its court battle in Denmark.

In the application filed at the Southern District of New York, the exchange stated that the subpoenaed documents would be towards its case against CNG Processing. 

CNG Processing started imposing deposit and withdrawal limits to Bitstamp. 

According to the Luxembourg-based Bitstamp, the fallout began after CNG started reporting issues in processing payments for U.S. bank accounts. The Danish payment firm CNG Processing also started imposing deposit and withdrawal limits on Bitstamp customers, going against the original agreement.

This led to Bitstamp dropping CNG as its payments processor, with the exchange stating on Twitter that it hasn’t used CNG’s services for over a year. After the termination of the agreement between the two, the crypto exchange demanded $1.7 million in security deposit and over $1 million in customer deposits.

CNG alleges U.S. banks have frozen accounts. 

The Danish payment firm has alleged that the money being held in those accounts cannot be removed from those accounts because Bank of America and Citibank have frozen and prohibited withdrawals. Accordingly, the disputed accounts’ status and disposition is a vital issue in the Danish Proceeding,” the application stated.

CNG Processing has failed to provide any material support for its claims of American banks freezing its accounts, Bitstamp has alleged. This impasse has necessitated the subpoenas, with the exchange expecting “to obtain information regarding the status and disposition of the disputed accounts.”...