Continuing with our latest trend, Alprockz is now pushing for the adoption of its Stablecoin, with the help of the Fusion Foundation.
This Stablecoin, known as RKZ is a regulated asset, which is backed on a 1:1 ratio by Swiss Franc (CHF). The flexibility of stablecoin assets, issued by Alprockz, is set to grow in the coming months, as the company intends to issue various other coins structured in a similar manner. These stablecoins, however, will be backed, not by Swiss Francs, but by various FIAT currencies such as USD, EUR, and etcetera.
Alprockz breaks down their practices, to demonstrate how they maintain safe custody and liquidity simultaneously. They indicate that roughly 90% of the funds backing RKZ on a 1:1 ratio are held as bank notes. The remaining funds are held in various Swiss banks, ensuring the possibility of quick access, and ensuring the liquidity that clients expect from these assets.
Adoption, through their partnership with Fusion, will be seen through exposure on the Fusion network. Fusion has indicated that their network already has over $12.3 billion in assets set to take part. Each of the participants involved in this, will now gain access to a regulated stablecoin for their proceedings.
Upon releasing news of this partnership, the CEOs of both Alprockz and Fusion took the time to comment. The following is what each had to say on the matter discussed here today.
Yassine Ben Hamida, CEO of Alprockz, stated,
“Our mission is to bridge the gap between traditional and digital economies with the broad use of the RKZ stablecoins…As the most forward-looking blockchain developer for global finance, Fusion is the perfect technology partner to demonstrate to the world what is possible in this new digitized economy.”
Dejun Qian, CEO of Fusion, stated,
“As stablecoins become more mainstream among global banks and central banking authorities, security will remain top of mind…By partnering with Alprockz to extend their secure and fiat-backed stablecoin, we are taking a huge step forward in making the exchange of any type of digitized asset seamless and safe.”
Fusion is an operating system that is based on blockchain. It was developed by a team of individuals looking to bridge traditional finance with cryptocurrencies, and assets of the like.
The company maintains various offices globally, with their primary headquarters being situated in Singapore. The company was founded in 2018, with operations overseen by CEO, Dejun Qian.
Alprockz is a Swiss company that is based in Zug – commonly referred to as ‘crypto valley’. Alprockz launched in this ‘hub for innovation’ during 2018. The company’s focus is on the creation and adoption of their own stablecoin, RKZ.
Company operations are overseen by CEO, Yassine Ben Hamida.
In Other News
As stated, this announcement follows a growing trend in the world of blockchain – the rise of stablecoins. These stablecoins stand to influence the continued development of the digital securities sector, as they are often used in DSOs, etc. With that in mind, here are few articles touching on the importance, and development, of stablecoins.
Raiffeisen Bank in Cooperation with FinTech Billon to Pilot Digitized National Currency
The transformation of the payments industry is in full swing. Driven by FinTechs, the payments technology innovation brings new ways of transacting on a global scale, with easier on-boarding, reduced waiting times and lower fees.
It’s no surprise that FinTechs also experiment with blockchain-based platforms that allow for tokenized representation of assets. One such platform is being developed by Billion, a British-Polish FinTech that is currently working with Raiffesen Bank on end-to-end digitized national currency transfers.
Raiffeisen to Pilot Digitized National Currency Project
According to a report, the Austrian banking giant successfully tested Billon’s tokenization platform, dubbed RBI, and moved the project from a proof-of-concept to a pilot project.
Borne out of Raiffeisen Bank International’s (RBI) Elevator Lab acceleration program, the tokenization platform is based on Billon’s distributed ledger technology (DLT) with the goal to enable tokenization of national currency.
Billon was founded in 2015 and is a FinTech company working on integrating national currency transactions, document and identity management tools into a single architecture.
The goal is to bring blockchain capabilities into the regulated world. This is in line with the global trend of commercial and central banks building blockchain-based infrastructure that comply with payment and data regulations.
FinTechs Augmenting Banks
The system from Billon enables banks to complete transactions that have higher settlement speeds, accurate payment status, reduced exception handling and as a result reduce customer inquiries.
Transactions with this system can have additional data or documents attached to them, accelerating the verification and validation process for e.g. the source of funds. Consequently, transfers are quickly settled and cleared while maintaining a clean audit trail and full transparency.
Both Billon and Raiffeisen Bank International plan to pilot the digital currency by the end of this year. The trial is set to include RBI’s corporate and institutional clients. Should the test period be successful, the Austrian bank could start using it in Central and Eastern European (CEE) countries where it has an extensive presence.
Stefan Andjelic, blockchain hub lead at Raiffeisen Bank International, spoke of the necessity of banks having to partner with FinTechs to meet new consumer demands:
“Billon is a great example of a fintech that understands how to adapt blockchain to serve the needs of banks and their clients. Specifically, during the COVID-19 situation, banks need to partner with fintechs to innovate faster and help clients with payments processing and liquidity needs.”
The full extent of the benefits from a tokenized platform are yet to be felt when deployed in a full working environment, but Billon expects the bank to improve customer experience, differentiate its offering and achieve cost efficiencies at several steps during the process.
Blockchain and Banking
There is a noticeable trend amongst commercial and central banks to develop new payment rails and exploring blockchain-based solutions.
Among the first household names in the financial world to entertain the idea of a digital currency was JP Morgan with its own JPM Coin that is marked for settling internal transfers for its corporate clients. Nonetheless, up to this day there is no update from the banking giant about fully deploying the JPM Coin.
At the same time, many central banks across the globe are taking decisive steps to launch their own digital currencies, clear examples being People’s Bank of China with the digital Yuan and the Banque de France testing a digital version of the Euro.
At the highest level, institutions are studying the feasibility of digital currencies and how these can be implemented in the current monetary environment.
VISA is another company whose involvement with digital currencies testifies the looming change in how payments are made. The payments giant has also filed for a patent in the United States to develop a digital fiat currency.
The Trend to Go Digital
The willingness to bring forth a digital version of a currency has also been exacerbated by the current COVID-19 pandemic. Transitioning to an almost fully digital experience could become a prerogative for many companies.
In the wake of the pandemic outburst, the Bank for International Settlements (BIS) published a report on how physical cash could transmit viruses, including the COVID-19. As a result, the BIS advised financial institutions to utilize digital methods of payment transactions, while advocating for central bank digital currencies (CBDC).
With this new blockchain-based initiative with Billon, Raiffeisen Bank is definitely on track to bring better digital payment methods to their offering.
France’s Central Bank Completes Security Issuance with Digital Euros
A major milestone towards the launch of a Central Bank Digital Currency (CBDC) was achieved in Europe, and more specifically in France.
The acceptance of a digital currency on a global or even on a national level was perennially viewed as a pipedream. Nonetheless, even after dismissing the biggest digital currency in the world – Bitcoin – nation states and central banks started to pay more attention and work on their own currency’s digital version.
While several countries have made some progress, China is known to be at the most advanced stage for launching its own CBDC. At the same time, news of a successful test for a digital Euro comes from France’s central bank.
Banque de France Unveils CBDC Progress
This first successful test was done in partnership with one of France’s biggest banks – Société Générale. In what is called a covered bond issuance, the total value reaches the €40 million (~$44 million) mark.
This becomes a noteworthy milestone for digital security issuance, since the transaction was instantly settled via the delivery versus payment (DvP) method directly against digital Euros.
Société Générale has lauded the results of the test and is highly optimistic in regards to the benefits digital currencies can bring, saying “It paves the way for the automation and shortening of payment processes, with simplified market infrastructures and strengthened security.”
According to reports, the central bank digital currency is one to be used for interbank settlements, rather than consumer payments. With the positive outcome of this initial test, Société Générale is encouraged to undergo more rigorous testing in the coming weeks:
“This experimentation was performed end-to-end using blockchain infrastructures…It demonstrates the feasibility of financial securities being digitally settled and delivered in Central Bank Digital Currency (CBDC) for interbank settlements,” stated Societe Generale.
This also becomes a huge milestone for the Banque de France. The central bank’s ambition to test a digital currency was voiced late last year in December 2019, stemming from a political will to take on a leadership role within the European Union.
France’s Efforts on a Digital Euro Paying Dividends
The development activity and the encouraging test results around the digital Euro coming from Banque de France are cementing the country’s place at the forefront of digital financial securities landscape.
Banque de France said it will continue to do more tests with other financial institutions over the next few weeks, as part of its ongoing exploration of a digital Euro.
“The results of these experiments will be an important element of the Banque de France’s contribution to the more global reflection led by the Eurosystem on the interest of [a CBDC],” stated the central bank.
It’s not too long ago that the central bank launched its digital Euro programme. In April, the central bank said it aims to uncover the benefits of digital currencies for clearing and settlement of tokenized financial assets.
The central bank shared that since the programme launch, there have been a lot of applications and interest to test the central bank digital currency, emphasizing the leading role the country has in payments technology innovation.
This current iteration of the central bank digital currency is being earmarked to be used for and by financial institutions – not retail payments. At the time of the programme launch, the central bank said it is not looking to replace coins and banknotes.
According to the central bank’s governor, the consumer side would have to be complemented by a different digital currency that focuses on usability and may not be underpinned by blockchain technology.
The Race for the First Central Bank Digital Currency
France is not the only country to have started testing central bank digital currencies. Last month, China finally confirmed it had begun testing its digital Yuan in four cities. According to the People’s Bank of China it started researching CBDCs as far as 2014, and finalized a basic design back in January.
If governments were adamant of adopting a digital currency, now it seems central banks are racing to be the first-to-market. It’s not surprising as well, since a successful digital currency issued by a major central bank could be used as an international currency – potentially weakening the role of existing currencies, like the U.S. dollar.
Monetary experts have voiced their thoughts that a digital asset used on a global scale could significantly reduce the influence of the U.S. dollar on global trade and weaken its position as a world reserve currency.
Whether this will come from a digital currency built by a central bank or from a neutral digital asset like Bitcoin, it’s clear that the world of financial securities is set to go through a seismic change.
Libra Project Appoints First CEO – Stuart Levey
Progress is being made at the Libra Association. A search committee, tasked with appointing their first leader, has just announced their decision.
Stuart Levey has been named the first CEO of the Libra Project.
While he might not be a household name, Stuart Levey boasts an impressive resume, making him an ideal fit for the position.
Notably, Levey served as the ‘Under Secretary of the Treasury for Terrorism and Financial Intelligence’. He held this position for many years, performing well enough to be kept on through multiple administrations, which included, both, Bush and Obama.
More recently, Levey took a position working for HSBC as their Chief Legal Officer – an impressive position in its own right.
Cumulatively, these experiences, and more, have provided years of experience dealing with the world of finance in varying capacities. Whether structuring government regulations, or immersed in banking practices, Levey has found success. Now, Libra hopes this trend will continue, and that Levey will lead the project to a bright future.
When the search for a CEO began at the Libra Association, a search committee was put in place to oversee the process. Leading this group was Andreessen Horowitz General Partner, Katie Haun. Upon announcing their decision, she had the following to say,
“Stuart brings to the Libra Association the rare combination of an accomplished leader in both the government, where he enjoyed bipartisan respect and influence, and the private sector where he managed teams spread across the globe. This unique experience allows him to bring a wealth of knowledge in banking, finance, regulatory policy and national security to the Association and strike the right balance between innovation and regulation.”
“Stuart shares our vision for using blockchain technology to deliver a more open, inclusive and high-functioning payment system that puts crypto in the hands of billions around the world.”
Time of Change
The announcement of their first CEO marks an important development for the Libra Project. While the project got off to a rocky start, due to skepticism from various levels of government, the project appears to be gaining steam again.
This skepticism has led to, essentially, a Libra 2.0 being drafted and put forth, marking important growth in project development. With being in a state of flux, clear and competent leadership is a must.
The Libra Project is an endeavour being spearheaded by Facebook. The overarching goal of Libra is to facilitate financial inclusion. The approach being taken, in an effort to achieve this, revolves around the creation of various stablecoins accessible to all.
In Other News
Beyond the announcement of Libra 2.0, and now a new CEO, the Libra Project has seen multiple ‘boosts’ in the past few months. These revolve around a ground membership within the Libra Association, as, both, Shopify and Checkout.com have joined the ranks.