In recent regulatory news, a report by the Center for Public Integrity has explored the potential for cryptocurrency donations to obfuscate politicians’ sources of funding, a U.S. judge has urged the Malaysian public to exercise due diligence when considering seeking exposure to cryptocurrencies, and a report conducted by IBM Blockchain and the Official Monetary and Financial Institutions Forum (OMFIF) has found that central banks are unlikely to adopt national cryptocurrencies in the near term.
Cryptocurrency Campaign Contributions and Donor Transparency
A report published by the Center for Public Integrity and Politico has sought to explore whether cryptocurrency donations pose a unique challenge to transparency in the donors to politicians.
The study looks at 20 candidates from across the political spectrum that have received or requested campaign donations in the form of cryptocurrencies. The report asserts that at least three of said candidates were running for office in a state that has since banned crypto donations.
Cryptocurrency analyst Joseph Argiro is quoted as emphasizing the need for US states to “put in political surveillance on [cryptocurrency] campaign contributions.” Despite such, Argiro noted that “the industry is so new that the tools are still being developed to facilitate that surveillance.”
US Judge Urges Malaysian Public to Exercise Caution With Cryptocurrency
While speaking at the “Cybersecurity in a Digital Era of Human Security” conference in Malaysia, Paul Grimm, United States district judge of the U.S. District Court for the District of Maryland, urged Malaysian citizens to exercise caution and conduct due diligence in considering making investments in cryptocurrency.
Grimm warned that cryptocurrency “exists in a market that is subject to fluctuations that are not controlled by a national bank with professionals,” adding: “Cryptocurrencies are not backed by the national banking system and no regulator can step in to ‘cool it down’ or ‘heat it up’ with regulatory monitoring policy that will affect it.”
“If you are looking at cryptocurrency as an investment, you should do due diligence over how the currency is valued, the value fluctuations and how to deal with risks associated with the investment,” Grimm stated.
Report Finds Central Banks Hesitant on National Cryptocurrencies
IBM Blockchain and OMFIF have published their findings from a joint survey of central banks looking into sentiment regarding central bank-issued digital currencies (CBDC).
The report was informed by 21 central banks that participated in the OMFIF’s survey during July and September of this year. The results show that 38 percent of the institutions are actively “researching or trialing a wholesale CBDC to best inform the next upgrade to their [Real Time Gross Settlement] system,” leaving 62 percent that are not exploring CBDC. 69 percent of the respondents reported “significant issues with the current cross-border processes.”
The survey finds that 76 percent of institutions are uncertain as to “whether [distributed ledger technology (DLT)] will be able to deliver on its promise, especially in areas such as regulation,” suggesting that more than a third of the institutions currently exploring blockchain technologies may not be optimistic about the prospect of integrating DLT into their operational processes.
The report asserts that “Trials of wholesale CBDC systems illustrate how variations of distributed ledger technologies have the capacity to meet and, in some cases, exceed the performance of existing interbank systems,” however, it concludes that “there is still a long way to go before the technology is mature enough to meet central banks’ expectations for the next generation of real-time gross settlement systems.”
Do you think that we will see widespread central bank adoption of distributed ledger technology? Share your thoughts in the comments section below!
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