Comment by Riaz Haq on February 4, 2021 at 10:36pm

China prepares to launch the world’s first official e-currency
Party leaders believe the country’s big tech platforms have too much power

https://www.economist.com/the-world-ahead/2020/11/17/china-prepares...

THERE IS A good chance that the digital yuan will enter circulation in 2021. It is a debut that will initially make little difference, but could, over time, change the way central banks conduct monetary policy.

The People’s Bank of China has filed more than 100 patent applications for a digital currency and has overseen a range of trials, putting the e-yuan into use in a few cities and on several apps. So far the experiments have gone smoothly, and soon people will have the option of downloading a government-issued digital wallet. Unlike commercial ones such as WeChat Pay and Alipay, the official version will be equivalent to an account at the central bank with the same solidity as hard cash.

For the millions who already use a smartphone instead of a debit card, it will feel like just another payment app. Yet some talk of digital currency as a revolutionary product that could spell trouble for banks as people withdraw money from savings accounts and put it directly into their ultra-safe official e-wallets. What is more, if digital currency were ever to fully replace cash, central banks would, in theory, gain three new powers: to lower interest rates below zero with little difficulty; to issue cash directly to those most in need; and to see more precisely who has money and how it is spent.

In China the central bank is not trying to reinvent monetary policy—at least not yet. Its motivations derive from more immediate challenges. Given the rise of mobile payments, it worries that the big tech platforms have too much power. The digital yuan will offer an alternative. It will also give China a conduit for moving money across its borders without having to rely on swift, a global payments system that comes under American influence. But China’s first objective is much more basic still: to check whether the technology behind the digital yuan works and whether people actually want to use it. Money has been around for some 3,000 years. This update will take time.

Comment by Riaz Haq on February 10, 2021 at 7:04pm

China looks to take its digital currency global

https://www.axios.com/china-central-bank-digital-currency-global-32...

China appears to have taken another major step in its quest to move the world away from the dollar and position itself as a major power in the world's financial markets.

What happened: China's central bank has set up a partnership with SWIFT, the global system for cross-border payments, through its digital currency research institute and clearing center.

Why it matters: The move has sparked "speculation over the central bank's pursuit of promoting the global use of its digital currency," China's state-operated Global Times wrote on Thursday.

The big picture: China is far ahead of the U.S. in the development of a central bank-backed digital currency and as such could be far ahead in the future of global payments and financial settlement.

If China can cement the yuan as the world's favored digital currency, it could displace the dollar and provide China with the immense global privileges that have been enjoyed by the U.S. since the end of World War II.
Be smart: The lack of financial transactions in and broad use of its currency is the greatest detriment to China amassing global power.

The country has been opening up its financial markets and now has mainland stocks listed on top international exchanges like MSCI and its government bonds have been added to the global benchmark Bloomberg and JPMorgan bond indexes.
In 2020, China drew double the amount of foreign capital to its yuan-denominated government bonds as the year before.
On the other side: The ability of the U.S. to borrow money at will in international debt markets and to impose sanctions on countries it sees as hostile are both largely dependent on the dollar's status as the world's funding currency.

The use of the SWIFT system is a major conduit to imposing sanctions.
Where it stands: Federal Reserve governor Lael Brainard said in a speech in August that the Fed was working to build and test a "hypothetical" central bank digital currency, noting that CBDCs "present opportunities but also risks associated with privacy, illicit activity, and financial stability."

European Central Bank president Christine Lagarde was similarly ambivalent about the development of a CBDC in January, saying it was "going to take a good chunk of time to make sure it's safe," adding, "I would hope that it's no more than five (years)."
China has already rolled out tests of its digital yuan in several Chinese cities, testing payments with real customers in real stores.
Yes, but: Axios China author Bethany Allen-Ebrahimian points out that having the first-mover advantage isn’t necessarily an advantage in implementing digital currencies because technologies are changing so rapidly.

Comment by Riaz Haq on February 25, 2021 at 10:23pm

#America’s Perpetual War. #US doesn’t just bomb its enemies. It chokes them by using US$, global reserve currency, to enforce its own sanctions to punish them. Search for alternative to US$ is accelerating. It’ll be hard for #Americans to live beyond means https://www.nytimes.com/2021/02/15/opinion/us-sanctions.html

"by deluding themselves about the extent of America’s might, they are depleting it. A key source of America’s power is the dollar, which serves as the reserve currency for much of the globe. It’s because so many foreign banks and businesses conduct their international transactions in dollars that America’s secondary sanctions scare them so much. But the more Washington wields the dollar to bully non-Americans into participating in our sieges, the greater their incentive to find an alternative to the dollar. The search for a substitute is already accelerating. And the fewer dollars non-Americans want, the harder Americans will find it to keep living beyond their means."

“It is past time,” Joe Biden pledged last year, “to end the forever wars.” He’s right. But his definition of war is too narrow.

For decades, the United States has supplemented its missile strikes and Special Operations raids with a less visible instrument of coercion and death. America blockades weaker adversaries, choking off their trade with the outside world. It’s the modern equivalent of surrounding a city and trying to starve it into submission. Wonks call this weapon “secondary sanctions.” The more accurate term would be “siege.”

America launched its first post-Cold War siege in 1990, after Saddam Hussein invaded Kuwait. For the next 13 years, Iraq — which before the war had imported roughly 70 percent of its food and medicine — needed United Nations approval to legally import anything. Claiming that everything from water tankers to dental equipment to antibiotics might have military use, Washington used its muscle at the U.N. to radically restrict what Iraq could buy. In her book, “Invisible War,” the Loyola University professor Joy Gordon notes that between 1996 and 2003, Iraq legally imported only $204 per person in goods per year — half of the per capita income of Haiti. After resigning to protest sanctions in 1998, the U.N.’s humanitarian coordinator in Iraq, Denis Halliday, warned, “We are in the process of destroying an entire society.”

The U.N. ended its blockade of Iraq when the United States invaded in 2003. Since then, Washington has often claimed to employ “targeted” sanctions, which restrict arms sales or penalize only specific officials or companies, not entire populations. And in some instances, the sanctions are indeed targeted. But in the case of a few select foes — Iran, Venezuela, North Korea, Cuba and Syria — the United States has initiated or intensified sieges that contribute to the same kind of misery experienced in Iraq.

Comment by Riaz Haq on February 26, 2021 at 6:53am

In addition to the World Bank, IMF, FATF, Amnesty, INGOs, Media, Hollywood and an army of think tanks, a key tool used by the US is SWIFT, the System for Worldwide Financial Transactions, to enforce its will. Banks use SWIFT to send/receive funds for imports and exports. A country whose banks are cut off from SWIFT ca not conduct international trade. Examples: Iran and North Korea are not connected to SWIFT.Here's a news item from 2018:

WASHINGTON (Reuters) - The Belgium-based SWIFT financial messaging service said on Monday it is suspending some unspecified Iranian banks’ access to its messaging system in the interest of the stability and integrity of the global financial system.

In a brief statement, SWIFT made no mention of U.S. sanctions coming back into effect on some Iranian financial institutions on Monday as part of U.S. President Donald Trump’s effort to force Iran to curtail its nuclear, missile and regional activities.

The SWIFT statement said suspending the Iranian banks access to the messaging system was a “regrettable” step but was “taken in the interest of the stability and integrity of the wider global financial system.”

Having abandoned the 2015 Iran nuclear deal, Trump is trying to cripple Iran’s oil-dependent economy and force Tehran to quash not only its nuclear ambitions and its ballistic missile program but its support for militant proxies in Syria, Yemen, Lebanon and other parts of the Middle East.


SWIFT’s decision not to mention the resumption of U.S. sanctions likely reflects the fact that it is caught between two contrary regulatory demands.

The U.S. government has told SWIFT that it is expected to comply with U.S. sanctions and it could face U.S. sanctions if it fails to do so. On the other hand, SWIFT is barred from doing so under the European Union’s so-called blocking statute, which could subject it to European penalties for complying with U.S. law.

https://www.reuters.com/article/us-usa-iran-sanctions-swift/swift-s...

Comment by Riaz Haq on February 28, 2021 at 11:01am

OPINION - POLITICS
Op-ed: A digital dollar would help the U.S. and its allies keep China in check
PUBLISHED SAT, FEB 27 20213:03 PM ESTUPDATED SAT, FEB 27 20213:07 PM EST
Frederick Kempe
@FREDKEMPE

https://www.cnbc.com/2021/02/27/op-ed-a-digital-dollar-would-help-t...

Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell hinted this week that a digital dollar is a high-priority project for the U.S.
China has ramped up efforts for a digital yuan to undermine the dollar and extend its influence.
The benefits for Beijing would be considerable if the U.S. cedes ground in financial technological innovation and the dollar’s global dominance wanes.

Chinese officials have made no secret that their greatly accelerated efforts at introducing and distributing the digital yuan are an opening move in their long-term strategy to undermine the dollar’s global supremacy and expand their influence.

Despite that, leading U.S. financial officials have rolled their eyes at any suggestion that deeper dangers lurk for the dollar, and thus also for U.S. national security, in the global digital currency race. Even as China marches forward and bitcoin’s value reaches $1 trillion, the Federal Reserve had been in no hurry to be a contestant.

Until now.

This week marked a public turning point for the most significant U.S. government officials engaged in international finance — Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell. Josh Lipsky, director of the Atlantic Council’s GeoEconomic Center, tweeted that it marked “the firing of a starting gun.”

At a New York Times event on Monday with Secretary Yellen, CNBC’s Andrew Ross Sorkin prompted her most full-throated endorsement yet of a digital dollar, or Central Bank Digital Currency, or CBDC. Though Sorkin called Yellen’s attention to an Atlantic Council survey with Harvard’s Belfer Center, showing that 70 countries now have digital currency projects, Yellen’s focus instead was on the domestic good a digital dollar could do Americans.

“I think it makes sense for central banks to be looking at it,” said Yellen, in a historic snippet on snapchat.

“I gather that people at the Federal Reserve Bank of Boston are working with researchers at MIT to study the properties of it. We do have a problem with financial inclusion. Too many Americans really don’t have access to easy payment systems and bank accounts. This is something that a digital dollar, a central bank digital currency, could help with. I think it could result in faster, safer and cheaper payments.”

In congressional testimony a day later, Fed Chair Powell also broke new ground, calling the digital dollar “a high priority project for us.” He added, “We are committed to solving the technology problems, and consulting very broadly with the public and very transparently with all interested constituencies whether we should do this.”

Yet while the Fed consults, China executes.

Comment by Riaz Haq on February 28, 2021 at 1:03pm

China’s new digital yuan: Lessons for Pakistan

https://dailytimes.com.pk/719831/chinas-new-digital-yuan-lessons-fo...

Muhammad Zubair Mumtaz

FEBRUARY 3, 2021

As more and more nation contributes to and depend on the global economy, the process associated with routing payments smoothly so that they can be monitored by the central banks becomes important. Over time, various types of digital payments were introduced to facilitate business and household transactions. However, a lot more is required to be done by Central Banks to help build trust in digital payments.

China, being the leader, has launched a Central Bank Digital Currency (CBDC). An initiative was taken in September of 2020 to allow Digital Currency Electronic Payments (DC/EP). In simple words, the DC/EP is a digital version of the Chinese yuan backed by deposits held by the central bank. To take advantage of this form of digital payments, banks must replace a portion of yuan holdings with assets that are in digital form and then allocate it to businesses and the public using mobile technology.

In contrast, payments are also made using cryptocurrencies; what is different in DC/EP? The answer is the legal status that differentiates between DC/EP and cryptocurrencies. In terms of making payments through cryptocurrencies, the laws are vague in regards to whether it is legal to pay for goods and services in China using this form of payment; however, DC/EP is recognized as a legal tender to make transactions. The government will also control the digital yuan while cryptocurrencies are decentralized and do not have a single entity to manage their supply. Anonymity is another significant difference between the digital yuan and cryptocurrencies. Cryptocurrencies are anonymous whereas the digital yuan will be monitored, tracked, and backed by the government.

---------------

On January 11, 2021, Prime Minister, Imran Khan, launched the first digital payment system, ‘Raast,’ to promote financial inclusion and government revenue. This system will be implemented in three phases ending in early 2022. This timely initiative by the government is highly commendable as it will serve its purpose in many ways. Several private-sector digital cash transfer systems already exist that do not require a bank account like JazzCash, Easypaisa, Telenor Pakistan; however, Raast would be the first to connect government organizations and financial institutions. Businesses, fintechs, merchants, individuals, and government entities will utilize this system to receive and send real-time payments via the internet, mobiles, and agents. Using the Raast, the government will pay salaries, pensions, and financial support programs (e.g., the Benazir Income Support Program, the Ehsaas Emergency Cash program, etc.). This initiative is vital to restrict illegal financial transactions perpetuated by militant and extremist organizations. An essential requirement of the Financial Action Task Force (FATF) is fulfilled through digital payments which will help Pakistan come off of the grey list. Furthermore, Raast will automate the collection of taxes on transactions and tighten rules on banking.

Though Raast is not an alternative to digital currency it will be useful to align the transaction channels as the government will have full information about receipts and payments. Based on this information, the informal economy will be brought into the tax net and corruption can be reduced significantly. The government may also control the money supply and take fiscal and monetary measures accordingly.

Comment by Riaz Haq on January 19, 2022 at 7:58am

#Pakistan president calls for National #Blockchain Strategy. Dr. Alvi discusses problems Pakistan faces with #data silos across gov't functions, & supports formation of a National Blockchain Strategy for his country, starting with universities. - CoinGeek https://coingeek.com/pakistan-president-calls-for-national-blockcha...


Leading the delegation is Founding President of BSV blockchain’s association, Jimmy Nguyen, who will spend a week in Pakistan with the delegation as part of a series of meetings in Islamabad and Karachi with senior government ministers and leaders from private business.

“This week, our Association has had the privilege of bringing a delegation of blockchain experts to Pakistan to learn how BSV can help the country harness the power of the blockchain – for its government agencies, enterprises, start-up ventures and developers,” Nguyen told CoinGeek. “Having attended sit-down meetings with the President of Pakistan Dr. Arif Alvi and the Minister of Science and Technology Mr. Shilbi Faraz on Monday, today’s Pakistan Blockchain Summit is a great chance to meet and hear from the dedicated and highly engaged blockchain community in the country.”


The meeting was broadcast in a news report on Pakistan Television Network PTV, and the president’s official Twitter account also posted a picture of the participants in a series of tweets about the issues discussed.


Dr. Alvi mentioned concerns he has with a lack of data-sharing between government departments, and discussed how blockchain could be used for digital identity and ID management. It could also make these functions more transparent and reduce corruption in both government and business, he said. The president also noted that Pakistani technology talent was driving some of the world’s largest companies, and hoped that local IT startups would continue to attract investment.

Nguyen spoke about how blockchain, and particularly BSV, could be used in various functions across the Pakistani economy, including: banking and payments, fintech, digital advertising, big data management, customs, voting, health care, as well as environmental and governance issues. He also mentioned the work BSV industry representatives are doing with other governments around the world to improve services.

Dr. Alvi stressed that a “systematic and inclusive approach” was required to transition his country’s data management to the blockchain, which included building awareness of what the technology could do and how business and government could use it to their benefit.

He also called for more training and development in other “fourth industrial revolution” technologies such as artificial intelligence and cyber security. Nguyen said his organization was willing to assist in training employees at all levels of government and the public service.

BSV blockchain’s associaiton has led a drive into South Asia, the Middle-East and Africa, meeting with several government and business representatives across the wide and populous regions. Reflecting the potential for growth in this part of the world, the association has launched a BSV Hub in Dubai led by Muhammad Salman Anjum of InvoiceMate to educate and form partnerships with business and other institutions that could benefit from BSV blockchain technology. There is also an ongoing pilot program with the government of Tuvalu that could see several government and banking functions go completely digital.

With its unbounded capacity for processing and storing massive amounts of data securely, BSV would be the most logical blockchain to choose for any organization looking to incorporate blockchain technology. BSV, using Bitcoin’s original technology and permanent protocol rules, is capable of replicating the functions of today’s internet, but in a way that timestamps and logs all information as it changes, as well as allowing users to “own” and control levels of access to their data.

Comment by Riaz Haq on January 25, 2022 at 8:17pm

Renowned British #economist #Keynes warned the world in `1924 against using #economic #sanctions. Both the deterrent and the compellent effects of #US sanctions have fallen dramatically amid rampant overuse. #Afghanistan #Iran #Russia #Syria #Pakistan https://www.theguardian.com/commentisfree/2022/jan/20/keynes-warned...

Promoting economic stimulus at home while enforcing deprivation abroad is a self-defeating way to seek world stability

Nicholas Mulder is assistant professor of history at Cornell University and the author of The Economic Weapon: The Rise of Sanctions as a Tool of Modern War (New Haven: Yale University Press, 2022)

he United States has come to rely on economic sanctions more than ever before. Following its retreat from Kabul in August, Washington has maintained economic pressure on the Taliban. The treasury’s freezing of $9.5bn in Afghan state assets has left that impoverished country facing starvation this winter. Two weeks ago, US officials warned Iran, already under heavy economic pressure, that it will face “snapback” sanctions unless Tehran restrains its nuclear ambitions.

Most prominent of all is the sanctions threat that the Biden administration issued against Russia last month. In the face of a large Russian military buildup on the borders of Ukraine, Joe Biden announced on 8 December that Vladimir Putin will face “severe consequences, economic consequences like none he’s ever seen or ever have been seen” if he escalates into open conflict.

In all three cases, advocates of economic pressure argue that sanctions will deter aggressive action and compel better behavior. But the reality is that both the deterrent and the compellent effect of US sanctions have fallen dramatically amid rampant overuse.

Sanctions were created as an antidote to war. Today, they have become an alternative way of fighting wars
Iran has been under US sanctions on and off since 1979. It has such longstanding experience resisting external pressure that further coercion is unlikely to work. Putin’s Russia has adapted to western sanctions imposed since 2014 by building up large financial reserves, promoting agricultural self-sufficiency, and designing alternative payments systems.

Western supporters of sanctions now face a gridlock that is in part of their own making. Instead of cooling tensions, their implacable and impulsive resort to the economic weapon has aggravated the very conflicts that it is meant to resolve.

Sanctions were created as an antidote to war. Today, they have become an alternative way of fighting wars, perpetuating conflicts but not defusing them. To understand how the policy of economic pressure has reached this impasse, it helps to go back to its historical origins.

A century ago, in the aftermath of the first world war, sanctions were created as a mechanism to prevent future conflict. During the war, the allies imposed a devastating blockade on their enemies, Germany and Austria-Hungary. This kind of economic war against civilians was not a new phenomenon. It dated back to antiquity and played an important part throughout the 19th century, from the Napoleonic wars to the American civil war.

Comment by Riaz Haq on December 6, 2022 at 10:41am

Pakistan launches new laws to expedite CBDC launch by 2025
The State Bank of Pakistan signed in new laws for Electronic Money Institutions — non-bank entities offering digital payment instruments — to ensure the timely issuance of a CBDC in the next three years.

https://cointelegraph.com/news/pakistan-launches-new-laws-to-expedi...

Regulators worldwide see central bank digital currencies (CBDCs) as a way to enhance fiat capabilities by inheriting the financial prowess of technologies that power cryptocurrencies. Pakistan joined this list by announcing new regulations to ensure the launch of an in-house CBDC by 2025.

The State Bank of Pakistan (SBP) signed in new laws for Electronic Money Institutions (EMIs) — non-bank entities offering digital payment instruments — to ensure the timely issuance of a CBDC in the next three years. The World Bank helped Pakistan design the new regulations, according to local media Arab News.

In addition to timeline adherence for the CBDC launch, the regulations warrant preventive measures against money laundering and terror financing while considering consumer protection and reporting requirements.

The state bank, SBP, will issue licenses to EMIs for CBDC issuance. During the announcement, Finance Minister Asad Umar stated that using EMIs in promoting the digital economy will safeguard financial institutions from cybersecurity threats. Deputy Governor of SBP Jameel Ahmad envisions curbing fiat-induced corruption and inefficiency through CBDCs. He said:

The commencement of a speedy regulatory environment places Pakistan among the nearly 100 countries that are actively involved in researching and launching CBDC initiatives.

Neighboring country India also recently joined the race to launch a home-grown CBDC. On Nov. 22, The Reserve Bank of India (RBI) announced an ambitious plan to launch a retail CBDC pilot by the end of 2022.

Indian central bank, RBI, is reportedly in the final stage of preparing the retail digital rupee pilot rollout, which will be initially tested among 10,000 to 50,000 users of participating banks.

Comment by Riaz Haq on March 8, 2023 at 10:13am

Pakistan approves blockchain-based national eKYC banking platform

https://www.kitco.com/news/2023-03-06/Iran-advances-its-digital-ria...

In other crypto-related developments out of the MENA region, the Pakistan Banks’ Association (PBA) has signed off on the development of a blockchain-based Know Your Customer (KYC) platform with the goal of strengthening the country’s Anti-Money Laundering (AML) capabilities in a bid to counter the financing of terrorism.

According to a report from the Daily Times, the PBA, which is comprised of 31 traditional banks operating in Pakistan, signed off on the project to develop Pakistan’s first blockchain-based national eKYC banking platform on Thursday at the behest of the State Bank of Pakistan (SBP), the country’s central bank.

Included in the list of member banks are multiple international behemoths such as the Industrial and Commercial Bank of China, Citibank and Deutsche Bank.

The new blockchain-based eKYC platform – dubbed “Consonance” – will also reportedly improve operational efficiencies, which are primarily aimed at improving customer experience during onboarding.

Consonance will be developed by the Avanza Group, and the platform will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network.

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