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Six Banks to launch Stablecoins with IBM: Bull Market Coming?

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IBM has signed letters of intent with 6 large banking institutions to launch their own stablecoins backed by fiat and issued on Stellar blockchain.

IBM, the American multinational information technology giant announced on yesterday (18th March 2019) that it has signed letters of intent with 6 large banking institutions to launch their own stablecoins which will be backed by fiat currencies and issued on Stellar blockchain.

 

Large banks launching stablecoins:

According to IBM, the partnership will allow these banks to operate international transfers faster and cheaper than the current banking system. Out of the six banks, three have been publically named which are RCBC based in the Philippines, Banco Bradesco based in Brazil and Bank Busan based in South Korea. The other banks shall be announced soon. The network was launched yesterday, however, the banking institutions are still waiting for regulations.

 

Currently, one stablecoins run on the IBM World Wire which is backed by the US dollar and launched by a San Francisco startup called Stronghold.

 

According to Jesse Lund, the head of blockchain for IBM, they are initiating with the markets that arre based outside of the United States, however, they plan to focus on adding the United States as an operational endpoint within the current year.

 

The IBM World Wire has payment locations in seventy-two nations with forty-eight currencies and forty-six banks and money transmitters.

 

Impact on XLM:

The network shall also open up possibilities of the banking institutions using Stellar Lumens or XLM. XLM acts as a bridge between different fiat currencies in cases where the trading of different fiats becomes difficult.

 

Jesse Lund also added that the World Wire network could start supporting other cryptocurrencies in future, however, it currently supports just Stellar Lumes due to the volatility in the cryptocurrency market.

#Blockchain

HSBC Bank Looking to Expand Blockchain Platform Voltron in South Korea

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HSBC, the largest bank in Europe is searching for banks in South Korea for launching Voltron, it's blockchain platform as reported by the Korean Times.

HSBC, the largest bank in Europe is searching for banks in South Korea for launching Voltron, it’s blockchain platform as reported by the Korean Times.

 

HSBC Voltron:

The Voltron platform delivers a more quick method to process and settle invoices using by using permissioned blockchain technology. The permissioned blockchain stops the transactional data from being shared with everyone but instead, the data is shared with only consented users. The platform decreases the time that is usually required for the total process.

 

According to Joshua Kroeker, the innovation director of HSBC, the platform would mostly impact the process timing. Thus the transparency which comes with blockchain, as well as the rapid flow, would help the banks in managing their working capital as well as their cash flows. Kroeker reached out to the banks in South Korea to partner with their blockchain platform i.e. Voltron for the letters of credit.

 

HSBC’s blockchain platform was initiated in 2018 and is currently partnered with seven banks namely Standard Chartered, Bangkok Bank, BNP Paribas, ING, CTBC Holding, SEB, and NatWest. The platform is still in its pilot stage however, it shall soon be launched commercially.

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#Explained

Research: How the Federal Reserve Works?

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The Federal Reserve, located in Washington, is the bank of the United States government and manages the financial institutions of the country.

Bank institutions in the United States are obliged to keep reserves amounts of money and deposits deposited in other banks – only a fraction of the client’s debt obligations. State-chartered banks can choose to become members ( and keep shares in their regional Federal Reserve bank ) after meeting certain standards. The policy actions adding reserves to the banking system are encouraging lower – interest lending, which has led to an increase in money, credit and the economy.

 

Federal Reserve

The Federal Reserve, located in Washington, is the bank of the United States government and manages the financial institutions of the country.
Fed Minutes: these are notes of discussions that the Federal Open Market commission has about economic policy. The purchase of government securities provides more money to increase consumer spending and stimulate the economy.

When Congress wrote the 1913 Federal Reserve Act, one of the Fed’s goals was to help banks acquire emergency cash reserves in order to cope with such panic attacks, so that a bank’s lack of funding did not interfere with the entire banking system. In addition, Reserve banks provide payment services to all u. s. financial institutions, regardless of their size or location. In addition to commercial banks, Reserve banks are also used as banks for the United States government.

Depositories can pledge a wide range of collateral accepted by other Federal Reserve loan programs to obtain a TAF loan. The elimination of “excess deposits” from participating banks will reduce the total amount of reserves available for loans, which should lead to an increase in market interest rates, thereby hampering economic activity and inflation. The deposit will be one of the many tools that the Federal Reserve could use to drain reserves when policymakers feel it is appropriate to start moving towards a less accommodative position in monetary policy.
Policymakers, under the leadership of president Bernanke, are preparing for the day when they will have to start taking advantage of more than a trillion dollars in excess of bank reserves in order to reduce inflation.

Reserve bank economists are experts in various aspects of our national economy. As you may remember, Congress created the Federal Reserve to promote safe, sound and competitive practices in the country’s banking system.
In case you are wondering, these types include state-chartered affiliated banks, which are owned and operated by banks – and international banking organizations in the United States. Fed examiners, as well as here, visit commercial banks and review bank balance sheets to assess the quality of assets,  internal controls, and risk management capabilities.

Bretton Woods was a blessing for Eight Families – The IMF and World Bank were at The heart of The “new World order.” A valuable repository for the wealth of the global oligarchy, which owns such Bank companies, is the American Trust Corporation – founded in 1853 and is currently owned by Bank of America. The oil industry insider with House of Saud connections, j .velister wrote in a Grim Reaper that The information he received from Saudi bankers about 80 percent of The property of The Federal Reserve Bank in New York – by far The most powerful Fed division – only eight families, four of which are in The united states. Thomas D. Schauf corroborates the claims of the mayfieldister, adding that ten banks control all twelve branches of the Federal Reserve. Benjamin Strong, the Banker’s Trust, was the first Governor of the Federal Reserve Bank in New York.

The New York Fed works within the Federal Reserve System and implements monetary policy, monitors and regulates financial institutions and supports the country’s payment systems. As part of their core mission, they supervise and regulate Second – District financial institutions.

The revolutionary bestseller of William Greider: reveals how the powerful and mysterious fed works – and manipulates and the global economy. For example, they may refuse to lend to a bank that is irresponsible, which increases their chances of default to teach other banks a lesson on risky loans.

Greider notes that anyone who knows and buys into the way our money systems work is a religious person.
Instead of “and such the government of the people, by the people and for the people “, the Federal Reserve system has made it “the government of the banks, by the banks, and for the banks will not perish the earth “.

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#Explained

Research: Can Cryptocurrency Replace Banks?

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Cryptocurrency offers something innovative, and an increasing number of national banks, including the fed, are interested in using blockchain technology.

Although cryptocurrency especially bitcoin was created to avoid central bank and government money, the technology behind bitcoin can be used as a national, central bank currency.

Cryptocurrency vs Traditional Currency

In contrast to the traditional currency, which has a value established by the central bank, bitcoin is driven by speculation about its value as a share.

Bitcoin offers something innovative, and an increasing number of national banks, including the fed, are interested in using blockchain technology to power a centralized national currency.

American intermediaries – including TD Ameritrade, which was the first to allow its customers to trade Bitcoin futures in the united states – are also at risk of credit losses when Bitcoin forwarding customers are unable to meet their margin calls and their positions. Since non – banking financial institutions generally have more flexibility than banks; they are both more competent and more vulnerable to cryptocurrencies and bitcoins as a new instrument.
Non – banking financial institutions, in particular, the FMI ( FMI ), have some protection against revenues from the usual, standardized process of raising funds, which usually require coordination between insurers, investment banks, and regulators.

Many central banks are looking closely at cryptocurrencies and exploring the potential for the creation of a cryptocurrency supported by the central bank.
The Financial Group of Mitsubishi UFJ, Inc. ( MUFG ), the Japanese Financial Group, announced plans to launch a cryptocurrency currency linked to the Japanese yen, and Venezuela has already launched a national cryptocurrency called the ‘PETRO‘.

 

Cryptocurrency Regulation

Banks have called for regulation in the cryptocurrency space to level the playing field between equities and equities.
As banks want to curb the growth of the cryptocurrency market, it is in their best interest to see as stricter rules as possible. However, banks have been hostile to cryptocurrency investors and, at the same time, have been looking for ways to earn money from the development of cryptocurrency. Such an institutional investment could be an essential step in stabilizing the cryptocurrency market.

 

Central Bank Digital Currency

One way to alleviate the above problems could be to create a brand new Central Bank digital currency payment system based on the same logic as cryptocurrencies.

The opening of the service to different vendors would have the most significant impact on banks, but the limitation to the Central Bank will also deprive banks of the profits from processing transactions due to the withdrawal of the fiat currency up to the Central Bank Digital Currency.

Cryptocurrencies are digital currencies that use encryption techniques to regulate the generation of currency units and to verify the transfer of funds. Cryptocurrencies are independent of central banks, and the risk that they will infiltrate traditional financial systems, which expose them to a potential bubble, is a sign of regulators ‘eyebrows.
If cryptocurrencies become an asset class, the impact on financial services companies will be more gradual.
After all, cryptocurrencies do not benefit from cash flow support or a credible central issuer, which would give it an intrinsic value.

Implementation:

If cryptocurrencies were to rise and become an effective currency, the impact on the implementation of the monetary policy would be significant, as central banks could lose control over the supply of money.
Every time retail investors finance their purchases of cryptocurrencies with credit cards, a deterioration in the credit rating of customers after a fall in cryptocurrencies could lead to an increase in crime rates.

However, even among cryptocurrency promoters, recognition of the role of the state as an enabler rather than a limit is now evident in efforts to obtain SEC approval for exchange-traded funds ( ETFs ).

There are real concerns, even with new regulations after the crisis, the conditions for financial institutions to fuel another crisis ( which could worsen cryptocurrency markets ) are still being left behind.
Digital currency technology has just created a new way for public funds and a state payment system independent of banks and their risk of default. Households and businesses would be attracted by the expected returns of private sector cash, including cryptocurrencies, only to try to raise public security funds during a crisis.

Firstly, if transactions in the new currency are common, it may be impossible for the central bank to find the appropriate intermediate objectives for its monetary policy.
Secondly, as private individuals, companies and potential financial institutions are raising their shareholdings in the new currency, the financial system may be less stable unless the central bank can find ways to stabilize liquidity in the currency. Alternatively, central banks could also use cryptocurrencies, perhaps using decentralized and near-anonymous technology to imitate and replace bills.

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