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Australia’s Financial Regulator Issues First Regulatory Roadmap for Crypto Assets

The Australian Prudential Regulation Authority (APRA), a major regulator of the Australian financial services industry, announced on Thursday that it has issued a policy roadmap for implementing regulation for financial firms that engage in business activities associated with cryptocurrencies.

The financial regulator published a letter addressed to financial institutions it regulates, including banks and pension funds. In the letter, the APRA highlighted the need to provide such institutions with “more clarity” relating to crypto and financial regulation. The regulator, therefore, sets its expectations on how financial institutions should handle digital assets in the country.

The APRA acknowledged that “in recent years, there has been rapid growth in crypto-assets and the use of distributed ledger technology.” The regulator further admitted that although crypto activities are still relatively limited in Australia, such activities’ potential scale and risks could become significant over time.

APRA has therefore stated that it expects entities to conduct “appropriate” due diligence and comprehensive risk assessments before engaging in activities associated with crypto coins. The agency further expects entities to ensure that they understand and have plans to mitigate any risks.

The regulator also mentioned that it is creating a longer-term prudential framework for cryptocurrencies in Australia through consultation with other international regulators.

The APRA has set a tentative goal for 2025 to make sure its framework is effective. The agency plans to conduct consultations on requirements for the financial treatment of crypto coins in 2023. The regulator said it would release a draft standard within the next few months.

The Rising Use of Crypto in Business

The latest policy framework for crypto regulation is a progressive development being made by the Australian government.

Last month, the government announced plans to introduce legislation that seeks licensing and custody measures for the nation’s growing digital asset industry. The government also announced potential changes to the way the nascent asset class could be taxed.

In November last year, Commonwealth Bank of Australia (CBA), the Australian banking giant, became the first major Australian bank to allow customers to buy, sell and hold crypto assets. The APRA is now concerned that the move by CBA could entice other regulated institutions to offer such products.

Binance Launches Feature to Implement Community Feedback in Roadmap Development

A new feature empowers users to provide in-depth feedback on product improvements and new features as Binance ramps up community participation in its ecosystem in 2023.

PARIS, FRANCE, FEB 1 – Binance, the world’s leading cryptocurrency exchange, launches a new feature to gather and act upon user feedback in a long-lasting, dynamic fashion. The feedback tool introduces a dedicated area for users to provide feedback and comments, ranging from suggestions for product improvements to community ideas covering new features.

The launch of the feedback tool marks the first phase of a multi-phase project. After months of testing and experimenting, the Binance product team has developed a new feature enabling the community to participate in the platform’s future product roadmap. This dedicated space will make it easier for users to suggest ideas for product features they want to see on Binance.

The product team has clarified that the central idea behind launching this new tool is to create a more direct way to gather feedback from the community on the features they want to see. Accordingly, the Binance product team will review all suggestions, following which the team will build a public-facing roadmap of all user-suggested features in March 2023.

Once the public-facing roadmap goes live, the Binance community can vote on the proposed features. Based on the results, the Binance product team will add the top suggested features to its roadmap. The Binance team will continue adding live updates related to the progress of the features that people request. The feedback section will be updated later this year to allow people to leave feedback for features launched through the program.

We love hearing feedback from the community, whether it’s direct from the customer or from reviewing comments from social channels and messages – Binance has always built feedback into the product development process,” explains Binance Head of Product Mayur Kamat. On average, we get around 1000 pieces of feedback every month – now we have a dedicated place for the community to make suggestions and leave a lasting impact on future Binance product developments.”

About Binance

Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. Trusted by millions worldwide, the Binance platform is dedicated to increasing the freedom of money for users. It features an unmatched portfolio of crypto products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization and infrastructure solutions, and more.

Hong Kong Monetary Authority Emphasizes AI and DLT in Fintech Roadmap

With the release of the Hong Kong Monetary Authority’s (HKMA) most recent Fintech Promotion Roadmap today, on 25 August 2023, the financial environment in Hong Kong is poised to be more attractive. This thorough manual presents a strategic outlook for the next year with the goal of promoting fintech adoption across the region’s diversified financial services industry.

The Roadmap accentuates pivotal fintech business sectors, primarily Wealthtech, Insurtech, and Greentech. Furthermore, it brings to the forefront two revolutionary technology paradigms: Artificial Intelligence (AI) and Distributed Ledger Technology (DLT), the underlying technology of blockchain. The drafting of this Roadmap was not an isolated endeavor. The HKMA joined forces with the Securities and Futures Commission, the Insurance Authority, and a spectrum of stakeholders from various financial sectors to ensure a holistic representation.

Delving deeper into the Roadmap, the initiatives of the HKMA are not limited to merely advocating fintech’s potential. Instead, there’s a distinct shift towards a hands-on approach, facilitating financial institutions in their journey to translate fintech theories into tangible solutions. Over the ensuing 12 months, the HKMA has earmarked a slew of activities:

Fintech Knowledge Hub: Aimed to be a reservoir of fintech expertise, this hub will feature a directory, categorizing fintech service providers and financial institutions. This endeavor seeks to centralize resources, rendering them easily accessible for all fintech stakeholders.
Events and Dialogues: With a commitment to nurturing a symbiotic relationship between financial institutions and fintech service providers, the HKMA envisions regular showcase events and roundtable discussions. These platforms will not only foster collaboration but will also be crucibles for innovation.
Skill Development: Recognizing the importance of continuous learning in a rapidly evolving domain, the HKMA will orchestrate interactive seminars and training sessions. These sessions, tailored to address specific fintech niches, are poised to become knowledge transfer hubs, catalyzing cross-sectoral information exchange.
Content Creation: To ensure that the intricacies of fintech adoption are well-understood, the HKMA has plans to curate and disseminate educational content. This will span use-case videos to research reports, providing a 360-degree view of the fintech adoption spectrum.

Offering insights into the motivation behind this initiative, Mr. Arthur Yuen, Deputy Chief Executive of the HKMA, was quoted saying, “The unveiling of this Roadmap is not just a milestone for the banking sector, but a beacon for the entire financial services industry. The underpinning philosophy of our Roadmap is collaboration. We’re looking beyond banking, casting a wide net to encompass sectors like insurance, wealth management, and capital market activities. Through synergies with other financial regulators and continuous engagement with stakeholders, our vision is a resilient, inclusive fintech ecosystem for Hong Kong.”

This initiative is not an isolated one. It dovetails perfectly with the overarching “Fintech 2025” strategy of the HKMA. This strategy germinated the “All banks go Fintech” initiative in 2021, a clarion call for banks to embrace digitalization. A subsequent Tech Baseline Assessment in June 2022 crystallized the growth trajectories in Wealthtech, Insurtech, Greentech, AI, and DLT. These insights were instrumental in sculpting the current Roadmap.

For those keen on delving into the granular details of the Roadmap and to understand the breadth of initiatives by the HKMA, the recently unveiled report is a treasure trove of information.

As Hong Kong stands at the cusp of a fintech revolution, the Roadmap by the HKMA is set to be its compass, guiding stakeholders through the labyrinth of fintech adoption, ensuring that Hong Kong retains its position as a global fintech center.

Binance Research: Ethereum's Roadmap for Scalability and Decentralization

Ethereum, the blockchain that transitioned to a Proof-of-Stake model, is far from done with its upgrades, according to a report by Binance Research dated September 4, 2023. The report highlights Ethereum’s focus on scalability and decentralization, with Layer-2 solutions and Danksharding being key components.

The transition to Proof-of-Stake is merely a “significant milestone,” the report states. Layer-2 solutions are gaining traction as evidenced by a “257.7% YTD” increase in mainnet data publishing fees in 2023. These solutions are seen as the most efficient route to scalability.

Danksharding, a new concept introduced in the report, aims to make Ethereum a scalable and unified platform for settlement and data availability. Proto-Danksharding (EIP-4844) serves as its precursor, introducing “blob-carrying transactions.”

Blobs, another concept highlighted, operate on a multi-dimensional EIP-1559 fee market. They offer a more cost-effective solution for Layer-2s compared to the current calldata space. Key components like Data Availability Sampling and KZG Commitments are part of the path to Danksharding, aiming for “centralized block production with decentralized trustless block validation.”

On the state management front, Verkle Trees are identified as critical for Ethereum’s move towards statelessness. They enable nodes to validate blocks without storing the entire state database. High disk space requirements, a barrier to universal node access, are being addressed through history expiry (EIP-4444).

Other notable upgrades include Single Slot Finality, Distributed Validator Technology, and Secret Leader Election, which aim to refine Ethereum’s architecture further.

The Binance Research report provides a comprehensive look into Ethereum’s future, emphasizing its ongoing efforts to balance scalability with decentralized validation. With various upgrades in the pipeline, Ethereum aims to solidify its position as a robust blockchain platform.