CRYPTO NEWS

CBDC Cybersecurity To Be Tested By Hong Kong, Bank Of Israel And Bank For Int’l Settlements

CBDC, or central bank digital currency, will be the main focus of three major financial and lending institutions to validate the feasibility of new digital currency system, the Bank of Israel said on Friday.

Upon its launch in the third quarter of this year, the joint CBDC project by the Bank of Israel, Hong Kong Monetary Authority, and the Bank for International Settlements Innovation Hub will employ a two-tiered approach.

This means that the CBDC would be transferred to consumers through financial intermediaries after being issued by the central bank.

Under the direction of the BISIH Hong Kong Centre and utilizing the groundwork established by Project Aurum, Project Sela will investigate cybersecurity vulnerabilities in the context of retail CBDC.

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CBDC Initiative To Give Intermediaries Less Exposure

BOI stated that the test will be cyber-security protected, and under the proposed approach, intermediaries will have no financial exposure from clients storing or transferring digital money, resulting in decreased risk and expenses.

Customarily, commercial banks distribute central bank money to the general population. Even in digital payment systems, transferring monies from one end to another typically exposes the intermediates participating in the transaction to financial risk, although for a brief period.

This research will investigate the sustainability of a two-tier architecture in which intermediates are “exposure-free.” Israel and Hong Kong will evaluate, as part of their testing, whether this makes the country less susceptible to cyber attacks.

Crypto total market cap at $885 billion on the daily chart | Source: TradingView.com

Israel Makes Headway Into CBDC

This is the closest Israel has ever come to investigating the possibility of a CBDC. A committee from the central bank recommended against introducing a digital version of the shekel in 2018, halting the initiative.

According to the International Monetary Fund, Israel is one of a hundred governments throughout the globe that has considered issuing a CBDC.

Andrew Abir, Deputy Governor of the Bank of Israel, issued a statement in which he said:

“Providing an effective payment system that will increase competitiveness in the payment sector is one of the major reasons we’ve outlined for the probable issuing of an Israeli CBDC.”

Through Project Aurum, Hong Kong has been investigating a two-tier distribution scheme in which CBDCs are issued to the public via commercial banks and payment service providers.

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The thriving Asian financial center initiated e-HKD research in June of last year and has since made public the digital currency’s technical and policy concepts.

Approximately 140 million people have used the digital yuan, notably at the recent Beijing Winter Olympics. The Bank of Jamaica recently acknowledged the CBDC as legal cash, making it the first nation in the world to carry out such initiative.

Featured image from PYMNTS, chart from TradingView.com

The Wolf of Wall Street: Investors Will ‘Almost Certainly’ Profit by Hodling BTC for 3 years

The popular public figure Jordan Belfort (better known as “The Wolf of Wall Street”) advised investors to look at bitcoin as a long-term investment. In his view, those who hold the asset for over 36 months will most probably make some profits. Belfort’s Crypto Guidance Jordan Belfort – the infamous stock broker whose story inspired::Listen

The popular public figure Jordan Belfort (better known as “The Wolf of Wall Street”) advised investors to look at bitcoin as a long-term investment. In his view, those who hold the asset for over 36 months will most probably make some profits.

Belfort’s Crypto Guidance

Jordan Belfort – the infamous stock broker whose story inspired Martin Scorsese’s film “The Wolf of Wall Street” – has not always been kind to the primary cryptocurrency. In 2018, he opined that bitcoin is based on the Great Fools Theory, and investors should get out of its ecosystem before losing all their money.

Amidst the bull run in the spring of 2021, though, Belfort totally changed his stance and predicted that the asset could reach $100,000 by the end of the year.

He doubled down on his support during his most recent interview for Yahoo Finance. He praised its limited supply of 21 million coins ever to exist, claiming that as inflation keeps rising, bitcoin will “start to trade more like a store of value and less like a growth stock.”

“The Wolf of Wall Street” also thinks the leading digital asset could be an appropriate investment tool as long as people have “diamond hands” and do not sell it for a period of 3-5 years (even though price fluctuations will imminently occur):

“If you take a three or maybe five-year horizon, I would be shocked if you didn’t make money because the underlying fundamentals of bitcoin are really strong.”

Subsequently, the American opined that bitcoin is still in its early days, which is why it is normal to correlate with the NASDAQ and tech stocks and not trade as a hedge against inflation (similar to gold).

“There is no real institutional ownership in bitcoin, for instance, you don’t have a teachers pension fund owning bitcoin for a ten-year hedge, it’s not like that yet,” he added.

Jordan Belfort
Jordan Belfort, Source: BBC

The Dangers of the Crypto Industry

Apart from bitcoin, Belfort gave his two cents on how people should protect themselves from cryptocurrency scams. Compared to traditional finance, the digital asset sector lacks comprehensive rules, which explains why sometimes “people are getting slaughtered.”

“In crypto, you can go out and raise money, but there is no disclosure, and every time there is no disclosure, it always ends badly,” he stated.

He advised investors to beware when dealing with a certain cryptocurrency project and get familiar with its executive team. Belfort believes that a protocol with unknown owners should be considered a huge concern.

Lastly, he warned people to check the utility of the projects they want to invest in. If the idea behind a particular enterprise works better from a centralized server, “I would probably not get involved,” he said.

CBDC Cybersecurity To Be Tested By Hong Kong, Bank Of Israel And Bank For Int’l Settlements

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