Seeds of Wisdom RV and Economic Updates Thursday Afternoon 9-12-24
Good Evening Dinar Recaps,
UAE’s RAKBANK USES mBRIDGE WHOLESALE CBDC SOLUTION FOR CHINESE PAYMENT
Earlier this week the UAE’s RAKBANK confirmed it made its first cross border payment using the mBridge platform. mBridge is multi-wholesale CBDC payment solution founded by the BIS Innovation Hub and the central banks of Thailand, Hong Kong, China and the UAE, with Saudi Arabia joining in June. In the same month, the central banks launched the minimum viable product (MVP) version of mBridge.
A key advantage is transactions can be sent directly from the sending bank to the recipient bank without the need to rely on correspondent banks as intermediaries. Hence, it aims to make payments faster, cheaper and more transparent.
“The successful transfer of eCNY to our correspondent in China is a game-changer in several respects,” said Vikas Suri, Co-Head of Wholesale Banking Group at RAKBANK. “It’s one of the first UAE-led foreign currency transfers executed in local currencies without involving a third currency to China and without using conventional payment rails.
This is a gamechanger that paves the way for instant blockchain based CBDC exchanges with payment versus payment, fundamentally altering how we approach international payments.”
A typical transaction would start with the bank buying wholesale CBDC dirhams. On the mBridge platform, the wholesale dirhams are exchanged for eCNY, and the eCNY is transferred to the recipient bank. The peer-to-peer nature of the transaction removes the need to hold Nostro balances offshore or to make any additional interbank payments.
The technology for the mBridge platform was developed by the Chinese central bank’s Digital Currency Research Institute, using a bespoke consensus mechanism, but borrowing some elements from Ethereum.
Last year the UAE started working with enterprise blockchain firm R3 for wholesale and retail CBDC. R3 said its Corda-based issuance layer technology was used for the mBridge payment, which would require some integration between Corda and the mBridge platform. We’ve requested details but didn’t receive a response in time for publication.
Chinese banks promote mBridge involvement
Meanwhile, various Chinese banks and Tencent promoted their involvement in mBridge payments in June, following the launch of the minimum viable product (MVP). In July, the Agricultural Bank of China said it successfully handled its first live mBridge transaction for a manufacturer. And last month, ICBC said it received eCNY via mBridge for one of its clients in Liuzhou.
The fact that mBridge transactions are still newsworthy means there’s a slowly, slowly approach as one might expect at the MVP stage.
@ Newshounds News™
Source: Ledger Insights
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FIRST U.S. XRP TRUST BY GRAYSCALE: WHAT YOU NEED TO KNOW
▪️Grayscale has launched the first U.S. XRP Trust, aiming to provide institutional exposure to XRP’s unique cross-border payment capabilities.
▪️The trust could be converted into an ETF, pending SEC approval, signaling potential mainstream adoption of XRP.
Grayscale Investments has officially launched its first U.S.-based XRP Trust, causing waves in the cryptocurrency market. At the time of writing, XRP is trading around $0.5713, up 7.45% over the last 24 hours.
This price increase has been attributed to Grayscale’s launch of the XRP Trust, which has prompted increased interest in the digital asset. Additionally, XRP’s 24-hour trading volume has increased by more than 70%, hitting $1.424 billion, indicating that the market has reacted positively to this news.
This development was also highlighted by blockchain researcher Collin Brown, who stated that this marks a major step towards a potential ETF.
@ Newshounds News™
Source: Crypto News Flash
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STABLECOINS REDEFINE FINANCIAL ACCESS IN EMERGING MARKETS, REPORT FINDS
Stablecoins have evolved from niche crypto tools to mainstream financial asset used to hedge against economic uncertainty.
Stablecoins have transformed financial access in emerging markets, becoming essential tools for millions seeking stability in volatile economies, according to a recent research report.
The report, Stablecoins: The Emerging Market Story, was sponsored by Visa and developed in collaboration with Allium Labs and Castle Island Ventures. It revealed that stablecoins have evolved from niche crypto tools into mainstream financial assets.
According to the report, stablecoin usage has surged across countries like Brazil, India, Indonesia, Nigeria, and Turkey, where traditional banking systems often struggle to meet users’ needs.
Everyday financial tool
The report noted that stablecoins initially served as a tool for traders and exchanges to settle transactions in the crypto world. However, their usage quickly expanded to meet the everyday needs of users in emerging markets.
The study also highlighted that stablecoins, particularly Tether (USDT), became the most trusted digital asset due to their wide network effects and established liquidity
Approximately 47% of people surveyed as part of the study use stablecoins to hold digital dollars as an alternative to unreliable local banking systems, while 43% of respondentonss favor stablecoins for more efficient currency conversi.
The report estimated that stablecoins settled $2.6 trillion in transactions during the first half of 2024, with over 20 million blockchain addresses making stablecoin transactions each month. This rapid growth reflects the increasing appeal of stablecoins for various everyday financial activities, not just for crypto trading.
Safety from economic uncertainty
The report emphasized that stablecoins played a crucial role in advancing financial inclusion across emerging markets, particularly in countries where access to traditional banking remains limited or unreliable.
In regions with high inflation or volatile local currencies, such as Argentina and Venezuela, stablecoins allowed individuals to hold digital dollars, offering a stable alternative to local currencies. This provided users with the ability to preserve the value of their savings without the need for a traditional bank account, which was often inaccessible or untrustworthy.
Stablecoins also helped bridge the financial gap for those who lacked access to USD-based banking systems. In countries like Nigeria, where the banking infrastructure struggled to offer easy access to US dollars, stablecoins enabled people to store value, make payments, and conduct cross-border transactions more efficiently.
This opened up financial opportunities for millions who would otherwise be excluded from stable and secure financial systems, making stablecoins a powerful tool for financial inclusion in the developing world.
Growth expected to continue
While the adoption of stablecoins raised concerns about “crypto-dollarization” in certain countries, the report showed that stablecoins were set to play an even larger role in global finance.
According to the survey, 72% of respondents expected to increase their stablecoin usage in the next year. The growth was driven by the efficiency, speed, and accessibility of stablecoins for cross-border payments, payroll, and remittances, particularly in areas where traditional financial systems lagged.
The report concluded that stablecoins had firmly established themselves as a viable alternative to traditional banking systems, offering emerging market users a secure and stable way to manage their finances. As stablecoin regulation evolved globally, their role in everyday financial transactions was expected to grow.
@ Newshounds News™
Source: Crypto Slate
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RIPPLE AND NYU ABU DHABI RENEW BLOCKCHAIN RESEARCH PARTNERSHIP IN UAE
▪️Ripple renews its $1 million partnership with NYU Abu Dhabi to boost blockchain research and innovation in the UAE.
▪️Ripple’s strategic collaborations, including UBRI, help advance blockchain technology and digital finance globally.
Ripple has renewed its strategic partnership with NYU Abu Dhabi through the University Blockchain Research Initiative (UBRI). This renewal demonstrates Ripple’s continuous commitment to fostering blockchain research and innovation in the UAE and the broader Middle East.
Ripple Expands Its Blockchain Research Investment in UAE
The collaboration with NYU Abu Dhabi has increased Ripple’s overall funding for blockchain research and student initiatives at the university to more than $1 million. Reece Merrick, Ripple Managing Director, Middle East, and Africa, stated:
“Ripple and NYU Abu Dhabi share a vision of unlocking the full potential of blockchain research and innovation in the region.”
The cooperation is critical to Ripple’s aim of expanding its footprint in the UAE, developing talent, and encouraging the use of blockchain technology in both the academic and financial sectors.
This expanded engagement is part of Ripple’s overall strategy to compete for a sizable share of the global payment ecosystem. As Ripple Labs seeks to increase the utility of XRP, the company has deliberately focused on key regions with high regulatory certainty and commercial potential.
Recently, as we previously reported, Ripple Labs expressed confidence that the Federal Reserve’s FedNow system might benefit XRP by facilitating speedier cross-border payments via XRP Ledger. This puts Ripple at the vanguard of digital financial innovation, as it competes with other payment alternatives on a worldwide scale.
In addition to increasing its blockchain footprint in the UAE, Ripple is looking into stablecoin potential. Ripple has prioritized the United States for the launch of its USD-backed stablecoin, with ambitions to expand into the Japanese market after regulatory approval is acquired.
Japan’s strong legislative environment makes it an appealing market for stablecoin development, according to Ripple’s CEO. This strategic objective aims to strengthen Ripple’s competitive position and expand the adoption of the XRP Ledger across various markets and financial systems.
Ripple’s research investments extend beyond NYU Abu Dhabi. The UBRI program includes 58 colleges worldwide, and Ripple has invested more than $60 million since the initiative’s start in 2018.
This includes offering financing to prestigious universities such as Morgan State University and the National University of Singapore, highlighting Ripple’s global reach. These collaborations play an important role in advancing academic research, increasing financial awareness, and boosting global acceptance of digital assets.
Furthermore, Ripple’s rising presence in the UAE is consistent with the country’s objectives to become a global center for financial and technical innovation. Collaboration with NYU Abu Dhabi allows Ripple to promote blockchain research while also contributing to the UAE’s goal of cultivating a tech-savvy workforce.
The university’s Ripple Blockchain Collaboratory has been instrumental in the development of fintech and blockchain firms, both of which are critical to the country’s digital economy.
@ Newshounds News™
Source: Crypto News Flash
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