Bitcoin Daily: Ex-Regulators Join Crypto Ranks, People’s Bank of China Mulls Digital Currency

Bitcoin Daily

Central bank digital currencies might have some positive effects, the Kiel Institute for the World Economy wrote in a report posted on the European Parliament’s monetary dialogue. Though the fractional reserve banking system in place would be “challenged at its core” if market participants hold their deposits in cryptocurrencies, instead of bank deposits, digital currencies might “pave the way for a more stable financial system,” as fractional reserve characters of the banking system “can be a major source of instability.”

The People’s Bank of China has filed over 40 patents that focus on aspects of digital currency, CoinDesk reported. The idea is to “break the silo between blockchain-based cryptocurrency and the existing monetary system,” according to the patents. One patent, for example, detailed a way for users to check transactions using a digital wallet.

In other news, the Korean Blockchain Association is facing concerns from the insurance industry over its plan to help crypto exchanges become insured, NewsBTC reported. While the group has “emphasized a stronger internal control system and security,” the official is not sold on the idea.

“There are no statistics related to the risks of virtual currencies, both at home and abroad, and it is still not sure whether an insurer can accept exchanges as its policyholders as a group, which are smaller and riskier than Bithumb,” the official said.

Hundreds of thousands of dollars-worth of cryptocurrency might be at risk after a crypto exchange in South Korea accidentally released information about 19 users, CoinDesk reported. A Bitkoex employee had reportedly released information on emails, wallet addresses and private keys to Karma (KRM) tokens. In all, the users hold about $620,000 worth of the token.

On another note, Florida Chief Financial Officer Jimmy Patronis has directed his office to create a position to oversee cryptocurrencies. CoinDesk reported. Patronis said that other states have taken action against bad actors in the crypto space and “Florida can no longer remain on the sidelines when it comes to cryptocurrency.” The individual in the position would see how current laws apply to cryptocurrencies as well as initial coin offerings (ICOs) and will also “shape the future of these regulations in our state,”  Patronis said.

And crypto firms are hiring former regulators, a common move by Wall Street banks and telecom companies, reported. One VC firm, for example, hired a new general partner who had reportedly served as a U.S. Department of Justice (DOJ) prosecutor. The new partner had reportedly focused on cybercrime, as well as fraud and corporate compliance failures.