Banks can start issuing deposit-backed electronic currencies under new CBE regs
Commercial banks are now allowed to issue e-currencies under new regulations (pdf) announced by the central bank yesterday. One unit of those currencies has to be equal to EGP 1 when used for mobile payments, and every single unit in circulation must be backed one-to-one by physical deposits, the CBE said. Banks who want to issue digital currencies will need to obtain prior approval from the CBE, develop an internal record-keeping system that can publish detailed audit logs, and keep an eye on how much e-currency is issued by setting a maximum that can only be changed after notifying the regulator, the CBE added.
The move came as part of regulations to raise the daily limits on mobile wallet lending, withdrawal, and transfers, which we covered in today’s AM edition.
Does the central bank still hate crypto? Yes, but this is an e-currency. The main difference being that crypto-currencies rely on a decentralized blockchain, while e-currencies are backed by a central bank. The CBE last month warned again against cryptocurrencies after the recently-enacted Central Bank and Banking Act prohibited issuing, trading and promoting crypto in Egypt without special licensing. Want to know why central banks are getting in on e-currencies? Check out our explainer here.
FOR GOOD REASON TOO- The CEO of a big Turkish crypto exchange has gone missing — and 100s of mns of USD may just have gone with him, Bloomberg reports. The CEO and founder of Thodex has apparently jetted off to Albania as investigators try to figure out what’s happened to him, to his exchange and to the money invested in it. The exchange has more than 300k users.
NO RISK HERE, RIGHT? The Middle East is getting its first BTC exchange traded fund as Canada’s 3iQ Corp is set to list its 3iQ Coinshares BTC ETF on the Nasdaq Dubai exchange, Bloomberg reports. The company is hoping to raise over USD 200 mn through the move, which aims to unlock trading at all hours around the globe, CEO Fred Pye said. 3iQ has roughly USD 1.5 bn in assets, and listed on the Toronto Stock Exchange last year.
What is a BTC exchange traded fund you ask? Much like a regular exchange traded fund, the BTC ETFs track the value of an underlying asset or index. The BTC fund mimics the value of BTC and trades on regular exchanges, not crypto exchanges, removing the hassle of getting involved in the storage and security procedures required from crypto investors. The US Securities and Exchange Commission has historically rejected any BTC ETF application, but the first BTC ETF was launched in Canada by Purpose Investments in February earlier this year.